Craig Vanderburg is a true pioneer in the professional employer organization industry, and his latest success is the founding of Troy-based Presidion Corp. Vanderburg has grown the $100-million-plus company a provider of human resources management services to small and mid-sized companies at a rapid yet controlled pace, focusing on both organic growth and acquisitions. Vanderburg, president and CEO of the company, attributes his company’s rapid growth to great customer service. Today Presidion is the largest professional employer organization in Michigan, serving more than 2,500 companies and 30,000 worksite employees.
Smart Business spoke with Vanderburg about how he finds good employees and exceeds customers’ expectations.
Make it measurable.
I would absolutely tell anyone who is interested in being the CEO of their own company to make sure that you absolutely understand your goals and strategic vision for the company and then document that and put it into a strategic plan, so you have that measurable, regardless of whether your company is doing $1 in revenue or $100 million in revenue. Have that measurable strategic plan in place so that you can constantly be checking off the boxes of your own path as you go.
First and foremost, you need to understand what your clients’ needs and requirements are. Secondly, you must have a very strong vision for your business and be able to understand the measurables of the product that you serve.
Envision the future.
Our vision for the company is for the long term, to be the premier provider of outsourced human resource services to small businesses in America. We focus on that on a regular basis by trying to exceed our clients’ expectations.
We have a constant reinforcement of our values to our people to continue to focus on that vision. The best way that we’ve determined to get folks to buy into the vision of our company is we have to identify the right people upfront when we’re hiring talent. By trying to identify people upfront before we bring them into the organization who have values that are consistent with the company, that allows us to better prepare them to focus on the vision of the company going forward.
Find the right people.
We look for the right mold of an individual driven by strength of their background, their education and their performance in the past. Marrying those folks up and understanding what their values are as we bring them into our company, we think those combinations make a strong fit in identifying the right people.
We believe that we have a very solid offering that attracts strong, qualified people. We have very competitive wages, competitive benefit programs and try to have a conducive environment to understanding the different changes and demands in the workplace that offer up a competitive package overall to bring the right people into the organization.
Reward to retain.
We try to compensate as we go forward such that they want to be part of the organization. They are valued and they are rewarded through their compensation programs to be consistent with the success of the company.
In order to keep retention at our highest levels, we constantly focus on the buy-in and daily practice of our core values within the work environment. Commitment to goals and redistribution of the rewards to all equates in high levels of retention. In addition, we constantly reinforce the need to properly balance work and family life. All employees are afforded significant work/life balance time.
Exceed customer expectations.
We are constantly on an annual basis surveying our clients and asking them, ‘What are the areas that we can improve upon in our offerings?’ We consistently focus on that feedback to try to improve the overall service offerings that we have in the first place.
Secondly, we have small focus groups in the company where we have folks who essentially are sample users of our products and services, and what we are doing is challenging ourselves internally to create a better mousetrap, if you will, on our current offerings and putting ourselves in the client’s position and asking ourselves, ‘What can we do better to meet a client’s expectations of what we offer today?’
The key to dealing with unhappy customers is to respond immediately, accurately and consistently. Upon any service failure, management is notified and follows the client account for the next 60 days to assure accuracy and service delivery.
HOW TO REACH: Presidion Corp., www.presidion.com
Joe Mansueto is proof that a hobby can turn into a successful business. Mansueto had a passion for investing and in 1984, he used that passion to develop products and tools to help mutual fund investors make better investment decisions. Morningstar was born, and today, the $227 million company is a leading provider of independent investment research and caters to a variety of investors. Mansueto, chairman and CEO of Morningstar, has received the Rosenthal Award for Excellence in Investment Research from the University of Chicago and the KPMG Peat Marwick High Tech Entrepreneur of the Year Award. Smart Business spoke with Mansueto about the importance of passion and patience when starting a company, how to find the best employees and how he is making Morningstar a global name.
On starting a company
Read everything that Warren Buffett (CEO of Berkshire Hathaway Inc.) has written. Go to berkshirehathaway.com, read all the annual reports, and I think it will give you some really great advice about what are good businesses, what are bad businesses, how you can develop competitive strengths.
You have to be patient. Successful businesses aren’t built overnight. It’s going to take five or 10 years to really build a successful business. If you think you are going to do it in a few years, you are deceiving yourself. You need to be prepared for that long haul, and you have to have the patience and perseverance to see that through. Sometimes people are in such a hurry, they get discouraged when they don’t see immediate success.
Try to build a business around a passion of yours. If you can build a business around a passion, then it’s not work, it’s something you really enjoy, and your odds of success go up. If people start a business merely because they want to make money or they envy the profit margins of certain businesses, that’s probably not the best reason to start a business. It’s not going to see you through the down times. You have to have passion and exude passion for what you are doing.
Starting a business is a full-time activity. It’s more of a lifestyle choice, and it’s going to consume you. You have to prepare to run your life in a way that accommodates that. It has implications not only for yourself but those around you. If you are married, what does it mean for your spouse? If you have a family, what does it mean for your family? When I started Morningstar, I was single and unencumbered in every which way. I had no mortgages, no family, so in some ways, it was very conducive to spending a lot of hours working. Today, I have three children, and it’s a different set of circumstances.
On finding and training employees
There are a lot of liberal arts graduates who don’t quite know how to make the transition to the business world. In our early years, we did a lot of hiring of very bright people with liberal arts backgrounds who went into many roles here. The down side is, it takes a little longer to train those people, but I think over time, they can learn the finance side and you get very strong talent. We did some slightly unusual things in hiring that other financial information companies probably didn’t do.
We are always looking for the best minds, maybe looking less at the particular background of somebody but getting the right person with a good ability to reason and communicate well. It’s kind of like the sports team that hires the best athlete. He’s not so much looking to be the quarterback right now, but instead of just looking for quarterbacks, look for the best athlete to draft and then find a way to use that athlete. In a similar way, we are always looking for the best talent and not so much trying to hire a business school graduate to fit into a certain role but have a more expansive view of the kind of person we would consider. That diversity in hiring has worked well for us.
We have an MDP program — management development program — where we hire leading graduates from universities, principally in the Midwest. Typically, we bring them into, say, our product support area.
They may work a year in product support, getting to know who our customers are, supporting all of the products. Then they might rotate to our data area and spend a year compiling our databases, learning how that’s done. After a couple of years of this rotational program, they can go into more specialized roles, be it product management or an analyst role.
Once they have that body of knowledge, then they can go on. A lot of times during that two-year period, they are getting a CFA or they might be going to night school getting an MBA. We certainly support a broad-based training and educational program. We pay for MBA schools, CFAs training, etc.
On growing internationally
First, it comes down to people and making sure that you have the right group of people. We try to hire overseas people in the same way that we hire people in the U.S.
We want to have one Morningstar globally. We want to have the same kind of office space — it sounds inconsequential, but it’s really important to have the same physical space — all over the world. We have a very open atmosphere at Morningstar. There are no private offices — we support collaborative teambuilding and teamwork — so that we have the same look and feel globally.
We want the same client experience globally. If we are hiring the same kind of people, they need to behave the same way with the clients overseas. We need to offer the same kinds of products that we have in the U.S. overseas. More and more, we are creating global products, products that are developed here or overseas that are multilingual, multicurrency. We are supporting global products capabilities. Those are some of the things that we do to ensure that there is a consistent experience with Morningstar, no matter if you are in Milan, Hong Kong, Tokyo, Australia or Chicago.
HOW TO REACH: Morningstar, www.morningstar.com
Twelve years later, the company with annual revenue of more than $4 million can’t find enough qualified employees to keep up with its fast growth, and Banning has turned down customers because he couldn’t meet the demand.
To help offset that problem, the president and CEO recently moved his company into a larger building and is experimenting with ways to make better use of his employees.
Smart Business spoke with Banning about the challenges of finding employees and how he is reorganizing the structure of his company.
How do you find quality employees?
One of the challenges we have from a growth standpoint is there is a lot of work that we could do, that we just can’t do or won’t accept because of a lack of qualified employees. What we are trying to do is become more streamlined and more efficient in-house and then look at growing the company after we get the processes and procedures in place.
We are trying to reach out to colleges or high schools and find good people and even train them in-house. A big push of ours this year is increasing the amount of training we do internally, and then we will be able to promote people within the office.
In the long run, that will benefit us as a company, and maybe we won’t have to hire as many people because we will be better trained and more efficient in what we do in-house.
How are you restructuring your business to make better use of employees?
We tend to put a square peg in a round hole and make, in our case, engineers and surveyors into managers, and I’m not sure that’s really what they want to do. I think they would be happy doing engineering and surveying.
So how can we make them better engineers and surveyors? Give them the assistance they need with someone who can do more of the administrative things and they can do the technical things. I see a lot of good technical people that are put into administrative roles, and it probably doesn’t work as well as it could or should.
We recently hired a couple people and put them in charge of specific items. To promote the continued growth of the company, you need people to help keep the technical people focused on what they can do. They help the technical people, whether it’s performing contracts or client development or follow-ups with clients.
The engineers and surveyors are still going to need to do that, but if we can get some administrative people to help out with some of those responsibilities, I see that as more beneficial having people that are comfortable doing that do that, and then have our technical people do what they are good at.
How are you retaining the quality employees already have?
We have tried to develop an atmosphere that is very beneficial to them. When I hired my first employee, one of the things that I told my insurance agent is, I don’t want to be in the insurance business. Therefore, I want insurance for the employee, as well as his family, paid 100 percent. As a company, even to this day, we pay 100 percent of the premium. That has been huge in starting that atmosphere that we wanted to promote throughout the company.
We try to promote the company as a fun place to work, and we also try to have events where the family is involved.
How has that atmosphere influenced employee turnover?
We probably have five or six people that have been with us at least 10 years. We’ve had pretty phenomenal growth over the last couple years, but I wouldn’t be surprised if almost half the people have been with us for five years or longer. Our turnover rate is very low. When we hire someone, we don’t hire them to get a project done and then they’re gone. We try to be more stringent in our hiring. When we hire someone, we expect them to be here forever.
It doesn’t always work out for either party, but that is the attitude that we tend to take.
HOW TO REACH: Banning Engineering, (317) 707-3700 or www.banningengineering.com
Education: University of Rhode Island, bachelor of science degree, business administration, MBA
What is the biggest business challenge you’ve faced?
Starting a new insurance company was the biggest challenge I ever faced. Raising the money and selling my business plan to investors was tough with no track record. I was very persuasive at the beginning.
What is the biggest business lesson you’ve learned?
No one person makes a company successful. It takes everyone pulling together with the same vision to truly succeed.
Whom do you admire most in business and why?
Bill Gates, because his vision was way ahead of his industry and he has been able to maintain a leadership position with his company in a very competitive industry through both extraordinary vision and execution.
Born: Tulsa, Okla.
Education: Bachelor of arts degree, romance languages, University of Virginia
What is the biggest business challenge you have faced?
Today we probably face as many challenges than I have ever faced in this business. And that is the tremendous consolidation that is taking place at retail and the limited number of outlets available to us. (And) dealing with the pressures of those major mass merchants at the same time as we have to deal with the pressures coming from our major suppliers the oil companies.
The combination of those two factors and the import pressures presented by products coming in from China, which are ridiculously underpriced, presents a very challenging marketplace. Yet they are challenges and issues over which we will prevail. We always do.
But I can’t think of a tougher time in my business career than the conditions that exist right now.
What is the most important business lesson you’ve learned?
Take care of your people. Do it right. If you take care of your people, then they’ll make sure things get done right.
Whom do you admire most in business and why?
My father, because of the manner in which he conducted himself. He was an honest businessman a modest, caring person who always took care of his customers and fellow employees, and he did it in a very honorable manner.
He ultimately became the president of the American Hospital Supply Co.
When it came time to replace himself as president and CEO, Brian sought someone who would maintain the culture he had created and continue to grow the company. In 1999, he decided William Henry, former president and CEO of The Stroh Brewing Co., was that person.
That choice paid off last year when Budco won a Stevie Award for Best Overall Company with up to 2,500 employees in The 2005 American Business Awards. During the six years that Henry has been with company, Budco has grown to $100 million in annual revenue, and the number of employees has increased by 65 percent.
Smart Business spoke with Henry about how he’s dealt with this growth without losing the original culture of Budco.
How did you maintain the culture while transitioning so many new employees into the Budco environment?
It’s a challenge. We did that at a time when we grew business, we moved into a new facility and we also introduced a new warehouse and logistics system. There were a lot of things going on, and it was a big challenge for us.
The culture was such that it allowed us to add those people and absorb them and get them into our culture.
I think we were lucky that we have one campus and we’re not so big that you can’t go out and see people, and they see the management and leadership of the company on a frequent basis. That really makes a big difference.
Having worked for Ford and Stroh’s, which were bigger companies, it’s hard. Ford has facilities scattered all over the country and the world. It’s hard to build a consistent, uniform culture in that kind of an environment. We’re lucky that we are not so big that we have people all over the place.
We are privately owned and there is one owner, so we think of ourselves more as a family. We do a lot of volunteer activities and barbeques. For example, as a holiday tradition, Bud and I serve coffee and doughnuts [to employees before the holidays]. It’s an opportunity to reach out and say, ‘Happy holidays’ to everybody. It’s those kinds of things that go a long way with the employees and maintain our culture.
How does Budco University help train and retain new employees?
It goes back to what we are trying to do with our customers. We are trying to provide unique, competitive solutions for them.
It requires that we have good people. The company has always been willing to invest in its people, to be a learning organization where we are always getting better. We formalized that training program into what we call Budco University.
All of our employees have, every year, a list of classes that hopefully they can attend to make them better and to make the company better and help us achieve our vision of serving our customers better.
One of the ways we measure (the impact of Budco University) and really measure all of our culture is through employee turnover. Our turnover has declined fairly consistently over the years. I think the training program is part of that.
On the other side, which is a little harder to measure, we are constantly upgrading the skills and knowledge of our people, which helps the company move forward.
How does the McNaughton Award fit into your culture?
It’s a formal recognition of something that is important to us and important to every company, and that is innovation. If you go back to what we are trying to accomplish here help our customers you do that through innovation.
Part of our culture goes back to an employee who was here when the company started. His name was Bill McNaughton. He was a very innovative kind of guy.
The McNaughton award is a way of formally recognizing the importance of innovation and the importance of the people who contribute to it.
Why is it important for Budco to give back to the community?
It is part of the culture of the company that started back with Bud. Bud is very committed to being involved in the community.
He believes firmly that private enterprise needs to lead the development of our inner cities. It has become an important part of the culture. We work very hard at maintaining that as we grow so that we don’t lose that.
As you get bigger, it’s easy to forget about some of that stuff, and it ends up changing the culture. It has helped us to maintain our culture, and it is an important part of what we do.
We are not doing it for the credit. It’s just part of our family-based culture.
HOW TO REACH: Budco, www.budco.com
“We realized there was a problem in the market regarding the ability to easily buy low-volume prototype parts,” says Hollis. “We wanted to create a business that would address that need in the market.”
In late 1999, the three founded Quickparts.com, an Internet-based company that provides custom manufacturing services. Engineers can log on to Quickparts.com, upload their design data, receive a quote in seconds, order the custom parts and receive them in as little as two days.
The concept was a hit, and Quickparts’ revenue has grown to $14 million in just six years.
Smart Business talked with Ron Hollis, president and CEO of Quickparts.com, about the pros and cons of being an Internet-based business and how he is managing the company’s growth.
What challenges have you faced as head of an Internet-based company?
When we first started, we had to prove that this was a real company. The way we did that was we got people involved very quickly. If you were online, got a quote and placed an order for parts, almost immediately you would get a call from someone at Quickparts thanking you for your order and letting you know when your parts were going to ship.
That connected the technology to the human element of the business. That was a very important struggle that we had to overcome.
How has being an Internet-based business helped Quickparts grow?
One of the great things about leading an Internet-based company is a lot of things are measurable. In traditional business, it is very difficult to measure key business metrics - the number of contacts, the number of quotes, the number of customer visits, etc.
In an Internet business, where everything is data-driven, it is very easy to measure. If you can measure, then you can evaluate, analyze and improve the efficiency of different areas of your business.
Another huge benefit of an Internet business is that you are open 24 hours a day, seven days a week, 365 days a year, so you never actually have to close your operations. Even though we might not have human resources in the office, a customer can still go online, get a quote and buy his parts.
How have you managed Quickparts’ rapid growth?
The key aspect of managing growth is discipline. You and everyone in the organization have to have the discipline to do the right thing, in the right way, at the right time. It really just becomes fundamentals of execution.
If everyone is executing, then growth is irrelevant. You will always adapt to the growth. If you don’t have the discipline to do those things, then growth will kill a company.
Our culture is very conducive to having such discipline in it, and it has allowed us to continue to grow. To us, rapid growth is normal growth.
The other thing is we are very focused about what we do. We know what we are good at and what we aren’t good at. We try to stay focused on doing what we are good at.
It’s all about people. Business is nothing more than the sum of the actions of the individuals in the company. You have to have great people in the company doing these things.
We spend a lot of energy developing our team members so that they are ready to absorb the challenges that come with growth.
How do you create a culture that takes a disciplined approach to growth?
You set forth what the expectations are. We have a set of values and beliefs that are fundamental to what the company is about. When we hire, we have a very extensive top grading system, which is about making sure that the interviewee understands our values and beliefs and that they are aligned with them.
We preach these values and beliefs over and over and live them every day so that the team members know what the right actions are and how to treat the customer. No matter what we do, we are always here to service the customer.
How will you preserve quality customer service as you grow?
A lot of it is to continue to train our team members so that they understand what is expected of them. We do a lot of training. We have a couple of books that when you become a team member of Quickparts are required reading.
One of them is about customer loyalty. The element of it is you have to go above and beyond serving your customers in order to create a loyalty to the company. Everyone at Quickparts has read that book and has to pass a test on that book as part of their employment.
These are just the fundamental principles and values that we have that you have to understand who and what the customer is in order to serve them appropriately.
HOW TO REACH: Quickparts, www.quickparts.com
Law, AllMed’s chief financial officer at the time of the sale, bought the company’s billing software to start Zotec Solutions, a medical billing and medical records imaging software company.
“I was at the right place at the right time, relatively speaking, to the opportunity that got created,” says Law. “Anthem was a wonderful company to deal with on the way out, and they allowed me to set up a very nice business.”
Today, his $7 million company employs 80 and has more than 4,000 clients. And although Zotec is growing rapidly, Law is trying to keep its atmosphere welcoming and laid back.
“We have a very casual business attire philosophy,” he says. “We are a laidback, work hard, play harder kind of company. We want people to enjoy what they are doing and be here because they want to be here versus being here for a paycheck.”
Smart Business spoke with Law, president and CEO of Zotec, about how he provides a quality product and the impact acquisitions have had on his company.
How did you turn the software you bought from Anthem into a rapidly growing company?
We tried to focus on providing value to every single customer that we have taken on. They have then, by word of mouth, told other people about what we have done and so on and so forth. It’s all been growth basically by having satisfied customers.
With more than 4,000 physician clients relying on Zotec, what do you do to ensure that you provide the best quality product?
I stay in touch with them. ... I know all of our clients personally. I’m still involved in the business on a day-to-day basis.
We’ve got a tremendous amount of checks and balances on statistical reporting that allow us to make sure that every client’s charges are coming in and every client’s claims and money are coming in.
We’ve built a model that allows me, from anywhere in the country, to know exactly what is going on with my business. I get on my Blackberry every day (to see) how much work was done by all of the individuals in my company.
How has the acquisition of Medcor Data impacted your company?
Both positively and negatively. Quite honestly, the integration of acquisitions, the culture shock in two of the companies that we have acquired, is significant. We have tried to manage that the best we could.
We kind of take the approach of gardening. We water the flowers and we pull the weeds when we make an acquisition. That is a difficult process.
It takes a toll on the people who are staying and the people who are going to grow from that acquisition. It’s a difficult balance to manage. Overall, financially, they have been extremely rewarding acquisitions.
How do you manage the culture shock?
As professionally and as humanely as we possibly can. We try to give people the opportunity to re-educate themselves on the way we do business. We try to be very open and upfront with people about what our intentions are and tell them basically what to do, not necessarily how to do it. And they usually step up to the process, and that also spawns creative ideas.
If you get a few people out of an acquisition that really get behind the team and want to help, they usually lead the rest of the people. We identify very early on the key people and the keepers that we want to make sure we take care of, and we reward them for positive steps that they take.
How will acquisitions contribute to the future growth of the company?
We have been just exploding with internal organic growth, which in the software side of the business has been enormous in the last year. We’ve had record quarters in the last four quarters. We are growing in the software side, and we see that as being a much more sustainable way of growing the business.
Acquisitions, they come along every once in awhile, but if you start forcing yourself to make acquisitions, it has always been my philosophy that you are going to make a bad one. If you can’t ever walk away from a deal during due diligence, then you are probably in the wrong business.
I like to be able to be in that position where we have enough organic growth where we don’t need acquisitions to sustain our infrastructure. Yet, we can go out and find an acquisition and make sure we do the proper due diligence and the culture fits and it’s a nice smooth transition.
We will make more acquisitions it’s just not a core strategy for us right now because of our organic growth.
HOW TO REACH: Zotec Solutions, (317) 705-5050 or www.zotec.com
Dr. Richard A. Chaifetz decided to do something about that, and in 1984 founded ComPsych Corp., a supplier of employee assistance programs.
“We want to help organizations attract and retain the best and the brightest and create superstar cultures,” says Chaifetz.
Today, the company has grown to more than $156 million in revenue and serves more than 23 million individuals in 6,000 organizations.
“Our growth is fueled primarily by our reputation of being the leading provider of employee assistance, behavioral health, work-life and related services,” Chaifetz says. “Our clients see our innovation, they see our passion, they see our overdelivery on their expectations, and they know they can count us. We strive to make ourselves better every day. And with that comes a reputation in the industry that allows us to not only retain our customers but grow at the rate we have been growing, despite our size.”
Smart Business spoke with Chaifetz about how to provide superior customer service and get the most out of your employees.
How do you ensure that you are providing quality customer service?
We have very strong guiding principles which essentially revolve around an expectation that our employees have a passion and dedication displayed in their work for our clients that is second to none.
We approach each customer with a built-to-suit mentality, so we don’t have to take a cookie-cutter approach. Customers are treated as special customers regardless of whether they have five employees or 500,000 employees.
We have a very innovative program model, and we expect our people to come up with new ideas and challenge the status quo. We expect them to over-deliver on customers’ expectations, coupled with an expectation that they provide our services and deliver our responsibilities with the utmost integrity. And that integrity needs to be demonstrated both professionally in the office and in their conduct and behavior outside of the office.
We make sure we provide long-term value and quality [to] our customers so that we build long-term relationships. There is nothing more important than retaining customers for life.
I believe the best way to do that is to overdeliver on their expectations, give them high-quality services and make sure you charge them fairly.
How do you encourage employees to be more productive at work?
If we can help employees remove the distraction of everyday stressors, they are more apt to focus on their job, perform at a much higher level and also be more aligned with the company that they work for because they see that organization as finding their best interests to be as important as the company’s interests.
We offer a comprehensive employee assistance program, work-life services, flexibility with scheduling. I’m a big believer that employees need to have very clear objectives, and they need to be given the support to achieve those objectives with a sensitivity to the personal issues that may impact their ability to do well on the job.
It doesn’t mean we let people do whatever they want to do. It means we give them the flexibility to accomplish their goals and set very clear expectations of what those goals are.
How do you give employees the support they need?
We set guidelines and expectations for employees. We don’t baby sit everything they do. On the other hand, I am a big believer that we don’t advocate the responsibility of being a manager or supervisor by ignoring things until it is too late.
A strong manager or supervisor is an excellent coach, and they trust their employees with a fair degree or a logical degree of verification that, in fact, things are being accomplished in the time frame and at the level that was agreed upon. It’s not a free reign, dot-com type environment but an environment where independent thinking, flexibility and out-of-the-box ideas are welcome.
How do you find quality employees?
This is a very entrepreneurial environment. This is an organization where people have a lot of flexibility to come up with new ideas, innovate and get rewarded for outside performance.
Individuals who are extremely bright, who want to be challenged, who want to test the limits within the boundaries of good business sense, who want to get rewarded for performance as opposed to just showing up and understand the importance of having compensation tied to results thrive in our environment.
We use a very stringent selection process consisting of extensive interviewing, extensive background checks, psychological and intellectual tests, reference checks, role playing, etc., to make sure that people fit our organization both from a cultural and performance expectation perspective.
We have a very well-defined staffing model that predicts significantly ahead of time what our staffing ratios need to be, so we hire proactively and are always somewhat overstaffed to ensure that the customers have the best services available to them at all times. What you want to do is reduce the surprises in your growth story and anticipate needs and care for them before they become issues.
What should companies take into consideration as they grow?
We add a variety of services every year as we see the demands, issues, stressors and concerns of employers and employees changing as our world changes. People didn’t think about terrorist attacks 10 years ago. We didn’t worry as much about work-life balance 10 years ago as we do today.
(Take into consideration) things that are appropriate to the aging population the baby boomers leaving the work force and becoming displaced, the challenges of retaining younger employees as the baby boomers retire, the challenges of dealing with the baby boomers who are still in the work force. Things change, and you have to react to those changes and anticipate what those changes are going to mean for the issues of productivity, performance, retention and attraction.
HOW TO REACH: ComPsych Corp., (800) 851-1714 or www.compsych.com
But increasingly, sophisticated employers and their advisers are looking beyond line item costs, and concentrating on improved employee health, absence, disability and presenteeism outcomes.
By analyzing available information across a spectrum of benefit products and services medical, disability, behavioral and pharmacy a health benefits carrier can see the individual member as a whole. This is known as clinical integration.
“Clinical integration allows us to have an opportunity to use clinical information to identify people who are most at risk from health conditions,” says Thomas J. Scurfield, vice president of sales and service for the Aetna’s north central east region.
Smart Business spoke with Scurfield about how clinical integration can help employers get the most from their health care benefits investments.
How does clinical integration work?
Medical, prescription, dental and other available information is integrated in one place in order to assess intervention opportunities to improve enrollees’ health, which may prevent or mitigate work absence. The various disciplines primary care physicians, behavioral health experts, pharmacists, disease management and disability management staff all work in concert to create the opportunity for better health outcomes as well as provide enrollees with a more coordinated experience.
It’s looking at a person’s health care needs as a whole rather than looking at their health problems in ‘silos.’
How can clinical integration increase the total value of investments in health benefits?
There are four essential components of a clinical integration offering. The first is the integration of health and productivity data. For example, a health plan will look at its member data to try to identify those who may need intervention by a case manager.
The second is a proactive engagement process. That is, if you have both health and disability management data available, you can initiate an outreach to those members who could benefit from risk-reducing programs.
This leads to a third component which is integrated care management. That could include identifying physician-prescribed individual care plans and tracking the member’s progress under that plan. And the last component is to measure your progress.
Can you explain how looking at a person as a whole may positively impact their health?
Your primary care physician understands that all aspects of your health physical, dental and behavioral are intricately connected. Medical science verifies those connections and explains them more fully every day. We know enough to appreciate that medical care should be approached holistically.
But even though a whole-person approach to care makes perfect sense, it’s not always easy to achieve, in part because of the way our medical system works, and in part because of the way most benefit plans are designed. Through clinical integration, which connects a member’s health data, evidence-based medicine and a health plan’s clinical expertise across product lines, a health insurer can bridge together pertinent details about member health, and act to see that those needs are addressed.
By integrating health benefits data, do employers benefit from healthier employees?
We have found that there is evidence that supports a direct correlation between health and productivity outcomes. For example, in an analysis of 50,000 member with fully-integrated medical, pharmacy and disease-management benefits, integrated plan members experienced:
- 35 percent fewer ER visits for asthma, diabetes and heart failure
- 34 percent fewer hospital administrations for asthma, diabetes and heart failure
- 15 percent lower medical costs for asthma, diabetes and heart failure
- 25 percent more people were identified as possibly having a disease 33 days earlier than with stand-alone products
What do employers need to know in order to maximize the value of integration?
Employers should ask their health carrier about whether they have ready and timely access to data, and how this data is being integrated with their programs and services. They should also ask about how information flows within the organization and how people work together throughout the organization to deliver services.
At the same time, employers should educate and encourage employees to participate in the disease prevention programs and maximize the services that are available from their health plan.
THOMAS J. SCURFIELD is vice president of sales and service for the Aetna’s north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or ScurfieldT@aetna.com.