Jason Stahl

Sunday, 26 August 2007 20:00

Consumer-engaged health plans

Offering employees a variety of options in a variety of different areas is crucial to employee retention today. The more flexibility they have with time off, retirement plans and other benefits, the more likely they’ll be to stick around.

An increasingly popular health care option is the consumer-engaged health plan. The reason, according to Leon Lamoreaux, vice president of business development for Priority Health, is that it gives employees options and encourages them to be active, informed participants in the health care they receive.

Smart Business spoke with Lamoreaux about what defines consumer-engaged health plans, how they’re administered and what options they offer employees.

What is a consumer-engaged health plan?

A consumer-engaged health (CEH) plan refers to a variety of products, programs and services designed to promote consumer accountability and responsibility for health care purchasing decisions. The ultimate goal is to eliminate waste throughout the health care system and position the member as an important participant in all of the health care financing and treatment decisions. Specifically, CEHs are thought of as high-deductible plans coupled with a health care reimbursement account.

There are three areas of engagement: the mind, the body, and the money or financial resources. The goal of engaging the mind is to give members access to quality and cost information, provide options and encourage them to be active, informed participants in the health care they receive. The goal of engaging the body is to help members understand the correlation between lifestyle choices and their overall quality of life, and the cost associated with not engaging in these healthy lifestyle choices. The goal of engaging the financial resources is to help members take part in the save or spend decisions of their own resources. There are many personal funding accounts in the classic definition of CEHs: the Health Savings Account (HSA), the Health Reimbursement Arrangement (HRA) and the Flexible Spending Account (FSA). The basic theory is that we spend our own money more wisely than we spend someone else’s.

What are the advantages to a company offering a CEH plan rather than a standard health plan? Are there any disadvantages?

Advocates for CEHs typically reference the short-term and long-term savings usually associated with them as their greatest advantage. When members become exposed to the actual costs of health care, and they have a vested interest in the financial outcome, there’s typically less health care utilization than when they’re sheltered from the true cost.

CEHs shouldn’t be entered into lightly or simply to save money in the short run. It takes a real commitment from the employer and from the member to be an active treatment team member and active, price-conscious consumer. One of the often stated disadvantages of CEHs is the member’s increased involvement. Members are expected to become involved in researching the highest-quality, lowest-cost treatment options. It means they must investigate alternatives and perhaps even enter into awkward discussions with their provider about alternative treatment options and steerage to generic drugs or particular participating providers.

The insurance industry is complex, and it takes effort to become an informed health care consumer. Tools are being improved each year to give members access to quality and cost information. When these tools are available and used properly, everyone benefits from the experience. When they’re not available or are misunderstood, it can lead to a frustrating experience.

What are some different kinds of CEHs?

First-dollar coverage HMO plans — typically characterized as co-payment plans — are at one end of the continuum. Even with these, members can be engaged by aligning co-pays so they mirror the expense as the service level acuity increases. For instance, if there’s a difference in co-pay amount between the primary care provider and the specialist, then consumer engagement is occurring at a basic level. One of the primary ways of increasing engagement is to use larger deductibles to involve the consumer in health care purchasing economics.

At the other end of the continuum is the ‘high-deductible health plan’ with an accompanying personal funding account, such as an HSA, HRA or FSA. As the member liability increases, the more the consumer becomes involved. Using deductibles is one of the basic ways to engage the consumer. It can be large or small and still engage the consumer to some degree. Recent generations of CEHs provide payment or coverage differentials based on the member meeting basic health criteria, such as taking a health risk assessment, achieving a healthy body mass index, not using tobacco products, maintaining normal blood pressure or participating in disease management programs.

CEHs are a great way for employers to reduce the overall cost of their health care. Call your agent or your health plan to find out if these plans are right for you.

LEON LAMOREAUX is vice president of business development for Priority Health. Reach him at leon.lamoreaux@priority health.com.

Sunday, 26 August 2007 20:00

Purchasing a business

Business buyers often fail to put enough time and effort into doing proper due diligence. But now, in Georgia, that could cost them.

A new ruling by the Georgia Supreme Court can leave a purchaser responsible for the seller’s delinquent sales taxes. Michael S. Evans, attorney at law with Baker, Donelson, Bearman, Caldwell and Berkowitz PC in Atlanta, says there are things a business can do to avoid this.

Smart Business spoke with Evans about the new law and how a purchaser can avoid “getting stuck holding the bag.”

The Georgia Supreme Court recently made an important ruling regarding the purchase of a business. What was it?

The Georgia Supreme Court ruled on June 4, 2007, in the tax case of JD Design Group Inc. versus Graham, that the purchaser of substantially all of the assets of a business was liable as a successor in interest for delinquent Georgia sales taxes owed by the seller. In that case, the purchaser agreed to buy substantially all of the assets of the seller’s business, including real estate used in the business. The purchaser later assigned the right to buy the real estate to its sole shareholder. Although the seller represented in the purchase agreement that all of its taxes had been paid, and the purchaser’s title search on the real estate didn’t show any liens, the purchaser didn’t require that the seller obtain a tax clearance letter from the Georgia Department of Revenue certifying that the seller had no unpaid taxes.

The purchaser would come to regret that decision several months later when the Department of Revenue sent the buyer an official assessment and demanded payment for almost $25,000 of the seller’s outstanding taxes. They later sent an additional assessment for almost $7,000 more.

Georgia law has long provided that the purchaser of a business must withhold a sufficient amount of the purchase money to cover the business’s unpaid sales taxes until the seller provides either a receipt from the Department of Revenue showing that all taxes (including interest and penalties) have been paid or a certificate from the Department of Revenue showing that no sales tax is due. A purchaser who fails to withhold purchase money until receiving either a receipt or a tax-clearance certificate is liable for the seller’s unpaid sales tax, including interest and penalties, to the extent of the purchase price. Failure to comply with this successor liability statute can also result in a misdemeanor charge.

The purchaser challenged the tax assessment on the grounds that it wasn’t a successor to the seller because it didn’t buy all of its assets (since the purchaser’s shareholder bought the real estate) and was just an innocent purchaser for value, and the Department of Revenue’s failure to record a lien should bar it from imposing liability beyond the original party. The Georgia Supreme Court wasn’t persuaded by any of those arguments, though, holding that the successor liability statute applies to sales of less than all of a business’s assets and that the purchaser could have protected itself by complying with its affirmative duty to get a tax-clearance certificate.

What do buyers of a business need to do to avoid ‘getting stuck holding the bag’?

The JD Design case should remind buyers to require in their purchase agreements that the seller provide a tax-clearance letter as a condition of closing. Buyers should also include tax indemnities in the purchase agreement requiring the seller to indemnify the buyer against any successor tax liability, though that may not help if the seller spends all of the purchase money.

How is the Department of Revenue involved in such a transaction?

Although the Department of Revenue can pursue the buyer directly without trying to collect delinquent taxes from the seller, it will typically get involved when it tries to collect from the seller and learns that the seller has sold its business and doesn’t have enough money to pay the taxes.

Does a company have any legal options to pursue if it doesn’t get a tax-clearance letter?

The buyer is required to withhold a portion of the purchase price sufficient to cover the seller’s outstanding taxes, interest and penalties. If the buyer doesn’t withhold and doesn’t have a tax-clearance letter, then its options are pretty limited.

What other things should individuals be aware of when purchasing a business?

Business buyers often fail to put enough time and effort into doing proper due diligence. They should remember that a thorough investigation prior to buying the business can save them a lot of headaches down the road, and that the seller’s creditors may not be prevented from recovering from the buyer just because the buyer pays fair market value for the seller’s assets. One common method of providing some protection for the buyer is to set aside a portion of the purchase price in an escrow account at closing. The funds can be held in escrow for six to 12 months or more and provide a means to cover indemnification obligations of the seller during the escrow period, so the buyer doesn’t have to worry that the seller will take off with the purchase money and leave the buyer holding the bag. If no claims are made during the escrow period, then the seller will normally get the escrowed funds.

MICHAEL S. EVANS is an attorney at law with Baker, Donelson, Bearman, Caldwell and Berkowitz PC in Atlanta. Reach him at (404) 221-6517 or mevans@bakerdonelson.com.

Saturday, 26 May 2007 20:00

Cost segregation studies

Cost segregation studies can result in significant tax savings for a property owner, says David Hopkins, a Certified Public Accountant at SS&G Financial Services, Inc. in Akron. Since property can be divided into its component parts, cost segregation studies are about taking advantage of IRS rules to classify assets and to then properly compute depreciation for each asset.

Smart Business spoke with Hopkins about the rules of cost segregation studies.

What is a cost segregation study?

A cost segregation study generally reallocates the costs associated with construction projects from real property to tangible personal property. This reallocation often allows for a tax savings because personal property has a shorter lifespan and thus can be depreciated over a shorter time period and is eligible for accelerated depreciation, compared to real property that’s generally depreciated over 39 years. Such a study may be a useful tax-savings tool for the owner of a building or for a tenant who has made leasehold improvements to a property. Since cost segregation studies are complicated and carefully scrutinized by the IRS, it’s very important that they’re performed by experienced professionals who can understand blueprints and construction specifications. There are CPAs that specialize in conducting these studies.

What in a building could be reclassified as personal property?

The list is long and varied. For the purpose of a cost segregation study, things such as landscaping, parking lots or sidewalks, carpeting and wallpaper could all be reclassified as personal property. There are also specific items for different building types, such as lead walls in a dentist’s office or power lines dedicated to machinery and equipment in a factory.

What are the financial benefits?

Cost segregation studies are conducted with the goal of increasing cash flow via tax savings. If you own a $4 million building that’s being depreciated over 39 years, you would have an annual depreciation deduction of about $100,000. So, over seven years, you’d see a depreciation deduction of about $700,000. Implementing a cost segregation study that now yields $1,575,000 worth of depreciation deductions over a seven-year period gives you $875,000 of additional deductions. Assuming a combined effective tax rate of 40 percent, this represents a tax savings of $350,000 over the first seven years.

Who should consider having a cost segregation study performed?

Generally, cost segregations can be performed on property that was acquired or built after 1987. It should be considered by an owner or owners of a building when there has been a change in ownership or if there have been major improvements or an addition made to the property. New construction projects are ideal candidates for cost segregation studies because actual cost data and blueprints tend to be readily available.

What are the steps involved and how long does it take?

A CPA will need to determine the purpose and function of all property. An analysis of all construction and engineering drawings and specifications will be completed, and an on-site inspection of the property will be done. A report will be provided to the owner upon completion that explains the allocation of assets between real and personal property and the class life of the personal property, and it will also include a summary of the tax savings and additional depreciation deductions to be claimed on the tax return. It takes about two to six weeks to complete a study, depending on the complexity of structure.

If I have a cost segregation study completed, will I have to amend my prior tax returns?

No, this is certainly one of the benefits. The IRS allows you to take the cumulative adjustment on your next return. The mechanism would be a change in accounting method filed with the IRS. This change is automatic and requires no user fee. This permits the taxpayer to use cumulative catch-up depreciation in the current year for a building that has been in service for a few years. For instance, in the previous example, if the building had been in service for seven years, the catch-up depreciation for the owner would be equal to $875,000.

Is a cost segregation study advantageous to everyone?

Cost segregations are complex and there are many situations where it’s clearly not advantageous. You have to evaluate your particular situation. For instance, if you’re contemplating selling the building soon, you’d be out professional fees and would-n’t have the chance to reap the tax savings. Also, if you’ve taken a lot of losses with no ability to take additional losses, it isn’t worth pursing a cost segregation study. Many passive investors in real estate will also fail to see a benefit if the cost segregation generates an overall tax loss for the business entity.

DAVID HOPKINS is a Certified Public Accountant at SS&G Financial Services, Inc. Reach him at (330) 668-9696.

Wednesday, 25 April 2007 20:00

Global business education

The business world has truly become a global one today. The emergence of growth economies in other countries has propelled companies into seeking new markets for their products. Entering new markets, these companies have a greater need than ever before for employees trained in global business practices.

“There is a right way and a wrong way to get that training, says Dr. Frank Morgan, director, executive development and leadership, The Dow Chemical Company. “The right courses will teach global business students useful concepts to apply to real situations they face, among other things.

Smart Business spoke with Dr. Morgan about the changing nature of business today and how students can best adapt to it by enrolling in the right program.

What are some reasons business has gotten more global in nature today?

The emergence of growth economies, such as India and China, have moved companies to seek markets for their products, to follow their customers where they’re manufacturing, and to seek well-educated and talented people, such as engineers, scientists and information technology specialists.

Do you feel leadership education courses have kept up with the changing face of business?

University leadership programs have not kept pace with the demands of an ever-changing business world. The reason is because most are mired in an archaic academic system, which is not very responsive to change and insulates itself from the practical world of business. Most university research in business isn’t read by managers and leaders because it’s irrelevant. The research is self-serving and being read by other academics who reciprocate and publish their colleagues’ papers.

A lot of academic research on business is an elucidation of the obvious and a study of the trivial. The reason is that the academic reward system is based on publishing in ‘A’ journals, not helping leaders become effective global business people.

What marks a quality leadership education program?

The program must be relevant and use concepts that are up to date, global and practical. The more application and analysis of real situations such as case studies and the more minimization of obscure theories such as lecture, the more the executive can be engaged and can learn the principles in a way that can be applied.

What sort of tools can someone expect to achieve from having participated in a quality leadership education program?

Their analytical skills can be enhanced, they can develop an appreciation for the global nature of business and they can learn to apply useful concepts to real situations they face. Also, the melding of the various business disciplines into solving important business issues is key. Executives deal with complex issues and have to apply judgment, global perspectives, firmwide tradeoffs and people sensitivity. Most schools teach these disciplines in a vacuum and may have one capstone course that tries to integrate them.

Do you feel classroom learning or online learning is the way to go?

For leadership development at Dow, we feel that both classroom and online learning can be combined to provide the most effective and efficient learning. Online tends to be better for more didactic material and classroom is suited more for interactive, discussion-based material.

The DeVos Dow MBA at Northwood University was designed to combine both methods and take advantage of the strengths of each but still provide the rigor of an accredited degree program that transforms the behavior of our business leaders.

DR. FRANK MORGAN is director of executive development and leadership, The Dow Chemical Company. Dow is connected with Northwood University in Midland, Mich. through the DeVos/Dow/Hantz Partnership MBA Program. Reach Morgan at (919) 545-2285.

Wednesday, 31 January 2007 19:00

Developing leaders

Good leaders are not always easy to find. Some are born with the traits necessary to provide outstanding leadership, while others have the capacity to learn the proper skills.

Healthy companies will learn to develop good leaders. Why? Because leadership development has tremendous impact on organizational performance, says Agustin V. Arbulu, associate professor of the DeVos Graduate School at Northwood University in Midland. Effective leadership, he says, leads to a positive work climate. And that leads to increased profitability.

Smart Business spoke with Arbulu about what companies can do to ensure they are developing good leaders.

Why is leadership development so important?

Leadership development is important because of its impact on organizational performance. After all, organizations are always seeking to improve performance in an increasingly competitive marketplace. Studies have shown that effective leadership correlates to an organization’s climate. For example, it has been said that 50 percent to 70 percent variance in organizational climate can be explained by differences in leadership style. In turn, organizational climate has been found to correlate to performance. So a positive climate can been attributed to increased profitability, sales and achievement.

How does a company promote a culture that constantly creates leaders?

It’s important to differentiate between organizational climate and culture. Culture refers to the values, beliefs, history and traditions that have been embedded in the organization over time. Climate, on the other hand, refers to the pulse that exists in the organization, which is exhibited in the day-to-day environment of the organization. Climate is like taking the temperature of a room.

So what can be done to create a culture that constantly creates leaders? A few things: actively encourage thinking among your personnel; foster an environment that’s based on trust and openness; encourage and tolerate calculated risk taking and don’t penalize for taking a risk; create a setting for positive conflict and healthy tension; actively encourage involvement and participation at all levels; actively encourage development of analytical skills; actively encourage decision-making through critical thinking.

Can anyone be made into a leader, or should a company pre-select those more suited? How does a company know who’s more suited to leadership?

Leaders are both born and developed. Some individuals are born with traits that allow them to be more empathetic, more confident, more resilient and more socially aware. At the same time, individuals can consciously develop certain competencies that move them toward becoming more effective leaders — if they’re prepared to commit the time and practice.

Companies have often simply depended on gut instincts to decide who’s more suited to be a leader. Instead, I believe both the organization and the individual should become more actively involved by making use of assessment tools (360-degree tools as opposed to self-assessment tools) to assist individuals to know more about their strengths and areas requiring further development. How are others viewing them?

Feedback from others is a powerful tool to identify areas of strengths and areas for improvement. Based on the results from these assessment tools, individuals can develop an action plan to build up certain competencies that lead to developing effective leadership styles.

How much time and investment should a company put into leadership development?

To be competitive, organizations should make leadership development a high priority. This means continual assessment of their personnel, initiation of development programs, and continual evaluation on the effectiveness of their leadership development programs.

What are the tangible results a company can expect from a well-instituted leadership development program?

As indicated above, if effective leadership leads to fostering a positive climate, then organizations can increase performance and even foster increased innovation. So a properly developed leadership development program that trains individuals can make an impact on the type of climate that’s created.

AGUSTIN V. ARBULU is associate professor in the DeVos Graduate School at Northwood University in Midland. Reach him at (248) 594-6262.

Wednesday, 31 January 2007 19:00

ERISA compliance

For many employers today, employee benefits constitute a significant expenditure. With that increased spending comes increased scrutiny and employer obligations to make sure that what’s being promised is actually being provided.

Paul Jackson, a labor and employment attorney with Roetzel & Andress, L.P.A., says it’s important for business owners to make sure benefit plans are in compliance with the federal law known as the Employee Retirement Income Security Act (ERISA).

Smart Business spoke with Jackson about why business owners should be concerned about their company’s ERISA plans and what they should know about ERISA compliance review.

What is an ERISA plan?

An ERISA plan is an employee pension benefit plan or employee welfare benefit plan. An employee pension benefit plan, as defined by ERISA, includes any plan, fund or program established or maintained by an employer, an employee organization or both, that provides retirement income to employees or results in the deferral of income by employees for periods extending beyond the termination of their employment. Therefore, if the employer has any arrangement designed to make payments to an employee after the termination of employment, that arrangement is likely an employee pension benefit plan under ERISA.

Employee welfare benefit plans can provide medical or hospitalization benefits; benefits in the event of sickness, accident, disability, death or unemployment; or benefits for training, day-care centers, scholarship funds or prepaid legal services.

Why should I be concerned with my company’s ERISA plan?

The persons involved in the operation of the plan or benefit arrangement can be — and often are — considered fiduciaries under ERISA. Fiduciaries have greater responsibilities and personal liability for failing to comply with those duties.

Additionally, the Department of Labor’s Pension and Welfare Benefit Administration has increased its enforcement activity. Currently, the Department of Labor (DOL) targets pension, health and welfare plans due to the downturn in the economy and the recent publicity regarding high-profile loss-of-benefits cases. There are potential civil and criminal penalties for an employer that doesn’t comply with ERISA. There also has been an increase in cases of employees claiming their employer failed to exercise sufficient oversight because of the significance of the benefits involved.

What is involved in ERISA compliance review?

An ERISA compliance review typically involves an evaluation of a company’s plans, summary plan descriptions and annual filings. Additionally, questions are asked regarding the compliance of fiduci-aries with their responsibilities, a review of the persons who act as fiduciaries, and a review of the insurability of the exposure of the fiduciaries involved with the ERISA retirement or welfare benefit plan. Finally, a review is conducted to make sure the plans are being operated properly.

What key points should be examined in a compliance review?

Documentary compliance: The plan and trust documents, summary plan descriptions, employee communication materials (such as employee notices) and enrollment forms are reviewed to ensure they’re consistent and in compliance. For example, many plan sponsors don’t have actual ERISA documents for their health plans, instead using booklets supplied by their insurance carriers. These booklets frequently don’t meet ERISA’s plan documentation standards and often don’t conform with a plan’s actual administrative practices.

ERISA requires a plan be operated in accordance with its written plan documents. In addition, such documentation is frequently not in compliance with the Health Insurance Portability and Accountability Act (HIPAA). All of these documents must be examined, as they are an employer’s best line of defense in a litigation or claim situation.

Operational compliance: The plan’s annual Form 5500 filings and any other filings made by the plan are examined to make sure those requirements are being met. Verification must be made so the plans are being operated according to their written terms. Such a review may include looking at definitions and eligibility requirements and how the plan is actually being administered.

The DOL recently issued guidance as to the requested claims procedure for welfare benefit plans. The provisions in the employer’s plan must be consistent with the DOL’s requirements, and the persons responsible for those claims procedures must be aware of and follow those requirements.

Fiduciary compliance: Fiduciaries, who may be the business owner or a manager, have a number of personal obligations to all plan participants. In this part of the review, an analysis is made to determine who the fiduciaries are, what their obligations are and what each must do to comply with those obligations. This is one area frequently overlooked until a claim in litigation is made.

PAUL L. JACKSON is a partner with the Labor and Employment Group at Roetzel & Andress, L.P.A. His practice focuses on employee benefits, regulatory compliance, union matters, and labor and employment litigation. Reach him at (330) 849-6657 or pjackson@ralaw.com.

Wednesday, 31 January 2007 19:00

IT staff retention

Companies today have to be better than they’ve ever been at creating and implementing effective employee retention strategies.

That goes for keeping IT employees around, too. Andrew Brouse, division director of Robert Half Technology in Akron, says it’s all about offering competitive salaries and ongoing education opportunities, among other things.

Smart Business spoke with Brouse about what companies should do to create the ideal work environment that will make their IT staff commit to them for the long haul.

How important is retaining IT employees today, given the current labor market?

Employee retention should be a constant priority. An employers’ ultimate goal should be to create the type of work environment that will persuade its best IT professionals to stay regardless of economic conditions. These firms will minimize the risk of turnover and put their organization in a stronger position to meet upcoming business demands.

Workers who feel overworked, under-paid or unappreciated are most likely to leave. A-list players — those with in-demand skill sets — may also be tempted to explore new opportunities. They may be satisfied in their current roles and not actively looking for work, but if faced with a better offer by a competing firm, they could unexpectedly leave. Aside from lost productivity, organizations may lose skills and experience that are vital to the successful launch of new products and services and other business growth initiatives.

What is the No. 1 strategy that seems to work best in retaining IT employees?

There’s no silver bullet that will create an effective retention program. Managers should carefully assess their employees’ professional and personal needs to come up with the most appropriate and feasible strategy.

Savvy employers are developing and executing strategies that offer a variety of incentives that match their corporate culture, organizational goals and performance philosophies. Introducing initiatives to improve internal career opportunities, support work-life balance and create an attractive and interesting work environment can significantly increase retention rates. The overall aim is to create a ‘great place to work’ or to become an ‘employer of choice.’

What sort of ongoing educational opportunities can a company offer its IT work force?

Companies can assist with obtaining technical certifications (MCSE, CCNA, A+, etc.), tuition reimbursement and/or management training or other nontechnical soft skills.

What are some other perks of the job that work well to keeping IT employees around?

Offering competitive compensation packages was once considered a cure-all for retaining valued staff, but as our survey results show, it’s no longer the most popular or effective strategy.

Today’s workers value programs that support career growth and work-life balance, so companies are offering additional perks such as on-the-job training and flexible schedules. Companies are leveraging training as a retention tool more frequently because it can be more cost-effective. Not only are individual staff receiving the added value of enhancing their skill set, but companies employing training now have a more skilled, productive work force.

Companies can create a more employee-friendly culture by providing career growth and training opportunities. IT professionals are always looking for ways to keep their skills up to date so that they remain marketable to prospective clients. Companies that offer professional development opportunities demonstrate that they support their workers’ long-term success. At the same time, they’re working to improve the organization by investing in future leaders. Customizing training and career planning to each employees’ strengths and interests can be even more effective. Younger workers especially value learning opportunities compared to their baby boomer colleagues.

Companies should also work toward empowering employees to generate and implement their ideas. It’s important to let individuals take ownership of some tasks and to show trust in them. Also, they should offer flexible work hours and/or telecommuting options. While these options were once only offered by the most progressive companies, they’re becoming commonplace as organizations acknowledge their employees’ work-life balance needs.

Other things companies should consider are bringing in professionals on a project basis when full-time employees are at capacity and addressing burnout. Promoting realistic workloads, encouraging employees to ask for help, and tackling morale issues immediately can prevent employees from feeling stressed and unhappy. Promoting activities that build rapport among staff members is also a smart retention strategy. Employees who have friends at work and have positive interactions with their managers and coworkers are typically more satisfied.

ANDREW BROUSE is division director of Robert Half Technology, a specialized staffing firm in Akron. Reach him at (330) 253-8160.

Sunday, 31 December 2006 19:00

Building character

Business success or failure often comes down to numbers. What’s our gross revenue? What’s our net profit? Are we in the black or red? But achieving big numbers doesn’t happen without a solid core of employees who realize the importance of character and personal growth.

Employees need to know their bosses care about them as people first and workers second, says Pat Riepma, athletic director and head football coach of Northwood University in Midland. Making a difference in employees’ lives, he says, will always reflect positively on the bottom line.

Smart Business spoke with Riepma about what strategies business leaders can take to foster personal growth among their employees.

How important is personal character in a business?

Personal character has to be the foundation in order for a business or team to be successful. A man’s character needs to be based on integrity. Integrity is not a sometime quality, but an all-the-time quality. Integrity is uncompromising, and it drives a leader to make choices and decisions that pave the way for his people to be successful.

What things might a business leader do to foster character and growth among employees?

It all begins with relationships with your people. Our players don’t care how much football we coaches know (X’s and O’s of the game) until they know that we care for them as people first, then as students, and finally as football players. This scenario would be the same in the business world as employees need to know their bosses care for them as people first and as workers second.

A leader can best foster personal character growth by giving time to his people, which is a great way to show that you care for them. A price tag cannot be put on the time you spend helping another person through a problem, or listening to their ideas, or encouraging them through a tough situation with a handwritten note followed up by a face-to-face, informal meeting.

A lesson I learned from my mother is no matter what profession we’re involved in, it’s a people business. It’s about making a positive impact on the people you come in contact with and making a difference in their lives.

What can business leaders learn from how sports are played to help them raise the level of what they do?

Great leaders understand that the most successful teams have members who play/work for each other and nobody cares who gets the credit. Great teams adopt the theme, ‘It’s not about me,’ and they get the attention off themselves. They understand the importance of loving the person next to them and realize that being a member of the team is more important than individual desires and wants. When this atmosphere is achieved, it allows an organization to achieve more as a team than what one individual could achieve on a solo mission.

How is a successful company like a successful sports team?

The formula is composed of what we discussed in the first three questions: character, servant leadership and teamwork. Uncompromising integrity has to be the foundation of the character of the team members. It starts at the top with leaders demonstrating this character and being examples for their people. It is not enough to talk about it, but rather we must model it, serve our people, and meet their needs. Finally, getting everybody to compete for a common goal that is most beneficial for the team and not for individual fame is most important.

Is it really all about winning or how you play the game?

We live in a competitive society. Winning is important, but the journey to reach the goal is more important. Winning will occur if a team or organization keeps a foundation of doing things right.

It starts with preparation. Proper preparation allows a team to taste success. It also includes team members acting with class and having integrity when making decisions and choices. A work ethic where everyone is willing to do the nonglamorous jobs behind the scenes is necessary.

There is no shortcut to building a successful company or team. When a team/company plays their heart out in a game or a project and gives everything they have, then you can live with the results. Even painful results allow participants the opportunity to handle adversity and show character. Victory allows us to display humility and the ability to handle success.

PAT RIEPMA is the athletic director and head football coach at Northwood University in Midland. Reach him at (989) 837-4385.

Friday, 24 November 2006 19:00

Data mining

Health care costs are rising these days. In fact, it seems everything is more expensive, impacting your bottom line. But there are actions you can take to cut those costs and maintain the plan’s maximum benefit to your employees.

Take data mining, for instance. Done effectively, says Tim Sullivan, director of medical informatics and performance metrics for Care Choices in Farmington Hills, this process can help companies implement fact-based solutions that can become cost-effective bottom-line management tools. That includes cutting health care costs and suggesting more appropriate medical treatments.

Smart Business spoke to Sullivan about data mining and the numerous benefits it can provide.

What exactly is data mining and how is it useful to a company?

Data mining is the process of analyzing data and summarizing it into useful information to identify patterns or relationships. It gives an employer and/or health plan the ability to summarize data in order to create predictive models that can assist an employer or plan sponsor in implementing fact-based solutions that, when implemented, become cost-effective bottom-line management tools.

Data mining allows a user to analyze data from many different dimensions and angles, and identify correlations and patterns among dozens of data fields. It results in useful information that can be used to cut health care costs, suggest more appropriate medical treatments, predict medical outcomes, and assist the plan administrator in designing more effective benefits among many users.

For example, an employer may want to use data mining to respond to human resource/benefit questions like how much emergency room visits cost the plan. By evaluating data, the employer may find that the benefit design in place encourages ER visits through lower co-pays than physician office visits or the urgent care center. In this case, data mining can be used to restructure the benefit to direct high-cost care to a lower-cost setting.

How long has data mining been around?

Data mining has been around since the 1980s but has become more popular in the 1990s and into the present due to several factors — mainly, the ability of personal computers to better handle large amounts of data. The creation of more advanced software applications such as SAS has also aided in the popularity surge.

Increases in health care costs and complexity in health care as a result of advances in medicine, pharmacy and technology that were experienced in the late 1990s and early 2000s forced employers to begin understanding how their health care dollars were being spent, how they could maximize their budgets, and how they could improve employees’ productivity and design benefits that would maximize those benefit dollars.

Finally, health plans are providing more integrated care management programs such as disease management and health coaching than ever before. Data mining tools are utilized by many health plans to identify at-risk patients and intervene with care management programs prior to the member becoming a high-cost one.

Is there one better way of conducting data mining over another?

The basics of data mining are that you have a database and a tool to query the database and a way to present the data in a useful format. The database is where you collect and store data from various sources (health plans, pharmacy benefit managers, workers’ compensation carriers, disease management firms, wellness programs). There are many tools that can either build the database, query the database, present the data, or do all of these tasks, such as SAS, SPSS, ACCESS or Excel.

Data mining can be accomplished by either looking at all of the data or by taking a subset of it. One can take a random sample of the population to create a smaller subset of the entire population in which the results can then be extrapolated to the overall population. The random-sampling methodology can be beneficial if your entire population is so large that it would impact the analysis run-time negatively.

Can a company conduct data mining itself, or should it rely on an outside party? What are the advantages/disadvantages to this?

Skills required for data mining and obtaining useful information from the mountains of data available can be compared to the same skills required of a detective. To conduct data mining, you need a database that has significant and detailed historical data as well as a tool to query the database. Also, it’s necessary to understand the relationship of the data, to have the ability to understand and manipulate it, and to have some knowledge of statistical methodologies if you intend to compile statistical analyses. Most businesses don’t have in-house expertise to do this.

TIM SULLIVAN is director of medical informatics and performance metrics for Care Choices. Reach him at (248) 848-2140.

Tuesday, 25 September 2007 20:00

Enhancing your skill set

It’s a competitive world out there, and everyone’s looking for an edge on someone else in the employment pool. Or, perhaps, people just want to sharpen the skills they already have.

If you fall into this category of people who want to pursue higher education opportunities and advance their professional standings, you’re in luck.

Opportunities abound today, says John Washatka, director of Academic Services for Adult and Graduate Studies at Mount Vernon Nazarene University (MVNU) in Mount Vernon, Ohio, with a Cincinnati campus location.

Whether it’s business or other professional courses, flexibility in scheduling and a variety of courses is in no short supply.

Smart Business asked Washatka about what opportunities exist for those looking to advance their professional education.

What are some of the more popular higher education programs adults are choosing these days?

Higher education programs among adults tend to be professional programs. Popular programs these days include business management and leadership, nursing and education. Among adult and graduate programs offered at MVNU, we have found the Bachelor of Business Administration and the Master of Arts in Education to be very popular.

Are more adults pursuing higher education today than in the past?

The number of adults returning or going to college later in life is increasing. There are two reasons I can see. First, employers are recognizing the need for their employees to be educated. If you think that society, as a whole, is getting more complex, then problems arising out of that sort of culture are more complex, too.

Solutions for those problems tend to be more complex as well.

A college education is an opportunity for students to learn, among other things, analytical and critical-thinking skills, communication skills and problem-solving skills. Any employer would love to see those skills in an employee.

The second reason is the increasing availability and opportunity for adults to go to school. More and more colleges are recognizing adults as a constituency they can reach while maintaining their educational mission. As a result, colleges are building programs that recognize the specific needs and characteristics of adult learners, making it possible for adults to go to school. Related to that is technology, including computers and the Internet, that helps assist in the delivery of those programs.

What kind of options do adults have as far as courses and schedules?

I want to say the sky’s the limit in terms of options adults have. It depends on two factors, though. The first factor is related to the college’s ability to be entrepreneurial in responding to adult learner needs. How far outside the traditional college box are colleges willing to go? A big concern related to that is the ability of the institution offering programs to maintain academic integrity. Colleges accredited by regional associations and agencies have to be careful to observe accreditation standards regardless of their method of content delivery.

The second factor is the adult students themselves. They have to be realistic with themselves in terms of time and resource commitments, their support network and their academic ability.

While I encourage all adults to get a degree, some programs will suit some learners better than others. For example, if students need face-to-face contact or know they’re socially oriented, then they probably shouldn’t enroll in an online program. On the other hand, someone who’s self-motivated may be able to take advantage of an online program. Advantages to online programs include a flexible schedule, increased program choices and the opportunity to network with professionals around the world.

What financial aid options are available?

While I'm not a financial aid expert, I believe options are related to the institution offering the program. Students’ best bets are to check with the institutions they’re interested in attending.

JOHN WASHATKA is the director of Academic Services for Adult and Graduate Studies at Mount Vernon Nazarene University. Reach him at john.washatka@mvnu.edu or (740) 392-6868 ext. 4702.

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