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Monthly Archives: July 2019
Cartoon – The Motivation Hotline
Rising health insurance deductibles fuel middle-class anger and resentment
The IRS rolled out new rules yesterday to help people who have chronic diseases, but are also on the hook for thousands of dollars of their medical bills.
How it works: The new rules allow insurers to cover treatment for chronic conditions, like diabetes and high blood pressure, before patients have met their deductibles.
- This only applies to high-deductible plans that also offer a health savings account — which is an increasingly common arrangement.
My thought bubble: High-deductible plans and chronic disease are both pretty ubiquitous, and this will surely help sick people get the care they need.
- As the Wall Street Journal notes, there’s a broad base of support for these new rules, including patients, insurers and policymakers from both parties.
But it’s hard to look at this change without asking some more fundamental questions about the rise of deductibles.
- After all, making people pay for more of their own care is the whole point. High-deductible plans were designed to give people more “skin in the game.”
- It only stands to reason that when you require people to pay a couple thousand dollars of their own bills before insurance kicks in, that’s primarily going to affect people who have a couple thousand dollars in health care bills.
Deductibles are a large and growing source of frustration for middle-class families, the L.A. Times’ Noam Levey writes.
- Neither high deductibles nor health savings accounts have put a dent in health care prices, as their advocates thought they would.
- And families with the highest deductibles are among the least satisfied with their employer coverage.
Go deeper: Workers’ health care costs just keep rising
Medicaid should be a bigger part of the “Medicare for All” debate
The fact that “Medicare for All” would eliminate Medicaid hasn’t gotten nearly as much attention as its elimination of private insurance. But it’s a move that would largely eliminate states’ role in the health care system.
Why it matters: State Medicaid programs are leaders in experimenting with delivery and payment reforms, efforts to control drug costs, and addressing social causes of ill health, such as poverty and poor housing. All of those projects would still be important in a single-payer world.
CFO Retirements Climb as Good Times Roll On
https://www.wsj.com/articles/cfo-retirements-climb-as-good-times-roll-on-11563355800
Market watchers say the surging stock-market could be prompting finance chiefs to hang up the abacus before a downturn hits.
Bill Rogers had climbed the corporate mountain, ascending to the finance chief role at CenterPoint Energy Inc. He had just guided the Houston-based utility through the $6 billion purchase of natural gas and electricity supplier Vectren Corp. And he was approaching an important milestone: his 60th birthday.
So, in March, Mr. Rogers retired. “The timing was right,” he said.
It is an increasingly familiar refrain. CFOs are retiring at the fastest pace in at least a decade—a generational changing of the guard that experts put down to factors including the increasing complexity of the role and the booming stock market.
One in six executives who left the CFO position at a U.S. public company in 2018 did so to retire, the highest share since at least 2007, according to an analysis of 12 years of regulatory filings by Audit Analytics for The Wall Street Journal.
Many CFOs leaving the role are simply reaching retirement age. Others point to new pressure from expanding job descriptions, which now often encompass oversight of human resources and information technology. Meanwhile, a rich array of advisory opportunities for seasoned executives may be tempting some into early retirement.
The market also plays a role: CFOs’ compensation often includes restricted equity grants, which in some cases can only be cashed out in full after retirement. A hot stock market has made that option more enticing. The S&P 500 stock index, which recouped losses suffered during the 2008 global financial crisis by 2013, has reached record highs this year.
Warning sign
Campbell Harvey, a professor at Duke University’s Fuqua School of Business, said the uptick in retirements could show that the executives overseeing American companies’ finances increasingly believe the long bull market will soon come to an end.
“It’s an intriguing market timing signal by people that are well able to assess the pulse and direction of the U.S. economy,” he said. “These executives are sitting on a pile of stock and it’s difficult to sell that stock as an insider, so when do you want to retire? Do you want to retire when the stock market is near an all-time high, or do you want to retire in the depths of the inevitable correction that might be a recession?”
A surge in deal activity has also been a factor. Last year was one of the busiest on record for mergers and acquisitions. Deals can trigger contract clauses that accelerate vesting requirements of restricted shares, giving CFOs an incentive to walk away, said Rhoda Longhenry, co-head of the financial officers practice at executive recruiter True Search.
The robust economy allowed Kenneth Pollak to retire from the CFO position at women’s apparel company Eileen Fisher Inc. in 2017 at the age of 66. “If the stock market didn’t come back, then I would say there was a good chance I would have worked a few more years,” he said.
Under pressure
CFOs are also tapping out because of escalating demands, recruiters said. CFOs once focused on regulatory compliance, accounting and reporting of financial results. Today, they are increasingly involved in setting strategy, finding and executing deals, and overseeing operations, technology, cybersecurity, talent management, human resources and risk.
Comparing the turnover rate for CFOs and CEOs provides some support for the idea that financial executives in particular are facing increased pressure at work. In 2009, the departure rates for CEOs and CFOs—for all reasons, not just retirement—were roughly the same, at 13.5% and 13.4% respectively, according to Audit Analytics. By 2018, the exit rate for CFOs had risen to 17.5%, compared with 15.2% for CEOs.
“The role has become increasingly more sophisticated,” said Peter Crist, chairman of executive recruiting firm Crist|Kolder Associates. “The pressure on a public company CFO is very high.”
Neil Edwards said his once-high blood pressure has eased to a normal range since 2014, when he retired at 59 from his role as CFO of internet-access company United Online Inc. “In the early days I really looked forward to getting into the office,” he said. “The last 18 months were very hard work. I was tired at the end of it.”
Retiring executives are also presented with more options, as consulting and outsourcing has permeated into more fields, recruiters said.
“We don’t believe anybody at this level ever retires, they are looking for flexibility,” said Gail Meneley, co-founder of Shields Meneley Partners, a Chicago firm that helps executives find their next job.
Mr. Edwards saw retirement as a second act, not the final scene. He does some consulting. He also puts his skills to use as a volunteer, helping impoverished schools in Cambodia with their finances.
Once Mr. Pollak was satisfied with his nest egg, his next priority was keeping busy. In his first year of retirement from Eileen Fisher, he traveled to Europe with his wife and secured a seat on a company board.
Downshifting from his hard-charging schedule was still a challenge. “When I was doing the board work and consulting, I was busy,” he said. “But there were times when I woke up on a Monday morning and wondered what I was going to do with the week.”
For Mr. Rogers, the aim of retiring from CenterPoint before age 60 was to leave time for his postwork goals. Since retiring, he has walked the Camino de Santiago in Spain with a group from the University of St. Thomas in Houston, one of several organizations that Mr. Rogers advises.
“You really can’t be sure what your health is after age 70,” Mr. Rogers said. “I have other interests, I want to make sure I have some span of time to see what I might do with them.”
4 health systems team up to save Philadelphia hospital
Four healthcare organizations based in Philadelphia have created a consortium to collectively negotiate with American Academic Health System for the potential purchase of St. Christopher’s Hospital for Children in Philadelphia.
St. Christopher’s, along with Philadelphia-based Hahnemann University Hospital, was included in a June 30 Chapter 11 bankruptcy case filed by Philadelphia Academic Health System, a subsidiary of AAHS.
The four consortium institutions — Einstein Healthcare Network, Jefferson Health, Philadelphia College of Osteopathic Medicine and Temple Health — said July 17 they plan to submit a letter of intent to AAHS for the purpose of keeping St. Christopher’s open.
“In a time of difficult transition for healthcare in Philadelphia, four healthcare organizations stepping up to do what’s right by St. Christopher’s patients is truly emblematic of neighbors helping neighbors,” said Achintya Moulick, MD, CMO at St. Christopher’s as well as its chairman of cardiothoracic surgery. “This will ensure continuity of care and service to the children of the community it serves, especially the underserved population.”
The four healthcare organizations formed the consortium as AAHS continues to wind down services at Hahnemann University Hospital. Under a closure timeline released July 16, Hahnemann will shut down Sept. 6.
Optum aims to help John Muir Health System thrive in Bay Area
UnitedHealth Group’s Optum is partnering with John Muir Health to help the system remain independent and become more competitive in California, according to CNBC.
“Optum’s expertise and capabilities will help us expand upon the high-quality patient care we provide to the Bay Area community,” Cal Knight, president and CEO of Walnut Creek, Calif.-based John Muir Health, said in a news release. “We share common values with Optum, and this new relationship will help us further deliver on our mission to improve the health of the people we serve. We are committed to remaining independent while embracing partnerships that help us grow and serve more patients.”
Optum, based in Eden Prairie, Minn., will take over John Muir’s information technology, revenue cycle management, analytics, purchasing, claims processing and other nonclinical functions. Optum and John Muir representatives said Optum will also be involved in John Muir’s physician network ambulatory care coordination and utilization management services.
Optum will hire about 540 John Muir employees as part of the partnership.
Optum, which offers various technologies and analytic tools, told CNBC the partnership provides a model under which it can help small, struggling hospitals remain independent.
Nick Howell, Optum senior vice president, told the TV business news channel: “Optum is not in the business of owning and operating health systems. We see this kind of partnership as a model. A lot of health systems out there are facing similar cost pressures and are trying to find ways to remain independent. We believe this is a new third option for them.”
Optum has been a big contributor to revenue growth for UnitedHealth. It also has emerged as a competitor for some hospitals as it expands its physician workforce.
Cartoon – Who wrote the Mission Statement?
Cartoon – Crafting a Mission Statement
Cartoon – Is this your Mission Statement?
HENRY KOTULA 