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

• Wall Street Journal: The Most Expensive Drugs Are Getting Even More Expensive. By Jacob Goldstein. Excerpts: Specialty drugs — often sold by biotech companies, and used to treat complex conditions such as cancer — are some of the most expensive medicines on the market. As it turns out, their already high prices are rising much faster than inflation, and even faster than the prices of other prescription drugs. Last year, the wholesale price of specialty drugs rose 8.7%, three times the rate of inflation. The price of non-specialty, branded drugs rose 7.4%, while the price of generic drugs fell by 9.6%. ...

  The price of specialty drugs can run to tens of thousands of dollars per patient per year. Drug makers explain the high prices by pointing to high research costs, small patient populations and the complexities of manufacturing biotech drugs. Even so, the prices have been getting plenty of pushback lately from patients, government officials and even the occasional Wall Street analyst wondering how high prices can go. That hasn’t stopped companies from jacking up the prices of drugs already on the market: Among 112 commonly used specialty drugs that were on the market from Dec. ‘03 through Dec. ‘07, the average price rose by 42.9%, the survey found.

• USA Today: Study: Many cancer patients forgoing care because of cost. By Liz Szabo. Excerpts: At a time when they're already fighting for their lives, more cancer patients are now struggling to pay for their medicines. One in eight people with advanced cancer turned down recommended care because of the cost, according to a new analysis from Thomson Reuters, which provides news and business information. Among patients with incomes under $40,000, one in four in advanced stages of the disease refused treatment. ...

  David Johnson, director of hematology and oncology at Nashville's Vanderbilt-Ingram Cancer Center, says some of his patients have opted to stop treatment partly because of the cost. His own brother-in-law, a truck driver, turned down Erbitux when he was facing colon cancer four years ago. He says patients face a painful dilemma: "Do they pay out of pocket — sometimes in the thousands of dollars — or do they forgo the therapy to preserve for their family what modest assets they may have?"

• The Henry J. Kaiser Family Foundation: Business Groups Question Health Benefits Cost Disclosure Bill in Senate. Excerpt: Several business groups are "reacting with caution" to a bill proposed last week that would require employers to show the entire cost of an employee's health coverage on a tax form, CongressDaily reports (Edney, CongressDaily, 10/10). Under the legislation -- sponsored by Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa), Senate Health, Education, Labor and Pensions Committee ranking member Michael Enzi (R-Wyo.), and Sens. Ron Wyden (D-Ore.) and Ben Nelson (D-Neb.) -- employers would have to disclose on annual W-2 tax forms the amount spent on health insurance premiums for employees and their families, as well as the amount spent on dental and vision coverage (Kaiser Daily Health Policy Report, 10/8). The senators believe that showing employees the cost of health care they lose in wages will encourage them to be more thoughtful in making health care decisions and help reduce health care costs, CongressDaily reports.
• Robert Wood Johnson Foundation: High and Rising Health Care Costs. Demystifying U.S. Health Care Spending. By Ginsburg PB. Excerpt: Concern about high and rising health care costs in the United States has increased sharply in recent years. With the increase in costs and the lack of affordability of health insurance for many Americans, health policy experts are discussing whether steps can be taken to expand insurance coverage while keeping costs down.
  • Health insurance is becoming increasingly difficult for workers—and their employers—to afford. Premiums increased 114 percent between 1999 and 2007, while workers’ earnings increased only 27 percent.
  • U.S. spending on health care—as a percentage of Gross Domestic Product—is more than six percentage points higher than the average for other developed countries.
  • Technology—not demographics or medical malpractice—is the key driver of health spending, accounting for an estimated half to two-thirds of spending growth.
  • Other important drivers of health care spending include health status (particularly obesity) and low productivity gains in the health care sector.
• Workforce Management: Kaiser Permanente Signs Up Employees for Microsoft’s Online Health Record Service. Nonprofit health insurer Kaiser Permanente announces that its 159,000 employees will be the first employees to participate in Microsoft’s Healthvault online health record. Excerpt: Kaiser, which made the announcement Monday, June 9, will allow employees to transfer prescription information, test results and other health data from the company’s own online personal health record, My Health Manager, to Microsoft's Health Vault. If the pilot program for employees is successful, Kaiser said it will make the service available to its 8 million members nationwide, according to news reports.
• New York Times: 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.

• WebMD Health News: Infant Mortality: U.S. Ranks 29th. U.S. Ties Slovakia, Poland for 29th Place in Infant Deaths. By By Daniel J. DeNoon. Excerpt: Nearly seven U.S. babies die out of every 1,000 live births. More than 28,000 American babies die before their first birthday. In Japan, ranked in third place behind Singapore and Hong Kong, the infant mortality rate is 2.8 per thousand live births -- less than half the U.S. rate.
• Washington Post: As Budgets Tighten, More People Decide Medical Care Can Wait. By Ceci Connolly and Kendra Marr. Excerpts: From Park Avenue dental offices to the Arlington Free Clinic, the global economic crunch is forcing a growing number of Americans to scale back on medical care. Consumers are attempting their own form of triage, pushing off seemingly less-urgent services in the hope that their financial health will improve. But the danger, say physicians, is that the short-term savings may translate into more severe long-term health implications.

  At the extreme are cases such as the Texas woman who went to the hospital complaining of back pain. Physician Doug Curran immediately spotted cancer on the X-ray. "She'd had a lump in her breast for a while, but things were tight and she said she couldn't get it looked at," he recalled. "We're going to see more of that."

  Nationwide, the number of consumers who went without a prescription, tapped into retirement savings to pay for health care or skipped a doctor visit for themselves or a child has risen since last year, according to a survey released this summer by the Rockefeller Foundation and Time magazine. One-quarter of the 2,000 respondents, for example, said they had decided not to see a doctor because of cost in 2008, up from 18 percent the year before. Ten percent said they did not take a child to the doctor for the same reason.

News and Opinion Concerning the U.S. Financial Crisis

"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich."

From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.

• Forbes: The Socialism Of Bankers. By Melik Kaylan. Excerpts: In the early 1980s all sensible folk abandoned faith in socialist ideas because it became clear that socialism was what socialists did--not what it promised. It promised utopia, but you had to sacrifice to the system. If you had faith in the machine, it would save you. The results said otherwise. We all said "no thanks" to that idiot utopia.

  Enter, instead, the new cult of the free market, aka the Chicago School. The entire economy of South America collapsed, as did the post-Soviet economies. Some said the cause was too much free market, some said not enough. If only we could get just the right amount of free market. If we stuck with it, if the entire globe competed freely, non-stop, around-the-clock, we'd all be rich. Possibly dead from exhaustion, but rich for sure. Now the world's economy is collapsing and nobody has a clue. What we lack, apparently, is confidence in the market. In other words, faith.

  There is doubtless a lot of truth to that. If no one goes to the marketplace to buy and sell eggs and butter because they don't trust the pricing, there will be none available. But it's also true that we have suffered from too much faith. Now that we're disabused, we won't believe again for a while. Too many common sense doubts remain un-addressed, or so it seems to a layman like me. At times like these when the media blizzard roars loudest, it always seems that the most glaring questions don't get asked. Here again, in no particular order and in all humility, I offer a few such probes...

• New York Times: Banks’ Bailout Unlikely to Crimp Executive Pay. By Reed Abelson. Under the bailout plan for the nation’s banks unveiled on Tuesday, no heads will roll, as they did in the United Kingdom. No banking executives are likely to go hungry, either. But their parting may not be quite as sweet. The Treasury’s plan seeks to take aim at the eight-figure pay packages given to Wall Street executives that have enraged so many Americans in the wake of the country’s financial collapse. ...

  Compensation experts say that the provisions, though politically prudent to appease public anger, will probably have little real impact on how financial executives are paid in coming years. They predict banks will simply pay higher taxes and will find other creative ways of paying their executives as they see fit. Some say there could even be a sudden surge in compensation as soon as the government program ends, in a few years, leading to eye-popping numbers down the road. ...

  Like other experts, Professor Murphy expects the $500,000 cap to be largely ignored, with banks willing to accept the tax consequences. For many of the top executives, such a salary would simply not be competitive: “$500,000 was supposed to be a good week,” he said, adding that many of these executives would respond to such suggestions by leaving for jobs at unregulated banks or hedge funds.

• FinancialWeek: 'Perverse' bonuses, not exuberance, led to crisis, study claims. Excerpts: Perverse bonuses for managers at some less-than-prudent banks and financial intermediaries, not irrational exuberance, fuelled the debt securitization boom that led to the financial crisis, a study said on Tuesday. “A large number of financial intermediaries retained a prudent policy over the last years. But others, including some large players, did not,” said the study by the Center for Financial Studies (CFS) at Frankfurt’s Goethe-University. “This set off the infection which first hit these players, but then undermined the confidence in the financial system on a large scale, with far-reaching contagion effects,” CFS said. ...

  Thanks to incentives such as profit-sharing bonuses, banks’ managers were keen on asset securitization “simply because it may increase their income with no commensurate risk premium imposed—the risk in the form of increased default probabilities is mostly borne by shareholders and third parties in case of bank insolvency,” CFS said. “The incentive to expand securitizations was upheld by the fact that the management pay-off was cashed out as a bonus well before the externality was felt in the profit/loss of the bank,” it said, describing such incentives as “perverse”.

• Washington Post: Executive Pay Limits May Prove Minimal. Lawmakers Hail Plan, but Analysts Question Its Impact. By Lori Montgomery. Excerpt: With the nation's largest banks set to receive an unprecedented infusion of public funds, lawmakers boasted yesterday that the top executives will for the first time face federal limits on their multimillion-dollar pay packages. But outside analysts and the banks themselves said the new limits are unlikely to significantly reduce anyone's paycheck. The $700 billion Wall Street rescue plan Congress approved less than two weeks ago does little to limit overall compensation, which averaged $22 million last year among chief executives at the first nine banks that will accept public money under the program.
• New York Times: Buy American. I Am. By Warren E. Buffett. Excerpts: The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

  So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

  Why?

  A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

• Washington Post: Worldwide Financial Crisis Largely Bypasses Canada. Tight Regulations, Strict Lending Practices Encourage Optimism. By Keith B. Richburg. Excerpts: While the United States reels from the global financial crisis, with credit markets still frozen and stock prices careening from highs to lows, Canada has remained relatively insulated .Canadian banks have not gone shaky like their American counterparts, economists and other experts said. There is no subprime mortgage or home foreclosure mess. And while the United States fears a prolonged recession, Canadians have remained relatively sanguine, convinced that they are in a good position to weather the economic tsunami from the south. ...

  The main reason for optimism here is the banking system. Experts here note that Canadian banks are more tightly regulated, more liquid and less highly leveraged. Instead of being highflying investment banks, they tend to operate in a more traditional manner, with large numbers of loyal depositors and a more solid base of capital. ...

  Strict rules also govern mortgage lending. By Canadian law, any mortgage that will finance more than 80 percent of the price of a home must be insured. Two-thirds of all Canadian mortgages are insured by the quasi-governmental Canadian Mortgage and Housing Corp. As a result of the tough standards for insurance, "people tend not to get mortgages they cannot afford," Gregory said. Defaulting on a loan is also more difficult in Canada than the United States, Gregory said. "You can't just drop off the keys and walk away."

New on the Alliance@IBM Site

• CWA Pushes Economic Recovery Plan for American Families. Excerpt: CWA is joining with other unions, civil rights, community and faith-based groups, student and senior organizations, and others to build support for a recovery plan that addresses the current and longterm needs of American families – especially when it comes to quality jobs, Cohen said. "We've seen an enormous handout for Wall Street, now we need real attention to Main Street. That means the creation of quality jobs by developing alternate energy sources, necessary repairs to our highways, bridges, schools and communities and especially important, investment in the global economic engine for the 21st century, the build out of high speed Internet networks," Cohen said.
• Job Cuts Status & Comments page
  • Comment 10/15/08: At the end of October IBM is shipping 24 staff members and their families to Bangalore, India for 18 months, their job prepare staff over there for the 3000 jobs IBM will ship over in 2009. More Americans out of work so we can help the Indian economy out. IBM the grand old US company do it's best to drive America into a depression -Ex-IBMer-
  • Comment 10/15/08: Trust in every relationship. When jobs are moved to India and other countries and people are put on a resource firing list that person is given 30 days to find a new job. What they don’t tell you is your manager needs you to exit IBM to count you in their exit numbers for their PBC. If you find a new job then your manager needs to fire someone else to make their target. This is why people can’t find jobs in those 30 days! -Anonymous-
  • Comment 10/16/08: Folks it has been a little over a yr now since i received my call from the spineless first line mgr advising me I had lost my job. It was rough at first, i went through a lot of interviews and heard the usual, over qualified or they couldn't come close to paying what I was making at ibm. I did eventually find a job and a good one at that. I now work for UPS @ a distribution center. I still sit behind a computer (don't touch a box) for 5 1/2 hrs a day. The pay is about half of what I was making at ibm BUT I only work 5 1/2 hrs a day. The insurance is great, $33/month for medical and dental for the entire family, medical alone at ibm was $240/month.

    After working there 6 months I received a 4% raise. I have already been told by my mgr when I want to go full time to let him know and they will start me @ $60K per yr. Right now I am kind of enjoying this 25.5 hr work week and will probably go full time at some point. The meaning of this post is for folks who are looking for a job to check out UPS, the insurance is great and unlike ibm they will PAY if you are a top performer. They are a stable company and appreciate someone who can function without having someone stand over them and direct their every move... ....good luck to all -A year later- Alliance Reply: UPS is also unionized in some job classifications; is this true for your job?

  • Comment 10/16/08: I have selected to be let go at end of October 2008; however, I am less than 3 months away from age 54 in which case I can get 1 year to retirement. I will lose out on retirement insurance benefits. What recourse actions do I have? How can I complain to my HR person? There were over 200 GTS people affected. -Anonymous-
  • Comment 10/16/08: to retire you need 30 years OR 15 years + 55 yrs or older. You can bridge ONE YEAR to retirement in your 29th year. Check with you HR contact or call the ESC . Most management is clueless about retirement/benefits, etc. -anon-
  • Comment 10/17/08: IBM claims they have a test program place http://www-935.ibm.com/services/us/gbs/bus/html/daksh.html to replace front software agents at the Atlanta call center. India started taking calls the week of 10/1/08, official start 10/13/08, Affecting 23 contractors. Normal actions clear out the contractors, then the IBM'ers on the back end are next. Right now the IBM'ers are fixing/recording process problems for India. Once the process is smooth, bye bye -Anonymous-
• General Visitor's Comment page
  • Comment 10/13/08: Does anyone know when the annual manager survey goes out to employees, so we can "rate" our managers? -Wondering-
  • Comment 10/13/08: to -Wondering-: That's like asking to fill out a comment card for the breakfast you just had on the Titanic...are you serious? You make ME wonder... -youmakemewonder-
  • Comment 10/13/08: Wondering...we were told this year we would not be rating managers. Div 16. -Marbles-
  • Comment 10/15/08: So in addition to no raise again, I get to see an increase in my LTD premium. This is mighty generous of IBM. -Anonymoius-
• Pension Comments page
• Raise and Salary Comments
  • Comment 10/17/08: Gotta love to know we are in tough times financially with IBM, but Mr Sam is able to receive $74million in sold stock this year. Yes. $74,000,000. http://biz.yahoo.com/t/40/4114.html -About to go insane @ IBM-
• 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:

• "Where's the money?" by "wonderaboutibm". Full excerpt: Help. My mental capacity to figure out what IBM really sees in outsourcing is failing me. I am searching for advantages, but I just can't find any. (And please don't try to tell me I am just mouthing off as a North American IT person.) Effectiveness or efficiency? Not in my experience. Low cost? I can't see how, with the staff turnover, rocketing wages in India, etc. and the extreme difficulty in keeping competent resources overseas. Let's hear the inevitable rejoinders.
• "How does IBM calculate utilization?" by "Em_Bush". Full excerpt: How does IBM calculate utilization?
• "Wrong question" by "Blue_Bystander". Full excerpt: They calculate it the way most professional services companies do: Billable hours / 2080. The real question is how do they determine your utilization targets? Do they expect you to hit 95%, take your vacation, get your training, and travel too? If so, your actual target will be in excess of 100% per week.
• "Well..." by "wonderaboutibm". Full excerpt: You hit the target by doing what IBM management asks: most GBS units specifically request 44 hours billable work each week that the staff member does work. You also increase (pad?) your utilization toward the end of each quarter, in response to the blizzard of notes requesting that, again from IBM management. Remember that we are supposed to go to asset-based value for the customer. Yeah, right.
• "With Utilization" by "Premaria". Full excerpt: If you really want to excel at IBM, you should plan how to increase your utilization at the beginning of the year. (1) You must be billable on more than one project at the same time - the only way you can maintain over 45 hours/week is to perform work on at least 2 projects every week. Of course, this means an average of 8 hours for the essentials (sleep, eat, bathe, etc.) each 24 hour period, but you'll get used to it. (2) Although you got 3 weeks of vacation when you joined the company, you can not use it. The best you can do is be sick or take mental vacations through WoW or Second Life.

  You think I'm kidding, but I've worked with guys who worked their butts off for 10 months and were able to take 2 months off and still have 100% utilization. Of course, they didn't have a life during the 10 months, but for them, it was worth it.