When it comes to healthcare costs, the glass is definitely half full

The good news on healthcare cost inflation is that it's no worse than it was last year and the three years before that. The bad news is that it's no better either—and remains stubbornly at more than double the rate of consumer inflation.

Despite a flurry of noise and new offerings around consumer-directed health plans (CDHPs) in the past couple of years, total health benefit costs for all the companies surveyed rose 6.1% in 2007 on average, according to the National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer Human Resource Consulting. The average spending per employee reached $7,983, the survey reports. Nearly 3,000 companies with 10 or more employees participated. For larger companies (500 employees or more), the average increase was 5.1%.

Mercer notes that the persistent inflation has resulted in lower profitability for companies. For employees— whose wage increases have not kept pace and who have had to shoulder a greater portion of the cost in recent years because of cost shifting—it has resulted in less disposable income or inadequate care. For employees of some smaller companies (10 to 499 employees), the pain can be even greater—the elimination of coverage entirely. The percentage of employers with fewer than 200 workers that offer healthcare benefits dipped to 61% this year from 63% in 2006—despite the increased availability of lower-cost options such as CDHPs. There has been steady attrition in that number since 2001 when 69% offered healthcare benefits. This raises the stakes for state and federal programs that absorb some of the costs for the uninsured.

Of course, the picture is much prettier than it was in the late 1980s and early 1990s when healthcare inflation was rising at a double-digit rate annually. Contributing to the slower growth, the survey showed that 80% of large employers use some kind of health management program as a way to control costs; 52% are promoting an employee consumerism that makes workers more aware of both the cost of individual procedures and drugs and steers them toward less expensive options.

CDHPs—which include tools such as health savings accounts or health reimbursement accounts—are one approach based on this kind of educated healthcare shopper, and according to Mercer worldwide partner Blaine Bos, CDHPs have been a factor in the recent slower growth. The numbers are still relatively low—about 5% of all covered employees use either a HSA or HRA. Only about 14% of larger companies and 7% of small and midsize companies offer CDHPs as a benefit option.

The biggest factor has no doubt been cost shifting from employer to employee. According to the Mercer survey, the average in-network PPO deductible at larger companies rose 11% for both individuals and families. Already higher deductibles at smaller companies rose a more conservative 2% for individuals and 5% for families.

However, none of the new approaches has produced the sizable declines in inflation that companies enjoyed in the mid to late 1990s with the advent of health maintenance organizations and other managed care programs. Healthcare inflation at its lowest in 1994 actually was a negative number.

 

 

 

 

Sometimes a flexible work schedule can be more attractive than money.

Today, accounting job candidates are more likely to ask about programs promoting a healthy balance between work and outside life than they were five years ago, according to 57% of the CFOs responding to a survey of 1,400 executives by headhunter Robert Half Finance & Accounting. That could explain why some accounting professionals have been moving from public accounting firms with busy travel schedules crammed with billable hours to corporations with more predictable work schedules and often more flexibility on hours and remote work arrangements, says Brett Good, the district president for Southern California at Robert Half.

Of course, with the extra pressures from Sarbanes-Oxley, a flurry of new U.S. accounting regulations and increasing exposure to overseas accounting rules, corporations have also needed more in-house accounting expertise. To help lure accounting talent, 68% of the CFOs polled said they are offering alternative scheduling arrangements as part of employment packages. The most common options are: flexible hours (51%), part-time positions (27%) and job-sharing (20%). But the accounting firms are fighting back, implementing “additional programs to help their teams achieve work/life balance in an effort to attract and retain top performers,” says Good.

XBRL is going global

Converging next month on Vancouver, Canada, will be an international assembly of regulators, institutional investors, equity exchange executives, banks, CFOs, controllers and other senior finance executives to discuss XBRL and other ways to make business data more interactive, reliable, timely and accessible. The keynote at the global conference will be U.S. Securities and Exchange Commission Chairman Christopher Cox, who has consistently been a strong advocate of XBRL and the modernization of the SEC's EDGAR system.

In recent years XBRL has gone global with the Chinese government recently mandating its use and the Japanese government requiring companies to file in XBRL by April 2008. According to the XBRL International Consortium, 550 of the world's largest technology, accounting, financial services and government regulatory agencies in 30 countries—including the IRS, Microsoft, Deutsche Bank, the FDIC, IBM, AIG and the International Accounting Standards Board—are involved in the development and use of XBRL. Speakers at the Vancouver conference to be held Dec. 3 through 6, reflect the international nature of the technology. Besides Cox, they include: Ontario Securities Commission Chairman and CEO David Wilson; Paul Madden, the program manager for standard business reporting at the Australian Treasury; Jose Maria Roldan, the director general of banking regulation for the Bank of Spain; Usha Narayanan, the executive director of the Exchange of India; and Toshinori Kobayashi, director of enforcement of corporate disclosures at the Japanese Financial Services Agency.

People on the Move

Insight Enterprises Inc. has appointed Glynis Bryan CFO of the $3.8 billion provider of brand-name information technology hardware, software and services, with headquarters in Tempe, Ariz. Bryan, 48, succeeds Stanley Laybourne, who announced his retirement in May. During her 20-year career in finance, Bryan served as executive vice president and CFO of Swift Transportation Co., CFO at APL Logistics, as well as numerous finance roles at Ryder Systems Inc., including CFO of Ryder Transportation Services.

The Phoenix Companies Inc., the $2.6 billion manufacturer of insurance, annuity and asset management products for those with highly complex financial needs, based in Hartford, Conn, has promoted Peter A. Hofmann senior vice president and CFO. Hofmann 48, is currently the executive vice president and chief strategic officers. He replaces Michael E. Haylon, who has resigned. Hofmann, came to Phoenix in 2001 to head the creation of the investor relations department and assist in the preparation of demutualization and the initial public offering. Before joining the company, he served as vice president of investor relations at J.P. Morgan Chase & Co. He also managed financial communications at J.P. Morgan & Co. before the merger with Chase Manhattan. Earlier in his career, he served as vice president of global bank marketing at Chemical Banking Corp. as well as a senior analyst at Tocqueville Asset Management.

Amkor Technology Inc. has announced the appointment of Joanne Solomon to corporate vice president and CFO, of the $ 2.7 billion provider of semiconductor assembly and test services, with headquarters in Chandler, Ariz. Solomon, 41, succeeds Ken Joyce, who has been promoted to the newly created position of chief administrative officer. Solomon came to Amkor in 2000, most recently serving as senior vice president of finance and as corporate controller. She has also served in various treasury and accounting leadership capacities throughout Amkor. Prior to joining the company, she was a CPA at PricewaterhouseCoopers for a decade.

The $2.5 billion theatrical exhibition companies, AMC Entertainment Inc., with headquarters in Kansas City, has promoted Greg Endecott director of finance. Endecott, 35, came to AMC three years ago and has most recently served as director of financial reporting, both internal and external. Prior to joining the company, he was with accounting firm BKD LLP.

Crane Co., the $2.2 billion manufacturer of engineered industrial products, with headquarters in Stamford, Conn., has named president and CEO Eric C. Fast interim CFO. Fast, 58, steps in as acting CFO after the resignation of vice president and CFO Robert Vipond, who has left to purse other interests. Fast served as the company's president and chief operating officer from September 1999 through April 2001. Prior to joining Crane, Fast has served in several director roles with Convergys Corp and National Integrity Life Insurance.

THQ Inc., based in Agoura Hills, Calif., has named vice president and corporate controller, Rasmus van der Colff, interim CFO. Van der Colff, replaces Edward Zinser, who has resigned. When joining the $806 million global developer and publisher of interactive entertainment software in May of 2007 as vice president and corporate controller, van der Colff brought over two decades of accounting financial experience. Before joining THQ, he served in various senior accounting and finance capacities for Sun Microsystems, Activision and KPMG Peat Marwick.

 

 

Article found in Careers

Here's a chance to be FIRST on fair value

FXpress Corp., the treasury and risk management software provider, has released a timely set of enhancements to its FIRST Web-based treasury workstation for corporate finance departments struggling to establish a compliance plan under FAS 157 and FAS 159. With the release of FIRST F7, corporate finance departments have a new way to apply the fair value methodologies to the full range of financial asset classes—from f/x derivatives to commodities, fixed income and interest rate derivatives—and automate their disclosures.

Earlier this month, the Financial Accounting Standards Board (FASB) refused to issue a blanket deferral of Statement 157, which offers guidelines on fair value measurements, enforcing compliance with the requirement for companies with fiscal years beginning after Nov. 15, 2007. FASB did, however, issue a one-year deferral for Statement 157 as it applies to other non-financial assets and liabilities. “Most of our clients will be much more involved with the valuations of their portfolios after the first of the year, but we wanted to offer clients an early release to enable them to plan their own adoptions of FAS 157,” says Darren Greway, director of products at FXpress. “We’ve added functionality to the Web in the form of enhancements to fair value methods already in place.” Users can apply checkboxes to identify individual transactions, assets and liabilities that should be measured at fair value.

FIRST F7 was produced with the input of leading accounting firms. The new functionality provides clients with two new disclosure reports in accordance with the FASB guidelines and it uses a credit model to determine counterparty risks across many different transaction scenarios and all asset classes in a portfolio. “This makes disclosures as easy and seamless as possible,” says Greway.