Detroit (1202)

ICD-10, an international disease coding system, is mandated for adoption in the U.S. by Oct. 1, 2014, and will require health care organizations to switch from the soon-to-be outdated ICD-9.

Srividya Thyagarajan, head of Healthcare Center of Excellence for HTC Global Services, says the change will impact providers of health care services, insurance companies, billers that deal with health care claims, government agencies that report statistics on morbidity, disease outbreaks, and researchers who are looking to prevent diseases. The changes will allow for capture in greater detail about the disease diagnosed and the procedures performed. This additional detail will provide better tracking of outcomes of care, severity of disease and conditions and management of risk and health status.But first, organizations need to train their personnel to understand and interpret the additional detail.

“At the end of the day, all of this is to improve health care quality and lower costs,” Thyagarajan says. Smart Business spoke with Thyagarajan about what organizations in the health care field need to be doing ahead of the deadline.

What is ICD-10 and what changes will it bring?

ICD-10 is part of the International Classification of Diseases coding system, defined by the World Health Organization to normalize the standards by which diseases are coded throughout the world. This helps us better understand and manage morbidity, mortality and disease outbreaks around the globe. ICD-10 is the 10th revision of the code set.

The revision will offer more specific details that can help analyze and prevent diseases. As an example, in ICD-9, the current coding standard, you would classify any type of injury to the arm as a fracture of the arm. In the new code set, you would provide more detail, such as where on the arm the fracture is, which arm is it on, whether it is an open or closed fracture and whether this is the initial encounter or subsequent encounter.   Such additional detail will help in understanding the severity of the condition and the type of care provided. This will help better manage care, cost and outcomes.

What areas of payers’ business cycles will this impact?

Almost all areas of the Payer’s business cycle will be impacted, including strategic processes, operational processes and support processes. A big part of a payer’s operation is receiving and processing claims, all of which carry the disease/ diagnosis codes, as well as a description of the procedures used to remediate the disease. This part will be heavily impacted. It will also impact a Payer’s strategic processes like utilization management, network management, disease management  because ICD-10 has a lot more data that can help Payers make decisions on paying for performance and incentivizing positive and preventive health services.

ICD-10, through its more detailed descriptions, can help in Payer support processes such as Fraud detection. It allows more detailed reporting to the government agencies that collect data and statistics on areas such as immunizations, disease outbreaks etc.

However, while providing additional details could help in understanding the cause and location of the disease, it could also lead to a decrease in reimbursement. As in the previous example, if, in ICD-9, only ‘fracture of the arm’ could be listed to classify a number of injury diagnoses regarding the limb, in ICD-10, the greater detail would require you to specify if it was the first encounter or subsequent encounter in the Claim. The Claim may be reimbursed at different levels for the first encounter and subsequent encounters.

To help ease into the transition, many payers are pledging financial neutrality for the first two years that the new code is implemented. This will mean a continuation of the reimbursement levels paid through ICD-9 until the Provider contract is up for renewal.

Can the required changes to an organization’s information technology systems be handled internally?

If an organization has a large IT department, it could handle the changes internally, but because IT is not part of their core business, they should look at IT vendors and suppliers that have expertise in large application system migrations. Many in the industry are thinking of this simply as an IT problem, but IT is the least of the worries. The larger part of it is the business policy and process changes to accommodate and deal with the greater specificity.

Is there a penalty for not complying with ICD-10?

No, there have been no penalties announced by the Center for Medicare and Medicaid Studies, but that doesn’t mean there won’t be an announcement later. Moreover, whatever has been negotiated in existing Payer-Provider contracts will have to be respected. Not being in compliance could result in delayed reimbursements for Providers and administrative overheads for Payers.

How much time should organizations dedicate to preparing for these changes?

If you really want to position your organization from a strategic standpoint, invest in ICD-10, make it part of your future and embrace it now. Decide how you’re going to code and determine how it will affect your bottom line. While organizations should have started preparing in 2010, there is still time if you start now. The fact that the deadline has been moved from 2013 to 2014 should not make organizations use it as an excuse to procrastinate.

Many have been approaching the change as if it’s a small problem that will go away after October 2014 as long as they accept the codes. However, after ICD-10 is implemented, crutches such as mapping services -- which link claim language from one version of the code to another -- will have to be thrown away for a more permanent adoption of the new standards. You have to make policy, process and system changes to ensure you leverage the additional detail to your advantage.

ICD10 can improve quality of care and lower cost, but organizations need to accept the change and use the additional details intelligently to derive these benefits.

Srividya Thyagarajan is head of Healthcare Center of Excellence for HTC Global Services. Reach her at

Insights Health Care is brought to you by HTC Global Services

Tuesday, 08 May 2012 13:09

Why SBA Financing?

Written by

Learn how SBA Financing can help your business grow & succeed

Thursday, May 31, 2012

10:00 a.m. to 11:00 a.m. EST (US & Canada)

Cost: FREE

Registration is required: Click Here to Register

If link does not work, type the following address into your URL:

Brief description of the topic:

In trying to grow their businesses, owners often find themselves seeking credit to finance those expansions.

Join Kreischer Miller, Fox Rothschild LLP and PNC Bank for this free webinar that will be hosted by PNC Bank and Smart Business to learn how U.S. Small Business Administration (SBA) loan programs may help.

The SBA offers a variety of loan programs that provide basic to complex financing solutions that business owners might not be able to attain conventionally. Hear from our well-versed panel — a CPA, an attorney and a senior SBA business development officer  — who will go through case studies that show the unique ways SBA loans can be structured to help businesses successfully grow and expand.

In this session you will learn:

  • How the SBA transformed since the Small Business Jobs Act was passed in 2010
  • Benefits of SBA financing vs. conventional financing
  • Overview of the SBA 7(a), 504 and Express Loan Programs
  • Case studies showing creative ways SBA loans can be structured

Panelists include:

Steven E. Staugaitis, a CPA and leader of Kreischer Miller’s Entrepreneurial Services specialty services group. Steve focuses on serving privately held companies with their accounting, tax and business advisory needs.

Thomas J. Kent, Jr., is a partner and Attorney for Fox Rothschild and co-chairs the firm’s Franchising, Licensing & Distribution Practice. He focuses on franchise law as well as mergers and acquisitions.

Lisa Kennedy, Vice President, Senior Business Development Officer at PNC Bank is one of the top SBA lenders in the nation. With over 22 years of SBA financing experience, she has helped fund over $150 million in SBA loans.

The Webinar and/or materials were prepared for general  information purposes only and are not intended as legal, tax, accounting or  financial advice,  or recommendations to buy or sell securities or currencies or to engage in any specific transactions, and do not purport to be comprehensive.  Under no circumstances should any information contained in the seminar, and/or materials be used or considered as an offer or a solicitation of an offer to participate in any particular transaction or strategy.  Any reliance upon any such information is solely and exclusively at your own risk. Please consult your own counsel, accountant or other advisor regarding your specific situation.  Any views expressed in the seminar and/or materials are subject to change without notice due to market conditions and other factors.

PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services and bank deposit products and investment and wealth management and fiduciary services are provided by PNC Bank, National Association, Member FDIC.

©2012 The PNC Financial Services Group, Inc.  All rights reserved.

Executives are some of the busiest people I know. They are often some of the unhealthiest, as well.

The trend in today’s workplace is towards doing more and more with less and less. This adds strain to the already overworked executive. That strain affects the health of the executive and hinders his or her ability to do their job effectively.

This trend cannot continue. It is destroying the lives of too many top-notch professionals.

Here are 27 tips for staying healthy as a busy executive:

1. Remember to smell the flowers. Take time out to enjoy the little things in life. Being just as impressed by small events as large ones helps to cultivate wisdom and clarity.

2. Stop living a “hit-and-miss life.” Living aimlessly is like shooting multiple arrows that miss their targets. This is a waste of time and not a trait of an effective leader.

3. Anxiety is anticipation run riot. Anticipating the worst keeps us from enjoying the present. Realize that anxiety does not facilitate self-control.

4. Remember to take breaks. Taking breaks during work helps you accomplish more during the time that you are working.

5. Avoid procrastination. Remove temptations around you such as an instant messenger program or magazines, which might tempt you from being efficient at work.

6. Keep things simple. Eliminate the things that cause clutter in your life, such as unnecessary magazine subscriptions, paper and too many unused gadgets.

7. Take care of yourself. Executives who look haggard or tired tend to have more responsibilities heaped on them, because your physical condition and dress sends the message that you permit that.

8. Commit yourself to exercise at least three times a week. Keeping yourself in shape will help you perform efficiently in all areas of your life.

9. Always eat breakfast. Low blood sugar as a result of not eating properly can cause unproductive afternoons.

10. Take your vitamins. If you eat constantly on the run to save time, take vitamins to avoid potential slumps in energy.

11. Bag your lunch. Not only is this cheaper, but it is more nutritious because you have control over what you eat. This can spare you from eating empty calories that exhaust you.

12. Sit down with your family for dinner. This is the one thing that you can do each day to bond with family members. It also saves money and allows you to control your diet.

13. Make dates with your mate. Planning romantic outings keeps your relationship erotic and alive.

14. Get professional help. If you can’t cope due to bad time management skills or emotional problems, get the help that you need.

15. Ask for help if you need it. Pride prevents most executives from asking for assistance from higher ups or colleagues. Being trained wastes less time than trying to figure out something yourself.

16. Make sure you have quiet time. Set personal time aside for yourself each week doing something that you enjoy doing alone. This gives you clarity and is a form of meditation.

17. Get enough sleep. People who are sleep deprived make more time consuming mistakes and are too irritable to lead a quality life style.

18. Never get too hungry. People who are hungry are irritable and make mistakes so that things need to be done over again.

19. Avoid people who suck your time. Needy or emotionally disturbed individuals can seriously throw your plans for the day astray. Avoid them the best you can.

20. Deal with your anger. Angry individuals are hasty, reckless and make careless errors that cause time consuming mistakes.

21. If you are tired, rest. It is better to rest and do a task twice as fast afterwards, rather than do it slowly because you are exhausted.

22. Take life one day at a time. Live in the present, not in the future, and you will accomplish more.

23. Give back to the community. Engage in one meaningful activity where money is “not the goal”. This empowers you spiritually and prevents you from getting too stuck in your own problems.

24. Make yourself inaccessible at certain times. Let others know when you are working and cannot be disturbed.

25. Reward yourself for a job well done. Whenever you complete a big task, make sure to keep motivated by giving yourself a reward.

26. Seek out the good in every situation. Disappointments and delays are a part of life. Learn how to make it up to your family if you are late and can’t be there for them.

27. Realize that you always have choices. Make choices about how you spend your time, and do not be at the mercy of obligations that you cannot fulfill.

As a busy executive, staying healthy has to be at the top of your priority list. It is essential to your job as a leader. Use these tips to guide you into the healthy lifestyle you deserve.

DeLores Pressleymotivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.

She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email or visit her website at

In a growing business, the myriad daily tasks of getting whatever a company produces “out the door” can be all-consuming. Lots of energy is typically focused on cash flow management, finding and training new employees, meetings, sourcing supplies, deadlines, etc. In the hustle and bustle, your staff can forget the most important factor of any business: the customers. However, without what our firm refers to as “Level 5 Customer Service,” growth can stall or collapse completely.

In studies, 70 percent of why most clients leave is due to poor customer service. As managers, we need to constantly be reassessing why customers prefer our products or services over the competitions’, whether we are exceeding customers’ expectations, and how we show gratitude to our customers.

Ignoring your customers can be like sitting on a landmine. For instance, prior to social networking online, the typical dissatisfied customer would verbally tell eight to 10 people about a problem with a vendor or service provider. In the post-Facebook-YouTube-Twitter-Interest world, that dissatisfaction is posted online in ways that can travel globally within hours. A single service disappointment can turn into the bomb that crashes sales.

However, Level 5 Customer Service can halt that exponential explosion in most cases. That’s because studies show seven of 10 complaining customers will do business with you again if you solve the problem in their favor.

Service expectations vary by culture. However in Western-educated societies, there are five key customer service practices that should be taught and re-taught regularly in any workplace:

  1. Greet the customer verbally and with a smile;
  2. Listen to understand the customer’s need;
  3. Explain features and benefits of products or services so customers have sufficient information to make decisions;
  4. Suggest additional items that may address their explicit needs, as well as possible ancillary needs they may not be aware of or may not have considered; and
  5. Thank the customer. Thank them even when no sale occurs. Thanks – like praise – go a long way toward generating goodwill.

Last, when presented with a customer’s concern or complaint, listen attentively, do not interrupt, be polite, apologize for the inconvenience and any error, and make a decision that resolves the issue in way that leaves the customer as warm and fuzzy as possible. When you provide a customer with more than he or she expects, you create a Level 5 experience. That experience reinforces customer loyalty.

Patricia Adams is the CEO of Zeitgeist Expressions and the author of “ABCs of Change: Three Building Blocks to Happy Relationships.” In 2011, she was named one of Ernst & Young LLP’s 2011 Entrepreneurial Winning Women, one of Enterprising W omen magazine’s 2011 Enterprising Women of the Year Award and the SBA’s 2011 Small Business Person of the Year for Region VI. Her company Zeitgeist Wellness Group offers a full-service Employee Assistance Program to businesses in the San Antonio region. For more information, visit

Tuesday, 01 May 2012 11:55

5 ways to be more persuasive

Written by

Noah Goldstein, Steve Martin and Robert Cialdini are the authors of The New York Times bestselling “Yes! 50 Scientifically Proven Ways to Be Persuasive.” Last summer, I met Martin on a trip to London, where he runs Influence at Work, and he shared these top five ways to increase your influence and persuasion.

1. Be the first to give. Studies show that we are persuaded more by people who have done something for us first. We give bigger tips to servers who give us a mint with the check. We’re more likely to help work colleagues with their projects if they have helped us with ours. Requests that are personalized are most persuasive of all. When researchers randomly sent out surveys, they were able to double responses if they personalized the request by placing a handwritten note on the survey.

2. Don’t offer too many choices. Whether it’s the number of products you offer or the number of retirement plans you allow your employees to choose from, too many choices often frustrate people. Companies offering a small number of retirement plans have far greater enrollment than companies that offer a large number of plans.

3. Argue against self-interest. Trust is a critical component to persuasion. The surest way to be perceived as honest is to admit to a small weakness in your argument, product or business immediately prior to communicating the strongest positive argument about your product or service.

4. Losses are more persuasive than gains. Instead of telling your audience what they stand to gain from taking your advice or buying your product, research shows that people are often more persuaded if you tell them what they stand to lose out on if they don’t take your advice or buy your product.

In 2003, the Oldsmobile far exceeded its sales projections despite the company reducing its advertising and product development budgets. Why? General Motors decided to discontinue the car because of slow sales. As a result, the car became something people would be losing out on, even though before the news, few people wanted one.

5. Make people feel as if they’ve already made progress toward a goal. A car wash offering a loyalty card nearly doubled customer retention by changing its offer from “Buy eight washes, get one free” to “Buy 10 washes, get one free — and we’ll start you off crediting you for two washes.”

Some people have the ability to capture an audience’s attention, convince the undecided and convert noncustomers into customers. Some do not, but there’s good news from social science. Persuasion is not just a skill gifted to a chosen few. It’s a science, and researchers who study it have formulated a series of rules for moving people in your direction.

Guy Kawasaki is the co-founder of, an “online magazine rack” of popular topics on the Web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of 10 books including “Enchantment,” “Reality Check” and “The Art of the Start.” He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through or at

Unfortunately, when everything hits the fan, it won’t be at a time and place of your choosing, and most likely, it won’t be just one issue.

When you least expect it and when everything seems to be going OK for the first time in awhile, a severe lightning strike may occur, seemingly out of nowhere, even when the sun is shining brightly. Worse yet is that first bolt may be followed by multiple booms, bangs and claps in rapid succession.

It may start with a phone call informing you that the unspeakable has occurred. One of your top people encountered a personal problem that will shed a bad light on your company, or you get a FedEx letter from one of your biggest customers stating: “It’s been fun while it lasted; have a nice life. Sayonara.” As a wave of nausea sweeps over you, your chief accounting lieutenant barges into your office, holding your auditors’ notice and stammering, “earnings restatement.”

Trouble comes in many sizes and shapes, and as the boss, you must always be prepared to provide direction. While any one problem could be monumental, two or more are almost debilitating. What can you do; what must you do?

First, figuratively and literally take three deep breaths and count to 10. Pick up a legal pad and write out the key issues, crystallizing options and setting priorities of who on your team does what. Also write out some ideas of how to get started. Step two, clear your calendar and focus.

The trick in attacking multiple major problems simultaneously is to compartmentalize each of them, quickly determining the downside risks and coming up with temporary fixes to stop any bleeding, followed by long-term solutions. Let’s say another crisis hits when you receive a notice that your largest plant has become the target of a unionization drive. You quickly recognize that if this effort is successful, then your other facilities run the risk of a similar fate. The economic consequences could be enormous, and as equally disturbing is the fact that fighting this will be incredibly time-consuming, costly and will surely divert the attention of management away from sales and earnings goals.

Rather than bemoan your current state of affairs, gather your team together, contact your attorneys and find out what precipitated this situation. Was there an underlying morale problem in the plant, or did the union simply choose your company because it was an attractive target? Don’t always expect the worse, but plan for it. Maybe you’ll get lucky and find out that it was a simple misstep by a lower-level supervisor that antagonized a very small group of otherwise well-meaning employees, which can be more easily fixed.

If the earnings restatement is the biggest threat, then most likely you will take charge of the accounting issues and have your vice president of human resources tackle the union problem. Time can be your biggest enemy or your greatest ally. If you procrastinate and don’t swing into action, the situations will simply proliferate. If, however, you jump in with both feet immediately, you may be able to stem the tide in your favor much more quickly. One thing is for sure: The good fairy won’t solve these problems and your only choice is to take charge.

Of course, you’ll have more than a few restless nights; your calendar will become an instant nightmare as you deal with these problems du jour. Nevertheless, at least, you’ll have started the compartmentalizing issue process.

A few words of caution: Certainly delegate aspects of the problems to your best and brightest but also make sure you’re constantly kept in the loop. An effective leader is much akin to being a juggler and having the skills to keep all of the balls in the air simultaneously.

One consolation is that if being the boss was so easy, then everyone would do it. In fact, being a good leader takes a keen mind, often an incredible sense of urgency and a strong stomach.

Troubles come with the territory. However, there is one major consolation: When you’re at the top, the height can be a bit frightening at times, but the view is certainly spectacular.

Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at

A unique new book with an unorthodox, yet proven approach to achieving extraordinary success.

What does it take to grow rapidly and effectively from mind to market?

This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.

Beating the competition is never easy. That’s why it requires a benevolent dictator.

Published by John Wiley & Sons. AVAILABLE NOW! Order online now at:

Also available wherever books and eBooks are sold, and from Smart Business Magazine and Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.

Tuesday, 01 May 2012 11:37

The inner circle

Written by

If you had the choice of growing at a 5.8 percent compound annual growth rate in a five-year period or declining 9.2 percent, which would you choose?

While the answer is obvious, the real question is, what does it take to end up on the positive side of the equation instead of the negative? Simple: some trusted friends.

The numbers above illustrate the difference in compound annual growth rates for members of Vistage, an organization for CEOs, and the average U.S. company. On average, just by belonging to Vistage, you are going to see much better growth. Why? Because you get insights about your business from CEOs who aren’t lost in the day-to-day issues.

Vistage, and other organizations like it (Young Presidents’ Organization, Entrpreneurs’ Organization — there are others as well) help you run your business better by putting you in contact with other CEOs.

Let’s face it; being in charge can be a lonely experience. At the end of the day, a lot of responsibility falls onto your lap, and if you fail, a lot of lives are affected. Some of us are blessed to have an inner circle of people we trust to bounce ideas off of and know that if an idea is bad, someone will speak up. But there are others out there that for whatever reason don’t have that trusted inner circle.

To be successful, you need to be willing to open up about problems before it’s too late to do anything about it. Telling someone you need help isn’t a sign of weakness. In fact, it’s the opposite. The increased success rates of companies that participate in peer groups bear that out.

You don’t have to have a giant network of other CEOs to be successful. Having two people that you trust and value their opinions is probably all you need. Two trusted friends can help you navigate through tough decisions and act as a sounding board for your ideas.

Working with your peers to review your ideas and goals is a great way to eliminate stress. They can provide the confirmation and validation you are looking for as you move your organization forward and can point out potential pitfalls you may have overlooked.

Sometimes, just having someone else say, “Yes, I think that will work,” can go a long way toward putting you at ease.

So what do you do if you don’t have a couple of people whom you trust? That’s where the professional organizations like Vistage come in. They can provide the same sort of feedback in a group setting and also offer a great way to network with other CEOs. As you build your network, you will most likely find a few people you are comfortable with and can build a closer relationship with them.

The most important aspect is to not try to go it alone. Whether you have a trusted inner circle of a few people or prefer a larger group setting, it’s important to have some sort of sounding board for your ideas. It’s also important to have people who understand what you are going through. Other CEOs can relate to the challenges of leadership and talk about what keeps them up at night. What you’re likely to find is that many of the same issues that bother you are also bothering others. Work together to find solutions or at least talk it through. You might discover a new approach to an old problem.

After all, two heads are better than one.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or

There has never been a more challenging time for employers dealing with the dual problem of rising health care costs and declining employee health. As such, employers need to be thinking very differently about how they approach health care, says Jim Winkler, a senior vice president and large employer segment leader at Aon Hewitt.

“Employers need to actively, directly and candidly talk with employees about the need to change behaviors for better health,” says Winkler. “You need to build in the right combination of rewards so that employees understand that if they want to spend a large amount of ‘house money’ on health care, they have to follow  ‘house rules’.”

Smart Business spoke with Winkler about the challenges and solutions surrounding health and benefits, and how to address them.

How can employers begin to have a conversation with employees about health care?

You first have to understand how consumers think about health care. Our Consumer Mindset 2011 research tells us that they understand that the system is broken, they understand the political dynamics and they know what they need to do in terms of health. Everyone knows they shouldn’t smoke, they should eat better and they should exercise. However, the messages that employees react best to are those that make navigating health easier and more personal.

Don’t talk to them about the company’s costs. Instead, talk about how a lack of health may be getting in the way of teaching a grandson baseball. You need to make it meaningful to employees so they understand the results of good health.

You also need to deploy more than just one tactic. You can’t just have a great communications strategy, and you can’t just have a plan design or incentive strategy. With consumer-driven health plans, consumers understand that you want them to be better consumers, but if all you give them is that design mechanism, you’re just going to frustrate them because they don’t understand the cost of specific health services. You have to give them the tools and information to navigate a broken system and help them see how their exposure to potentially higher out-of-pocket costs is going to enable them to make healthier decisions. You have to connect those pieces.

For example, if you have a consumer-driven plan, don’t just put employer money in the savings account. Instead, say, ‘If you complete a health risk assessment and you know your biometrics, then we’ll put money into your account.’ Make it very clear that you want employees to be successful under the benefits plan and to have access to more of the employer’s money, but you need them to do something in exchange.

People don’t always like that, but they can see very clearly how the actions they take can lead to good things and how inaction can result in a less satisfactory benefit plan.

How can an employer target better health for employees?

There are two starting points. First, as an employer, you want to have your arms around your data. Maybe you’ve done a health risk questionnaire and you have medical claims data in such a way that you can stratify it to say that, of the eight greatest risk factors (such as smoking, lack of health screenings, poor diet, etc.) and the 15 most prevalent chronic conditions, these are the ones that are most prevalent in your population. From that, you can target those two or three greatest risk factors that will lead to the best improvement in health status and a lessening of the frequency and severity of chronic disease.

If you don’t have that data because you’re a smaller company or you haven’t performed a health improvement strategy yet and have no real insight into company-specific risks, the three areas to target are poor diet, physical inactivity and lack of health screenings.

Your real opportunity for impact is to get after weight, as more than two-thirds of the U.S. population is either overweight or obese, and physical inactivity. With health screenings, you begin to build a baseline, and the more screenings you do, the more you understand risk in your population. And screenings are an early identifier of risk and disease, so you start to put a dent in high-cost conditions. If people wait until they’re diagnosed, then they’re likely to be on medication for life and have a higher cost outcome.

How do you address concerns about employers being involved in employees’ health care?

As an employer, you have to start with the basic premise that your current cost environment, the way you’re running your benefits program today, is not sustainable. If you’re going to change the status quo, can you continue to do the things you’ve been doing, like plan design changes that shift costs to employees and changing your medical vendor? Is it reasonable to assume the same tactics will produce a different outcome?

No, so you have to take a different approach. There are two paths you can take. One is the path of house money, house rules. Be candid with employees and share that the reason you’re talking to them about their health, and their behavior,  is that you’re spending a lot of money on health care, so the organization has a vested interest in managing health care costs more effectively.

Second, in a challenging global economy, you need a healthy, present, high-performing work force. What percentage of your work force is out because of health issues? What if you could cut that number in half? You add nothing to your payroll costs, you spend less on medical coverage, and you get people back to work who are more productive to the business.

It’s in your best interest to drive business results to spend less on health care and have a healthy work force, and the way you’re going to get that is by engaging people around their health.

Jim Winkler is senior vice president at Aon Hewitt, the global human resource solutions business of Aon plc. Reach him at Linda Van Howe is senior vice president at Aon Hewitt, Detroit practice leader - Health and Benefits. Reach her at (248) 936-5238 or

Insights Risk Management is brought to you by Aon Risk Solutions

U.S. employers are continuing to struggle with rising health care costs, and in an effort to limit spending, many are shifting more costs to employees. Others are emphasizing wellness initiatives or controlling costs through health savings accounts and reimbursement arrangements.

How can your company approach implementing an optimal health care plan for its employees? Start by asking your carrier or consultant what options are available.  This will help guide you through the process so you aren’t blindsided by unpredictable costs in the future, says Randy Narowitz, CEO of Total Health Care.

“The biggest area of concern we are hearing from the employers today is they can’t manage or predict the cost of the health care benefits,” says Narowitz. “Having predictable, manageable cost increases is a real value to employers.”

Smart Business spoke with Narowitz about the kind of questions employers should ask when choosing a plan, what type of relationship you should expect with your carrier and how to realize cost savings.

What factors should companies consider when analyzing their employee benefits?

Employers are evaluating their health care plans annually. Typically, you start with the plan design that you offer today. Then the decision-maker for the employer decides if the company can maintain, improve or cut back on the benefits.

It’s important to evaluate alternatives in terms of cost and the product offerings. There are a variety of ways to differentiate carriers: size and strength of the provider network, plan design flexibility and premiums.

What questions should an employer ask a carrier when choosing a plan?

If you are using the benefits as a tool to attract or retain employees, then you want to evaluate the quality of the benefits and compare them to what else is out there in the marketplace. Features such as co-pays and deductibles are factors in the decision-making process and can be tweaked to be competitive. Also, access to care  and a strong provider network are important components to consider.

If you are cost sensitive, then you want to ask about how to optimize the benefits at the lowest possible premiums. You want to analyze the tradeoff between the premium costs and the benefits.

What can a company expect from its relationship with its carrier?

The carrier must be well versed on all of the alternatives available, understand your needs and find the best match for you.

Most employers use the services of a consultant or broker to assist them in the decision-making process. A consultant’s role can vary significantly.

At one extreme, the consultant is your exclusive liaison to the carrier. The consultant represents several health care plan options, helping the employer work its way through differentiating which products are best for its business. The consultants may also take the lead on administrative tasks including open enrollment, employee education, compliance and communications with the carrier,

At the other extreme, a consultant’s role is limited to the selection process.You can expect your representative to be able to differentiate the plans and the products depending on how you prioritize your decision-making criteria.

As an employer, you should expect your representative to be able to navigate through the decision-making process on your behalf.

Also, health care reform is upon us and is impacting employers significantly. With recent health care initiatives, it’s very important for the employer to be updated. Your plan representative, carrier and consultant need to be able to educate you about the latest changes associated with health care reform.

How can companies save money when they are looking for a carrier?

The primary decision about cost involves how much of the financial burden you want to shift to the employees. Shifting the financial burden to employees by raising co-pays and deductibles, and having them pay a portion of the premium are ways to reduce and control your health care costs.

Savings associated with prescription drug costs can be achieved by raising co-pays or by restricting access to branded drugs when generics are available. Employees are very sensitive about changing medications, but there is a real opportunity to save money when you make these adjustments. Contracting with a restricted network, such an HMO, and introducing  wellness initiatives can also reduce costs.

What information should employers provide to employees?

If you change a plan design in any way, it is important that the changes be communicated clearly. If the product has complexity in terms of network participation, this needs to be simplified and communicated clearly, as well.

Employees are very resistant to a change in their health care benefits. If you are planning to reduce benefits or shift costs to the employees make a significant commitment up front to educate your employees.

Simplify the message and commit the time and resources to help them understand the changes before the new contract year begins.

Randy Narowitz is Chief Executive Officer of Total Health Care USA, a leading Michigan managed care provider. Narowitz is an influential figure in the health care industry. He has worked  to bring the issues of health care quality and delivery to the forefront of both the local and national health care agendas. Total Health Care USA is NCQA Accredited and serves members in Wayne, Oakland, Macomb and Genesee counties.

Insights Health Care is brought to you by Total Health Care

Letting employees go is never easy. But it can become even more difficult if you fail to do it right.

When an employee feels that he or she was unfairly terminated, choices for the employee are often few and emotions can fuel the fire, resulting in a lawsuit against the employer. To protect yourself, you must ensure that your records and the way they are kept are extremely tight. Any holes in the process could present an opportunity for an employee to sue, says Thomas Paxton, shareholder at Garan Lucow Miller PC.

“State and federal legislation over the years has actually increased the ways that employees can sue their employers,” says Paxton.

Whistleblower acts, Family and Medical Leave Act, the Americans with Disabilities Act and Title VII all present opportunities for disgruntled employees to sue. The result can be costly lawsuits that can severely impact a business’s bottom line and reputation.

“An employee could get a verdict that includes years of lost wages that can reach into the millions,” says Paxton. “And even if you win, it is very costly to defend these suits.”

Smart Business spoke with Paxton about how maintaining solid records can protect you in the case of an employee lawsuit.

What key documents should a company maintain to protect itself against employee lawsuits?

The two most important documents a company can have are a solid job application and updated, accurate job descriptions. The job application should not ask for irrelevant information, which requests a candidate to reveal discriminatory data. Never ask for an applicant’s photo. Do not request a birth date. Do not request information for factors that identify someone’s membership in a protected class, including age, gender or race.

The application should also include a statement that the applicant signs to agree to comply with the company’s rules and regulations. This component can go a long way at trial if you can take out an employee-plaintiff’s job application and show a signed statement that he or she agreed to follow the rules.

Second, maintaining updated, accurate job descriptions is critical for defining employees’ roles when a worker claims he or she cannot perform a certain duty. A good job description gives employers and employees a foundation to objectively determine the employee’s actual performance. Further documentation of incidents in which job duties were not performed can help support the employer’s case that any decision was made because of legitimate, nondiscriminatory reasons.

These two documents, along with wage and hour information, rate or basis of pay and terms of compensation should be kept in a personnel file separate from any employee medical records.

How should employees’ health records be maintained?

The U.S. Equal Employment Opportunity Commission mandates that employers file employees’ medical records separately from personnel records to protect against making employment decisions based on protected criteria, as medical conditions are irrelevant to job requirements.

Some occupations require keeping certain medical records on file. Medical records may also be on file if an employee applies for a disability benefit, such as FMLA. Separating personnel and medical files will help protect an employer in case an employee claims that he or she was wrongfully terminated or was demoted because of the employer’s perception of a disability or an actual disability that is unrelated to someone’s employment or that person’s ability to do the job.  If you keep medical and personnel records in the same file, it would be difficult to make a defense in a lawsuit that you did not know about the employee’s medical condition when you made the business decision.

What processes can an employer implement to minimize its liability in the event of a lawsuit?

Consistently review and document the performance you expect from your employees. Hold employees accountable for performing duties outlined in their job descriptions. File this information. Most important, train supervisors and other managers in the company to immediately and objectively document any and all performance issues.

It goes back to the old saying, ‘Get it on paper.’ Adding to that, get it on paper, on time. Always document performance issues as soon as they occur. This can be as simple as placing a note in the employee’s file. Document what happened and when, and the results of the situation. If you wait to document a reason for terminating an employee based on performance until after a lawsuit is filed and after you talk to your attorney, the documentation won’t hold any clout in court.

Further, when job descriptions or duties change, always update those documents so that they remain current to the requirements of the position.

Where can a company get started to ensure proper documentation?

The first step is to conduct a review of your records and record-keeping processes. It’s a good idea to enlist a professional with experience in employment law who can identify any gaps in your record-keeping process. It’s a far better investment to protect your business by instituting a record-keeping process than it is to defend your company in a costly employee lawsuit.

Your lawyer should be readily willing and capable of reviewing your processes and records so as to minimize the possibility of litigation and to maximize the successful defense of a filed lawsuit. Also know that maintaining well-documented processes is a cultural commitment. It requires the cooperation of all leaders in your organization, from the CEO to the managers. Once you institute a solid system, you need to train everyone on your policies and procedures so that there are no surprises down the road.

Thomas Paxton is a shareholder at Garan Lucow Miller PC in Detroit, Mich. Reach him at (313) 446-5518 or

Insights Legal Affairs is brought to you by Garan Lucow Miller PC