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Highlights—April 5, 2008

  • Reuters: US suspends IBM from seeking new federal contracts. Excerpts: IBM is under investigation by the U.S. Environmental Protection Agency and has been temporarily suspended from seeking new business contracts with all U.S. agencies, the company said on Monday. International Business Machines Corp, the world's largest provider of computer services, said it received a notice of temporary suspension from the Environmental Protection Agency (EPA) tied to possible violations of ethical bidding provisions of federal law on an EPA contract submitted in March 2006. ...

    In addition, IBM said the U.S. Attorney's Office for the Eastern District of Virginia had served IBM and certain employees with grand jury subpoenas requesting testimony and documents on interactions between the EPA and IBM employees.

  • TheStreet.com: EPA Suspends Big Blue From Bidding on Federal Contracts. By Ivy Lessner. Excerpt: "We understand the basic issue with the EPA ... is whether certain information concerning a contract should have been provided to IBM employees by an EPA employee" for a bid submitted in March 2006, IBM spokesperson Fred McNeese said.
  • CNN/Money: Government Ban On New IBM Work Stems From $84 Million EPA Deal Given Rival. Excerpt: An EPA official confirmed on Tuesday that the suspension is related to a 10- year, $84 million deal awarded Feb. 12, 2007 to CGI Federal, a wholly owned U.S. subsidiary of Canada-based CGI Group Inc. (GIB). The contract is to modernize the agency's financial management system. IBM, which was also vying for the contract, protested the award two months later to the Government Accountability Office, according to information provided by market research firm Federal Sources Inc. Fed Sources said it learned that the GAO upheld IBM's protest in October, but then said earlier this month that investigators there had not made a decision yet on IBM's protest.
  • Wall Street Journal: IBM Suspended From New Federal Work. By William M. Bulkely and Stephen Power. Excerpt: Fred McNeese, a spokesman for IBM, said "it's our understanding that the basic issue is whether certain information concerning a contract should have been provided to IBM employees by an EPA employee."

    A person familiar with the matter said concerns were raised within the EPA about how IBM had acquired sensitive information relevant to its pursuit of a contract valued at more than $80 million to help the EPA modernize some of its computer systems. "It appeared they [IBM officials] used some information given to them by an EPA employee who didn't realize the ramification of sharing such information," the person familiar with the matter said.

  • Wall Street Journal: IBM May Bid for Government Contracts After EPA Lifts Ban. Company Admits Workers Violated Procurement Law. By William M. Bulkely. Excerpt: The EPA agreed to lift a week-old, governmentwide contracting suspension of IBM as a result of IBM's admission and its promise to cooperate with EPA investigators. IBM also promised to help in a related probe of potential criminal-law violations by the U.S. attorney in Alexandria, Va. It placed on leave five employees who had been subpoenaed to give information in that probe.

    While the short duration of the suspension means financial damage to IBM was minimal, the admission of apparent legal violations is a black eye for the company, which has long taken pride in its role as a key technology provider to the federal government, its largest single customer, according to people familiar with the matter. IBM Chief Executive Samuel Palmisano kept close track of the situation after the EPA suddenly issued the suspension.

    According to an agreement signed by EPA's debarring official, Robert Meunier, and an IBM lawyer, "information available to IBM indicates that one or more IBM employees appear to have obtained and used source-selection information in apparent violation" of the federal Procurement Integrity Act. "IBM officials knew" the information, which was about the competing vendor, "was improperly acquired" and used it in competing for the contract, the agreement says. IBM and the EPA declined to name officials involved or the suspended employees. ...

    The suspension surprised government contractors because it wasn't preceded by any warnings or negotiations. Steven Schooner, a procurement law expert at George Washington University Law School, said "as a general rule, mainstream large firms don't get suspended." He noted that suspensions by one agency, which are automatically effective across the entire government, are controversial because "a temporary suspension can be done with no due process, and you can get smeared." Temporary suspensions can last as long as a year.

  • Yahoo! IBM Employee Issues message board: "Sickness=low performance rating..." by "Adrian Rice". Full excerpt: Performance rating of "3" during a year I had a chronic respiratory infection. Went on long-term disability, returned after becoming healthy, got 30 days to find a job or leave. Was told my chances of finding a job in IBM with my rating were about zero. Luckily I was eligible for retirement bridge leave. I am sure this same kind of thing happens throughout the company, and to people far less lucky than I was because of the retirement bridge. I guess the US labor laws would make this illegal, but good luck trying to prove you were canned for being sick!
  • Gulf News (Dubai, United Arab Emirates): IBM plans to relocate Mideast office to Dubai. By Arno Maierbrugger, Excerpts: Global computer major BM (sic) is studying plans to move its Middle East headquarters from Vienna to Dubai, Austrian newspaper Oberoesterreichische Nachrichten reported. The headquarters has been located in the Austrian capital for more than two decades, together with operations for Austria, Switzerland, Eastern Europe and Africa, generating annual sales of approximately two billion euros. ...

    IBM currently employs 1,900 people at its Vienna office. Around 450 of them are supposed to move to the new locations, mostly senior level managers. IBM Austria spokesman Georg Haberl declined to comment on the report, saying that IBM in Austria has not been informed about any changes yet. "We don't know ourselves what the global headquarters is planning," he said.

  • Wall Street Journal: Americans Delay Retirement As Housing, Stocks Swoon. Nest Eggs Shrink, Deferring Dreams; 'Freaked Out' Elite. By Jennifer Levitz. Excerpts: As the falling real-estate and stock markets erode their savings, many aging Americans are delaying retirement, electing labor over leisure in uncertain times. A three-decade veteran at International Business Machines Corp., Dick Boice had planned to sell his house, pack up and move to Arizona with his wife, Lauren, to take early retirement. But two months after the January date he set to exit the work world, Mr. Boice, who is 59 years old, is still on the job. He figures he'll stay put for another couple of years.

    The Boices had counted on proceeds from the house sale to boost their retirement income. After a year on the market, the roomy colonial in Blue Springs, Mo., didn't move, forcing the couple to cut the asking price by $40,000 to around $250,000. The house remains unsold. Meanwhile, Mr. Boice has watched the value of his 401(k) and individual retirement accounts fall by roughly 20% so far this year, to a combined $240,000. ...

    Mr. Boice has plenty of graying company at the grindstone. Millions of retirement-age Americans, stung by the recent economic pall, suddenly are having to reassess their plans -- with many forced to quickly change course. In February, the proportion of people ages 55 to 64 in the work force rose to 64.8%, up 1.5 percentage points from last April. That translates to more than an additional million people in the job pool, according to the U.S. Labor Department. The ranks of those 65 and over in the work force rose to 16.2% from 16% in the same time span -- meaning 212,000 more hands on deck. So far, the numbers for March continue to show a "sharp" increase, says Steve Hipple, a department economist. ...

    A recent Schwab survey of 1,006 financial advisers indicated that nearly a quarter of their clients are considering working longer specifically because of the economic fallout of the past 12 months. Factors other than the gloomy economic outlook may be contributing to stalled retirements, says Mr. Hipple of the Labor Department. Most retirees, of course, get Social Security benefits. But traditional corporate pension plans -- which promised specific, predictable monthly payouts -- are largely a thing of the past.

    Over the past three decades, the 401(k) plan has gradually supplanted pension plans as the main source of retirement coverage for U.S. workers in the private sector, according to the Employee Benefit Research Institute, a nonprofit group. In 1979, it says, 62% of U.S. employees participated only in a pension plan. By 2005, 63% of workers reported that they participated only in a 401(k) plan.

    Another big motivation for older workers to stay on the job: scarce health benefits for retirees. Between 1988 and 2007, the percentage of large companies offering retiree health benefits fell by half, to 33%, according to the Kaiser Family Foundation. ...

    Many would-be retirees are angry about the conditions that they see as contributing to the economic downturn. Mr. Boice blames lax lending standards and regulations for dragging down his home value. "What really needs to happen at this point," he says, "is for those that created the subprime mess to have their hands slapped." In Healdsburg, Calif., Jeff Bartman, who has also shifted retirement gears, still considers himself fortunate compared with others. But he points to the Bush administration for many of the country's current woes. "The war, housing, $100 oil...when you look at those things, you blame management. You blame the people running the show," he says. ...

    Still, the prospect of millions of grandparents toiling away in their golden years doesn't square with the American Dream. Some aging workers feel denied their due. "I've worked all my life," says Mr. Boice, the IBMer. "It's coming down to a point where I want to try to take life easier and do something I want to do rather than work for someone 9 to 5."

  • National Public Radio's (NPR's) Morning Edition: Workers, Employers Adjust to Phased Retirement. By Judy Martin. Excerpts: Economic worries and the rising cost of health care have many baby boomers concerned that they'll outlive their retirement savings. Some are opting to phase slowly out of the workforce instead of leaving permanently. Phased retirement poses challenges for workers and companies, but it could be crucial to retaining a talented workforce.

    Gail Langan belts out the Beatles tune "When I'm 64" on her bugle. She's not there yet, but retirement is near. The 56-year-old IBM project manager wanted to have more personal time and to play in a drum-and-bugle corps, so she works from home four days a week. It's her version of phased retirement. She has a plan, but her husband died suddenly six years ago, she's contributing to her son's college education, and selling her house is part of that plan.

  • Wall Street Journal: Skilled-Worker Visa Applicants Expected to Soar. By Miriam Jordan. Excerpts: U.S. businesses are bracing for another round of visa roulette, as applications for high-tech professionals -- accepted by the government starting on Tuesday -- are expected to far outstrip supply. The H-1B visas enable U.S. companies to hire skilled foreign workers for certain jobs that are difficult to fill domestically. Attorneys who help employers file petitions say they haven't seen a decline in interest despite the economic downturn. Last year, the U.S. government received 124,000 applications for H-1B visas, nearly double the congressionally mandated cap of 65,000, so the visas were awarded by lottery. ...

    The H-1B visa allows 65,000 foreigners with at least a bachelor's degree and specific skills to work for a U.S. company for a six-year period. The program allocates an additional 20,000 visas to foreign nationals with advanced degrees from U.S. universities. U.S. high-tech companies for years have called on Congress to increase the cap on visas for skilled foreigners. In testimony to Congress earlier this month, Microsoft Corp. Chairman Bill Gates warned lawmakers that the U.S. risks losing its competitive edge in technology unless it can secure qualified workers. "Other nations are benefiting from our misguided policies," Mr. Gates said. "They are revising their immigration policies to attract highly talented students and professionals who would otherwise study, live and work in the United States for at least part of their careers."

  • Forbes: Help Wanted. By Joshua Zumbrun. Excerpts: On March 31, a flurry of corporate migration lawyers will descend on FedEx, DHL and UPS, overnight envelopes in hand. They'll be looking for work--for their clients. Applications for U.S. companies to hire foreign workers in technical fields on a temporary basis cannot be received before April 1. Demand is so high for foreign scientists, engineers, computer programmers and doctors that the cap is expected to be reached the first day. There's no wiggle room for the mail to miss. ...

    Despite wages that can exceed $30 an hour on average, the National Foundation for American Policy found 140,000 high-skilled jobs were still open at S&P 500 companies in January and February of this year despite an increase of 544,000 unemployed workers since February of last year. The NFAP's study found some companies outsourcing jobs to fill critical gaps in their workforces.

    The temporary visas have become embroiled in the nation's explosive political debate over immigration in recent years. The visas are only temporary, but critics of the nation's immigration policies, like CNN anchor Lou Dobbs suggest they come at the expense of the middle class. Critics say H-1B visas are little different from outsourcing--just another method, Dobbs argues, of taking jobs from American workers and giving them to foreigners for less money.

  • WashTech: Unemployment Up, 80,000 jobs slashed in March. Govt sees strong demand for guest worker visas. Excerpts: The national unemployment rate has risen from 4.8 percent to 5.1percent as employers cut 80,000 jobs in March. Meanwhile, the US Citizenship and Immigration Services (USCIS) was flooded with H1B visa applications Tuesday, the very first day it started accepting them. At stake were 66,000 highly sought after foreign worker visas, used for bringing a new wave of immigrant workers into the country, about half of who work in Information Technology. In 2007, 124,000 total H1B visa applications were received by USCIS, far exceeding the supply. ...

    The public has been on edge, smarting from the mortgage crisis, stock market volatility, high prices of fuel and now, extensive job losses. In addition, the American IT worker is also affected by the double whammy of H1B visas influx and outsourced jobs. Senate Majority Whip Richard Durbin and House Judiciary ranking member Lamar Smith are responding with measures to help such workers.

    According to the National Journal's Congress Daily AM, Durbin and Smith are considering limiting the H1B visa use to U.S. companies. "Eight of the top 10 companies seeking H-1B visas in the last round were foreign companies," Durbin said Tuesday. "The foreign companies, by and large, have taken control of the H-1B process. For example, the largest Indian companies are getting thousands of H-1B visas. They then, for a fee, will place engineers from India in American jobs for three years or six years and then, for another fee, place them back in India to compete with American companies. Trust me, that is not what we have in mind with H-1B visas."

    In addition Sen. Grassley (R-IA) has written a letter to Speaker Pelosi and Majority Leader Reed regarding the abuses in the H-1B visa program and recent testimony heard in the senate (see letter).

  • BusinessWeek: Senators Target Visa 'Loopholes'. With U.S. tech companies calling to raise the entry cap, Durbin and Grassley seek proof H-1B-type permits won't hurt Americans. By Moira Herbst. Excerpts: Companies flooded the U.S. government with applications for more high skilled H-1B visas on Apr. 1, the first day of the annual application period. At the same time, U.S. tech companies are calling on Congress to raise the annual cap on visas issued (BusinessWeek.com, 3/31/08). But two longstanding critics of the program are pushing in the other direction. On Apr. 1, Senators Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa) sent letters to 25 Indian outsourcing firms—which are responsible for 20,000 new H-1B visas in 2007, or about a third of the annual cap—asking them to explain how they use the H-1B visa program.

    "We'll hear arguments all day as to why the cap on H-1B visas should be raised, but nobody should be fooled," said Grassley in a prepared statement. "There are highly skilled American workers being left behind, searching for jobs that are being filled by H-1B visa holders. It's time to close the loopholes and enact real reform."

    With U.S. unemployment on the rise, scrutiny of visa worker programs is growing. Critics of H-1B say outsourcers such as Infosys Technologies (INFY) and Wipro (WIT) are abusing the program, replacing U.S. employees with cheaper foreign workers whom they ultimately cycle into new jobs in their home countries. They argue that the L-1 visa, allowing for intra-company transfers, is being similarly abused.

    U.S. government data reveal that in the past several years, the list of top 10 companies receiving both H-1B and L-1 visas has been dominated not by U.S. tech firms such as Microsoft and Google, but instead by Indian outsourcing firms. For the past two years Wipro and Infosys have been the top two recipients of the visas. Indian outsourcers accounted for nearly 80% of the visa petitions (BusinessWeek.com, 3/6/08) approved last year for the top 10 recipients. ...

    Durbin and Grassley argue the H-1B program must be reformed before it is expanded. As an alternative to raising the cap, Durbin and Grassley are advocating S.1035, or the H-1B and L-1 Visa Fraud and Abuse Prevention Act, introduced in 2007. The bill would reform the H-1B and L-1 visa programs by requiring that all employers seeking to hire an H-1B visa holder prove they have made an effort to first hire a U.S. worker. "The H-1B program can't be allowed to become a job-killer in America," said Durbin in a statement. "We need to ensure that firms are not misusing these visas, causing American workers to be unfairly deprived of good high-skill jobs here at home."

  • The Capital Times (Madison, Wisconsin): A Great Place To Work. It Isn't About The Perks, It's 'respect, Dignity, Flexibility' . By Lisa Maddux. Excerpts: Although some of Fortune magazine's top 100 best companies to work for offer unusual perks such as scuba-certification classes and meditation rooms, it's not the bells and whistles that probably got them there in the first place. The real secret to being a good place to work? "People are treated with respect, dignity, flexibility," said Richard Hansen, CEO of Johnson Financial Group , one of three Wisconsin companies to make this year's list. "It's really not all that complicated." Hansen said his company's business model aims to offer its clients satisfied, motivated associates, producing low turnover rates in employees and customers.

    "The focus is on being a good place to work," Hansen said, noting a company needs to take the best care of its people that it can and also deliver to the clients what they expect. ...

    Consultant Dan Stahl agreed with the Wisconsin Fortune companies when it comes to the importance of a pervasive, if sometimes elusive, climate of respect. "How the organization treats people and respects them ... that's what I think differentiates the best organization from those who are aspiring," said Stahl, president of the consulting and recruiting firm Human Resources Group Inc. "I think the challenge is finding ways to help individuals fulfill their expectations while fulfilling the organization's goals." "It seems like such a simple formula," he said. "(But) it is tough for companies to get it right." To Hansen, just participating in the Fortune survey was a reward. The format prompted management to address questions that were strategic, long term and open-ended. ...

    Fortune partners with Great Place to Work Institute to conduct the most extensive employee survey in corporate America. Of some 1,500 firms that were contacted, 407 companies participated in this year's survey. Nearly 100,000 employees at those companies responded to a 57-question survey created by the Great Place to Work Institute, a global research and consulting firm with offices in 30 countries. Most of the company's score (two-thirds) is based on the results of the survey.

    The other third of the scoring is based on the company's responses to the Institute's Culture Audit, which includes detailed questions about demographic makeup, and pay and benefit programs, as well as a series of open-ended questions about the company's management philosophy, methods of internal communications, opportunities, compensation practices, and diversity efforts, etc.

    Editor's note: Although at one time IBM was at or near the top of Fortune's Top 100 Best Companies To Work For list, it has been completely absent from the list in recent memory. Note that the Fortune list is based two-thirds on employee surveys, and one third on employer input. In contrast, Working Mother magazine's Top 100 Companies list, which is often touted by IBM in both external and internal communications, is based entirely on an employer survey. In other words, the Working Mother list is based on what companies say their policies are; Fortune's list is based on how companies actually behave, and how their behavior affects employee opinions of the companies.

  • USA Today: 20% of companies pick up CEOs' taxes on perks. By Greg Farrell. Excerpts: CEOs are just like the rest of us: They hate paying for things out of pocket if they can find someone else to foot the bill. Fortunately for them, in many cases there is someone willing to pick up the bill for selected personal expenses: the shareholders.

    A new study from The Corporate Library finds that the most common form of perk being granted to CEOs these days is something called a tax "gross-up." In plain English, it means that a company pays the taxes owed by the CEO on benefits granted by the company. ...

    Almost any perk granted to a CEO generates a tax bill, from an executive life insurance policy paid by the company to country club dues. But one of the most common reasons cited by the report for tax "gross-ups" is use of the corporate jet. Since the Sept. 11 attacks, for security reasons, the boards of many companies have encouraged their CEOs to fly on private jets rather than commercial airlines when traveling on business. Public companies often allow the CEOs to use the corporate jet for personal travel as well. Personal use of the company plane is a form of compensation to the executive, so it generates a tax liability. But rather than making the CEO pay tax on that benefit, dozens of companies in the Russell 3000 pick up the tax bill.

  • New York Times: The Dilbert Strategy. By Paul Krugman. Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom.You now understand the principle behind the Bush administration’s new proposal for financial reform, which will be formally announced today: it’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive. ...

    ...if financial players like Bear are going to receive the kind of rescue previously limited to deposit-taking banks, the implication seems obvious: they should be regulated like banks, too.

    The Bush administration, however, has spent the last seven years trying to do away with government oversight of the financial industry. In fact, the new plan was originally conceived of as “promoting a competitive financial services sector leading the world and supporting continued economic innovation.” That’s banker-speak for getting rid of regulations that annoy big financial operators. ...

    Thus, in a draft of a speech to be delivered on Monday, Henry Paulson, the Treasury secretary, declares, “I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil.” And sure enough, according to the executive summary of the new administration plan, regulation will be limited to institutions that receive explicit federal guarantees — that is, institutions that are already regulated, and have not been the source of today’s problems. As for the rest, it blithely declares that “market discipline is the most effective tool to limit systemic risk.”

    The administration, then, has learned nothing from the current crisis. Yet it needs, as a political matter, to pretend to be doing something. So the Treasury has, with great fanfare, announced — you know what’s coming — its support for a rearrangement of the boxes on the org chart. OCC, OTS, and CFTC are out; PFRA and CBRA are in. Whatever. ...

    For example, there was a 2003 photo-op in which officials from multiple agencies used pruning shears and chainsaws to chop up stacks of banking regulations. The occasion symbolized the shared determination of Bush appointees to suspend adult supervision just as the financial industry was starting to run wild. Oh, and the Bush administration actively blocked state governments when they tried to protect families against predatory lending.

  • New York Times: 81% in Poll Say Nation Is Headed on Wrong Track. By David Leonhardt and Marjorie Connelly. Excerpts: In the poll, 81 percent of respondents said they believed “things have pretty seriously gotten off on the wrong track,” up from 69 percent a year ago and 35 percent in early 2002.

    A majority of nearly every demographic and political group — Democrats and Republicans, men and women, residents of cities and rural areas, college graduates and those who finished only high school — say the United States is headed in the wrong direction. Seventy-eight percent of respondents said the country was worse off than five years ago; just 4 percent said it was better off.

    The poll found that Americans blame government officials for the crisis more than banks or home buyers and other borrowers. Forty percent of respondents said regulators were mostly to blame, while 28 percent named lenders and 14 percent named borrowers. In assessing possible responses to the mortgage crisis, Americans displayed a populist streak, favoring help for individuals but not for financial institutions. A clear majority said they did not want the government to lend a hand to banks, even if the measures would help limit the depth of a recession.

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
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  • Omaha World-Herald, courtesy of Physicians for a National Health Program: Some hospitals seeking fees before surgery. By Michael O’Connor. Excerpts: The Nebraska Medical Center has joined an increasing number of hospitals nationally that request that patients pay out-of-pocket costs before a scheduled surgery. The trend is driven in part by the popularity of high-deductible insurance plans, which can mean bigger out-of-pocket costs for patients, said Rick Wade, spokesman for the American Hospital Association. Bigger out-of-pocket costs can be more of a burden on patients, so hospitals want to make sure patients are aware as early as possible what their financial obligation will be, he said. ...

    Comment: By Don McCanne, MD. Full excerpt: The hospitals are not the villains here. By introducing high-deductible plans, the private insurers have relieved themselves of the responsibility of paying for the initial costs of the medical and surgical procedures and services. In so doing, they have placed the burden of obtaining payment of the upfront charges onto the hospitals and health care professionals. Since large medical bills are more difficult to collect after the services have been provided, it is only natural that the hospitals would request payment in advance.

    High-deductible plans are a solution that serves the interests of the insurers. Not only are they relieved from paying bills below the deductible, they are also able to sell these plans at premiums that many employers can still afford. In contrast, high-deductible plans do not serve the interests of most patients. Innumerable studies have now demonstrated that financial barriers impair access to appropriate health care which, in turn, impairs health outcomes. Placing the hospital in the role of the toll-keeper will undoubtedly cause many patients to walk away from the care they should have (if they can walk).

    Wouldn’t it be nice if we had a system in which the Admissions Office of the hospital existed solely for the purpose of assisting the patient who is being admitted? Other countries do that. But not us. We continue to accept the toll-keeper role because it enables the private insurers to thrive. But isn’t it time for us to adopt policies that are designed instead to make patients thrive?

  • New York Times: Mental Health Insurance Parity. The Murky Politics of Mind-Body. By Sarah Kershaw. Excerpt: The United States has a long history of separating the treatment of mental and physical illnesses, dating back to the days when the severely mentally ill were put in poorhouses, jails and, later, public asylums. That ended after the deinstitutionalization movement of the 1960s, but mental health experts and advocates say that the delivery of services is still far from equal, because emotional illness is still not considered to be on a par with medical illness.

    Countries like Canada and the United Kingdom, with national health care systems that don’t limit access to any services, have long ago moved toward merging these two branches of health care, and the Scandinavian countries are known for treating mental illnesses as medical diseases, according to researchers who have studied the various systems.

    In the United States over the last five years, research studies examining the link between physical brain abnormalities and disorders like severe depression and schizophrenia have begun to make a strong case that the disorders are not scary tales of minds gone mad but manifestations of actual, and often fatal, problems in brain circuitry. These disorders affect behavior and mood, and they look different from Parkinson’s disease or multiple sclerosis in brain imaging. Still, a growing number of studies — and many more are under way — are making the biological connection, redefining the concept of mental illness as brain illness.

    “Insurance companies balk at this, but there are striking similarities between mental and physical diseases,” said George Graham, the A.C. Reid professor of philosophy at Wake Forest University. “There is suffering, there is a lacking of skills, a quality of life tragically reduced, the need for help. You have to develop a conception of mental health that focuses on the similarities, respects the differences but does not allow the differences to produce radically disparate and inequitable forms of treatment.”

  • Drug Benefit News, courtesy of AIS's Health Business Daily: If Generics Are Always a Cheaper Option, Why Do Some PBMs and Health Plans Push Brands? By Neal Learner. Excerpt: It's a given in the pharmacy benefit world that generic drugs are the lowest-cost option, often pennies on the dollar of their branded counterparts. Yet some health plans and PBMs continue to favor brand drugs over generics based on the steep rebate agreements and other financial deals they forge with pharmaceutical manufacturers. One community pharmacist, in fact, claims that he is seeing an increasing number of generic drugs being denied coverage based on the assertion that the brand versions are cheaper. And pharmacy benefit executives tell DBN that some industry players tacitly -— if not overtly — push brands as a means to get rebates.
  • Kaiser Daily Health Policy Report: California Proposes Ban on 'Balanced Billing' by Health Insurers for Emergency Care. Excerpt: The California Department of Managed Health Care on Friday released draft regulations that would bar physicians and hospitals from billing patients for the cost of services above what their HMOs are willing to pay, the Los Angeles Times reports. The draft regulations are an attempt by Gov. Arnold Schwarzenegger's (R) administration to ban the practice known as "balance billing" by physicians who often work in hospitals but do not have contracts with the same HMO as the hospital. Some doctors -- who mostly are emergency department physicians, radiologists and anesthesiologists -- believe payments they receive from insurers are too low and send bills to patients for the difference, according to the Times. Patients may wrongly assume that the bill is for their copayment and is authorized by their HMO.
  • BusinessWeek: Kids Are Falling in the Wellness Gap. Where you're born in the U.S. has a lot to do with how healthy you grow up. A study by Every Child Matters points out the stark differences. By Catherine Arnst. Excerpts: When it comes to American kids' well-being, all states are by no means equal. In fact, a baby's chances of making it to adulthood have a lot to do with where he or she is born, and there's a widening gap between states where kids are likely to grow up healthy and places where the chances are slimmer, according to a new, unsettling report. ...

    Petit also points out that the bottom-ranked states generally have a narrower view of the role of government in addressing social issues, and have much lower tax burdens than those states at the top of the lists. Every Child Matters says it's highlighting the findings in part to build a case for "new investments in health, education, and social programs" aimed at kids wherever they live.

    The divide between states at the top and bottom of the rankings is stark by many measures. A child in South Dakota is 3.5 times more likely to die by age 14 than a child in Rhode Island, and women in New Mexico are more than 5 times as likely to receive inadequate prenatal care as women in Rhode Island or Vermont. Children in Oklahoma are 13 times more likely to die from abuse or neglect as those in Maine, and the teenage birth rate in Texas is 3.5 times that of New Hampshire. Two of the states farthest from each other are also opposites when it comes to teenage death: Alaska's teen death rate is 2.5 times higher than that of Hawaii.

    The top 10 ranked states in the study, starting with No. 1, are Vermont, Massachusetts, Connecticut, Rhode Island, New Hampshire, Hawaii, Iowa, Minnesota, Washington, and Maine. The worst 10, starting at the bottom, are Louisiana, Mississippi, New Mexico, Oklahoma, Texas, South Carolina, Arkansas, Nevada, South Dakota, and Arizona. For more on the report, go to www.everychildmatters.org. And for a closer look at the highest- and lowest-ranked states, see BusinessWeek.com's slide show.

  • Boston Globe: McCain camp working out healthcare details Aides struggle to sort out his promises. By Michael Kranish. Excerpts: When Senator John McCain unveiled his healthcare proposal last fall, a journalist asked whether the Arizona senator's battle against skin cancer would make him sympathetic to the idea of requiring that insurance companies provide coverage to people with preexisting conditions. McCain flatly rejected the idea. "That would be mandating what the free enterprise system does," McCain said. ...

    The crux of McCain's healthcare plan is to end a tax break for employers who provide health insurance premiums now utilized by many workers. That would be replaced with a tax credit worth as much as $5,000 per family for the purchase of health insurance. McCain would also promote cost controls and competition among insurance companies. He has also joined with Democrats to support legislation that would allow the purchase of prescription drugs from Canada.

    But McCain's plan has no guarantee that people could get insurance, and no requirement for people to do so. McCain believes his plan would make insurance more affordable, which would bring it within reach of many more families. But many critics say that failing to require insurance companies to provide coverage could leave millions of people without affordable medical care.

    The McCain plan has come under attack from Democrats, who say it mostly benefits the wealthy and the healthy. "It's fine except for the poor and the sick," said Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology, who has worked on Democratic healthcare plans. ...

    But even some pro-business voices have said McCain's plan falls short of helping enough people in need. Fortune magazine said earlier this month that McCain had the best health insurance plan, but then criticized his handling of people with preexisting conditions. "The problem with McCain's approach - and it is a huge problem - is that McCain ventures so far toward total laissez-faire liberty that he risks leaving the poor and sick behind," the magazine said. "Anyone with cancer, diabetes, or other preexisting conditions will see their premiums multiply, too." ...

    McCain compared health insurance to buying a home, saying it was desirable but not required. "I think that one of our goals should be that every American own their own home," he said. "But I'm not going to mandate that every American own their home. If it's affordable and available, then it seems to be that it's a matter of choice amongst Americans."

  • New York Times: Voodoo Health Economics. By Paul Krugman. Excerpts: Elizabeth Edwards has cancer. John McCain has had cancer in the past. Last weekend, Mrs. Edwards bluntly pointed out that neither of them would be able to get insurance under Mr. McCain’s health care plan.

    It’s about time someone said that and, more generally, made the case that Mr. McCain’s approach to health care is based on voodoo economics — not the supply-side voodoo that claims that cutting taxes increases revenues (though Mr. McCain says that, too), but the equally foolish claim, refuted by all available evidence, that the magic of the marketplace can produce cheap health care for everyone.

    As Mrs. Edwards pointed out, the McCain health plan would do nothing to prevent insurance companies from denying coverage to those, like her and Mr. McCain, who have pre-existing medical conditions. The McCain campaign’s response was condescending and dismissive — a statement that Mrs. Edwards doesn’t understand the comprehensive nature of the senator’s approach, which would harness “the power of competition to produce greater coverage for Americans,” reducing costs so that even people with pre-existing conditions could afford care.

    This is nonsense on multiple levels. For one thing, even if you buy the premise that competition would reduce health care costs, the idea that it could cut costs enough to make insurance affordable for Americans with a history of cancer or other major diseases is sheer fantasy.

    Beyond that, there’s no reason to believe in these alleged cost reductions. Insurance companies do try to hold down “medical losses” — the industry’s term for what happens when an insurer actually ends up having to honor its promises by paying a client’s medical bills. But they don’t do this by promoting cost-effective medical care.

    Instead, they hold down costs by only covering healthy people, screening out those who need coverage the most — which was exactly the point Mrs. Edwards was making. They also deny as many claims as possible, forcing doctors and hospitals to spend large sums fighting to get paid.

    And the international evidence on health care costs is overwhelming: the United States has the most privatized system, with the most market competition — and it also has by far the highest health care costs in the world. Yet the McCain health plan — actually a set of bullet points on the campaign’s Web site — is entirely based on blind faith that competition among private insurers will solve all problems. ...

    As I’ve mentioned in past columns, the Veterans Health Administration is one of the few clear American success stories in the struggle to contain health care costs. Since it was reformed during the Clinton years, the V.A. has used the fact that it’s an integrated system — a system that takes long-term responsibility for its clients’ health — to deliver an impressive combination of high-quality care and low costs. It has also taken the lead in the use of information technology, which has both saved money and reduced medical errors.

    Sure enough, Mr. McCain wants to privatize and, in effect, dismantle the V.A. Naturally, this destructive agenda comes wrapped in the flag: “America’s veterans have fought for our freedom,” says the McCain Web site. “We should give them freedom to choose to carry their V.A. dollars to a provider that gives them the timely care at high quality and in the best location.”

New on the Alliance@IBM Site:
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  • Spotlight: As the Alliance@IBM CWA Local 1701 begins its Spring membership drive you need to know some hard facts.

    The Alliance has been losing members due to retirement, job loss and employee financial difficulties. This web site receives an average of 40,000 visitors a month.

    Tough economic times are obvious; however, we simply can not go on or take employee advocacy to higher levels if we don't build our dues paying membership. It is not just this web site: It is an office and an organization that is at stake. Our staff of 1 full time, 1 part time and volunteers/members are dedicated to building this organization; but it is up to YOU to see that we are able to keep the office open and the organization financially viable. We need to become financially independent--We can not continue to rely on being financed by non-IBM CWA members. IBM employees need to support their own organization!

    Frankly if IBM employees do not see the value of this employee organization then the future of our work is in jeopardy.

    Please consider joining the Alliance@IBM as a member for only $10 a month--the cost of a few Starbuck's coffees. Your dues and involvement help the Alliance with the following:

    • Organizing employees and challenging IBM on policies and practices detrimental to employees and retirees.
    • Exposing job cuts.
    • Helping employees to deal with redeployment and replacement training.
    • World wide media source for IBM employee issues.
    • Legal references and current labor law information.
    • Political action on employee issues.
    • Stockholder proposals and actions.
    • Working with International IBM employee Unions to develop worldwide responses to IBM employee issues.
    • Working with Federal, State, and Local officials to make sure IBM employees, IBM retirees and communities find information and remedies for toxic exposures from IBM sites.
    • Union privileges and benefits through Alliance@IBM's membership that are offered through the Union Plus /Privilege program.

    We also have the expense of keeping an office up and running: Rent, Office supplies, fax, phones internet access and mailings of organizing materials; such as newsletters, flyers and brochures.

    We believe Alliance@IBM has, by its very existence; given IBM Corporate Mgmt pause, during their anti-employee actions.

    The bottom line is that if we are NOT here, then IBM Corporate Management has the field. There will be some who say that employees do not want representation through an employee organization or a union. Now is the time: Prove them wrong or prove them right.

  • Plan Now! Make your voice heard at the IBM Stockholder meeting April 29th in Charlotte, North Carolina. Details to follow...
  • From the Job Cuts Status & Comments page
    • Comment 3/26/08: From what I've read in this newsgroup, people are being selected for RA regardless of their performance rating, skills, how hard they work or years of experience. Someone mentioned once you're selected, you're marked and they want you gone. So who is making the selection? And what criteria are they using? Is it the first line managers making the decision? And if so, are they selecting older people? Troublemakers?, etc? -curious-
    • Comment 3/27/08: -curious- The generally target older people, they make up the criteria as they go along (but beware if you were part of the overtime lawsuit), first line managers are generally part of the decision process and people who are good butt kissers generally get to keep their job. Therefore when it is all said and done with IBM will be just a bunch of butt kissers that can't get anything accomplished. -anonymous-
    • Comment 3/27/08: It does not matter who you are any longer. If you are tapped on the shoulder it is over. I was a 2+ performer with 20 years in the company. My customer could not believe this had happen. I was removed in June 2005 and it has not been easy, but I am still standing. -Removed_on_Birthday-
    • Comment 3/28/08: -curious- I've seen two resource actions now, and each of them swept out 1st line managers who had a reputation for speaking truth, to the irritation of their 2nd line bosses. The 1st lines who will speak about the current environment are heads-down and quiet, aware they're better off shutting up about anything and everything that doesn't match the party-line coming down from above. People in the trenches are the same. IBM is selecting for and getting a culture where people are afraid to speak unpleasant truth about things like schedules and quality, because doing so is often punished. Better for you as an individual to be a "team player", and pretend that reality is what the bosses say. -irRational-
    • Comment 3/28/08: In regards to who makes the layoff decisions: First, the bean counters work with Sammy boy and his cronies to review the financial health of the company. Sammy decides how much he wants to save for the upcoming year, then the bean counters in financial crunch the numbers for Sammy. Once they have the numbers, it begins to trickle down to the upper mgmt (directors and 3rd lines). Usually, the numbers are so steep, that the only way to make the goal for the year is to target employees.

      Older employees on average make more money and have some of the higher cost benefits vs. younger employees, so they target those folks first. You can't lay off every old-timer, so mgmt plays games and adds some of the younger workers to the mix. (Just so it looks good to the government).

      The 2nd and 1st line mgrs are the ones who have to make the decisions on who gets the boot. Usually, the first line mgr doesn't have any more to say than which employee he has to let go, but the 2nd lines have to approve it, so if the 1st line wants to save someone, and the 2nd line mgr doesn't agree. the 2nd line has the last say. -miss understanding-

    • Comment 3/28/08: Ok...I have this from someone who is a 2nd line manager in IGS. It was off the record, learned it at a social gathering away from work. I have no reason to doubt this. IGS is aggressively targeting 80 - 85% goals for offshoring for 2008. IGS has given the customers the option of which services they can off-shore, but 80 - 85% MUST be off-shored in order to keep current prices in effect.

      Apparently, the large customers are very happy with what IBM is doing because IBM is throwing in some incentives that are just too good to pass up. So there will be rolling layoffs across IGS for the remainder of the year. Folks with cookie cutter type skills (and remember..IBM uses this term a lot differently than YOU do). such as Websphere, MQSeries, DB2, S/A AIX, NT, Solaris, Linux skills... You folks better learn something real quick because those are a few of the skills that are being targeted. -tai mai shue-

    • Comment 3/28/08: "Therefore when it is all said and done with IBM will be just a bunch of butt kissers that can't get anything accomplished." They're already there. When all is said and done a lot gets said and nothing gets done. -too late-
    • Comment 3/31/08: "Folks with cookie cutter type skills (and remember..IBM uses this term a lot differently than YOU do). such as Websphere, MQSeries, DB2, S/A AIX, NT, Solaris, Linux skills... You folks better learn something real quick because those are a few of the skills that are being targeted." Gee, what do you suggest we learn now if one has been keeping up with the I/T technology? Powerpoint? Or "butt licking 101" ?.. which is not yet being offered as a course in academia as "Office Politics Logistics" as of yet. -offshoreIBMexecs-
    • Comment 4/02/08: I was told during the initial 'emergency' team meeting that I would not be moving to an hourly rate along with the 15% pay cut. I was relieved. I didn't take part in the lawsuit, however one of my coworkers did. About a week later I got a call from my manager - they had 'reevaluated' my position and I would be made hourly and receive the 15% pay cut. Wow, what changed? I couldn't imagine - I figured they decided to implement the hourly plan 'across the board' for U.S. employees. Come to find out my coworker who opted in on the OT lawsuit got a nice pay out ($8000) and was never made an hourly worker. I anger and frustration expressed by almost every IBM'r I speak to is amazing, yet I was amazed to learn of the member numbers for the Alliance. I'm doing my best to spread the word. Thank you! -Anonymous-
  • General Visitor's Comment page:
    • Comment 3/29/08: Not too long ago, someone placed a post here and they used the phrase"globally integrated enterprise bunk" in it. I regularly work in the "globally integrated enterprise" and it occurred to me that some of you might not have had the pleasure to do so. You may not have had a taste of what it's like to work in that environment. So if I may, I'd like to share with everyone what the flavor of working in the "globally integrated enterprise" is truly like.

      Working in the "GIE" means that "Pradip" is your Sys Admin in India, and "Guermo" as the Storage Management guy in Brazil. English is a second language to both of them, so while on the conference bridge speaking to each other in English, neither can understand what the other said! Of course, Ken, the end user in Maryland, who never understood technobabble when it was we Americans trying to explain why the system went down, is now very upset and concerned!! Since nobody wants to embarrass anybody, we all say nothing after Pradip or Guermo has finished speaking and we pretend we understood what they said!!

      There's a long pregnant pause and finally somebody says something, and the conversation gets switched to another topic entirely!! During the call, SameTime's light up on my T-Pad like crazy, but I just exit out of ST altogether and don't respond to any of them! So that's a little taste of what it's like to work in the "GIE". Do YOU think it's going to work?? I don't! -Da Catboid-

    • Comment 3/31/08: C'mon folks. Time to put up or shut up. The Alliance needs new members. I'm a member and continued my membership when I retired. (Or RA'd as my wife points out...) If you don't join and the Alliance folds, then I don't want to see any any whining on the yahoo message boards. That's tough. You didn't put up (membership) so now you can shut up. -Neal Watkins-
    • Comment 4/01/08: HP surpasses IBM for the first time in history and Sam gets a 20% raise. Can I get on that pay plan? -Sam The Man-
    • Comment 4/02/08: I have been retired for some time now but just joined the Alliance. Why? to try to do what I can to help. I still speak with many of my old coworkers and it just gets worse and worse. Some of them were not"able" to use all their vacation or holidays due to "workload". Many did not receive a raise in years. Their VP was a joke. 60 hour weeks are the norm. If people cannot see the signs in fiery letters in the sky then there is no getting through to them. Many IBMers just try to rationalize or convince themselves it will get better. Would you see cancer and assume it is going to get better? The shame is it is not just IBM but the govt as well. My best wishes to you all and I hope my small contribution each month provides some help. Thanks Alliance -toolateforme-
    • Comment 4/05/08: Boy, boy! It's sad, really sad to read how IBM treats to it's employees and what kind of company IBM is today. Back in 1960s, 1970s and 1980s, probably 1990s, I very clearly remember how many people wanted to join IBM because it was the best company anyone works for. Thomas Watson and Thomas Watson Jr worked very hard to maintain IBM the most desired and highly respected company. I spoke with many computer science college students and graduates and to my dismay almost all of them do not want to work for IBM at all. When I was introduced to them as an IBM employee, they looked me down with laughs. Back then, when people heard you were working for IBM they looked up at you and said "wow". What happened? Who ruined and destroyed the image of IBM? I am sad to read all of these messages. When and why IBM wasn't the same company as it was back in 1980s and before? This is really sad, very sad. I just want to know who screwed up IBM! -Sad-
  • Pension Comments page
  • Raise and Salary Comments
    • Comment 04/01/08: Salary = 59k before 50k after; Band Level = 6; Job Title = It Specialist; Years Service = 0; Hours/Week = 42; Div Name = 16; Location = DC; Message = In regards to the petition. I didn't sign because I gave my notice and took a job I had already been considering right as the pay cut was being announced. Instead of a 15% pay cut, I got a raise instead. I really like my new job. Imagine working at a company where my manager actually knows what I do and they don't use an insane utilization quota to force me to use my vacation time when I am on the bench. -Gone and loving it-
    • Comment 04/02/08: Salary = 49k; Band Level = 6; Years Service = 2; Hours/Week = 40; Message = Gone & loving it: "Imagine working at a company where my manager actually knows what I do and they use an insane utilization quota to force me to use my vacation time when I am on the bench" My last talk with my manager regarding PBCs and overtime brought up this topic. He mentioned utilization rates and that he needed to work extra hours if he took all 5 weeks of his vacation so that his utilization rate would be where it needed to be. "Wait. Let me clarify with you. Are you saying that if I take my 3 weeks vacation, then I need to work enough hours extra to make up for that time I'm gone????" I asked him. No, that wasn't what he was implying at all. It sure sounded like it. I told him that my 3 weeks vacation and 12 personal days are part of my benefits package so that my utilization is based on 46.6 work weeks, not 52. People need to stand up - collectively or individually - against stupid abuse like this. -tulsa_member-
    • Comment 04/03/08: Can one of the people who got their pay cut 15% and are not raising heck about it explain to me how you lost your backbone? Are you so afraid that you will not even protect your families income by organizing and fighting back? -zombie not-
    • Comment 04/04/08: With a 15% pay cut I work 15% less for IBM. Further, I fine IBM another 5% work output, for lack of respect of me and others, by IBM. IBM can make dumb rules... so can we. Less pay=Less work. That's all, seems fair. Meanwhile join Alliance@IBM. -NewRulesNow-
  • PBC Comments
  • International Comments
Vault Message Board Posts:
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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:

  • "Business as Usual" by "Frank_Reality". Full excerpt: I find it curious that the most recent layoffs in ITD targeted experienced (older) project managers. Last week, Joanne Collins-Smee sent out a note detailing education priorities - the top priority was project management. Clearly, the plan here was dump the older employees and now replace them with younger, less expensive ones. Every day IBM sucks even more
  • "Following a trend" by "civilliberty". Full excerpt: I was told by a colleague that Accenture has a 28 year old senior manager running with one of their large projects which is having all sorts of issues. It's to be expected that issues will arise, but honestly, how much experience can a 28 year old bring to bear on a situation?. Once again, they're screwing the customer - inexperienced senior manager and no doubt charging a full senior manager fee (would that be about $2000 a day - at least?)
  • "sunny" by "for message board". Full excerpt: What's the difference between a Band 9 (sr mng. consultant) & Band 10 (ass partner; what're the salary ranges & qualifications required when hiring a Band 9 vs. 10 on the COMMERCIAL side of GBS for BUSINESS CONSULTING (restructuring, not IT) Practice area. Thx.
  • "The real difference" by "Dose of reality". Full excerpt: A band 10 has someone to blame and take the fall when a project falls apart - a band 9 just has a bulls eye on his back. On the other hand, a band 10 has more revenue-generating responsibility, so he will bear the brunt of booking shortfalls. Key band 9 qualification - defensive project management. Key band 10 qualification – see the Jack Jones character from the movie The Assassination of Richard Nixon. The only real requirement is total suspension of disbelief about what you are selling.
  • "message" by "for message board". Full excerpt: thanks for your reply - very helpful. I'm looking into organization / change practice (BPR, etc). In finance, telecommunications, and energy industries. Just to clarify, the base salary for B9 is 15K-30K a month (gross)? Or was it annual 150-300K, are these ranges standard all across the board worldwide locations? Do you know variations based on countries? Thanks again for your suggestions & input.
  • "Let me clarify..." by "VMember99". Full excerpt: Base salary for B10 is approx. 15 - 30K USD MORE THAN B9 gross (annually). Pay range varies by country/market - so, it will all depend on "market rates" in your particularly geography that will dictate compensation. OCS skills could get you at higher end of pay scale as well as B10 given that is the only area within Strategy & Change that the rest of IBM believes adds value (and that is really because client's are demanding quality, skilled practitioners in that area).
  • "Flying on the edge of the envelope" by "ancientblueconsultant". Full excerpt: There is no doubt that the developed executive behavior at the blue pig to win at all costs inherently (but never publicly) expects and even induces people to go to the edge of ethics. Some unfortunately fall prey to the peer pressure and go over the line, to the joy of higher level execs who are then protected.

    The suspension is already lifted, but the mystery still remains if the suspension was a valid one. If so, this will affect the pig profoundly since they will now have to portray themselves, as we always knew, to be not exactly pure and clean from now on. If the suspension was valid, they'll always have to put a check in that little check box and then explain it in detail on every RFP from now until hell freezes over. I'm not optimistic in a Bush administration this will happen, but if it was flagrant enough a violation they won't be able to hide it.

    BTW, You weren't the only one in your perplexing amusement. Advertising can buy a lot of things, including the elimination of fair and balanced access to the truth.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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