Tuesday, October 9, 2007

ACC President Thomas Hinton Proposes New National Healthcare Program

Tom Hinton, president of the American Consumer Council, introduced a consumer healthcare proposal that would create a new, not-for-profit federal agency, the National Healthcare Foundation, to provide primary and urgent healthcare for all Americans.

In announcing his support, Hinton said, “It is time for our elected officials and policy makers to adopt a national healthcare reform program in which every American can participate at little or no cost.”

According to Hinton, “the solution is the adoption of a progressive healthcare program for the United States which would be created by an Act of Congress, paid for by taxpayers, and managed by an independent, non-profit agency called the National Healthcare Foundation, under the direction of the Secretary of the Department of Health and Human Services.

Hinton said the healthcare proposals of presidential candidates have some merit but do not go far enough in providing primary and urgent care for every American. In a prepared statement, Hinton said “while the United States arguably has the finest healthcare professionals and treatment facilities in the world, many Americans cannot get access to our outstanding healthcare system because of the prohibitive cost, insurance restrictions, political bickering, and arcane government regulations that work against health and wellness in our country. In the meanwhile, Americans are being denied urgent treatment for legitimate illnesses and dying.”

ACC’s proposal calls for a voluntary program that would transform America’s current healthcare system into a network of not-for-profit hospitals and clinics that would provide primary and urgent care needs for every American citizen. Hinton estimated that this innovative approach would attract more than 90 percent all of medical professionals, universities, clinics, non-profit service agencies, and industry organizations that currently serve the healthcare industry in America because fees-for-services would be paid for by the NHF provided certain licensing and regulations were met.

In announcing the proposal, Hinton said that “it is appalling that every American does not currently receive free

Hinton also addressed the question of who will pay the bill. “The honest answer is that any national healthcare program will be paid for by you and me -- the American taxpayers and corporations doing business in the United States. Despite the initial investment, we believe a national healthcare initiative is the most efficient and comprehensive way to advance healthcare for all and keep the costs from spiraling out of control. It will require a reallocation of national resources to pay for this program.”

Part of ACC’s proposal includes two important reforms he says are vital to “changing the way America thinks about health and wellness issues and protects our medical practitioners” -- Malpractice insurance and the reclassification of certain illegal drugs.
primary healthcare services as an entitlement of their citizenship. It’s time we emerged from the dark ages of ‘healthcare for the privileged’ and adopted a progressive healthcare program that provides outstanding healthcare for all Americans.”

Hinton’s proposal calls for a special Malpractice & Medical Claims Insurance Fund (MMCIF) to be established as part of the healthcare reform package by Congress which would pay for medically-related lawsuits or malpractice claims brought against NHF participants. Hinton noted that reasonable malpractice insurance premiums would be established by the MMCIF and paid for by NHF program participants.

Hinton said “this element of the NHF is the hook that will single-handedly encourage over 90 percent of all physicians, dentists, and other healthcare practitioners, who must now pay costly malpractice insurance premiums, to enroll in the NHF and support its success.” Hinton added, “Also, as a volunteer program, the benefits of participating in the NHF must be significant in order to attract widespread national participation among medical professionals and medical care facilities. This clause will have that positive effect.”

Hinton also explained how the program would allow for the re-classification of several illegal drugs including marijuana, cocaine, and heroin. Under the proposal, legislation would allow for the controlled distribution of limited quantities of these drugs through legal prescriptions under a system similar to the current medical prescription and pharmaceutical distribution of prescribed drugs by licensed physicians. According to Hinton, “These drugs would be prescribed by physicians and dispensed by licensed pharmacists to persons who require them for medicinal purposes or to treat their addiction. As part of Hinton’s proposal every patient using this prescribed classification of drugs would be required to participate in a licensed counseling and treatment program.

The role of the NHF would be to administer a national healthcare program through a network of state agencies that entitles every American citizen and authorized visitors (tourist, student, visa holder, etc) to unlimited primary and emergency healthcare services for any treatment that will enhance their wellness or preserve their life.

At the heart of ACC’s national healthcare proposal would be a network of medical facilities, hospitals, shelters, and clinics that would all be required to operate as independent, self-operated, not-for-profit entities. “This system is already in place now,” Hinton noted. Individual physicians and other medical professionals would be exempt from this requirement and eligible to participate in the NHF program provided their billings were directed through a not-for-profit entity such as a not-for-profit hospital, lab, or clinic.

The full text of Hinton’s remarks regarding ACC’s healthcare reform proposal follows.

A Healthcare Solution for America

A Statement by:

Thomas Hinton
President & CEO
American Consumer Council

San Diego, CA

October 9, 2007

Good morning and thank you very much for attending this briefing. I think the large turnout today reflects the legitimate concerns American consumers have for the troubled state of healthcare in this country.

I am here today because American consumers are unhappy with the cost and accessibility of healthcare in our country. It is apparent from the emails, letters, and comments made by thousands of American consumers that the overwhelming majority of people in this country are both frustrated and angry with the current healthcare system. They are frustrated because of the escalating cost of medical insurance and fees-for-services; and, they are angry because politicians and policy makers have failed to act and reform healthcare.

Specifically, Americans want three things in terms of healthcare reform. First, they want unlimited access to primary and urgent healthcare. Secondly, they want that access at an affordable cost. And, thirdly, they want assurances that doctors, nurses, and other healthcare providers will be thoroughly-trained and educated in terms of medical technology, the treatment of diseases, and place the concerns of their patient above all other competing interests. Given these three priorities, let me share with you a potential solution that will fix our healthcare delivery system and ensure these three objectives are met.

We believe the long-term healthcare solution for America requires a shift is how we think about healthcare. In other words, Americans need to embrace the proposition that every citizen -- if fact, all human beings -- have the right to health and wellness given the tremendous medical advancements and capabilities we have made around the world.

While the United States arguably has the finest healthcare professionals and treatment facilities in the world, many Americans -- more than forty million by current estimates -- cannot access our healthcare system because of the prohibitive cost, insurance restrictions, and arcane government regulations that work against health and wellness in this country.

It’s time to move beyond the finger pointing, political bickering, and posturing among special interest groups who stifling healthcare innovation and continuous improvement, and adopt a national healthcare reform program that every American can access at a reasonable cost. To date, I have heard only weak proposals from politicians and policy-makers to reform healthcare. But, frankly, these are “band-aid” solutions and will not be enough to save the patient, the American consumer. What is called for is radical surgery -- sweeping reform that is innovative and all-encompassing. For these reasons, bold leadership is now required at the highest levels of government and the healthcare industry.

I believe the solution is the adoption of a progressive healthcare reform program for the United States which would be enacted by Congress, paid for (mostly) by taxpayers like you and me, and managed by an independent, non-profit organization under the direction of the Secretary of the Department of Health and Human Services.

The heart of this progressive healthcare reform program is a lucrative, but voluntary, enrollment program for medical providers and healthcare facilities. In other words, medical providers have a choice. They can continue to do business-as-usual and treat those patients who elect to support them through direct payment or insurance, or they can enlist in a new national healthcare program known as the National Healthcare Foundation.

We believe this innovative approach will attract, within three years, more than 90 percent all of medical professionals, universities, clinics, non-profit service agencies, and industry organizations that currently comprise the healthcare industry in America. I also think it will set a precedent for other nations that wish to provide a national healthcare program for their citizens.

But, who will pay for it, you might ask? The honest answer is that it will be paid for by you and me -- the taxpayers of the United States of America. There are certain things that every American needs and should demand from their government. A quality education and comprehensive healthcare are two such needs that will raise our standard of living and create a stronger nation. I also believe a national healthcare initiative is the most efficient and comprehensive way to ensure healthcare for all and keep the costs from spiraling out of control.

My motive in proposing a national healthcare initiative is selfish. I want access to the best healthcare in the world for the rest of my life -- whether I live a thousand days or 10,000 days; and, I don’t want to be told by some faceless individual working in a corporate complex, whose job it is to save his/her insurance company money, that a vital medical procedure, treatment, or drug will not be authorized because their bottom line is valued more than my life. It’s that simple! Here’s a true story that illustrates my point.

A few weeks ago, I read a very disturbing front-page story in the Wall Street Journal about a middle-aged woman who worked in a small town in Texas as a hairdresser. As I recall the story, the woman discovered a lump in her breast and went to a private hospital for diagnosis and care. Unable to pay for the necessary treatment, she was shuffled from one doctor to another over several months until a medical facility finally agreed to examine and treat her for a fee. Regrettably, over the course of her illness she did not receive timely care. Furthermore, federal regulations that would have allowed her free medical care were unknown to the patient and she was caught in a Catch-22 cycle for months. Eventually, the woman died despite receiving her mastectomy operation and quality post-care in Colorado where she relocated to live with her daughter, who is a nurse. Regrettably, during this ordeal, the patient was forced to sell her home, relocate to a trailer, eventually move to Colorado and move-in with her daughter, and be subjected to the humiliating rules of the state and federal healthcare bureaucracy which blocked her recovery and care. Despite the heroic efforts by her daughter to get her mother timely and proper care, the patient died.

As I read this heartbreaking story, it occurred to me that the woman’s death was unintentionally expedited by insensitive people in the healthcare industry who made a series of life-and-death decisions to deny her treatment, or enforce policies and procedures in the early stages of her diagnosis that inhibited timely treatment that might have saved or prolonged her life. Had that been their mother, I am sure the roadblocks and regulations would have been removed to facilitate the best possible care. This story is not only a tragedy, but a disgrace to the dignity of every American. Frankly, reading this story angered me because nobody should deserve to suffer and die -- let alone go broke -- when we have the best medical care in the world. There are some national concerns whose interests are poorly served by the twin engines of capitalism and profit. Healthcare is one such national concern.

So, here is our proposal to remedy the healthcare problem in America. It is not perfect and will require refinement. But, it provides a good start for us to move forward and create a national healthcare program we can all be proud of.

Step 1. Establish the National Healthcare Foundation of the United States.
The United States Congress should approve and fund a National Healthcare Foundation (NHF) within the Department of Health and Human Services. The role of the NHF would be to administer a national healthcare program through a network of state agencies that entitles every American citizen and authorized visitors (tourist, student, visa holders, etc) to unlimited primary and emergency healthcare services for any treatment that will enhance their wellness or preserve their life. This includes examinations, diagnoses, surgery, and rehabilitation.

At the core of this innovative national healthcare program would be a network of medical facilities, hospitals, shelters, clinics, and providers who would “opt-in” to participate in the NHF and be fairly compensated for their services. All participants would be required to operate as independent, self-operated, not-for-profit entities. In other words, no for profit businesses would be entitled to receive moneys from the NHF. This requirement will protect the integrity of the new healthcare initiative and remove the profit motive from healthcare. Obviously, this would require some for-profit medical corporations and hospitals to change their current status to “not-for-profit” in order to participate in the NHF. Of course, they can choose not to participate since it is a voluntary program. Individual physicians and other medical professionals who are incorporated as for-profit entities would be exempt from this requirement and eligible to participate in the NHF provided their billings are directed through a bona fide not-for-profit entity such as an NHF member hospital or clinic.

Step 2. The National Healthcare Foundation (NHF) will be funded and paid for primarily by the United States Government through its taxpayers. Every citizen has the right and privilege for primary and emergency healthcare under the same constitutional protections that ensure “life, liberty, and the pursuit of happiness.”

We estimate the annual cost for this program as outlined would be $350 billion in its first year (2009). It would not be cheap; the cost of good healthcare never is. But, this is also a way to control the spiraling costs of healthcare, and, as you’ll read, we can achieve a significant return-on-investment within three years of this plan through some innovative methods and self-funded programs. In three years, this program could actually cost us less than we are currently spending on healthcare today.

As part of the new NHF, all physicians, nurses, clinicians, pharmacists, researchers, technicians and other healthcare professionals -- as well as all healthcare facilities such as hospitals, teaching universities, clinics, and laboratories -- would be paid a fair market wage or fee for their services based on current wages and fees-for-services. These wages and fees would also be reviewed annually for cost-of-living adjustments. This proposal does not require anyone -- doctors, dentists, nurses, clinicians, teachers, administrators, or technicians -- to take a pay cut. These people are professionals and deserve to be paid a premium wage commensurate with their skills, years of service, and degrees of certificates. In other words, this program will reward and incentivize medical providers to further their education and capabilities by paying them more.

As part of this proposal, Congress would create an independent Healthcare Compensation & Insurance Commission (HCIC) consisting of fifteen individuals appointed by the president and confirmed by the Senate from the private and public sector who would establish a code of ethics for all NHF participants and compensation and fee-for-services schedules that ensure fair compensation for all medical professionals and participating non-profit healthcare and educational institutions. The HCIC would also establish regional malpractice insurance rates and set jury award limits for financial claims against medical professionals and institutions that are sued for malpractice and related claims. While mistakes and errors will happen, this aspect of the program would dramatically reduce the exorbitant cost of malpractice insurance and allow doctors and other healthcare providers to focus on serving their patients instead of worrying about malpractice insurance premiums and lawsuits.

Step 3. The National Healthcare Foundation (NHF) would consist of ten divisions. The purpose of these divisions is to oversee the new national healthcare reform program and ensure all Americans receive primary and urgent healthcare as well as foster the research, education, and advancement of the healthcare profession. Each division is described below in general terms outlining their major roles and responsibilities. Additional divisions could be created as warranted.

Primary Care
Urgent Care
Assisted Care, Long-term Care, Child Services, Shelters, Hospices, and Therapy Services
Research & Technology
Organ Donor Programs
Education, Training, and Accreditation
Wellness Treatments
Licensing, Regulations, and Insurance
Payment, Audits, and Enforcement

1. Primary Care would include primary treatment areas of medicine including, but not limited to the following:

Adult Psychiatry
Anesthesiology/Pain Management
Cardiovascular Surgery

Pediatric Dentistry
Ear, Nose & Throat
Emergency Medicine
Family Medicine
General Surgery
Infectious Diseases
Internal Medicine
Oral Surgery
Pain Management
Palliative Care
Pediatric Cardiology
Physiatry (Rehabilitation)
Plastic Surgery
Preventive Medicine
Radiation Therapy
Urgent Care

Primary Care would also include care for the developmentally disabled, mentally impaired, and treatment programs for diseases such as alcoholism and drug addiction. The NHF would pay for one hundred percent of these services based on a regional matrix formula that fairly reimburses participating physicians and/or medical providers such as hospitals, clinics, and social services agencies at current billing levels. In other words, a family physician in New York City might be reimbursed using Schedule A while a community clinic in Albany might be reimbursed according to Schedule B. The drug treatment center in Macon, Georgia might be paid according to Schedule C, and so forth.

2. Urgent Care is defined as any medical treatment that requires emergency room-related services and ambulatory services to treat life-and-death situations such as heart attacks, seizures, car accidents, shotgun wounds, etc. Such care would be provided by licensed emergency rooms or 24-hour emergency care clinics located across the nation. This non-profit network currently exists with the exception of several rural and poor communities that desperately need medical professionals and local facilities. This level of service would also apply to animal care through veterinarians with a limited annual dollar amount for pet owners. The NHF would pay for one hundred percent of these human services based on a regional formula and payment schedule that fairly reimburses the medical providers for their services and procedures. Veterinarian care would be reimbursed at fifty percent of the cost with pet owners paying the remaining balance.

3. Assisted Care, Long-Term Care, Child Services, Shelters, Hospice, and Therapy. This division would advance the needs of those persons who are unable to independently care for themselves including persons suffering from mental illness, Alzheimer, AIDS, and terminal illnesses. This division would also be the champion of children who require adoption, foster homes, and day-care services for working parents. This division would also support the needs of persons requiring mental or physical therapy.

This division of services also would include those patients who require assisted care living or long-term care situations including hospices. Also, it would apply to those patients who are under psychiatric care, medical counseling, the aged, infirmed, developmentally disabled, persons suffering from physical injuries including paralysis, or persons requiring rehabilitation treatment and therapy.

This division would also fund homeless shelters, runaway shelters, and homes for victims of family violence or spousal abuse. The NHF would also provide greater grant funding to support various state and county government social service agencies.

The NHF program would pay for ninety percent of these services. The other ten percent would be funded through private contributions, grants, and fundraising activities. Patients or family members would not be charged any fee for receiving these services.

4. Research and Technology would advance and encourage the development of innovative medical practices including new medical procedures and treatments, product design, drug research, and other such developments that would enhance the advancement of medicine and its treatment of patients. The NHF program would pay for eighty percent of these services to bona fide not-for-profit institutions and research centers. The other twenty percent would be funded through private sector and public sector grants, individual contributions, and fundraising or advancement campaigns. For profit entities including drug manufacturers would fund their own research and be eligible for grants under other federal agency programs as is currently the case.

5. Organ Donor Programs. This division would advance the existing international network of organ donors, recipients, maintain a national database, and work to promote public awareness and support for organ donations while expanding the international network. This program would be completely funded by NHF including the costs associated with transporting patients, family members, and organs for a medical procedure.

6. Education, Training and Accreditation. This division’s mission would be to advance enrollment and training capabilities of teaching universities and hospitals as well as all other certified and licensed not-for-profit educational institutions that train medical professionals including doctors, nurses, and technical professionals. The NHF would pay for ninety percent of a student’s educational and medical tuition or training that requires a medical degree or healthcare professional certificate. The remaining ten percent would be paid for by the student or through scholarships and grants. The cost of continuing medical education programs would be borne by the individual unless it leads to a medical degree or post-degree certification.

A scholarship program would be required of each participating not-for-profit teaching institution to fund “special need” applicants and non-residents (foreign citizens). Institutions would be required to fund all non-educational programs and services such as administration, facilities management, and human resources as is currently the case. All students receiving funding support from NHF would be obligated to serve-with-compensation in an NHF-certified healthcare facility or practice of their choosing for an period of time equal to the funding they received from the NHF. The current system for accrediting medical colleges, schools, and universities would remain in place and not be funded by NHF.

7. Optional Treatment and Wellness Programs. This division of the NHF would be responsible for overseeing and advancing those medical treatments that are deemed non-life threatening but do enhance the health and self-esteem of individuals. Cosmetic surgery, plastic surgery (not required from a related illness or medical emergency such as an auto accident or burn incident), and wellness treatments such as spas and weight loss clinics would be covered under this section. The NHF program would pay for twenty-five percent of all such services with an annual and lifetime limit expenditure-per-person to be set by the HCIC.

8. Licensing, Regulations, and Insurance. This division of NHF would be responsible for overseeing three key areas -- licensing, regulations, and insurance programs associated with the NHF.

In the Licensing area, all not-for-profit medical facilities seeking to participate in the NHF program, and receiving any federal funds through the NHF, would be required to be certified by NHF or its designees. For example, a not-for-profit medical lab in St. Louis would have to apply for “NHF Licensing” in order to participate in the volunteer NHF program. Certain licensing reciprocity would be available -- including any hospital, laboratory, or medical facility that is accredited by the Joint Commission -- so long as that facility maintained its Joint Commission certification.

The Regulatory unit of NHF would oversee two major reforms that effect healthcare. First, the creation of a national malpractice insurance fund to protect all practitioners and facilities; and, secondly, oversight for the regulation, distribution, and enforcement of all “Re-classified Prescription Drugs” including many of those drugs that are currently deemed illegal today such as marijuana, cocaine, and heroin. These particular reforms are urgently needed in order to curb excessive malpractice insurance rates and end America’s fledgling war on illegal drugs which is costing taxpayers hundreds of millions of dollars. Here is how these two reform programs would work in concert with other federal agencies.

A special Malpractice & Medical Claims Insurance Fund (MMCIF) would be established by Congress as part of the enabling NHF legislation to cover all medically-related lawsuits or malpractice claims against program participants. Why? Because this element of the NHF is the “hook” that will single-handedly encourage over 90 percent of all physicians, dentists, and other healthcare practitioners, who must pay costly malpractice insurance premiums, to enroll in the NHF and support its success. Also, as a volunteer program, the benefits of participating in the NHF must be significant in order to attract widespread national participation among medical professionals and medical care facilities. Regardless of their status as not-for-profit entities or for-profit businesses, medical professionals and healthcare institutions will follow the money! It’s the American way.

Under this proposal, the MMCIF would pay up to ninety percent of all medical malpractice insurance premiums -- as established by the HCIC -- and have the power to cap the dollar amount for all malpractice claims as part of their independent administrative law authority. Participants (physicians, dentists, and healthcare facilities) in the NHF program would pay the remaining ten percent which would sufficiently fund the malpractice program as well as other activities of the NHF. The NHF would be able to contract with insurance companies and agents across the country to administer this program and ensure all participants are in compliance. A reasonable fee-for-service, as approved by the HCIC, would be paid to these companies and agents for their services.

The second major reform deals with solving America’s problem with illegal drugs. Each year, the United States Government spends billions of dollars trying to stop the flow of illegal drugs into our country and arrest, prosecute, and imprison drug offenders and traffickers. While the merits of this effort are laudable, it is a costly war that requires a different solution in today’s global environment. That solution is not the legalization of drugs, but rather, a program that would allow for the regulation and distribution of those drugs under a system similar to our current prescription and pharmaceutical distribution of prescribed drugs.

Under this proposal, the Food and Drug Administration would authorize American-owned drug companies to manufacturer certain drugs in various dosages -- including marijuana, cocaine, and heroin -- to ensure these prescriptions meet rigid federal guidelines for dosage and/or treatment. Federal and state healthcare agencies that oversee current licensing requirements for pharmacies and other prescription drug providers, would license certain drug distribution facilities to dispense medically-approved prescriptions of those drugs to persons who require them for medicinal purposes or to treat their addiction. As part of any legal prescription from a physician, every patient using these “recreational” drugs would be required to participate in a licensed counseling and treatment program which would be paid for by the NHF as part of its Primary Care Division.

This drug reform program would have many beneficial effects. First, it would severely reduce the activities of illegal drug cartels in foreign countries and allow the Drug Enforcement Agency (DEA) to focus its vital resources on other important activities. Secondly, it would reduce property crimes and felonies by drug users who must “feed their addiction.” Thirdly, it would reduce gang violence in major cities and reduce the need for gang involvement. Fourthly, it would allow the medical community to adequately treat people with addictions. Fifth, it would reduce the prison population since more people will receive treatment for substance abuse in a medically-controlled environment and, thus, they will not be engaged in criminal activities nor be imprisoned for criminal offenses. This program would be funded completely by NHF. The cost savings to DEA and other drug-fighting agencies justifies this reform proposal.

9. Payments, Audits, and Enforcement. The NHF would establish a Payments, Audit, and Enforcement Division to handle all claims and funding requests from program participants. By law, payments for treatment and services would be paid within thirty days of billing to all approved, first-party payees (physicians, hospitals, clinics, etc) or the NHF would be required to pay interest to those providers. The NHF could contract out payment services to approved third party contractors or state agencies.

The Audit Division would be responsible for overseeing compliance of all NHF and HHS rules and requirements for billings and payments.

The Enforcement Branch would be given full federal law enforcement powers and be responsible for enforcing all NHF and HHS laws and regulations. Alleged violators would be referred to the United States Attorney for prosecution. Violators also could be fined, imprisoned, or banded from NHF program participation if found guilty of fraudulent activities or unethical conduct.

10. Administration. This division would encompass the typical administrative and support functions of a major government agency including but not limited to: human resources, government relations, inspector general, legal, regulatory affairs, and budget.

In Conclusion:
This description is not meant to be all encompassing, but rather, it is an attempt to advance the discussion on how to establish a progressive healthcare program that ensures all Americans will receive the finest medical care in a timely and affordable manner. The cornerstone of this proposal is that it is national in scope, available to all Americans, voluntary in its participation, and it removes the profit motive from healthcare through the not-for-profit participation requirement.

Certainly, there will be some people who do not believe in offering free primary and urgent medical care. Others will argue the national cost for such a program is too high. We would strongly disagree with both arguments because we believe that every human being has the right to health and wellness in America. If we do not create a meaningful healthcare solution soon, the costs will soar beyond our control. A progressive healthcare program is the right thing to do given who we are as a people and what we stand for as a nation.

And, in response to the cost of this program, certainly, a network of not-for-profit healthcare facilities, staffed by America’s best-and-brightest medical professionals, would be money well spent and enhance the quality of life for all Americans.

Also, let me comment on the naysayers who are critical of national healthcare programs in England, France, Canada, Australia, and elsewhere. I am not suggesting that these programs must become our model. Nor am I suggesting that we must emulate all of their practices. But, we are suggesting that these programs work and they work well. If those programs were inept, citizens would be protesting in the streets. So, there must be some merit in their programs. Our question is this. What are their best practices? And, secondly, can we apply those best practices to a “Made in America” national healthcare model?

In closing, I would not wish it upon anyone to be that person who must look your mother in the eye and tell her, “I’m very sorry, but we will not treat your breast cancer at this physician’s office or medical facility because you don’t have adequate insurance and our doctors aren’t able to take on any more charity cases.”

Regrettably, those words are being repeated, over and over, every day in medical offices and insurance companies by otherwise caring people whose job it is to put profits ahead of the healthcare needs of human beings. It’s time we put an end to this unethical and inhumane practice in the United States of America. Through this proposal we can achieve something significant that all Americans will be proud of.

Thank you.

About the Author: Thomas Hinton is the president and chief executive officer of the American Consumer Council (ACC). He can be reached at tom@americanconsumercouncil.org His Blog address is: www.tomhinton.com/blog

10 Low Cost Ways to Show Your Employees You Really Care

It’s approaching that time of year when Wall Street starts calculating bonuses for its top performers to show their appreciation to employees for a strong quarterly performance. Many other companies will soon be digging into their coffers to shower employees with year-end rewards, gifts and bonuses. But, don’t kid yourself. These companies aren’t giving away greenbacks just to be nice. They do it to keep their best and brightest employees motivated, committed, and primed for another record-breaking quarter or year. Employers understand that bonuses and other forms of recognition build employee satisfaction and strengthen employee loyalty.

But, what about smaller companies that might not have millions of dollars to spend on performance bonuses or incentive trips for their top performers? What can you do to show your employees that you really care?

Here are my ten favorite ways any boss can show his or her appreciation to employees throughout the year without breaking the bank! How many of these fun ways are you currently using in your organization?

1. Write personal notes to thank employees for all they’ve done to make your business a success. Personal notes from the boss mean a lot to employees. Don’t underestimate their long-term value. At a retirement party for one long-term employee named Joe, he produced 32 hand-written notes from the CEO and told attendees “I’ve kept every one of your notes over the years. It’s the best present I ever got from the company!”

2. Host periodic in-office pot luck luncheons to celebrate team achievements.

3. Create a “Wall of Fame” where positive letters from customers are posted for all to see. And, be sure to personally acknowledge the work of those outstanding employees who generated the high praise from customers.

4. Provide three training days a year for every employee who meets their quarterly goal or performs above-and-beyond the call of duty. Send these high performers to a professional development program of their choice. Allowing the employee to choose his/her own training program makes it more meaningful for that employee.

5. Celebrate employees’ birthdays and special work-related anniversaries on their actual day. If the special day falls on a weekend, celebrate it on the Friday before. The point is not to wait until the end of the month to celebrate these special dates because the celebration will lose its emotional impact and goodwill if you’ve missed the actual date.

6. Twice a year, host a “Praise ‘Em” event. It can be as simple as a bowling party or lunch at the pizza parlor where you shower each person with high praise. By the way, this doesn’t replace the annual holiday party. Find at least one meaningful thing to say about each employee present and mean it! Let them know you appreciate the good job they are doing. (Yes, I know that a few of your employees might be slackers, but certainly, if you’re paying attention to their performance, you can find at least one good thing to say about their work twice a year, right? If not, they don’t belong on your team!).

7. Involve employees in key decisions that directly affect them. People have a right to participate in their future. This is a good way to treat your people with dignity and respect. Let them know they are an important part of your business success by seeking their ideas and input before you make key decisions that affect their lives.

8. Don’t keep secrets. This is what fuels the negative water cooler gossip machine. Avoid secrets at all costs because they only create an atmosphere of deception and resentment. If you are not at liberty to discuss a particular corporate decision, just tell your employees you cannot talk about that issue at this time. Otherwise, be open and truthful. This tells your employees that you respect them.

9. Give your employees the gift of a listening heart. As the boss, you should be sympathetic to the personal problems of your employees. Every employee has “issues” whether it’s a troubled teen-ager, an abusive spouse, a sick parent, or too much work and not enough time off. If you are doing your job as the boss, you should know what’s troubling your employees and be understanding and helpful in their time of need, especially family emergencies and tragedies affecting the company or an employee.

10. Stand up for what is right. Don’t be the kind of boss who cowers under the pressure of the corporate hierarchy and sells his soul for a few bucks instead of doing the right thing for his people. In the final analysis, it is more important to preserve your integrity and self-respect than to do something stupid, immoral, illegal, or hurtful. People never forget the heroic actions of a true leader. Do battle for what is right and your employees will follow you anywhere… even out the door!

These are just ten ways to show your employees that you really care. They cost very little and, in the end, you will find that you have happier, healthier, and more dedicated people working for you and creating record results!

Tom Hinton is a popular business speaker and author. He can be reached via email at tom@tomhinton.com. His website is: www.tomhinton.com

Why the Best is the Best

Whenever I enter a Ritz-Carlton hotel, I know “I’m not in Mediocreville anymore!” Walking through those doors transports me to a world unparalleled in service, with guest amenities and services consistently beyond my expectations. Unlike the Wizard of Oz, the hotel is everything it purports to be.

I’m not a shill for The Ritz-Carlton, but, like other quality professionals, I’m a fan of extraordinary customer service and of organizations that exude professionalism and exceed customers’ expectations, and The Ritz-Carlton is one of those organizations. In the July issue of Consumer Reports, the magazine’s subscribers agree that, “The Ritz-Carlton earns top marks in value, service, upkeep, and making problems go away.”

This two-time Malcolm Baldrige National Quality Award winner (1992 and 1999) has set the standard in the hotel industry for unparalleled service. In addition, Training magazine recently ranked it No. 1 for employee-sponsored workforce training and development. Based on those accomplishments, I wanted to discover what was behind the curtain, so to speak. How does this company of 40,000 employees maintain its mystique and what lessons can other companies learn from it?

First, I interviewed vice president for quality and program management John Timmerman, who is responsible for the hotel’s quality worldwide. I also interviewed area human resources director Laura Gutierrez, who is responsible for human resources in Dearborn, Michigan, St. Louis, Cleveland, and Philadelphia. Both are long-term employees, which is consistent with the company’s low turnover rate. I came away from both interviews in awe of their strategic-planning methodology and the manner in which the hotel and its ladies and gentlemen, as they are called, constantly look for ways to strengthen service.

By the way, no Baldrige applicant has achieved a perfect score of 1,000, and the final assessments always allow for many opportunities for improvement. In that regard, The Ritz-Carlton continually seeks best practices from other organizations and from their own properties that can be incorporated worldwide, and it listens closely to the needs, wants, expectations, and suggestions of guests.

As I reviewed my interview notes with Timmerman and Gutierrez, I decided to present nuggets of information that reflect the processes ingrained in the hotel and thus have those nuggets stand alone as benchmarks for other organizations. So sit back and enter a world of customer excellence with me.

  • Guests return to The Ritz-Carlton because they are emotionally engaged with the hotel, as validated by The Gallup Organization, which reports Ritz-Carlton performance at greater than the 90th percentile of their global database of consumers. That means that The Ritz-Carlton’s guests return even if a competitor offers a lower price. That’s loyalty.
  • Part of the hotel’s mystique comes from fulfilling even the unexpressed wishes and needs of the guests. This is accomplished by having the empathy to know what thrills guests and how the staff can make the visit memorable. This is accomplished in conversations with guests and by maintaining a knowledge-management system that records the preferences of every guest. Maybe it’s a favorite magazine or wine, or dessert or cappuccino. Whatever the case, the staff goes out of their way to dazzle the guests, thus strengthening those relationships.
  • Customer feedback is obviously an important part of the improvement process. Simon Cooper, president and chief operating officer, states, “When it comes to customers, feelings are facts.” The Ritz-Carlton deploys multiple methods to capture the customer experience, such as comment cards and a follow-up survey call from the Gallup organization to guests after their stay. In addition, the staff discreetly look, listen, and ask for feedback during transactions and moments of truth to build upon the Ritz-Carlton knowledge-management system. In addition, there’s a follow-up survey conducted by The Gallup Organization, which provides third-party validation. Finally, mystery shoppers circulate though the various properties to critique the processes.
  • The feedback report on the company’s first Baldrige application, in 1991, indicated significant opportunities for improvement, which acted as a catalyst for The Ritz-Carlton to benchmark dissimilar industries and thus create “cycles of improvement”—the line-up, the open-door policy, the annual employee survey, management by walking around and asking questions of staff and guests, the feedback from Baldrige, and all the other elements that make up the strategy for improvement. It worked, and in 1992 The Ritz-Carlton became the first service organization to win the Baldrige Award. In 1999, when The Ritz-Carlton won its second Baldrige award, examiners visited more than 30 domestic properties and then talked to all of the international properties by telephone. That’s a thorough site visit!
  • Every employee of The Ritz-Carlton has a wallet card with the mission and values of the organization. Most of the 12 service values are applicable to any organization:

Service values—I am proud to be Ritz-Carlton

1. I build strong relationships and create Ritz-Carlton guests for life.

2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.

3. I am empowered to create unique, memorable, and personal experiences for our guests.

4. I understand my role in achieving the key success factors and creating The Ritz-Carlton Mystique.

5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.

6. I own and immediately resolve guest problems.

7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.

8. I have the opportunity to continuously learn and grow.

9. I am involved in the planning of the work that affects me.

10. I am proud of my professional appearance, language, and behavior.

11. I protect the privacy and security of our guests, my fellow employees, and the company’s confidential information and assets.

12. I am responsible for uncompromising levels of cleanliness, and creating a safe and accident-free environment.

These are outcomes that any company can infuse into its own internal processes. Who wouldn’t want to participate in plans to restructure their own work? Who wouldn’t want to feel empowered to fulfill the needs of customers? In this case, The Ritz-Carlton allows each employee to make corrections costing up to $2,000 each day. And guess what? The Ritz-Carlton tracks and publicizes employee acts of customer-service heroism and measures customer engagement, not the actual amounts spent. Finally isn’t it refreshing to know that there’s no buck passing? Whoever receives or hears about a problem, owns it and follows up to ensure its resolution.

  • Employees are surveyed yearly by The Gallup Organization, and the results are shared with all the ladies and gentlemen of The Ritz-Carlton. Open lines of communication are an integral part of the strategic plan, and one of the ingredients is the daily lineup. At every property worldwide and at every shift change a meeting of the staff is held. During this meeting a leader will focus on one of The Ritz-Carlton Service Values and discuss activities at the local property, such as guest arrivals or special events. In this fashion the staff is made to feel comfortable in discussing issues with the team, thus reinforcing the open-door policy. This is a strong element in the hotel’s success and one that I think other companies should adopt.
  • How does one recruit, hire, and train such extraordinary employees? The Ritz-Carlton uses the services of a company called Talent Plus, which has engineered a 60-minute interview process that can be conducted over the phone. This process extracts from potential employees information to make sure that they will fit into the hotel’s demanding culture. The questions address how the candidate might handle certain situations at work and asks for examples of work experiences. Many of The Ritz-Carlton human resource staff have been trained in this process, and thus many of the interviews take place at the local properties. Having participated first-hand in the Talent Plus process, I can attest to its thoroughness and effectiveness.

Previous experience in the tourist industry is helpful but not a prerequisite, according to Laura Gutierrez. It’s more important to have a positive attitude. Gutierrez says that talents are formed between the ages of five and eight, and it’s the function of the hiring manager to identify those talents and make sure that they’re in sync with the goals and culture of the hotel.

  • Successful organizations have a methodology for weeding out ineffectual practices and a way to correct defects. At The Ritz-Carlton that process is known as “MR. BIV”—an acronym for mistakes, rework, breakdowns, inefficiencies, and variation. The overall goal of MR. BIV is to foster an environment of open communication and continuous cycles of learning. It’s a systemic approach to problem solving that is used worldwide and that has stimulated numerous improvements in internal processes.
  • There has recently been some discussion in the papers about The Ritz-Carlton relaxing some of their standards to meet the expectations of a new breed of guest—one who might be more casual in appearance. According to John Timmerman, the standards remain the same but staff are empowered to treat guests “as they see themselves.” That means employees can break the rules of scripted procedures to satisfy a customer. For example, an employee can speed up the cycle time of the dining process if they feel the business customer prefers speed over formality, or slow down a process if the traveler wants a more informal and relaxed environment. Universally, service is at a very high level, and guests leave knowing that their every request has been honored.

Some guests make unusual requests because of the reputation of the hotel. “As long as it is not illegal or immoral, we will move heaven and Earth to fulfill requests,” John Timmerman says. That attitude has served the hotel well over the years, enabling it to rank consistently in the top tier of hotels worldwide. The Ritz-Carlton is currently ranked in first place by the Market Metrix Hospitality Index.

As a Baldrige examiner, I’m aware of numerous organizations that benchmark against the processes of The Ritz-Carlton, notably hospitals. It’s a simple equation—hospitals have rooms and processes to gain entrance to those rooms. Once a room isn’t occupied, how fast can the room be turned around for the next patient or guest? No one does this procedure better than The Ritz-Carlton, and hospitals are incorporating these procedures as their own.

Well, I think you can tell that I’m completely enamored with the processes at this award-winning hotel. I think that there are numerous processes that other organizations can copy that will allow those companies to distinguish themselves from their competition. There are many other techniques and processes that I could have touched on, but I think you have a flavor for this remarkable company. Meeting and exceeding customers’ expectations and fulfilling even their unexpressed wishes ought to be the clarion for all companies.

Several years ago, a reporter for a major newspaper attempted to test the customer service of the hotel and made unusual requests to gauge the response. One such request was to “Provide a room with seven pillows—four feathered and three foamed alternatively stacked, and a room facing south on a floor in the single digits.” The other requests were just as odd. He concluded, “I poked, I prodded, I tried to do everything in my power to drive those people crazy. Not once did they flinch, overact, or try to escort me out headfirst. They won.”

When a U.S. commander speaks to a group of soldiers, his words are often met with a hearty “Hoo-Ahh,” which means “Heard, Understood, and Acknowledged.” That’s what I wanted to say after my interviews with John and Laura, because everything they said resonated with me as a quality professional who has experienced the care and attention of the ladies and gentlemen of The Ritz-Carlton. This company should be benchmarked and held up as a role model. You can learn more by reviewing its 1999 application on the Baldrige Web site. There’s a storehouse of knowledge and information in those 24 pages, and it’s free.

Now I’m off to my local Ritz-Carlton to test their processes. I ordered a Roman chariot to transport me up the road from the hotel to Greenfield Village. I’ll let you know next month how it turned out. In the meantime, ”Hoo-Ahh!”

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 company and the Michigan Quality Council, one of the top state quality award programs in the United States. He has been a member of the Malcolm Baldrige National Quality Award board of overseers and responsible for the management of a volunteer structure of more than 1,000 people in a statewide program patterned after the Baldrige program.

Customer Service Mis-steps: Recovery Matters

Organizations that provide spectacular customer service always keep their line people informed of new developments or offers that will improve a process, and of glitches in the system that may have an adverse effect on customers. Similarly, great customer service means being flexible to the needs of customers and making sure that your internal information is accurate before issuing instructions or denials to customers.

Two recent incidents illustrated for me that line employees are the lifeblood of organizations, and when service representatives aren’t up to date on new policies and system problems, or when they act in a capricious manner, it affects the reputation of the organization.

At the outset, let me state unequivocally that as a Verizon cell phone customer for more than ten years, I’ve been very satisfied with customer service, phone upgrades every two years, and the availability of nationwide phone service when traveling. For convenience, my monthly Verizon bill is automatically charged to my checking account. Just like clockwork, on the 15th of each month I can expect a charge to hit my account.

Recently, as I was reconciling my checking account I noticed that the Verizon automatic charge hadn’t been processed although it was the 20th of the month. When I called customer service, I was notified that a new accounting system had been installed and that the monthly installment would be processed shortly. The representative assured me that my call didn’t trigger the charge, and that my monthly payment had already been programmed to go through that evening.

On April 25 the monthly payment was finally processed to my account. As is my custom, I reviewed the bill for the next month and to my surprise, I noticed that the upcoming charge was for an additional $5. Discussing this with a Verizon representative was truly an experience.

”Mr. Kalmar, the $5 is a late fee on your account, because you failed to pay your bill in a timely fashion.” I almost went into a catatonic fit, but I remembered that when dealing with service representatives it’s best to keep your cool.

I calmly informed the young lady that I have no control over my monthly payment and that it, in fact, is processed automatically by Verizon. She still insisted that the fee was appropriate, because, no matter the circumstances, the payment was late. While she wasn’t thoroughly convinced of my explanation, I finally wore her down with my—at least in my mind—cogent and repeated explanation of how an automatic payment process works and why I should not be assessed a late fee for something out of my control. I must admit to brandishing the phrase, ”Can you hear me now?” a couple of times, but it was done in good taste.

During this entire conversation, it was obvious that she hadn’t been informed of any accounting glitch in the Verizon system nor was she conversant in the benefits of automatic payments and why the burden of timely payments falls on the company and not the customer.

The next day, I called Verizon and spoke to a supervisor who grasped the circumstances of the late payment, confirmed the $5 late fee had been reversed, and in an offer of magnanimous customer service gave me an extra 100 minutes for the next three months.

There were many lessons to be learned from this episode:

  • First of all, I know you are saying ”But Bill, it was $5, get a life!” Unfortunately my 30 years in banking provided me with a warped sense of fair play and the conviction that balancing accounts on a regular basis is important. For that, I don't apologize.
  • When companies are making changes in their billing practices or instituting major upgrades to accounting systems, employees should be kept in the loop. Information should be circulated regarding the changes, so that employees are aware of impending problems without having to be informed first by customers.
  • Customer service representatives should be empowered to resolve issues on the spot without management intervention. In this case, the first representative I talked to should have had the authority to reverse the $5 charge and to provide some type of compensation.
  • Verizon has since sent me an apology and reversed the $5 again. Let's see if their accounting system catches that faux pax. If not, I’ll gladly return it. After all, I’m receiving an extra 300 minutes. Just the thought of explaining my returning the $5 to a Verizon representative makes me shudder.

Having been in banking for a number of years and, more recently, a Baldrige examiner, I’m rather meticulous and, unfortunately, also anal-retentive. In that regard, I keep detailed, accurate records and always carry my planner with me. This next customer service experience reinforces the need for keeping meticulous documentation.

This is a situation that still reverberates in my head as a prime example of a service rep needing a course in diplomacy and congeniality. Not too long ago, I had an appointment for a root canal, a procedure that’s always part of some comedian’s routine because the process is painful and expensive. Be that as it may, I had scheduled a 1:00 p.m. appointment for this procedure. A meeting earlier that day finished ahead of schedule, so I proceeded to the dentist’s office, hoping to be waited on before my assigned appointment.

When I bounded into the waiting room at 12:15 p.m., resplendent in my suit and tie, I noticed that the other patients were dressed casually. Comedian George Gobel once remarked: "Have you ever felt that the whole world was a black tuxedo and you were a pair of brown shoes?" That day I was those brown shoes and I think that contributed to the dilemma I’m about to describe.

As I approached the service counter, I characteristically announced my name and stated that I was early for my 1:00 p.m. appointment. From the back of the office came this response: ”You’re late for your 11:30 a.m. appointment, but we will try to work you in." Of course this took me aback and I quickly pulled out my planner stating to the service rep that my record showed a 1:00 p.m. appointment. "Well, your planner is wrong,” came a loud voice from the back of the reception area. Now all those waiting for their appointment looked up from their papers and magazines and gazed at me as if to say: ”Pretty boy in the suit is late and now wants to get in before us.”

From my planner I extracted a card given to me at my previous appointment in the writing of the same loquacious service rep. The card clearly was inscribed for a 1:00 p.m. appointment. Showing her the card in her own handwriting was a moment that I will always cherish. She paled and quietly acknowledged in an almost whisper that I was correct and I would be next.

I’m not a vindictive person (well, not all the time), but this was a classic moment that had to be captured for posterity. I calmly asked her to come into the waiting room and explain to the mob that was ready to lynch me that I was, in fact, not late. To her credit, she did so and we all had a good laugh, at least until I was strapped into the chair for my root canal.

Here’s how this encounter could have been handled:

  • Service reps, particularly in medical offices, should be sensitive to circumstances that might result in confrontations with patients. Just as in service industries where the customer is presumed to be always right, that same maxim should exist in the medical field.
  • This may be a stretch, but if in her mind my appointment was at 11:30 a.m., perhaps I should have been called when I failed to appear. On the other hand, good customer service dictates that medical offices call patients the day before an appointment to confirm. Had this been done, this unpleasant situation could have been avoided.

In the case of the Verizon episode, I was placated with extra cell phone minutes. In the case of the root canal, I wish they had placated me with extra Novocain, but my waiting room rant may have precluded that from happening.

About the author
William J. Kalmar has extensive business experience, including service with a Fortune 500 company and the Michigan Quality Council, one of the top state quality award programs in the United States. He has been a member of the Malcolm Baldrige National Quality Award board of overseers and responsible for the management of a volunteer structure of more than 1,000 people in a statewide program patterned after the Baldrige program.