News & Trends

May 20, 2004

Check out the latest earnings statistics for HMO CEOs in Managed Care Week's annual Executive Compensation Report. See how they compare with some of sports high earners.The Leapfrog Group has changed the criteria used to measure hospital performance. There will now be 30 quality measurements, up from the original three.The Alliance of Community Health Plans says the quality of patient care needs improvement and that plans should do a better job of performance reporting and increasing patient participation.

 

NEWS & TRENDS

EXECUTIVE PAY: RISING TO C-LEVEL

The numbers always cause a buzz—the annual Executive Compensation Report of HMO CEOs, put out by Managed Care Week. (Dollars are in millions).

 

 

 

Salary

Bonus

Total

William McGuire

UnitedHealth Group

$1.996

$5.5

7.5

Leonard Schaeffer

WellPoint Health Networks

1.310

6.037

7.35

John Rowe

Aetna

1.042

2.2

3.04

Larry Glasscock

Anthem

1.040

2.312

3.24

H. Edward Hanway

Cigna

1.030

2.1

3.13

Anthony Marlon

Sierra Health

.995

2.035

3.03

Howard Phanstiel

PacifiCare

.976

2.0

2.98

Allen Wise

Coventry

.900

2.1

3.0

 

Of course, this is chump change compared to the Sports Illustrated "Fortunate 50," The list of the highest earners in sports, which appeared in the May 17 issue. Here are the top 10-- in millions, of course:

 

 

 

Salary or winnings

Endorsements

Total

Tiger Woods

Golf

$6.7

$70

$76.7

Shaquille O’Neal

Basketball

14.0

26.5

40.5

LeBron James

Basketball

4.0

35

39.0

Peyton Manning

Football

26.9

9.0

36.4

Kevin Garnett

Basketball

29.0

7.0

36.0

Oscar DeLa Hoya

Boxing

30.0

2.0

32.0

Andre Agassi

Tennis

2.5

24.5

27.0

Kobe Bryant

Basketball

13.5

12.0

25.5

Derek Jeter

Baseball

19

6.0

25.0

Grant Hill

Basketball

13.3

11.0

24.3

 

Of the top 50, 24 are professional basketball players, and 12 are from baseball, four from football, three from tennis, two from auto racing, two from boxing, two from golf, and one from cycling. The only women are Serena ($17.5 million) and Venus ($15.1 million) Williams, at Nos. 23 and 41, respectively.

BUSINESS ISN'T TOO SHABBY, EITHER

While HMO execs continue to fare well, their business performance is also doing quite nicely, thank you very much. Earnings among the nation's HMOs totaled $6.7 billion in the first nine months of 2003— a 52% increase over 2002, and more than 10 times the profits attained in 1999, reports Weiss Ratings, an independent rating and financial analysis firm (www.weissratings.com).

The Weiss report, issued in early May, covers 487 HMOs. Those with thebiggest year-to-year increases were:

  • Aetna Health (Florida), $167 million

  • California Physicians Service, San Francisco, $128.5 million

  • Blue Cross Blue Shield of Michigan, Detroit, $118.9 million

  • Scan Health Plan, Long Beach, CA, $109.3 million

  • Pacificare of California, Cypress, CA, $95.9 million

On the down side, 116 HMOs (22% of the total) had losses in the first ninemonths of last year.

"The health of the industry has never been stronger," notes Weiss VP Melissa Gannon, "yet consumers are feeling weary from the skyrocketing costs of healthcare. Until consumers can see how the industry's profitability can enhance their healthcare experience through the use of new technologies and improved treatment options, they will continue to question the rise in premiums."

The HMOs with the strongest safety ratings from Weiss were Blue Cross ofCalifornia, Blue Cross Blue Shield of Massachusetts, Horizon HealthcareServices (NJ), Blue Cross Blue Shield of Arizona, and the Community Health Planof Washington.

 

TIME IS MONEY

Do you really want to know how your employees are spending their time? A handheld device called a TimeCorder (Pace Productivity) allows workers to chart their own activities. It's basically a bunch of electronic stopwatches that track the amount of time spent on a number of precoded activities. It can record just one activity at a time—walking and chewing gum and other such multitasking efforts would be tracked separately.

Pace says that the device helps improve productivity by pointing out where time is being wasted. At one financial institution, front line sales people increased selling time by four hours a week based on the analysis. Clients include Lilly, Aventis Pasteur, Met Life, and Starbucks.

For details, visit www.GetMoreDone.com .

 

EEOC and retiree health benefits:
The proof will be in the pudding

Will the Equal Employment Opportunity Commission's new regulation on retiree health benefits be good or bad in the long run for retired workers? Employers and labor groups are mostly giving a hearty thumbs up, saying that the ruling allows employers to be more flexible in providing benefits to early (pre-Medicare-eligible) retirees without running afoul of age discrimination law.

The AARP adamantly says No, and that the regulation—by enabling businesses to reduce or eliminate employer-paid benefits when the retiree becomes eligible for Medicare—is discriminatory in itself.

Essentially, the decision safeguards an employer's desire to build a bridge to Medicare for its early retiring employees. What remains in doubt is whether anything will be waiting for them on the other side.

 

A FEW HOPS FORWARD ON PATIENT SAFETY

When business execs concerned about health care quality and cost got together four years ago to form The Leapfrog Group, they focused on three key measures of a hospital's performance: computerized physician order entry, use of intensivists in critical care units, and the volume of medical procedures.

The Froggers are now admitting that three is not enough, and they're now doing a survey based on 30 quality measures, including the original triumvirate. The new yardsticks come from the National Quality Forum's 2003 report Safe Practices for Better Healthcare: A Consensus Report (www.qualityforum.org) .

The expanded list of 30 cuts a broad swath—use of standard abbreviations and dose designations, ensuring flu vaccination for healthcare workers, rigorous handwashing procedures, protocols to avoid wrong site and wrong patient surgery, and vigilance in evaluating a patient's risks of pressure ulcers, aspiration, and malnutrition. Also: creating an active role for pharmacists in the medication use system, providing adequate nursing coverage, and establishing a hospital-wide culture of safety.

First results of the survey will be posted on the Leapfrog group's Web site in July (www.leapfroggroup.org).

 

JUMPING IN THE POOL TO SAVE THE UNINSURED

Some big names in business—GM, Sears, McD's, IBM—will pool their resources to offer health insurance for part-time employees, under-65 retirees who don't qualify for Medicare, and others who lack coverage. Sears alone has 100,000 uninsured part-timers. If the purchasing group can find a willing underwriter, the coverage would begin next year. The aim: develop a plan that identifies quality providers and rewards physicians who follow recommended guidelines.

 

20% of your workers, 80% of your costs

Research into employee health and wellness programs is getting a $30 million boost from the Centers for Disease Control and Prevention (www.cdc.gov). About half of that will be focused on generating scientific evidence to help convince businesses that worker health promotion really does help the bottom line.

"Just 20% of the workforce accounts for 80% of health care costs, and it's out of control," says Gregg O. Lehman, President and CEO of Gordian Health Solutions, a population health management company. "By actively getting at-risk employees into health management programs, companies can see a return on investment within the first year."

 

Smoke get in their eyes--but is not on their minds

The California Tobacco Control Alliance says that businesses in the state don't understand just how much employee smoking is costing them. The Alliance puts the cost to employers at $3,000 per smoking employee.

More than 70% of Californians support the notion of including smoking cessation efforts in standard health benefits, according to a poll by San Jose State University's Survey and Policy Research Institute. Yet the Tobacco Control Alliance's own survey of employers discovered that smoking-related costs were not on the radar.

To promote better awareness of the issue, the Alliance has begun a campaign called Smoking Cessation Benefits Everyone. For details, check out www.cessationbenefitseveryone.org .

 

VIVE LE DIFFERENCE? NO WAY!

The quality of patient care is literally and figuratively all over the map, says the Alliance of Community Health Plans (www.achp.org), and something must be done to level the field on a higher plane. In a new report, Variations in Health Care: Implications for Quality Improvement, ACHP says that plans should do a much better job of reporting on their own performance and increasing patient participation in healthcare decision making.

The ACHP also calls for paying healthcare providers based on incentives thatreward efficiency, quality, and value. A recent study by the Rand Corporationfound that patients in 12 major metropolitan area had just a 50-50 chance ofreceiving the "standard of care" as recommended by expert guidelines.

 



Jeff Forster. News & Trends.

Business and Health

May 20, 2004;22.