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

• New York Times: When a Job Disappears, So Does the Health Care. By Robert Pear. Excerpts: As jobless numbers reach levels not seen in 25 years, another crisis is unfolding for millions of people who lost their health insurance along with their jobs, joining the ranks of the uninsured. The crisis is on display here. Starla D. Darling, 27, was pregnant when she learned that her insurance coverage was about to end. She rushed to the hospital, took a medication to induce labor and then had an emergency Caesarean section, in the hope that her Blue Cross and Blue Shield plan would pay for the delivery.
• Los Angeles Times: Consensus emerging on universal healthcare. The prospect of bold government action appears to be accepted among players across the ideological and political spectrum, including those who opposed the idea in the 1990s. By Noam N. Levey. Excerpts: After decades of failed efforts to reshape the nation's healthcare system, a consensus appears to be emerging in Washington about how to achieve the elusive goal of providing medical insurance to all Americans. The answer, say leading groups of businesses, hospitals, doctors, labor unions and insurance companies -- as well as senior lawmakers on Capitol Hill and members of the new Obama administration -- is unprecedented government intervention to create a system of universal protection.

  At the same time, those groups, which span the ideological and political spectrum, largely have agreed to preserve the employer-based system through which most Americans get their health insurance. The idea of a federal, single-payer system patterned on those in Europe and Canada, long a dream of the political left, is now virtually off the table.

• Washington Post: U.S. 'Not Getting What We Pay For'. Many Experts Say Health-Care System Inefficient, Wasteful. By Ceci Connolly. Excerpt: Talk to the chief executives of America's preeminent health-care institutions, and you might be surprised by what you hear: When it comes to medical care, the United States isn't getting its money's worth. Not even close. "We're not getting what we pay for," says Denis Cortese, president and chief executive of the Mayo Clinic. "It's just that simple."

  "Our health-care system is fraught with waste," says Gary Kaplan, chairman of Seattle's cutting-edge Virginia Mason Medical Center. As much as half of the $2.3 trillion spent today does nothing to improve health, he says. Not only is American health care inefficient and wasteful, says Kaiser Permanente chief executive George Halvorson, much of it is dangerous.

• Politico: New fault line forms in health care fight. By Chris Frates. Excerpts: A new fault line is forming in the health care reform debate that could prove to be just as bruising as the conservative-vs.-progressive battles: the schism between single-payer and public-private advocates. Both sides are pushing for universal health care, but the more purist single-payer advocates believe that any approach that retains the insurance industry is doomed to fail.

  “Private health insurance is no longer a workable model for health care reform, because the insurance companies sell a defective product and health care costs are so high that even moderate-income families can no longer afford the premiums, co-pays and deductibles,” said Ida Hellander, executive director of Physicians for a National Health Program, a group of 15,000 doctors who support a single-payer system.

  So far, though, groups working to create a public insurance plan that exists alongside tightly regulated private plans have grabbed the political high ground — largely because many deem a single-payer system too easy to demonize as socialized medicine.

• New York Times: UnitedHealth to Insure the Right to Insurance. By Reed Abelson. For these economically uncertain times, the UnitedHealth Group has a “first of its kind” product: the right to buy an individual health policy at some point in the future even if you become sick. Called UnitedHealth Continuity, the product is not actual medical insurance, but is aimed at people who may have insurance now but are worried they may lose it — and may not be able to obtain replacement insurance on their own. They may expect to retire early, for example, before they qualify for Medicare. Or they are worried about the possibility of losing their job and their health coverage.

  People who are already sick will generally not be eligible for the new product. Those who do pass a medical review, will pay 20 percent each month of the current premium on an individual policy to reserve the right to be insured under the plan at some point in the future.

• Taking Note: The End of Pharma's Free Ride? By Niko Karvounis. Yesterday Reuters reported that, in comments at a Financial Times conference in London, a top executive at Roche Pharmaceuticals condemned direct-to-consumer advertising as a disaster. “Direct-to-consumer promotion [of drugs] was the single worst decision for the industry," said William Burns, Roche’s head of pharmaceuticals, to conference attendees. "When industry says we're spending all the money on R&D but actually it's spending it on TV advertising to preserve margins, it doesn't get much credibility,” he continued.

  Burns’ despondency is understandable: if ever there was a time that the prescription drug industry needed credibility, it’s now. For the first time in recent memory, drug companies are facing the prospects of an end to their free ride of unregulated profiteering. There are already rumblings that both the Obama Administration and the Democratic Congress want to stack up a series of clean legislative victories by going for “low-hanging fruit”—bipartisan, popular initiatives that will pass easily—and there are few juicier targets than Big Pharma.

• Los Angeles Times: Insurers propose universal, centralized healthcare. Several consumer groups criticize the early bid by America's Health Insurance Plans, a trade group that fought an overhaul in the 1990s, to take an active role in Obama's effort to revamp the system. By Noam N. Levey. Excerpts: Sharpening the emerging debate over how to reshape the country's healthcare system, the major group representing insurers unveiled a proposal Wednesday for covering all Americans in a more centralized insurance market. The plan offered by America's Health Insurance Plans, a trade group representing companies that together insure more than 200 million people, comes a decade and half after the industry helped kill the last major healthcare reform campaign -- pushed early in the Clinton administration. ...

  Several consumer groups sharply attacked the insurance group's plan on Wednesday. "The health insurance industry's vision of healthcare reform lets them keep charging whatever they want and increase their profits while sticking families and taxpayers with high costs," said Richard Kirsch, national campaign manager for Health Care for America Now.

• USA Today: Medicare drug criticized as unclear. By Julie Appleby. Excerpt: More than 1 million people in the Medicare drug program next year will pay almost the full price for certain brand-name drugs when they choose them over generics — a move that advocates for patients say is not clearly spelled out by the government nor insurers. For hundreds of targeted drugs, patients will pay a standard co-payment. They also will pay the difference in price between the brand- name medicine and the generic. The practice in Medicare mirrors similar efforts in job-based insurance.

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.

• Associated Press, courtesy of MS-NBC: Bush administration ignored clear warnings Under pressure from banking industry, U.S. government eased lending rules. Excerpts: The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.

  “Expect fallout, expect foreclosures, expect horror stories,” California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.

  Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

  “These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages,” David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

  The administration’s blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

• New York Times: Debt Watchdogs: Tamed or Caught Napping? By Gretchen Morgenson. Excerpts: “These errors make us look either incompetent at credit analysis or like we sold our soul to the devil for revenue, or a little bit of both.” — A Moody’s managing director responding anonymously to an internal management survey, September 2007.

  The housing mania was in full swing in 2005 when analysts at Moody’s Investors Service, the nation’s oldest and most prestigious credit-rating agency, were pressured to go back to the drawing board. Moody’s, which judges the quality of debt that corporations and banks issue to raise money, had just graded a pool of securities underwritten by Countrywide Financial, the nation’s largest mortgage lender. But Countrywide complained that the assessment was too tough.

  The next day, Moody’s changed its rating, even though no new and significant information had come to light, according to two people briefed on the change who requested anonymity to preserve their professional relationships. ...

  That was not the only time Moody’s softened its stance on Countrywide securities. It elevated ratings several times after Countrywide complained, the people briefed on the matter say. Since the subprime mortgage troubles exploded into a full-blown financial crisis last year, the three top credit-rating agencies — Moody’s, Standard & Poor’s and Fitch Ratings — have faced a firestorm of criticism about whether their rosy ratings of mortgage securities generated billions of dollars in losses to investors who relied on them.

  The agencies are supposed to help investors evaluate the risk of what they are buying. But some former employees and many investors say the agencies, which were paid far more to rate complicated mortgage-related securities than to assess more traditional debt, either underestimated the risk of mortgage debt or simply overlooked its danger so they could rake in large profits during the housing boom. ...

  Moody’s current woes, former executives say, were set in motion a decade or so ago when top management started pushing the company to be more profit-oriented and friendly to issuers of debt. Along the way, the firm, whose objectivity once derived from the fact that its revenue came from investors who bought Moody’s research and analysis, ended up working closely with the companies it rated, and being paid by them.

  And in 2000, when Moody’s issued stock to the public for the first time, executives hungry to churn out quarterly profit growth had another incentive to redirect the firm’s focus from low-margin ratings of relatively simple bonds to highly lucrative assessments of much more complex debt securities. As it rode the mortgage wave, Moody’s came to enjoy profit margins that were higher than those of the mightiest of Fortune 500 companies, including Exxon and Microsoft.

• Jobs with Justice: Call to Action!! People’s Bail-Out Now!! National Week of Action: December 7-13. Excerpt: As many predicted, the Wall Street Bail-out has proven to be the gross give-away to the same financial bigwigs that have been pocketing millions while wrecking the real economy. Little or no benefit has gone to the working people and the real economy, at a time that we face the greatest economic crisis since the 1930s. By the time Obama is sworn in, hundreds of thousands of additional people will lose their jobs, lose their homes and lose their health care.
• Jobs with Justice: Hold Bank of America Accountable. Excerpt: Only weeks after taking $25 Billion in bailout money, Bank of America is turning its back on hundreds of workers making energy efficient doors and windows in Chicago by refusing to continue credit to Republic Windows and Doors. To make matters even worse than putting 300 people out of work, Bank of America has instructed Republic to refuse to pay workers compensation they are legally entitled to, either earned vacation pay or the severance pay legally required under the WARN Act, in lieu of proper notice of plant closing.

  Like many other 'titans of Wall street,' Bank of America, Key Bank and others are taking their bailout -- supposedly meant to allow credit to get our economy moving again -- and using it to take over other banks, pay bonuses to executives and dividends to shareholders... just about everything except helping businesses continue to employ workers.

New on the Alliance@IBM Site

• Job Cuts Status & Comments page
  • Comment 11/30/08: Open Letter to Sam Palmisano: Sam, as you close the 2008 year receiving your $10 million annual salary on top of the millions of dollars in stock options and bonuses you will receive, I want you to think about all the employees you have been screwing by laying them off, cutting their pay, sending their jobs overseas, ruining their holidays, their families, their careers, and their lives. You are a closed minded asshole. Now I know the real Ebenezer Scrooge.. Sam Palmisano. I hope you rot in hell. You are on my bad list. -Santa Claus-
  • Comment 12/01/08: To AnotherBTVer: Where have you been over the last 10 - 15 years? Ever since NY won the contract for the new manufacturing fab in the early 90's BTV has been going downhill. The IBM corporation has not made any significant investment in BTV in over 10 years. The manufacturing tools are old and outdated. The technologies manufactured in BTV are old an no longer leading edge. All new technology development has been transferred to the ASTC in Fishkill. BTV does not make anything for IBM machines anymore. BTV is on its way out. Yes, this was planned by the executives of the IBM corporation. IBM wants to consolidate its operations in NY. When IBM finds a buyer for the BTV facility it will be quickly sold. Get your head out of the sand. Open your eyes and see what is going on. -AnotherBTVerToo-
  • Comment 12/01/08: I'll echo a little bit of what Think and AnotherBTVer are saying. I've been here in BTV for over 25 years. The chip business has always been cyclical. It's very, very bad right now, but it's always been up and down. BTV managed to smooth out those bumps pretty well until this one. What makes BTV vulnerable is that (AFAIK) we make nothing for any IBM products. What makes BTV unique is that there's stuff we do for the Gov't that cannot be done by a non-US company (hush-hush, locked doors and all that). What makes BTV cheap is that it's old technologies, running on old tools, in old buildings. Like AnotherBTVer says, we've been in lows like this in the past. What we've lost is the faith that IBM will hang in there for things to recover. Would IBM sabotage BTV? I don't see that. Would IBM make a decision that looked to us like it was favoring EFK over BTV? Yes, I can see that. We'd never know the whole reason (maybe a deal with NY, maybe a tax deal, maybe a consolidation of resources). -Nuther BTV'er-
  • Comment 12/01/08: Had my exit interview today. Was one of 126 canned in GBS U.S. today. Was in SEA&T sweatshop working minimum 53 hour weeks (and they wanted you to perform "giveback" activities in addition). Layoff as I see it, was due to the fact that I wouldn't live out of a suitcase (travel to External Accounts) or that I got some money from the Rosenberg vs. IBM overtime lawsuit (which was even mentioned in the "resource action" package). Second time I've been "downsized" from IBM - won't be a third....that's for sure. -OutsourceGWB- Alliance reply: Sorry to hear of your job loss. Please send the Alliance a copy of the resource action package (the section that has ages/titles/selected, title page, and the section that mentions the Rosenberg suit.) Our address is on front page of this web site.
  • Comment 12/02/08: OutsourceGWB - I'm in SEA&T and I have to agree that the practice group sucks since they want 48 to 53 hours each week. The group is screwed up with no vision and there is no way to compare yourself with your fellow employees. Everyone is kept in the dark. Managers in this group are complete idiots. The giveback is complete joke but you have to do something otherwise they label you as not being a team player. -SammyIBM-
  • Comment 12/02/08: It would not surprise me at all if BTV is up for sale. IBM has, over the years, followed a pattern of selling any manufacturing entity that produced a commoditized item. US manufacturing facilities for commodities are rarely competitive with their Asian counterparts. Add to that the cost of IBM's hierarchy and you have an unsustainable business model. Look at IBM's history with printed circuit boards (raw and populated), printers, disk drives and PCs. In each case (if memory serves), a plant or business was sold off and the new owner was promised some segment of "guaranteed" revenue from IBM for some time period. It doesn't take a crystal ball to predict what's next for BTV....just a bit of 20:20 hindsight. -Think-
  • Comment 12/03/08: 15 -20 IBM employees were RA'ed on 12/01/2008. These employees were assigned to the Bank of America site in Chicago. All were LONG term bank employees who got hired by IBM as part of ABN-AMRO Bank,NL outsourcing deal of 2005. It has been a continuous RA effort by IBM to RA small groups at a time to avoid a lot of headlines. The total number RA'ed is likely to be in the thousands as group after group has disappeared during the last 3 years. -Anonymous-
  • Comment 12/03/08: Expect to see GTS up for sale in the near future around Feb-March after some more conversion. There has been talk of less China and more into India, Bangalore campus getting spread into other divisions as well. There will be one more round of RA's that we know of by end of year and should be mostly SA/TE/TL's as the PM's are mostly gone or needed only on customer facing and rest are going through the IBM certs at Bangalore. For some projects expect to get callbacks in periods of end of Jan through March as subs to prev IBM'ers and the offer will be a 10-20% less with no benefits as the SDLC starts up with many customer bases. Don't get hopes up, mostly looking for specific skill sets and customer interactions-specific Seibel, SAP, etc are the ones I heard mentioned. -IBM UC'd-
  • Comment 12/04/08: I work as Contractor for IBM Global Services, I have been informed of pay-cut of 15% effective 01DEC08. Received information from various sources about GDF - Global Delivery Framework in Boulder will go live for Wave1 in the 3rd week of Jan'09 -VisionIBM-
  • Comment 12/04/08: Today AT&T announced 12,000 jobs to be cut starting December - 2009. IBM outsourced its entire Network Services division to AT&T in February. Here comes the layoffs. So much for AT&T being a good career move for the IBM network people that moved. More of a move to the bread line! -blue with bluesky-
  • Comment 12/05/08: Hearing rumours in Rochester that all of ISC is to be vendored out. No details yet... -Anonymous-
  • Comment 12/05/08: Approximately 300 from ibm.com, software, and hardware effective Dec 3. Locations all over. Another group scheduled for Dec 10. -Archie Tect-
  • Comment 12/05/08: I am a former IBMer of 10 years back as a contractor. Was notified of pay cut 11/29, and yesterday was told today is my last day. Many other contractors and regulars are losing their jobs this week in IGS/ITD -PW-
• General Visitor's Comment page
  • Comment 12/01/08: I am due to return to work on Jan 9, 2009 from my Maternity Leave (MLOA). I have been demoted, although my base pay remains the same, however I will be put into a position where I used to TRAIN this team. I will be taking incoming calls & back to the call center status. IBM is pathetic and I plan to resign ASAP. My 11 years with the company seems to have been a complete waste of time, as they are getting rid of the "regs" and moving quickly towards a "contractor/sub" workforce. -IBM Canada Employee-
• Pension Comments page
• Raise and Salary Comments
  • Comment 12/03/08: Salary = 80,000; Band Level = 8; Years Service = 3; Hours/Week = 30-40; Used to work 60 until I realized there are no rewards. Message = I came from a startup where working hard and being smart advanced me quickly. In my first year, I worked my tail off, but did not receive raise nor recognition. Now that it is clear that no raise or promotion will come for several years, I don't work as hard and am, frankly, pretty disillusioned. Since the only good thing about working at IBM is the brand name (pay sucks and there is too much process and politics to actually innovate), I plan to take the advice I have read, which is to only stay at IBM 3 years and move on. Stagnant wages hurt me now, but also depress my salary for the rest of my life. Unless something changes, I'll take the next job offer that seems to move my career in the right direction. In IBM, I don't have a career, just a job. -RegrettingThisJob-
  • Comment 12/05/08: To "Regretting This Job": a lot of us are feeling the same way you do. Why work ourselves to death for no recognition and no raise? Some of our colleagues who are slacking off or "cruising" will get the same appraisal rating that we do. I think the IBM execs have completely lost touch with reality and don't realize how they're running this company into the ground... -Anonymous- Alliance Reply: They absolutely DO "realize how they're running this company into the ground..". You could say it's been a part of their plan since the 1990's, to run the USA part of their business into the ground; but build up the rest of it in BRIC and other places. The question is, do you want to do anything about it?
• 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:

• "I suppose it's all context" by "wonderaboutibm". Full excerpt: You got me, in a way. You pointed out an inconsistency, perhaps, in what I wrote. On a purely logical level, the cost cutting has gone absurd because the cutting itself has gotten so minute, so silly that at the margin, it is now counterproductive. It has become a case of saving 5 cents here and losing a quarter elsewhere as a result. For example, when you starve onsite resources in the name of offshoring the work to GR, and then the work doesn't get done for any number of reasons, IBM may end up paying a lot more in penalties, opportunity costs, etc. than what was saved. A more specific example is cell phone expenses. Since IBM won't as a rule pay for cell phone usage anymore, cell phones just aren't used in cases where they could be very effective in speeding work through.

  The IBM financial controls have grown so onerous as to take on a life of their own. They have become major impediments to smooth and efficient operational excellence. Period. No argument. But then again, does IBM management really care if they think US-Europe is no longer a market worth nurturing?