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News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform

• Contra Costa Times, courtesy of Physicians for a National Health Program: Genentech bumps $40 drug with $2000 version. U.S. senator chides Genentech plan. By David Morrill. Excerpts: A U.S. senator said Genentech’s plan to restrict availability of its Avastin drug so doctors might be forced to use the more expensive medicine Lucentis to treat an eye disease will cost taxpayers $1 billion to $3 billion annually.

  The South San Francisco-based biotech company’s decision “is of great concern to me,” U.S. Sen. Herb Kohl, D-Wis., said in letters to the U.S. Centers for Medicare and Medicaid Services and the Food and Drug Administration made public Wednesday

• Boston Globe, courtesy of Physicians for a National Health Program: Single-payer healthcare is the one way. By Michael Kaplan. Excerpts: Along with most residents of Massachusetts, I assumed that the Massachusetts Health Reform Law was going to allow my daughter to keep her health insurance coverage after she graduated from college. The Connector Authority specified that for two years of post- dependency status, a young adult could remain on a family policy. What a relief that was. She graduated this May and is in those early stages of becoming self-supporting.

  When my wife’s employer, Berkshire Health Systems, informed us that my daughter’s coverage would end on Dec. 31 of this year, I was shocked. It turns out that the law requires only companies that pay health insurance premiums to give the extra two years of coverage. Those companies that self-insure are governed by federal law under ERISA and are not bound by this requirement. Self-insured companies pay the health insurance companies to administer the benefit, not to insure them. So our Blue Cross Blue Shield policy seems like an insurance policy, but it is not. Berkshire Health Systems insures itself, as do national companies that employ across state lines. Many large local employers are self-insured as well. These large companies do not have to pay the extra cost to cover dependents for those two more years. ...

  As a physician and healthcare activist for many years, I was aware that this reform law was not a panacea and did nothing to control the rapidly rising costs of private insurance that force both employers and their employees to pay more in premiums, with the insured also paying more in higher copayments and deductibles. While the reform widened the safety net for some poor families, this safety net will shred if there is not a massive infusion of new money from the state or federal governments.

  Two important lessons can be learned. First, we need to sever the connection between healthcare and employment. People need continuous, portable coverage that is affordable, comprehensive, and equitable. Second, we cannot depend on the private insurance industry to provide this for us.

  Piece-meal reform such as the new law will not work. Both employers and the public support the concept of single-payer healthcare. Big business is starting to realize that a single payer system will be the only affordable way to cover everyone. When will our politicians understand that their political futures will depend on supporting this kind of comprehensive reform?

• Economic Policy Institute: Canada's health system beats U.S. in cost and results. By Ross Eisenbrey. Full excerpt: When the Clinton administration tackled health care reform in 1993, Canada's national health care system—which operates without a private insurance industry—was held up as a model by progressives and a disaster by conservatives. The United States rejected any positive lessons from the Canadian single-payer model in 1993, and we are living with the results of that decision today.

  As the chart below reveals, the cost gap between the United States and Canada has only widened since 1993, and per capita health care expenditures in the United States are now almost double those in Canada ($6,401 vs. $3,359). Canada's per capita health expenditures rose about 65% from 1993 to 2005, while costs in the United States rose by over 90%.

  Yet infant mortality in the United States is higher and life expectancy at birth is less than in Canada. It is also noteworthy that despite Canada's much lower expenditures on health care, Canadians consult with physicians far more often than do Americans. The average number of physician consultations per capita was 6.0 in Canada, versus 3.8 in the United States.

• National Public Radio: Socialized Medicine Belittled on Campaign Trail. By Julie Rovner. Excerpts: In the debate over health care on the campaign trail, the term "socialized medicine" is getting thrown around more and more often. It is almost never a compliment. But the politically loaded phrase means different things to different people.

  Republican rival Mitt Romney labeled the plan "socialized medicine" in his critique. "It's a European-style socialized medicine plan," he said. "That's where it leads, and that's the wrong direction for America." ...

  History of Term: But what is socialized medicine? "The term socialized medicine, technically, to most health policy analysts, actually doesn't mean anything at all," says Jonathan Oberlander, a professor of health policy at the University of North Carolina. ...

  Term's Definition: "When you talk about Europe, and you talk about a British system where the hospitals are owned by the government and the doctors are directly employed by the government, then you might say that's socialized medicine," Oberlander says.

  But that is different from what most single-payer proposals would do. "There, you would essentially have government financing, just like you do with Medicare, but you would continue to have private practicing physicians and private hospitals," Oberlander says.

  None of the leading Democratic candidates, however, has proposed anything like a single-payer system, much less a fully government-run program like Britain's National Health Service.

• The Century Foundation: The Mandate Debate. By Maggie Mahar. Excerpts: Over time, if private insurers are forced to compete with public sector insurance on a level playing field (which means that all insurers offer community rating and that all offer benefits that are, at a minimum, as rich and comprehensive as Medicare), I think that the majority of Americans will wind up picking the public sector plan. The public sector plan should be able to offer better value for our health care dollars because it doesn’t have as many extra expenses: Medicare doesn’t have to return profits to investors; it doesn’t have to advertise and lobby Congress, and it doesn’t pay its executives the seven-digit salaries that for-profit insurers feel they must pay in order to compete with each other.

  But right now, many Americans are nervous about health insurance. And they don’t trust government. They need time to decide whether they feel more comfortable with for-profit insurance or a public program. In the meantime, we need to ensure that everyone is covered, and that everyone helps weave the safety net. That’s why we need community rating and mandates. It’s all about solidarity.

• New York Times: The Mandate Muddle. By Paul Krugman. Excerpts: Imagine this: It’s the summer of 2009, and President Barack Obama is about to unveil his plan for universal health care. But his health policy experts have done the math, and they’ve concluded that the plan really needs to include a requirement that everyone have health insurance — a so-called mandate.

  Without a mandate, they find, the plan will fall far short of universal coverage. Worse yet, without a mandate health insurance will be much more expensive than it should be for those who do choose to buy it.

  But Mr. Obama knows that if he tries to include a mandate in the plan, he’ll face a barrage of misleading attacks from conservatives who oppose universal health care in any form. And he’ll have trouble responding — because he made the very same misleading attacks on Hillary Clinton and John Edwards during the race for the Democratic nomination.

New on the Alliance@IBM Site:

• From the Job Cuts Status & Comments page
  • Comment 12/5/07: RA_me_please_IBM- It has been posted here before but I will say it again. I was part of the "resource action" in May. I was given the separation package and read through it very carefully. If you express any interest to your manager in being laid off you will forfeit any severance package that you might have otherwise been entitled to get. When I was RA'd, several of my colleagues said they wished it was them that got laid off and one even asked our manager if it could be him instead of me. I quickly advised him not to do bring it up again based on what I read in the sep package. Of course a lot depends on your relationship with your manager but it's better to be safe. BTW, if you are in any sort of technical support role, I have heard throught the grapevine that most, if not all, internal support roles will be replaced by contractors or outsourced next year. So, sit tight, do the minimum and maybe your wish will come true without having to jeapordize your severance package. -Anonymous-
  • Comment 12/5/07: TO; -RA_me_please_IBM- >>>> If you have to ask, you should have been laid off already. Simply do a half-azz job continuously. You will either get laid off or promoted. With the current poor management you never know which will happen. -gotta-go-go-go-
  • Comment 12/5/07: to: RA_me_please_IBM I was RA'd in the spring. To encourage my manager I asked him what future I saw in my job/career at IBM because I didn't see where I fit in. I was notified of my selection 3 weeks later. -RA'd bear-
  • Comment 12/5/07: Good article. My apologies to those who have read it already. http://www.baselinemag.com/article2/0,1540,2227222,00.asp 12/03/07: Clash of the Titans: HP vs. IBM-Who Wins? By Lawrence Walsh HP is on pace to crack the $100 billion mark, and put Big Blue in second place for good. -whatisthebestway-
  • Comment 12/5/07: To -whatisthebestway- That WAS a good article. Thank you. The only thing that would have made it better would be under the caption "Clash of the Titans," rather than two guys arm wrestling, they would have one guy ready to arm wrestle (HP), and the other guy standing to the side giving a lecture on the evolution of business models and the history of world corporations (Sam Palmisano). HP=Get it done right, and get it done right now. IBM=Let’s talk about on-demand processing and utility computing. What ever happened to Palmisano’s bet-the-company on-demand strategy anyway? Doh! -John-
  • Comment 12/5/07: How can you jeopardize your severance package? If IBM fires you and you did nothing legally wrong, don't they have to give you severance? -Anonymous- Alliance reply: There is no legal requirement to pay severance pay. Too many employees believe they have certain rights that simply don't exist, absent a union contract.
  • Comment 12/8/07: I do contract consulting now and have my resume listed on several of the job boards. Right now I am getting two to three calls a day for postings in my old organization. Most of the postings are for 20% more than I was making as a IBM'er. I am politely declining the requests but I think it's ironic that IBM is trying to hire back the positions they so graciously slashed this last year as a result of LEAN. -RA'd bear-
  • Comment 12/9/07: If anyone reading this was cut and IBM tries to hire you back, don't do it. There are plenty of other good companies out there to work for. IBM is rotten and cares only about it's cheap foreign workers in the third world. IBM is quickly becoming the Nike of the IT industry. -dirtysanchez-
• General Visitor's Comment page:
  • Comment 12/05/07: "IBM plans accelerated $1 Billion stock share repurchase" How much $ has IBM wasted on these buybacks over the years since Gerstner and now with Palmiselloff? Is there a way to find out?IBM would have made a better investment with stockholder's money by investing in their most important asset: their employees. Investing money instead of stock buybacks in their employees would definitely pay better dividends to the business. -Anonymous-
  • Comment 12/05/07: I guess we all know what performance bonus will be this year . Gee Sorry No money left after the accelerated buyback last month. Maybe next year if you double your efforts. But the executives bonus will be incredible due to the buyback. -Exodus 2007-
  • Comment 12/05/07: Concerning work-life balance and overtime: As a FORMER IBM manager, I can tell you that 2-years ago my former organization tracked overtime broadly. Anyone who worked less than 10% OT were reported as slackers at the director level. Anyone who worked greater than 20% were also tracked at the director level as those people who did not know how to manage their time. AWS employees were exempt, but tracked. I feel pretty confident that the director didn't track this information for the fun of it. He was feeding it to someone else or responding to HR or something. -Anonymous-
  • Comment 12/06/07: To former IBM Manager. I know in my organization before I left, if you were not tracking at least 18% to 20% overtime, you were considered a slacker. What was really interesting before I was RA'd, was IBM started a rule in a lot of teams that you couldn't report your OT in Claim. If you worked 60 hours, you could only claim 40. Methinks it had to do with the overtime settlement.

    The managers could personally track your OT, but don't put it in a system where it could be documented. As to working more than 20% OT. In my former team, if you didn't work at least 20% OT, you were considered a slacker. Last year I was low claimer for the year at 18% OT and I was rated a 3. The rest of my team was claiming 25% to 40% OT for the year. On top of that, I had 4 weeks vacation and all the IBM holidays. That OT number for the year was pure hours worked. My vacation time had to be made up with extra OT to get the billable to 2300 hours. -RA'd bear-

  • Comment 12/09/07: The following site was previously posted. It is worth the read. http://www.secform4.com/insider-trading/51143.htm If you look at all of the awards handed out this year, you will get sick to your stomach. -Anonymous-
  • Comment 12/09/07: On 08/28/06, Nick executed options on 197,228 shares at $36.0625, and sold them for $80.00 a share, realizing a profit of $8,665,705.20. The expiration date on these shares was 03-12-07. If he had sold them on 01-16-07 when the shares closed at $100.82, he would have realized an additional profit of $4,106,286.90. Pretty costly mistake, kissing away a mere extra 4.1 million. -CostlyMistake-
  • Comment 12/09/07: I knew a guy a couple of years ago who billed 3000 hours in one year and was still RAd. -Flat Hat-
• Pension Comments page
• Raise and Salary Comments
  • Comment 12/08/07: Salary = 80600; Band Level = 7; Job Title = IT Specialist; Years Service = 3.5; Hours/Week = 45; Div Name = Systems and Technology Group; Location = Austin, TX; Message = In my three and a half years at IBM, my salary has gone up 7% total (less than the rate of US inflation) even though I got promoted over a year ago. I was told that I was making 5% more than the average Band 7 this year and was overpaid already so I get no raise. Very frustrating to hear since I have several e-mails indicating that I perform way more than 5% above average. Way to encourage mediocrity IBM. -Anonymous-
  • Comment 12/09/07: Salary = 73000; Band Level = 7; Job Title = Software Sales Teamlead; Years Service = 5; Hours/Week = 40; Div Name = IBM.com S&D; Location = North East (Europe); IOT Message = No SIP during 2007 due to IBM's 'cost of sales', effectively equates to a decrease year on year when matched to inflation + increase in cost of living. No visibility or 'line of sight' to actual commisionable earnings. Major frustration is not getting wage increase with a PBC 2+. Feel sorrier for those with PBC 1 going into 2007. -paddyboy-
• PBC Comments
  • Comment 12/03/07: to: -no one- You take yourself too serious. Not to realize my tongue in cheek response. BTW, I am doing private consulting work now, spending time with my children and living a healthier life style. I don't need to make the consistent income I had at IBM and I surely don't need the stress. Actually I am very happy to be away from the Blew Pig. I only stuck out the last couple years because it was easier to stay rather than leave. I gave up trying to care after three years of 2's without a raise. Then wham, bam - I was a 3 performer with a target on my back. I ended up getting 6 months severance which I banked and am now living on my wits and grins. Really feels good to feel like I can do something positive and my clients actually say thank you. Who I really feel sorry for are the poor suckers left behind. They work 60 hours a week minimum, have to show a positive attitude to keep their lousy jobs and dread the consequences of the getting a PBC 3. Especially since those of us who knew our stuff are gone and not there to bail their incompetent managers arses out anymore. -RA'd bear-
  • Comment 12/05/07: IBM HR says there is "no quota" or "bell curve" on PBC distributions. Sam Palmisano or Randy McDonald: can you swear on your life about this being true and take a lie detector test to attest to it? Of course you two won't. But why is no one surprised? -Anonymous-
  • Comment 12/06/07: For those of us left who survived the RA, the news is not good going forward. I heard that mgrs have to give out 10% 3s this PBC cycle so we are all now getting closer to the 3. In addition, this will lead to another big layoff in 2008 with 50% of those 3s targeted to go for starters. Fun place to work - Not. Good luck to you all on your PBC review and rating. I so hate the politics involved pitting worker against worker for a better rating. Got to get out. -usingNonIBMmachine!-
  • Comment 12/06/07: For those of us left who survived the RA, the news is not good going forward. I heard that mgrs have to give out 10% 3s this PBC cycle so we are all now getting closer to the 3. In addition, this will lead to another big layoff in 2008 with 50% of those 3s targeted to go for starters. Fun place to work - Not. Good luck to you all on your PBC review and rating. I so hate the politics involved pitting worker against worker for a better rating. Got to get out. -usingNonIBMmachine!-
  • Comment 12/06/07: When I first started at IBM years ago, one of my first meetings was talking about the new performance evaluation system. All the experienced employees asked about rating skew. One of them was a manager. Skew is a fact of life in IBM PBC's. If a manager didn't give a 3, he was deficient. But what I've heard is there is a percentage of 3's in every department. One team may not get a member with a 3. But it is expected that the department (at second line managers level) will have a certain percentage of 3's every year. -RA'd bear-
  • Comment 12/08/07: Prior Yr PBC = 2; This Yr PBC = ?; Message = you're exactly right RA Bear. There is a skew and every manager needs to pony up at least one (depending on dept. size, etc.). 3 performer. I do think every organization has different skew percentages. Basically though, all the managers gets together (example: first lines with the second line leading) and do what is called a calibration session. Employees are 'ranked' into the four rating buckets: 1, 2+, 2, and 3. About 10% are 1, 2+ and 2 are about 80% (with more 2 than 2+) and about 10% being 3. It's a mandate by HR. Very few managers get out of giving a 3 even if they have to pull the old standby "relative contribution' out of the hat to achieve it. -Innovation Station-
  • Comment 12/08/07: In our org, typically the PBC skew is 5% 1's and 15 to 20% 3's. The skew varies with the org and also year to year. Regardless, combined with the pitiful salary plan allocations and the grid system, it's a game which ensures to keep minimal pay and bonuses for the vast majority of IBM employees. -screwed-
• International Comments

Vault Message Board Posts:

Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. A few sample posts follow:

• "Leave or perish" by "Big_Blew". Full excerpt: I quit IBM after a 3-odd year stint in GBS. During this time, I depreciated my resume fully, gained no valuable experience, got grossly underpaid and felt extremely ashamed to work for an organization with no ethics, employee loyalty or customer respect.

  IBM should sell GBS at scrap value. There are no employees to boast of (the PWC heritage is long gone), no incisive thought leadership and a complete lack of value-addition on client engagements. Calling this empty corpse shell a consulting organization is an insult to the consulting industry.

  For any self-respecting individual looking at making a career in the consulting industry, the only reasons why you should join IBM GBS are as follows:

  1. You are too under-qualified to make it to a real consulting firm
  2. You would like to coast along, suck up and make a career out of making proposals for the sales of servers
  3. You believe all the gloss so craftily painted by the leadership team while they exploit third-world consultants to fatten their bonus pools
  4. You are a masochist

  I hope this message goes out to all the prospective employees and HR trolls. Be warned - the end is near.

• "It took some of us a while to get the message..." by "alternationalconsultant". Full excerpt: In 2004, I was one of the university grads reading those posts -- and of course, I ignored them. IBM's offer was higher than the consulting firms. Plus, my manager at my senior-year internship was ex-PWC, and she had glowing reviews for the firm. Not much would have changed with IBM, right?

  Needless to say, everything said came true -- so earlier this year, I left to another firm where I am much happier and have never looked back.

  But why so long for the move? Ironically enough, I did gain some great experience -- thanks to my client (and my PM). They both saw some potential with me and cultivated my development where my practice did not. The client actively sought me to fill larger and more visible roles with each project phase, signing at least two PCRs to keep me there. The PM saw this and also saw my growing discontent -- and gave me separate opportunities to expand my core consulting skill set. These were things that he could have easily handled, but wanted to give me a shot at trying out. Meanwhile, my practice could have cared less, other than the $$$ signs from me being a band 6 filling band 7/8 roles -- and when my PM left IBM, the well of opportunities and development started to dry up. So I left too.

  In any case, one thing has certainly changed. I was one of the first (if not the first) college recruiting classes to come into BCS, so I had to navigate the company on my own. We were some of IBM's biggest cheerleaders -- and since we joined, we jump started successive recruiting efforts at our alma maters. Within my first year, I not only had project work under my belt, but I was involved in recruiting, knowledge management, proposals -- I even wrote winflashes for my projects.

  Now, today's recruiting classes are coming into a different environment. The precedent has been set with past hires, and the new joiners that are working directly with the unhappy band 6s and 7s from the '04/'05 recruiting classes are getting the truth much earlier in the process. It took me several months to realize my situation -- the new band 6s that I managed on my last project got the picture within their first two weeks.

• "The sooner the PIG" by "mogrits". Full excerpt: dies the better off everyone will be. I'm sorry to say that for the few people still at IBM who have struggled so hard to stay around and retire so as not to throw away 20 or 30+ years of service BUT IBM needs to be relegated to the history scrap heap along with Wang, Digital, etc., etc. The company is totally beyond recovery, at this point, having been almost fully consumed by inept, arrogant, pinheads that call themselves executives and leaders. From the ashes of IBM will arise some viable companies I have no doubt. Perhaps these companies will even remember the combination of ingredients that made IBM great once, starting with giving a damn about their employees and customers. Unfortunately, the same idiots who have brought about the downfall of IBM will continue to prosper instead of being recognized for what they are.....greedy, self-absorbed cretins.
• "You are waking up" by "ancientblueconsultant". Full excerpt: Yes, you are correct about public companies. That's why Kennedy (despite heavy advertising threats by IBM BP and ACN) had a seminal article on the fact that private smaller boutique firms are beginning to offer better career opportunities, higher pay and have less retention problems with their human assets versus public company "resources".

  Clients also are starting to rate the boutiques with better practice capabilities and engagement satisfaction. This will only get worse for large companies as technological barriers of entry and social networks continue to evolve.

  Just like we all know that consulting is a good way to earn a living but not the road to wealth, public companies are waking up to the fact that consulting and services can only be a low margin supplement to a product business, not a core business in itself. Despite all the hoopla of supply chain dehumanization of resources and IC re-use, the margins of software and hardware continue to trump services.