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

• Washington Post: Business Leaders Envision a New Rx. By Jane Bryant Quinn. Excerpts: Chattering health-care policy wonks think we're at a "tipping point." The employer-based health-insurance system, they say, is going down. It costs too much, stops workers from moving to new jobs and leaves too many of us uninsured.

  That's all talk, says Paul Fronstin, director of health research for the Employee Benefit Research Institute in Washington, which studies economic security. It's just not happening. Employers see their benefit programs as a way of attracting and keeping better workers. They also are doubtful about the alternative -- a government-run, Medicare-ish program whose costs and benefits they can't control.

  They've floated their ideas in a proposal called the New Benefit Platform for Life Security, developed by the ERISA Industry Committee, or ERIC. The committee represents the nation's major employers. ERISA is the federal law that regulates employee benefits.

  ERIC contends that health care should be delivered through large, third-party benefit administrators, all of them competing for the business. A government-authorized entity would design three to five standard health plans, with input from all the stakeholders (medical, consumer, insurer, employer and regulator). Employers would have the option of keeping their current plan or -- as ERIC expects -- contracting for coverage through the new system.

• Denver Rocky Mountain News: Failure of profit-centered health insurance. By Michele Swenson. Excerpts: The U.S. averages twice as much spending on health care, with worse outcomes, than any other industrialized nation. Our country is unique in its dependence on over 1200 for-profit health insurances that function as gatekeepers to health care. Shareholder and CEO profits trump access to quality health care. No health care reform proposal by any presidential candidate addresses the failure of the private health insurance industry, characterized principally by rising premiums and decreasing benefits. Premium increases of 87 percent over 6 years outpace both cost-of-living and median family income increases.

  Promotion of incremental reform demonstrates lack of political will - the same failure to confront corporate profit-taking by insurance and pharmaceutical industries that wrote Medicare prescription drug reform with billions of dollars of taxpayer subsidies and inflated profits to benefit their bottom lines.

  Commercial health insurance is the 800-pound gorilla, responsible for 20 to 30% of health care dollars siphoned to excessive administrative costs, lobbying, marketing, CEO salaries and profit-taking - $1.4 billion stock options to former UnitedHealth CEO William McGuire; $30 billion annual after-tax health insurance profits, plus $32 billion insurance underwriting and marketing costs, revealed by the McKinsey Group Report of 2007.

  Profit is a perverse incentive for quality health care: imagine for-profit fire or police protection. Underwriting is the art of evaluating and avoiding risk, insuring profits by covering the healthy and rejecting everyone else as a “pre-existing condition.” “Market-driven” health care treats health as a commodity, to be negotiated like a car or a house. Free-market health care has also spawned “designer hospitals,” built to offer only the most profitable specialty services, e.g., cardiac procedures, eliminating less profitable care, such as emergency room and mental health.

• Urban Institute: Health Insurance Coverage of Young Adults: Issues and Broader Considerations (PDF). Summary: Over 10 million, or nearly one in three, young adults ages 19 to 26 lacks health insurance coverage. Young adults are at higher risk of lacking health insurance coverage relative to other age groups because they have low access to both employer-sponsored insurance and subsidized public coverage. Given that so many uninsured young adults are poor or near poor, addressing their uninsurance problem will require significant subsidies, either through public program expansions, tax credits, or direct subsidies. However, achieving universal coverage among young adults could require other policy changes, such as individual mandates. Ultimately, decisions about allocating greater public subsidies for covering young adults or imposing mandates should be made in the context of considerations about broader health care reform.
• Associated Press WorldStream via NewsEdge: Amputees bump up against coverage limits for artificial limbs. Excerpt: After bone cancer forced the amputation of her right leg below the knee, Eileen Casey got even more bad news: Her insurer told her that she had spent her $10,000 lifetime coverage limit on her temporary limb and that the company wouldn't pay for a permanent one. "It was shocking to find out I was going to have to take out a loan to buy myself a leg so I could keep working and living independently," Casey said. At the bank, she said, she burst into tears when they asked what the loan was for. Since then, Casey has joined a nationwide fight by amputees and the prosthetics industry to get the states and Congress to require fuller coverage for artificial limbs. The insurance industry is fighting the effort, saying such mandates drive up costs and reduce the flexibility customers want.
• Health Affairs: How Many Are Underinsured? Trends Among U.S. Adults, 2003 And 2007. By Cathy Schoen, Sara R. Collins, Jennifer L. Kriss, and Michelle M. Doty. Abstract: With health insurance moving toward greater patient cost sharing, this study finds a sharp increase in the number of underinsured people. Based on indicators of cost exposure relative to income, as of 2007 an estimated twenty-five million insured people ages 19-64 were underinsured--a 60 percent increase since 2003. The rate of increase was steepest among those with incomes above 200 percent of poverty, where underinsurance rates nearly tripled. In total, 42 percent of U.S. adults were underinsured or uninsured. The underinsured report high levels of access problems and financial stress. The findings underscore the need for policy attention to benefit design, to assure care and affordability.
• Philadelphia Inquirer: The cost of hospital care is difficult to pin down. By Stacey Burling. Excerpts: Inspired by the story of an uninsured couple who were told they would have to pay anywhere from $15,000 to $40,000 to have a baby in various New Jersey hospitals, famed health economist Uwe Reinhardt tried an experiment. He asked his wife to call a hospital and find out how much a normal birth costs.

  "She just couldn't weasel it out of them," said Reinhardt, who works at Princeton University and this year chaired a high-profile commission that evaluated the financial health of New Jersey's hospitals. So Reinhardt tried himself. He was able to extract a number from a supervisor, but only after he had explained rather haughtily who he was.

  In health-policy circles, there has been a lot of talk in recent years about "consumer-directed health care" and "price transparency," fancy ways of saying Americans might spend a few gazillion less dollars on health care if they could figure out, in advance, how much things cost and had a reason to care. With the number of people with high-deductible insurance plans or no insurance growing, more people have a reason to care.

  The Bush administration has strongly endorsed the idea that information about prices will drive Americans toward more cost-effective care. Barack Obama and John McCain are calling for greater price transparency.

• Washington Post: Someone else's problem. Want Universal Health Care? The Operative Word Is 'Care.' By Michael L. Millenson. Excerpts: On a recently posted YouTube music video, to a hypnotic bongo beat, rapper MIKE-E knocks out rhymes about...universal health care:

  You are among the masses/One of 47 million people without health care access . . . Focus on the laws that must be enacted/Because we know there are flaws in our health care practices.

  These may sound like lyrics only a lobbyist could love, but the video -- sponsored by the American Cancer Society -- expresses the frustration felt by those trying to end the United States's status as the only industrialized nation whose citizens don't have universal access to health care.

  Here's a cold truth: Despite much media hand-wringing on the subject, most of us give about as much thought to those who lack health coverage as we do to soybean subsidies.The major obstacle to change? Those of us with insurance simply don't care very much about those without it. It's only when health care costs spike sharply, the economy totters or private employers begin to cut back on benefits that the lack of universal health care comes into focus. Noticing the steadily growing ranks of the uninsured, the broad American public -- "us" -- begins to worry that we'll soon be joining the ranks of "them."

  News stories about the uninsured typically offer poignant profiles of people with whom the public can easily identify. As an award-winning article in Redbook last year informed its readers, "Increasingly, this is a problem for the middle class." Similarly, the Cover the Uninsured Web site, sponsored by the Robert Wood Johnson Foundation, highlights personal stories of seven appealing uninsured individuals. Several are current or former small-business owners. Six are white, and one is an African-American woman. There are no identifiable Hispanics. ...

  When the general public talks about a health care crisis, what they're generally talking about is rising costs, a constant complaint since the Hoover administration (though Richard M. Nixon was the first president to officially declare a health care "crisis"). In response to this public clamor for cost control, those who advocate for the uninsured have decided to talk not only about the 22,000 of "them" who die annually because of a lack of access to care, but also to emphasize the money that providing coverage to "them" could actually save the rest of "us."

  The Commonwealth Fund recently tallied the ways in which universal health care would save hundreds of millions of dollars, most of which were related to lowering the societal costs exacted by the greater burden of illness among the uninsured. The list was an exhaustive and exhausting one that nonetheless had the whiff of desperation, as if civil rights activists had appealed for support against segregation because it was reducing the pool of qualified candidates for the Selma, Ala., police department.

• InvestmentNews: Study: Ranks of underinsured have swelled. By Darla Mercado. Excerpts: Health care premiums have skyrocketed between 2000 and 2007, rising by 91% compared to only a 24% increase in wages. Last year, 17.2 million individuals said that their out-of-pocket medical expenses were equal to at least 10% of their family annual income, compared to 8.9 million in 2003. ...

  The study noted that adults with annual incomes below $20,000 were at the highest risk of being uninsured or underinsured, But people in higher wealth brackets have also been affected: 22 million people with income between $40,000 and $99,999 said they had insufficient coverage, compared to 9 million in 2003. Meanwhile, seven million people who make more than $100,000 said they were uninsured in 2007, up from one million in 2003.

• New York Times editorial: Hidden Drug Payments at Harvard. Excerpt: Three prominent psychiatrists at the Harvard Medical School and its affiliated Massachusetts General Hospital have been caught vastly underreporting their income from drug companies whose fortunes could be affected by their studies and their promotional efforts on behalf of aggressive drug treatments. Their failure to divulge their conflicts is striking proof that today’s requirements for reporting payments from industry — essentially an honor system in which researchers are supposed to reveal their outside income to their institutions — needs to be strengthened.

  What makes this case particularly troublesome is that the Harvard group’s research has helped fuel an explosion in the use of powerful antipsychotic drugs to treat children, as was described in The Times on Sunday by Gardiner Harris and Benedict Carey. Although supporters praise the most prominent of the trio, Dr. Joseph Biederman, as a visionary who has saved many lives, critics complain that the Harvard studies have been too small and loosely designed to provide conclusive results. Critics say they also were subject to biased interpretation through use of a subjective rating scale. ...

  Under pressure, two of the researchers acknowledged receiving $1.6 million apiece in consulting fees from drug companies between 2000 and 2007 and the third reported earning more than $1 million. That was far more than the researchers had originally reported, a number that Mr. Grassley pegged at a couple hundred thousand dollars apiece. Even the updated numbers left out other payments that drug companies reported separately that they had made to the trio.

• Hartford Courant: Aetna Proposes Insurance Reform Employer-Based System Would Be Preserved. By Diane Levick. Excerpts: Reform is needed to fix the crisis of the uninsured, but it requires a joint effort of government and the private sector and should preserve the nation's employer-based health insurance system, Aetna Chief Executive Ronald A. Williams told a congressional panel Tuesday. Changes in the $2.2 trillion U.S. health care system to help the 47 million uninsured must deal with the interrelated issues of cost, quality and access to care, he said.

  "Solutions that purport to be a silver bullet — or solutions that tackle one of these pieces without addressing the others — will not transform the health care system in a way that Americans deserve," Williams said in testimony given to the Senate Committee on Finance.

• Workforce Management: Employer-Sponsored Retiree Medical Plans Coming Up Short. Excerpts: Employees will need more savings to cover health insurance premiums and out-of-pocket health care expenses in retirement than was previously thought. This is not all that surprising, given the rise in health care costs and the decline in the number of employers that offer health benefits to retirees.

  But the amount retirees will need is a bit of a shocker. According to new information from the Employee Benefit Research Institute, a male retiree with health insurance benefits subsidized by a former employer will need at least another $122,000 to have a 90 percent chance at covering all medical costs. Women, who on average live longer than men, will need even more money: $140,000 for a 90 percent chance to cover all their health care needs.

  The news gets worse. Male retirees who rely on employment-based benefits that are not subsidized will need $196,000 to have a 90 percent chance of meeting their health care needs. Women retirees with unsubsidized benefits will need a whopping $224,000. ...

  Paul Fronstin, EBRI senior research associate and co-author of the report, said the high levels of savings now needed by employees is a result of employers shifting more financial responsibility for retiree health benefits to employees.

• Kaiser Daily Health Policy Report: Many People Base Life Choices on Ability To Retain, Obtain Health Insurance. Excerpt: Karen Politz, a research professor at Georgetown University's Health Policy Institute, said, "People are turning themselves inside out to get health insurance." According to the Journal, "Financial advisers say health coverage worries are rampant among clients," and among those with medical conditions, "conversations increasingly center on how to get or stay on a group policy or segue into the individual market in a way that prevents insurers from denying coverage or excluding pre-existing conditions." Leon Rousso -- a certified financial planner in Ventura, Calif. -- said, "Access to coverage is a huge issue," adding, "You may have the financial means to pay for premiums but not be able to get coverage, leaving you exposed to potentially catastrophic losses if you become ill" (Knight, Wall Street Journal, 6/10).
• eMaxHealth: Comparing John McCain's Health Care Plan to Barack Obama's Plan. Excerpts: But to understand their big idea differences, I would point you to our pension system to better understand where McCain and Obama are going on health care.

  Back in the 1960s and 1970s, it was common for workers to have what is called a defined benefit pension plan. The worker got a promise from the employer that when retirement came he'd get a certain monthly benefit--often about 60% of his final average earnings. That might be $2,000 a month--every month for the rest of his life. Therefore a defined benefit.

  But starting in the 1980s, employers came to find that they couldn't afford these very expensive defined benefit pension plans. Employers started backing away from these plans by no longer making new employees eligible for them or simply terminating them and freezing the benefits for those who had been participants.

  Instead, employers more often offered a defined contribution plan--most often in the form of a 401(k) plan. A 401(k) pension plan is based primarily on employee contributions that are made pre-tax. Often, the employer matches the employee's contribution at some percentage of what the employee contributes--a defined contribution plan.

  401(k) plans are popular with employers because they have no big funding requirement--defined benefit plans required them to contribute whatever it cost to keep the expensive benefit promise. Now, the risk of having enough money to retire on was shifted from the employer to the employee.

  The pension plan story is what the big idea difference between McCain and Obama's health plan is really about.

  Obama: Do we continue down the same incremental line with health care reform--building on the employer-based system where the employer provides so many of us with generous defined benefit health insurance plans that the employer continues to pay most of the cost of no matter how expensive they are?

  McCain: Or, do we change the health insurance focus from relying on the employer to relying on individual responsibility and a structure that enables the individual to build their own health care security and not have to rely upon the generosity of one employer or another?

• USA Today: Record life expectancy still lags. By Steve Sternberg. Excerpt: U.S. life expectancy has reached 78 years, a record high driven by declines in all but one of the major causes of death, the government reported Wednesday. Despite the good news, the USA ranks 29th in life expectancy among the United Nations' member nations. Tops is Andorra, which has an average life expectancy of 83, followed closely by Japan, Sweden, Australia and Switzerland.

  "We're two to three years behind most Western countries at this point," says University of Pennsylvania demographer Samuel Preston, a member of a National Academy of Sciences panel that convened for the first time last week to try to explain the lag. "We may be gaining, or not, depending on the rate at which their life expectancy is increasing."

• CQ HealthBeat News: Taiwan: Surprising Lessons From a Small Island. By John Reichard. Excerpts: In the middle of May, two Taiwanese officials, Hou Sheng-Mou and Michael S. Chen, came to Washington facing a tough assignment: promote single payer health care in a city where it’s widely regarded as a non-starter in the debate over revamping the U.S. system. ...

  The pair struggle to be heard above the din of nearby caffeine-fueled conversations and the roar of a fire engine flying past. But if they feel any sense that their efforts are futile, they do not show it. Wearing ties designed to look like American flags to honor their hosts, they patiently answer question after question about health care in Taiwan, rejecting American notions about what a single-payer system means.

  “In Taiwan, we have no waiting lists,” says Hou. “In Taiwan, the doctor works on Saturday. They operate on Saturday afternoon.” Moreover, the government does not tell its citizens where they must go for care, he said. Sophisticated information technology is a part of the health system. Each resident of the country carries a “smart card” to entitles them to health care.

  “With the smart card you can go to any clinic at any time without an appointment,” Hou said. And there is no “gatekeeper” denying access to specialists, a frequent complaint among Americans about U.S. managed care companies. This freedom of choice helps improve quality because providers must compete to attract patients, Hou says. ...

  The climate now in Taiwan is a marked contrast with its situation before its adoption of a single-payer system of universal coverage in 1995. Only 59 percent of the population had health insurance at the time, and health costs were growing at double-digit rates. Now 99 percent of the Taiwan population is covered and health costs are growing between 4 and 5 percent annually.

  Hou says the single payer approach is key to keeping costs generally affordable because everyone is in the same insurance pool. That means premium money left over because of the relatively low costs of healthy people can be used to pay for the care of sick people. In a system of multiple smaller insurers, sicker people have a hard time finding affordable coverage because insurers try to make money by appealing to good risks and avoiding bad ones. ...

  Having just one payer eases uniformity of billing and payment systems unlike a system in which multiple insurers compete for profits. Administrative costs average below two percent of all health spending in Taiwan. In the United States, however, administrative costs gobble up 15 to 30 cents of the health care dollar, analysts say.

• New York Times editorial: The Plight of the Underinsured. Excerpts: It is well known, by now, that almost 50 million Americans lacked health insurance for all or part of last year. What is less well known is that 25 million Americans who did have health insurance often found it pitifully inadequate when a medical crisis hit. They were only marginally better off than those who had no coverage at all.

  That is the disturbing finding of a survey by the Commonwealth Fund, a private foundation specializing in health policy research, that was published by the journal Health Affairs. The survey found that some 22 million adults with health coverage all year still spent a large chunk of their incomes — at least 10 percent for middle-class families — for out-of-pocket medical expenses. Another 3.4 million were saddled with high deductibles that would cause financial problems if they became ill.

  Conservative health theorists and insurance industry leaders have long argued that the best way to slow soaring health care costs is to force people to pay a significant share of the bill so that they will buy medical services more judiciously, and sparingly. But as out-of-pocket expenses and deductibles have risen, many families are instead postponing or forgoing treatment.

  Many of those surveyed had put off seeing a doctor when sick, failed to fill prescriptions or skipped tests, treatments and preventive care. About half had difficulty paying their bills; many took out loans, mortgages or credit card debt to pay them.

• Families USA: Failing Grades. State Consumer Protections in the Individual Health Insurance Market. Excerpts: As pressure mounts on policymakers to find a solution to America’s health care crisis, some lawmakers are promoting the individual health insurance market as the best avenue for reform. They propose providing tax credits for people who seek out and purchase health insurance on their own, suggesting that individuals will be able to find the best deal for themselves. However, without adequate consumer protections, the individual insurance market offers a raw deal. Individuals seeking health coverage on their own have virtually no bargaining power to obtain good health benefits at a reasonable rate.

  The task of protecting consumers in the individual market has, for the most part, been left to the states. States have taken some steps to protect consumers, but they face limitations. The insurance lobby is strong, and many insurers would prefer an unregulated market in which they accept only consumers who are good risks for their business. This leaves consumers with a patchwork of protections that are inadequate as a whole and that vary greatly from state to state. In one state, consumers may be able to buy insurance that will cover their medical needs, but only at a very high price. Just across the state line, neighbors with similar medical conditions may find that although policies are cheaper, no insurer will sell to them or insurers will only sell them polices that exclude coverage of the very services that they most need. Consumers are put at the mercy of insurers and the vagaries of states’ insurance laws. ...

  We found that protections vary greatly across the country, and in many states, because of a lack of consumer protections, insurance companies can deny people coverage, raise premiums significantly, refuse to cover treatment for certain conditions, and even revoke the coverage of policyholders who have been paying premiums for years.

New on the Alliance@IBM Site:

• From the Job Cuts Status & Comments page
  • To readers of the Alliance comment sections: Please read the front page of the Alliance web site for important news on our membership drive. Many of you read and participate in the comment sections and find them a valuable resource for what is going on inside IBM. But in order to keep this resource we need growth in our dues paying membership. Please click the links above and join the Alliance. Your only source for the real news inside IBM.
  • Comment 06/06/08: My goals for next year include 103% utilization. My manager told me last week that just meeting the goals will result in a rating of 2. IBM really wants people to leave with these unrealistic goals. Majority of people in my group will a 3 next year due to business development team not able to close on deals (we already several business development team members leave/retire/quit in the last few weeks). I am barely hanging in right now. I hate working everyday knowing the end is coming - no motivation right now. -Anonymous-
  • Comment 06/07/08: To 103% utilization: You are actually still concerned about a PBC and are still listening to what your manager is telling you? Have you been reading this site? You can can work yourself to death if you want. Your manager is just telling you that you'll never get the PBC you want because he's not allowed to give it to you. He's telling you, no matter what, you'll never get better than a 2. I worked like a dog and never got better than a 2. PBC's are a joke. If you want better pay, make sure everybody you know, knows about Alliance. Without a union, don't be shocked if you get another 2 or 3 or get ra'd with the rest of us. Remember, they can do whatever they want, and your manager is NOT your friend, so don't treat him as such. He'll smile at you as he's pulling out the knife. -RA'd_may2007-
  • Comment 06/08/08: would love to know what's going on at the BTV plant... cant believe all the rumors! not sure what's reliable or not. you know some of what is said must be true but it would be great to know what if anything is coming down and if LTS employees are going to be hit as well. -Missy-
  • Comment 06/09/08: I heard from several reliable sources that around 500 employees will be cut at the BTV site this summer, most likely July. Stay tuned. Hopefully the Alliance can offer more information. -Joe-
  • Comment 06/09/08: To RA'd in May - you are so right about the IBM environment and while there may be some decent managers out there (very few), their hands are tied and they are doing what they are told. They can't help themselves let alone others. -goneanddidbetter-
  • Comment 06/10/08: That's all we are hearing at the BTV plant are the lay off rumors. Temps and some perms in 5-2 jobs are suppose to get cut. There hasn't been this much buzz going on since the last big layoff happened. I guess only time will tell we are not getting answers from any higher ups. -Rumormill-
  • Comment 06/11/08: Well by the end of the year, all internal accounts will be OFFSHORED.. ALL of MVS. if you have to log on a system to do your job, you can hang it up. From a VERY reliable source.. -peevedtothemax-
  • Comment 06/11/08: The latest from the btvrumormill has 300-500 people will be affected around June 24th. Band 5 on up also LTS as well. Talk of 5-2 3 shift schedules for eng/maint depts and finally mangers who do not have people to manage will be axed. -btvrumormill-
  • Comment 06/12/08: The funny thing is, I read in the papers that companies are offshoring because of lack of qualified people to fill the jobs in the US. When I post a requirement in India, it takes me an average of 2 months to fill it, because the people here are not qualified to do it. If people are qualified to do the job, we have to cow tow to their every whim so they do not leave. If you are looking for a job here in Bangalore (and are qualified) you can find one very easily. The offices for all the major US suppliers are all literally across the street from each other here. So if workers here are fed up with IBM, they can literally walk across the street to HP, Dell, Cisco, etc. -Anon In India-
  • Comment 06/12/08: 80 - 85% of all US technical jobs will be offshored by the end of the year. Stop waiting for the other shoe to drop and join the union people. Once it happens to you it's too late. -tai mai shue-
  • Comment 06/12/08: To -tai mai shue- who mentions: "80 - 85% of all US technical jobs will be offshored by the end of the year." To -peevedtothemax- who mentions: "Well by the end of the year, all internal accounts will be OFFSHORED." I do not believe either of those statements. Look on Monster.com, Dice.com, etc. There are plenty of U.S technical jobs. An IBMer I know posted his resume out there and was getting replies for jobs every hour. He did leave IBM and says he's glad he did. Our project is looking for some good technical people (yes, it's an internal project), but we are not getting many resumes from our job posting. We want people with good technical skills and good communication skills. We've rejected some people who have a language barrier and are difficult to understand and we've rejected some who don't have the strong technical skills. But we have no plans to outsource. -jobs are here-
  • Comment 06/13/08: To -tai mai shue- : 80 to 85% of IBM technical jobs may be offshored, but not all technical jobs in the US. Since I left big blow, I am appreciated, not over worked, and there are a lot of companies out there that do not offshore jobs. I am constantly told what a great job I'm doing, "good work", etc. Never once in my 9 years has a manager at big blow ever said anything to me like that. -ra'd last may-
  • Comment 06/13/08: To "Tai Mai Shue," "jobs are here" and "peeved to the max" - The long term strategy is to offshore everything that can be. The IBM Global Account is first on the block since there are no contracts prohibiting offshoring and the reasoning that IBM can't effectively sell offshoring to SO contracts unless the IBM Corporation is doing it ourselves.

    The executive levels within ITD are ignoring the quality problems, lack of productivity issues, the high turnover rates and the rapidly escalating pay in BRIC. Total denial. Even so, they aren't so stupid that they think they could offshore all of the IGA work by the end of 2008. If they did, major breakdowns would occur with a devastating impact on the business. But every quarter, the execs will be relentlessly pushing to reduce US headcount and will be demanding more work moving offshore. Every damn quarter, they will be back for looking for more to cut and more to offshore. Not unlike Chinese water torture for the survivors.

    Over time, the US jobs moved offshore will become higher and higher skilled. operators, then system admins, then IT specialists then lower-band project managers, then lower-band architects and eventually the high band PMs and architects. Think year end 2010 as a more reasonable target than 2008.

    Finally, this offshoring is not limited to IGS and ITD - virtually everything is on the table for global integration and migration to a low cost country. IBM US layoffs, counting the layoffs already executed in the last 3 to 4 years and including the ones to come yet this year, in 2009 and in 2010 could reach 100,000 if they execute their plan. I believe they are already behind plan because of the unanticipated issues noted above, so completion by 2010 is in doubt. -Frank-

  • Comment 06/13/08: -jobs are here- wrote: "But we have no plans to outsource" You need to take off the blinders. You're living in a world of fantasy. Most all internal and admin jobs at IBM will be sent elsewhere. -Been There-
  • Comment 06/13/08: Anyone have any news for Canada? We got a few more Argentinean and Indian colleagues this week and have been told to participate in a 'Global' Technical documentation project (no coincidence the only ones contributing are from the western countries!) - no surprise I suppose and IBM Canada is saving 100k a year by now taking away the water coolers from most (eventually all) their sites too! - Isn't it the law that they have to provide drinking water at their offices!? -DM-
  • Comment 06/13/08: I do not believe I have ever heard anyone seriously say " Damn am I sorry we unionized". -Exodus 2007-
• General Visitor's Comment page:
  • Comment 06/09/08: Hey, I heard that IBM is planning to move all work from home employees (WFH) back into the office like HP did the other year.. Can anyone confirm it? -Work at HomeBoy-
  • Comment 06/10/08: Last May, I was fortunate enough to have found a job with one of my previous employers, and let me tell you, LIFE is GREAT outside of IBM. Anyone still employed at IBM...keep looking!!! There are jobs out there with employers that care about, and respect, their American workers.

    I remember when I became an IBM employee. I was actually pretty excited. Working for a technology leader. Little did I know how dysfunctional and disorganized IBM is! I have no clue how they stay in business. Never seen managers move around a company so much. Are they running and hiding because different accounts are finding out how incompetent they are?

    I was actually one of the lucky ones as I really liked my first manager. She actually was human and cared about her employees. She got smart and left. Anyway, just wanted to give my two cents worth to those that remain. There is life outside of IBM...and it's GREAT! No more 60-70 hour weeks and getting calls when you are not on call. I am ME again and it FEELS SO GOOD!!!! -LuvMyJobNOTatIBM-

  • Comment 06/10/08: TO -Work at HomeBoy- If IBM were to make us go back into the office, they would lose 3/4 of the workforce. I work in one of the technical groups in IGS, and the ONLY reason we continue to take IBM's cr*p is because we can work from home. If this were taken away, the low salary, sh*tty work hours, and all the other stuff we have to put up with would tip the scales in favor of better employment opportunities...bring it on ibm...watch your technical staff WALK! I can promise you that! -miss understanding-
  • Comment 06/10/08: To Work at HomeBoy: If there is any truth to the rumor about moving work at home people back to the office, it's only to try and get people to quit. Too many are way too comfortable rolling out of bed, getting their coffee, saving on gas and walking over to the computer. Just remember, if you can do it from home, they can certainly do it from overseas. Want to protect your great work at home cushy job? Call all your work at home homeboys, and tell them to get on the ball and sign up with Alliance, or you too, will be ra'd with the rest of us if you don't quit. That my friend, is the fact about big blow. -ra'd last year-
  • Comment 06/11/08: -Work at HomeBoy- Southbury is closing the "C" building by end of this year (the "A" building has been closed for years, so only the "B" and CSB building will be open) and allowing the employees that do not need an office in SBY to apply for work-at-home status. -sby_willie-
  • Comment 06/11/08: Work at home boy: I doubt the blue pig will do that. I would NOT put it past them to circulate rumors to force people out though. The benefit more than we do on having employees work from home. No office rent and all of the big costs behind that. Its much more cost effective to have the employees pay for the ac heat rent electricity etc.. BUT as the cramer article alluded to, layoffs will be the norm

    I left after being extended a few times on my RA, I finally told them to shove the next extension up their collective asses. I landed a job with the competitor shortly after leaving. Life is soooooooooooooooooooo much better outside ibm. The rest of the IT / Workforce is not based or as screwed up as ibm.

    I use to be proud to be an ibm'er. That changed around 2002 when the cuts kept going past the fat and muscle, into the bone. Management doesn't give a rats a$$ about you.. they don't.. really , they don't. Once they killed off spirit and the other initiatives to keep the employees happy and address our complaints, we knew the game was over. sam has made the street completely clear that he will delivery quarter after quarter, thru 2012 or something, record profits. The ONLY way he can do this is cut back on expenses / overhead. The US worker is the most expensive and the biggest overhead, so we are considered the lowest hanging fruit. I have seen folks go into mental breakdowns or worse at ibm. They dint care about us. IBM use to care about us.. we use to be family, now we are a cost and no longer considered an asset.

    Polish your resume and don't quit.. keep contacts line up job opportunities. If you quit, they win. Let them RA you so you collect the money.. There is ZERO future at IBM as an employee... zero. You are just as if not more than expendable than the contractors now. Contractors make less, you are now lower in the pecking order.. welcome to the new ibm with zero work life balance.

    As far as the one commenting on PBC's.. thanks for the laugh... we have not be judged by those in a decade.. its a waste of time. I copy and pasted the same crap every year. Its ALL based on your 1st and 2nd line and the "bucket" available. I was treated well.. My last three ratings before being RA'd were 1 2 2+ had a great record and great skills and was still screwed. Good luck all.. it was great working with everyone for a decade. The people are the only thing I will miss about ibm.. -RA'd Last May-

• Pension Comments page
• Raise and Salary Comments
  • Comment 06/06/08: Salary = 59500; Band Level = 6; Job Title = Software Engineer; Years Service = 1; Hours/Week = 50; Div Name = SWG; Location = Austin; Message = Low salaries are the reason why many employees are leaving IBM in favor of other companies. -Anonymous-
  • Comment 06/07/08: Based on what I have heard from some pretty good pals even though IBM had a great year, the stock is up, and the executives are fat and happy ... this will NOT trickle down to the little people... (who's surprised?) Expectations are that at least 1/3 of US workers will not get any raise, and that those fortunate enough to get one will not get one big enough to even keep up with the government's low-ball CPI inflation estimates... Yeah, I know, you all are SHOCKED the the little folk are getting hosed again.... -Anon-
  • Comment 06/08/08: Maybe the raise announcements are being delayed because the company is waiting to see how many of the foreign and H1-B students that are graduating this year are accepting their job offers. What do you think. If so you know what comes next! -H1B VISA land-
  • Comment 06/09/08: As far as raises go this year, I've been told that only people rated 1 or 2+ will be getting a raise. Even then the max for a 1 is 4% and 3% for 2+. To make things really stupid the thimble for raises doesn't even include enough per manager to give out the max raise to everyone rated 1 and 2+ -tx-
  • Salary = not enough; Band Level = 8; Years Service = 24; Message = Last year, I got a piddly raise. My mgr didn't even have the decency to talk to me about it. I found out about it when it first appeared in my paycheck. Talk about respect for the individual being non-existent. -miss understanding-
  • Comment 06/10/08: Salary = 55000; Band Level = 6; Job Title = SW dev intern; Years Service = 1,3; Hours/Week = 40; Div Name = SWG'; Location = NY; Message = 55000 $ intern salary -Anonymous-
  • Comment 06/10/08: The way the US economy is going with all the corporate outsourcing and off shoring, I wouldn't be surprise if the raises turned out to be a negative percentage value instead of a positive one. How much can we take away from the US workers this week? -sam-
  • Comment 06/10/08: re raises being deferred to end of June, I assume the reason is that IBM doesn't want to commit to even a minimal raise, for a select group of individuals, until they have final 2Q results. Right? -re raises-
  • Comment 06/10/08: To wondering - you can't look at the compensation on the HR site because it is locked down once the new salary structure has been determined. It will be visible again on the day you get (or don't get) the raise in your paycheck. This is common practice at ibm for the past several years. -miss understanding-
  • Comment 06/11/08: IBM has to finalize what RA's and layoffs they will do this month and next first. That's more important to them than the raise cycle. So when the piddly raises if you get one are announced your manager can tell you "at least you still have a job". RESPECT FOR THE INDIVIDUAL is long dead in IBM. -anonymous-
  • Comment 06/11/08: I think it's different for each mgr. Mine says there is no money for MBA for us at all but more than he thought for TCR. No real idea how to interpret that. -No real info yet-
  • Comment 06/13/08: Salary = less and less; Band Level = who gives a...; Job Title = 15% I/T pay cut tester; Years Service = 1 too many; Hours/Week = too much for too little; Div Name = IBMiscrap; Location = everywhere; Message = yep, holding the raises until June 30th since it is the end of 2nd QTR. If the executives make their 2nd QTR targets the raises will be a $.01 more otherwise you'll get plenty less or none at all. Pretty simple math when you think about it. Since IBM is laughing at all you sheep who still will look on this website but don't join the Alliance (what is your reason for now joining???) the more they will shear you with sharpened blades and skin your hide! JOIN THE ALLIANCE and get your raise in WRITING with a CONTRACT! Otherwise keep on bleating sheeple. Your making it all so hopeless by not joining. -a-
  • Comment 06/13/08: In regards to the delayed pay increases, let me ask this question. When the average wall street investor compares the companies results for the quarter ending in June this year against last years results in June... will they take in consideration the delayed pay raise. I'm assuming of course that the companies objective is to shift the recording of the wage increases this year for whatever reason into the next quarter on the balance sheet. Obfuscation? You tell me. Come on you got tera-flops and gigabytes hooked together with laser light communications and high speed wireless...you got MBA's, and PHD's and PM's with BA's and BSCS's holding spread sheets, flow charts, and power point presentations so why should there be a delay for ANYTHING from a schedule time. Especial something so simple that it is an annual event. Now you think about that. If I were an outside company looking in, it would make me wonder why with all the horsepower and all the manpower that you have why can you not accomplish things on time. Oh yeah there's probably a good reason for the delays I'll bet. You're just privy to it yet. BTW are the new H1-B visa holders in your department yet? -a-
  • Comment 06/13/08: But my contract calls for 5 percent per year for 3 years. Oh, that's right, no contract. Guess you get what you get. Did someone ask why a union?? I have never seen such a large group of people fight so hard for longer hours and shorter pay. Everyone who is unhappy with their raise should join the alliance . Consider it a better investment then a night school course and much cheaper. If everyone does it then for a mere $120.00 a year you will get better cheaper benefits, better work hours and defined raises. and a say in a lot more things to do with your work environment as long as you vote for them . With a CONTRACT the board of directors may have to take money from SAMMY for poor performance instead of making YOU pay FOR him. -Exodus 2007-
• PBC Comments
• 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. Some sample posts follow:

• "Travel" by "suid79". Full excerpt: How would you describe associated travel with the Sales Leader positions? Do they only hire entry-level people or experienced, as well? And, what is the typical timeframe for hire? Many thanks.
• "Very Little Travel" by "ancientblueconsultant". Full excerpts: Here are the averages from my personal notes from interviewing 8 SSLs (two more this week). You spend most of the time doing paperwork and dealing with the client's procurement and attorneys, not selling or learning anything of value in the market for you as a professional.
  • 10% filling out forecasts
  • 10% getting and deciding which leads are yours
  • 5% getting trained on solutions only of value if you sell for IBM
  • 15% on cadence calls
  • 5% trying to figure out SAP and why its performance is so bad
  • 15% on phone with client teams, ITSMs and lower level client personnel
  • 10% fending off internal competitors
  • 10% doing "Guppies" (gross profit estimators), QA and proposal writing.
  • 5% pulling FMS (field management system) reports trying to figure out whether or not you are making in progress and some commission
  • 5% on RFP response calls
  • 7% dealing with delivery issues
  • 3% facing or talking to client technical or line management
• "I had to laugh..." by "mogrits". Full excerpt: when you posted this one. One of my old friends still with IBM is in the SSL role currently and your overview is ABSOLUTELY on the money based on what he tells me. The sad thing is, this hasn't changed for several years. Oh, the role names have changed around but with the exception of a few items, you could almost substitute this list for any of the sales related jobs within IBM today. I keep wondering how long they will be able to manipulate the financial side to keep the PIG afloat. Thanks for the list and the laugh.
• "Thanks" by "ancientblueconsultant". Full excerpt: Thanks for the validation of my interview notes, Mogrits. My problem is that unless an SSL has some previous experience outside of IGS doing real selling, why would I hire one to join my team to sell consulting? It's getting tougher to find good ex-IBMers from the services franchises that have anything in their experience to show that has value for an employer in the marketplace.
• "Good points about IBM...possible?" by "quantcoder". Full excerpt: So I have been going through all the IBM bashing and "blue pig" threads. Is there anything nice you might have to say about IBM? I understand the sarcasm and frustrations. But for a change, lets talk something different and give me a few nice points on IBM. If you are telling me there is NONE, i m not going to buy that. So spare the sarcasms for a change. What say??
• "Nice try..." by "mogrits". Full excerpt: Troll. Go back and gather round the other HR trolls to start work on the next layoff or outsource. I can't say that there really are any good points left as there are plenty of other companies out there that now exceed IBM in all the basic parameters of decency in treatment of their employees. So, you tell me, what are the good points you obviously think exist? You can always start your own message board.... call it "Things that are Good and Wonderful about IBM". I look forward to reading the postings.
• "Why not join IBM and find out for yourself?" by "civilliberty". Full excerpt: I'm not backwards in coming forwards in saying something good about companies I have worked for, if I can find something good to say. In my over 20 years of experience though in IT as permanent employer and contractor, working for industry and consulting companies I would have to say that IBM is the most undeserving employer I have worked for. My view towards the end was 'give me the package, things can only get better outside of here'. My first contract proved it, and it has been proved ever since.
• "People talk of the IBM of old" by "civilliberty". Full excerpt: I am not familiar with that IBM. But, I did know someone who considered he was paid ok, and found IBM a good company to work for (I would add though that it was more a case of having a good people manager - we both had the same person at different stages - she was a real gem in the midst of many fakes). His experiences were also a part of the time when IBM was doing well in the market (pre-dotcom bust). Ever since then it appears IBM has got far worse. Where it can take from an employee, it does.
• "Tough Assignment, but here's some thoughts..." by "ancientblueconsultant". Full excerpt: quant, I've been out of the executive ranks now for about 2 years, yet I interview and talk to active IBMers of all levels on a daily basis. The problem you face here is that this forum is by in large mostly US and Western European/Australian based. In these geographies, IBM has been slowly re-trenching for decades, reducing benefits, personnel compensation, etc. as it turns to new markets in other geographies and emphasizes "economical" global resourcing here.

  That's why you'll see that the past IBM will always be better than the current IBM. In the geographies mostly represented by this forum, IBM has moved from being the pre-eminent US multinational employer to an employer on par with the general market. Nothing wrong with that strategy, unless you are an employee with some history with the company. As a new employee, you'll have no knowledge of the past, so ignorance in this case is good, but as you acquire a historical perspective the inexorable movement down the hill will become noticeable to you.

  There are good jobs in IBM, but not in the services, sales or engineering areas. The problem here is that IBM tends to pigeonhole people as part of their assimilation process into the company.

  The other problem is that IBM is now designed for short stints. All the programs, plans for retirement, medical etc. are designed for people to come in for 3-6 years than leave. Anyone staying there for long actually loses in the long term financially, unless you move up into the executive ranks.

  The good areas I would certainly recommend for an individual for a short stint are:

  • Attorney in the area of Intellectual property (patents, etc.) IBM is certainly a leader here and although they now outsource most IP work, if you get a job there as an attorney it's a good learning experience.
  • Attorney in contract law and negotiations in STG (not SWG or IGS or even IGF). They still have leading edge contract law issues.
  • Economist in finance and corporate planning. IBM economists are among the best.
  • Tax Accounting. IBM is a great avoider of taxes and the international exposure is very good for a career corporate tax accountant.
  • Advertising and Public Relations. IBM is a great propaganda machine and if you can stomach the work, it's a great learning experience in advertising and PR.

  Other than these areas, I can't honestly tell you there's any good jobs that would grow you in the marketplace without some inordinate personal cost.

• "my good points list" by "bluejules". Full excerpt: I had to bite on this one. Since I'm working on my own plan/timeline for departure, I already had a list of plus/minus. Here's the positives I noted, in no particular order:
  • very flexible on location - remote work is fine (YMMV)
  • lots of friends at IBM who I enjoy working with
  • have reasonably good 401K plan when compared against other employers
  • can reduce the amount I contribute to bring it in line with how I'm compensated
  • stable job while I launch other business ventures
  • employer history over 2 years helpful when seeking real estate-backed loans (may want to do that at some time in the next year)

  Maybe not the type of points you were expecting, but these are my positives at the moment. Naturally, they're balanced with a long list of negatives. Looking through them, they're pretty much the same as what everyone else has expressed.

• "Don't Forget to add..." by "ancientblueconsultant". Full excerpt: That for a new hire, the IBM 401(k) plans are not different than what new folks at other companies like HP get and the stock plan is less attractive than most. Just using HP as a typical example, the 401(k) is the about same, the Beneflex is better than the IBM pile of benefits options and the stock purchase program is not as attractive as HP's. The HP RMSA isn't as good as the old FHA, but new folks don't get retirement medical. The degree program is better at IBM, but at HP it's guaranteed and at IBM it's very selective and restrictive on what degree, etc. http://h10055.www1.hp.com/jobsathp/content/benefits/US/HP_Benefits_Brochure.pdf

  Remember, you are a new person so your bennies will be less as the other poster so aptly stated. The trend is downward for bennies in large multinationals. Do your homework and make sure you compare all of the bennies apples to apples. The difference between boutiques and large firms are that you can tailor even more the bennies to fit your individual profile, except for maybe the 401(k) investment options.

• "FUMU" by "Frank_Reality". Full excerpt: They don't call them "fast trackers" anymore - they're called ER's - executive resources. They bounce from job to job creating havoc and messes, but never stay long enough in any one position to actually have to clean up the mess they've made or be held accountable. The worst manager I ever had was a female dog that was an ER. For what it's worth, I think it's gotten worse since the 1993 days. IBM invented FUMU - the "F*ck Up, Move Up" method of executive training. Which explains a lot about crap we have running the corporation today.