But had they been called earlier, these professionals might have prevented the train wreck. The following are two woeful realities in hypothetical situations, as well as what might have been had professionals been used appropriately.
A lose-lose situation
National Suspension & Gear Co., facing competition from China, asked its 42 principal suppliers to accept across-the-board price reductions of 20 percent so that it could reduce the price on its truck suspensions.
Twenty-two of these vendors terminated their relationships with National, which soon began its predicable death spiral, with delays in shipments and vendor payments, objections from customers, tighter scrutiny from National's bank lenders and dwindling cash flow. The situation ultimately provided gainful employment for two work-out specialists and 14 bankruptcy lawyers.
A consultant might have suggested a creative approach.
* National could have asked for bids from its suppliers, advising them that it was seeking to create greater efficiencies by eliminating duplicative sources of parts. The threat would also have been a carrot -- the successful bidder could double or triple its sales volume.
* National could have offered incentives to its suppliers for improving efficiencies in the manufacturing process, which also would have fostered a partnering relationship.
* National could have suggested that the parts shipped to it would be held on consignment. As parts were needed, they would be drawn from the parts bin, and bar codes on the items would be scanned to create invoices.
The suppliers might have benefited from a consultant's advice as well.
* A supplier could have suggested design changes to make National's manufacturing process more efficient and its products more competitive, resulting in even greater sales by the supplier to National.
* The consignment arrangement could limit the supplier's exposure in a bankruptcy by National, so long as it had properly documented the arrangement, filed its UCC financing statements and notified any senior secured lenders of the arrangement.
Tiffany Rybiecki, CEO of Acme Holding Co., a public company, met Adam Schlock, a fund manager, at a trade conference. They established a rapport during a follow-up lunch, for which Schlock was gracious enough to pick up the tab.
In high spirits, Rybiecki held forth on solutions to repair Acme's balance sheet, which she outlined on (of course) a cocktail napkin; someone (such as Schlock's fund) could buy BankAir's loan to Acme for 18 cents on the dollar, and this prescient investor could (by prearrangement) agree to discharge the loan for 30 percent of Acme's equity, plus get a seat on Acme's board.
It went true to plan until Schlock accelerated the BankAir loan his fund had just purchased at such a fabulous discount. Nonetheless, to avoid unpleasantness, he agreed to honor the original oral agreement with Rybiecki, except that his fund got 70 percent of Acme's stock and his nominees got five of Acme's seven board seats.
Rybiecki had ample time in her early retirement to consider the binding nature of the handshake deal and the concept of the free lunch.
If she had conducted the most cursory investigation of Schlock, she would have discovered that he had entered into a consent order with the SEC not to serve as an officer or director of any public company.
Would that have signaled Acme's counsel, had she been engaged in this process, to advise caution on the character question? Would counsel have insisted that the prearranged deal be papered? I think yes, on both questions.
Should the SEC have been contacted after the note was accelerated? That question should have been explored, but the broader disclosure questions should have been addressed even earlier. Rewinding even further back, an investment banker might have suggested that Acme pare its debt through an exchange offer for convertible preferred, or that it consider other structures that would have better served the shareholders than the back alley deal.
There is a moral to these stories. Far from being a cost, professionals, properly engaged, can prove invaluable to the success of a business.
David G. Edwards is a partner in the Chicago office of Barnes & Thornburg LLP and a member of the Business, Tax & Real Estate Department. He practices primarily in the securities law and general corporate areas. Reach him at (312) 214-8306 or firstname.lastname@example.org.
More people today -- especially those in younger generations -- are quite comfortable taking charge of their health and well being. The survey bears this out, with 44 percent saying they believe they need to be primarily responsible for making most of the decisions affecting their health care and health care coverage.
More than half -- about 54 percent -- however, aren't familiar with many of the services and programs available to help them. Don't wait until you're sick to find out what your benefits are.
People realize they can't afford -- physically or financially -- to be in the dark about their health care, and are hungry for assistance in becoming better informed and engaged health care consumers. With the pace of change in health care today, insurers have to continue making it easier for people to be informed and engaged, so they can make the best decisions about their health care and coverage.
Here are a few services consumers often overlook.
* 24-hour phone access to nurses, who can answer questions or direct members to the most appropriate care setting. This can be particularly helpful in the middle of the night if you aren't sure what to do and need guidance or a friendly voice.
* Nurse case managers. Some plans assign a nurse case manager, who works directly with patients and families to help them understand their options, identify facilities for rehabilitative services or post-operative care and find additional resources.
* Personalized online health resources. A good Web site should let you order medications, check the status of your claims, find a participating provider, track your deductibles and copayments, order medications and get health news and information tailored to you and your family.
* Disease management programs. If you or a covered dependents have a chronic condition such as asthma or diabetes, disease management programs can educate you about your disease and help you take steps to lead a more healthy life.
* Discounts on health and wellness services. You can sometimes find discounts on health and wellness services such as health clubs, laser eye surgery, cosmetic dentistry and massage therapy.
Health plans have changed a lot in recent years, offering many new services, resources and support. Take time to understand what's available so you can choose what's best for you and you family, then take advantage of the services you sign up for.
Everyone is concerned about health care costs and the quality of the care they receive. Long term, the best way to manage costs is through quality programs that help people either stay healthy or effectively manage their illness. Many of the services people don't know about are geared to do exactly that.
When you think about it, there is no better win-win: Healthier people and better control of health care costs.
Z. Colette Edwards, M.D., M.B.A., is vice president and senior medical director ofCIGNA HealthCare of Ohio.
Employers are grappling with health care costs and looking for maximum leverage from their health and disability programs.
Disease and disability management
Disease management empowers employees with information to help them stay healthy and avoid events that may lead to disability. Those with chronic conditions are identified early so there's more opportunity to keep them healthy. The result is not only significant medical cost savings, but also happier, healthier, more productive employees with fewer absences.
Disease management is a systematic approach to medicine that encourages patients to follow health-promoting behaviors through a strong patient-doctor relationship. The most effective programs align physicians and patients through education and support programs for asthma, low-back pain, diabetes, cardiac disease and other chronic conditions. Disease management also responds to consumer demand for more personalized care. The perfect companion to disease management is disability management, which uses simple processes and quality management to identify and manage factors that influence an employee's return to work. Better disability management processes are providing employees greater ease in reporting a disability and faster, more effective return-to-work planning from the moment the claim is reported.
Through disability management, barriers to an employee's return to work are identified and assistance is provided early -- while the employee is recovering -- through modified work arrangements, vocational rehabilitation or retraining. At the heart of any disability management program is an employer who is responsive to the needs of sick or injured employees and who is willing to offer modified job duties or flexible schedules to help the employee ease back to work.
Caring for the whole person
The return-to-work planning process begins almost immediately after receiving the report of a disability. Most complex diagnoses have multiple factors that affect return to work.
Heart disease patients may suffer depression after surgery, and both the physical and psychological impacts of the disease must be addressed. The best disability management programs ensure that one person manages the disability, developing a customized strategy for each claim and shepherding it through the entire process to ensure smooth, consistent management without disruption or time lags.
Health and disability insurers are beginning to use disability predictive models to forecast disability claims that have a higher risk of delayed return to work. The process involves looking at the whole person and the medical and nonmedical factors affecting the ability to return to work. While more traditional models depend entirely on medical factors to determine return-to-work probability, new models point to the psychosocial, behavioral and environmental factors that affect the disability.
For example, if an employee has no access to public transportation and can't drive because of a broken leg, paying for taxi or shuttle service to facilitate return-to-work might be in order.
Continuum of care
Disease and disability management programs, working hand in hand, are part of a continuum of care that:
- Helps manage chronic conditions and reduce chances of worsening.
- Enables people with potentially disabling illnesses and injuries to return to work with the support they need.
Combining disease management with disability management is an effective method of preventing some disease conditions from turning into a disability. Disease management for asthma can prevent it from worsening and enhances the patient's ability to perform the job.
This also lessens the possibility of the individual becoming disabled due to asthma. If a disability does occur, an integrated disease/disability management program can help the person return to work and productivity sooner.
Employers will get the best results -- from both a clinical and employee productivity standpoint -- by integrating disease and disability management into complementary benefits. In this way, employees can continue to live productive working lives and employers can make the most of their employee benefits programs.
Barton Margoshes, M.D., is national medical officer, CIGNA Disability Management Solution; Z. Colette Edwards, M.D., M.B.A., is vice president and senior medical director, CIGNA HealthCare of Ohio. CIGNA is one of the nation's leading providers of health benefit programs, with managed care networks in 45 states, the District of Columbia and Puerto Rico. Reach Edwards at (800) 541-7526.
For those charged with managing a company's employee benefits plan, the question is not merely academic. Breaking down the barriers between physical and behavioral health care delivery systems can improve clinical outcomes for employees while reducing medical costs for companies. And that has a positive effect on the bottom line.
Behavioral health disorders affect up to 25 percent of the work force, drive as much as 60 percent of physician office visits, are a leading cause of disability and absenteeism, and often constitute the top spending in pharmacy plans as medications to treat behavioral health disorders become more available and more commonly used.
Behavioral health as a workplace issue
The U.S. Surgeon General has identified depression as second only to heart disease in the magnitude of the burden it creates for society.
Those who suffer from it often struggle to carry out their workplace responsibilities while coping with a debilitating illness that presents no obvious outward signs. Fortunately, it is treatable.
But the costs associated with not responding to depression can be staggering -- at a personal level as well as at a financial level. The Wall Street Journal estimated recently that depression's annual toll on U.S. businesses amounts to $70 billion in medical expenditures, lost productivity and associated costs.
An integrated approach -- one that treats body and mind -- offers the best course for treating depression and other illnesses. But that approach will fail unless a company's health care benefit plan promotes it.
The health care professionals who serve a company's employees -- doctors, pharmacists, and behavioral health providers -- must work together across the continuum of care, from prevention to treatment to recovery.
While an illness like depression might be seen as a matter for behavioral health professionals, primary care physicians play a large role in its diagnosis and treatment. Industry data show that up to 70 percent of all antidepressants are prescribed by a patient's primary care physician.
Conversely, when a patient receives treatment for depression from someone other than the primary care physician, it's important the physician be aware of and engage in that treatment. This collaborative approach helps primary care physicians and behavioral health providers work together to treat the whole patient.
Sharing vital information
Sharing information is also important when it comes to medications, especially if the patient is receiving multiple medications that could interact in harmful ways.
Employee benefit managers should make certain their company's health care delivery system allows for data integration among pharmacy, behavioral health and medical plans. Some health insurers are deploying Internet-based technology to make sharing information more seamless while ensuring patient confidentiality.
Disease management programs
Because patients with certain physical conditions are at greater risk for developing depression, an integrated approach to health care should include well-developed disease management programs. Patients with diabetes or heart disease should be screened for depression early for improved clinical outcomes for the patient and employer savings through lower disability costs, decreased absenteeism and improved productivity.
Depression and diabetes. Stress and heart disease. The mind-body connection is undeniable. Understanding all the factors that contribute to health and illness means better prevention, more accurate diagnoses, more effective treatment and a faster, safer return to work for employees.
As companies recognize the benefits of an integrated behavioral health-medical services program in the prevention and resolution of problems that adversely affect their employees and workplace, they will increasingly look to organizations that have the experience, clinical expertise, and technological capacity to build and deliver integrated programs. Colette Edwards, M.D., is vice president and senior medical director of CIGNA HealthCare of Ohio. CIGNA is one of the nation's leading providers of health benefit programs, with managed care networks serving 45 states, the District of Columbia and Puerto Rico. CIGNA provides medical coverage through managed care and indemnity programs to more than 13.3 million people, including more than 250,000 in major Ohio markets. Reach Edwards at (800) 541-7526.