Practice in a
While once unthinkable economic events are happening with daily frequency, most of the hard work of managing your eyecare practice in this environment remains to be done. The continuous commentaries about these weeks being "a critical time" shows what volatility and economic difficulty do to radically affect competitive positioning in virtually all industries and business segments, including eyecare. Economically challenging times, however, do not cause all businesses to decline. Rather, they set up the conditions for new opportunities.
Eyecare practices that focus on continuous customer satisfaction have two key factors at play: 1) better tactical responses to rapidly shifting market conditions that secure financial self-determination, and 2) relentless focus on, and continued funding for, a narrow set of key, business priorities and patient needs. While markets may get a bailout, you and other ECPs and business owners will not.
We recognize the challenges faced by you and your staff. Business Essentials has always sat at the forefront of the critical issues facing our ECP readership. During this unprecedented time, we offer an initial look at several actions for practices to consider as they revisit both their short-and medium-term operating plans:
1. Plan for increased cost and reduced availability of credit.
Availability of standard credit will fall far short of demand. That, however, is not the real news. The real news is that this retraction of debt financing is taking place against the backdrop of unprecedented capital availability globally. There are several things that you may wish to consider going forward:
a. Increase your ability to self-fund by reducing investment in working capital.
b. Leverage healthy relationships with optical manufacturers and suppliers to structure more attractive financing.
c. Plan for cash needed in the next 9 to 18 months rather than just next month.
2. Reorient sales and marketing around the economic condition of your patient base.
The news here is not that demand has slowed; it is that capacity to buy is more unevenly distributed than at any time in recent memory.
a. Build/retain credibility with patients by focusing communications on crisp, differentiated messages.
b. Consider adjusting marketing messages to better reflect service and product features and value, along with value-added health services of your practice.
c. Target your patients whose eyecare needs of individuals and families are still robust (or even increasing). Pricing, an underexploited lever in even the best of times, becomes a critical discipline as patients have a continued need for good health and vision.
3. Develop a concrete response to a radically changed picture of supplier capacity and viability.
Across all categories, suppliers have different demand for their services, and different levels of economic stability. Understand the strength and stability of key suppliers’ financials and determine if or where you may be exposed to unforeseen price increases, inventory requirements, or related financial implications that can negatively affect your practice and your balance sheet.
The staff of Business Essentials continues to value our readership. We are working diligently to help you navigate uncertain times like these. We welcome
your questions and value your feedback.
Hedley Lawson brings over 25 years of optical industry experience to JMI. For over 10 years, he has been a contributing editor to VM, most recently as writer of the monthly column "Business Essentials." He is the Contributing Editor of VM's
E-Newsletter Business Essentials. Contact
Business Essentials with questions or comments.
and Cons of
What are the advantages and disadvantages of
having an Employee Handbook?
Employee Handbooks spell out the rules of the workplace that apply to all employees. Employers are not required to have an Employee Handbook. So, if you are deciding whether to have one, you should consider the advantages and disadvantages before proceeding.
If you choose to have an Employee Handbook, you are generally free to pick the rules to include in the handbook as long as the provisions do not violate any law. But, if you have a handbook, you must include information covering legal requirements associated with employees' rights to family care or medical leave.
A well-written Employee Handbook has many advantages. By having your office/workplace rules written down, your employees will:
- Believe that your practice is fair and that you treat all employees equally,
- Know your practice's obligations to them and their requirements to you, and
- Be less likely to claim that they were unaware of the practice’s requirements and rules.
On the other hand, Employee Handbooks may also create problems if:
- Your rules and requirements are confusing or ambiguous,
- You imply that "at-will" employees have job security,
- You fail to reserve sole discretion to discipline or terminate employees, or
- You and your managers do not follow the requirements and rules you have set out in your handbook.
If you have a question or issue for one of our experts, contact
—Hedley Lawson, Jr.
President Signs Into Law New Disability Legislation
On September 25, 2008, President Bush signed into law the
ADA Amendments Act (ADAAA/S. 3406). This law (Public law number 110-325), authored by Sens. Tom Harkin (D-IA) and Orrin Hatch (R-UT), constitutes the first legislative change to our nation’s landmark disability statute, the Americans with Disabilities Act of 1990 (ADA). The law becomes effective on Jan. 1, 2009.
The purpose of the ADA Amendments Act is to overturn several Supreme Court and lower court decisions over the past decade that limited the ADA's coverage. However, the ADAAA also will leave intact the first prong of the disability definition language, so that a person will still need to show that he/she has a physical or mental impairment that "substantially limits" one or more of his/her major life activities in order to be protected under the ADA.
While the first prong of the disability definition will remain the same, the most significant changes to current law contained in the ADA Amendments Act are as follows:
Expands the Definition of "Regarded As" Prong. The ADAAA will provide that an individual is "regarded as" having a disability if the employee establishes that he/she has been discriminated against because of an actual or perceived physical or mental impairment. This new provision ensures that people who are fired or suffer other adverse employment actions because they are regarded as disabled can prevail if they prove that they were discriminated against. However, the "regarded as" prong would not apply to transitory and minor impairments where the impairment is expected to last less than six months. The legislation also makes clear that employers will not be required to provide a reasonable accommodation to individuals that are regarded as disabled.
Establishes New List of Major Life Activities. The ADAAA will introduce a new, non-exhaustive list of major life activities that will now include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. For the first time, major life activities will also include the operation of major bodily functions, including functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.
Broadens construction. The ADAAA will establish a new rule of construction emphasizing the importance of the findings and purpose language in the bill by directing courts to interpret the definition of disability consistent with those provisions.
Authorizes regulations. The ADAAA explicitly authorizes the U.S. Equal Employment Opportunity Commission and the Departments of Justice and Transportation to issue new regulations.
Consumer-Driven Health Plans Growing in Popularity
A new survey by employee benefit advisory company
United Benefit Advisors Inc. (UBA) shows that participation in consumer-driven health plans are becoming an increasingly popular company-sponsored health insurance option.
Consumer-driven health plans typically have lower premiums but higher deductibles and out-of-pocket costs for some medical procedures than other insurance plans. They typically include a health reimbursement account or health savings account that employers contribute to.
Indianapolis-based UBA surveyed 18,019 health plans sponsored by 12,860 U.S. employers. The plans cover approximately 4.4 million people.
The survey showed that the total number of consumer-driven health plans increased by 43 percent over 2007. They now account for nearly 13 percent of all plans offered by employers, according to an announcement from UBA.
Participation in the plans also increased over the past year. More than 11 percent of the insured in the survey were enrolled in consumer-driven health plans, up from 6 percent in 2007.
"In 2008, employers contributed an average of $1,209 to health reimbursement accounts for single employees and $2,274 to family plans," UBA said. The average employer contribution to a health savings account was $642 for a single employee and $1,053 for a family plan.
To help keep costs down, many employers have implemented wellness programs, UBA said. About 10 percent of employers surveyed currently offer a wellness program, compared with 7.4 percent in 2007. Many of those plans include health risk assessments, seminars, workshops or coaching for high-risk employees.
Preferred provider organizations (PPOs) represented 54 percent of all plans offered and 62.7 percent of employees were enrolled in them. Health maintenance organizations (HMOs) accounted for 21.3 percent of all plans offered, with 13.3 percent of all employees enrolled.
The average annual cost per employee for all plans was $7,327 for medical coverage only. Employees paid $3,210 of that cost, while employers paid $4,117. The average monthly premiums for all plans were $370 for single and $901 for family coverage.
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Employers Have Options When an Employee Faces
Situations involving personal issues at home, whether domestic violence, drug or alcohol abuse, or family matters, may be of concern to you and your employees.
Business owners and managers often are troubled when employees are victims of domestic violence and the initial reaction is usually to offer some type of help or assistance. If an employer has an
Employee Assistance Program (EAP), employees are able to speak privately with professional counselors about personal matters including domestic violence, personal issues and frustrations, anger, family, or substance abuse problems. Often, it is better for an employer not to get involved in an employee's private life or be put in a position that would compromise work decisions.
The benefit of an EAP for your practice is that it provides quick access to independent professional counselors for matters beyond the expertise or resources of you and your practice management. The benefit to your employee is that they are able to have access to a professional counselor during working hours on a no-or low-cost basis. Often, employees are not able to get the help they need because of cost or lack of time outside of work. Matters are kept confidential; all that is reported to the ECP is whether the employee showed up for the appointment. If after a limited number of appointments the employee is in need of further help, the employee may be provided with other resources or referrals for follow-up.
If you do not sponsor an EAP, speak with the employee to let him or her know that while it is a private matter, you care about the employee and your door is open. In addition, you may let the employee know about local resources available to assist, including court protection, shelters and counseling.
Some state laws prohibit discharging or discriminating against employees and their children who are victims of crimes and those who seek court protection. For example, California employers with 25 or more employees are required to provide employees who are victims of domestic violence or sexual assault with time off for medical attention, counseling and domestic violence shelter services. Other states are considering similar legislation.
If an employee knows that she/he is in need of such services, they must provide the employer with reasonable advance notice, unless that is not feasible. You may require the employee to present some documentation of the need for time off—such as a police report, court papers and documentation from a counselor, medical provider or domestic violence provider—within a reasonable time. Remember to keep these matters confidential.
Domestic violence situations may create other more onerous problems at work. You should talk to the employee who is the victim of domestic violence about what the employee knows about the abusive person and what that person has said that she/he would do or is likely to do. Also, alert other managers and the receptionist so that they are prepared.
It may be a good idea to obtain a picture of the person so that your managers and the receptionist are aware of whom to watch out for in the parking lot and the building. If the employee is seeking a restraining order, ask that your office be included.
restraining order is obtained that restricts the abuser from being at your office and the abusive person shows up at work, immediately call the police. You may have the abusive person arrested for violating the restraining order. A copy of the restraining order should be retained at work so that you can show it to police if they are called.
Take all threats seriously; document time, date, place, what was said and names of witnesses for the police and court actions. Even if there is no restraining order, if the abusive person shows up at your worksite and is harassing, threatening or refusing to leave, immediately call 911.
Lastly, consult with your attorney about all matters noted above to ensure that your policies and practices are consistent with state statutory and case laws. As well, discuss with counsel any restraining orders and other precautions that the attorney may advise.
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New Medical Rules for Identity Theft Programs
A 2003 fair-credit law requires businesses that extend credit to implement identity-theft-prevention programs by Nov. 1, 2008. The programs must detect and respond to activities, or "red flags" that could indicate identity theft. While the program extends to financial institutions, it also encompasses health-care providers and physicians who routinely extend credit.
Many health-care providers have only recently become aware of the new rules. Medical identity theft is a growing problem. The
World Privacy Forum estimates that each year 250,000 to 500,000 Americans are victims of medical identity theft. The
Federal Trade Commission reports that of 8.3 million U.S. identity-theft victims in 2005, 3 percent said thieves have obtained medical treatment, services, or supplies using their stolen personal information.
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|In This Edition...|
It's Your Business
in a Down Economy
From the Top
Into Law New
Ask the Experts
The Pros and
A Decline In
Staying on the
Job After 65
Rules and Regulations
New Medical Rules
For Identity Theft Programs
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How Much Does Your 401(K) Plan Cost You?
Uncovering the fees and costs associated with your 401(k) plan may require some digging. Once you find these costs, understanding them can be even more difficult.
Regulations proposed by the
Department of Labor (DOL) could change all that. Under the proposed regulations, 401(k) plans would have to disclose annually each investment's annual expense ratio, which is the percentage going to management and other costs.
In addition, the plans would have to provide detailed performance data and make clear any administrative fees deducted from an account. Many plans currently provide performance data on the funds and options they offer, but they may not provide the detailed one-, three-, and five-year data that the DOL is likely to require. Once final, the new regulations could go into effect as soon as Jan. 1, 2009.
Inflation May Offset '09 Pay Increases
Despite a weak economy, employers are expected to raise employee salaries next year at the same rate as this year according to figures compiled by Watson Wyatt Worldwide. Rank-and-file employees can expect base pay gains of 3.5 percent in 2009. Higher performers can expect an average gain of 4.4 percent, while mediocre performers will get 2 percent or less.
Workers in critical and difficult-to-fill positions also are expected to do well. Even with a 3.5 percent raise, workers will be lagging behind the rising cost of living. The Bureau of Labor Statistics figures show inflation rising at 5 percent in June.
The pay figures were compiled by
Watson Wyatt Worldwide.
A Decline in
Reported for 2007
The number of uninsured Americans declined for the first time in 20 years to 45.7 million in 2007, according to the
Census Bureau. The drop was attributed to an expansion of government-sponsored health insurance programs, which covered an additional 2.7 million people in 2007. At the same time, the number of people covered by private insurance declined to 67.5 percent in 2007 from 67.9 percent in 2006.
Employment-based insurance also continued to drop in 2007.
Experts said the report is good news but not exactly great news, given that it fails to take into account the economic downturn that began in late 2007.
Staying on the
Job After 65
Among Americans age 65 and older who work, 56 percent held full-time jobs last year. That is up 10 percent from 1999. Most of the growth in age 65 and over workforce was fueled by women working after their partner died or for other reasons. But the over 65 crowd is paid less, a median of $686 a week for men and $534 for women. And, this is not a trend that can be blamed on Baby Boomers since Boomers have not reached the age 65 threshold yet.
Easy-reference to Web resources about human resource policies and rules
ADA Amendments Act (ADAAA/S. 3406)
Employee Assistance Program (EAP)
Social Security Administration (SSA)
Watson Wyatt Worldwide
World Privacy Forum