A fork in the road: health reform requires innovation, urgency

Friday, September 30th, 2011

When it comes to health coverage, businesses know the tipping point is not far away, and we need an innovative approach to health reform that realigns the incentives. That was the message of the seven-member health system reform panel held at the Governor’s Health Summit that included Salt Lake Chamber Director of Public Policy Wesley Smith (pictured, far left).

Smith says the good news is businesses realize the magnitude of the challenge.

“We can’t afford to be the Yankees,” he said. “We have to play Moneyball. We have to be more innovative to make this work.”

“Innovation means new but I think it should also mean new and better,” said Edmund Haislmaier, senior research fellow of health policy studies at The Heritage Foundation. “People are searching for silver bullets. They may be new, but they are not necessarily better.”

For years, businesses have been sounding the alarm about the unsustainable costs of health coverage. Gov. Gary Herbert hosted the summit and laid out three goals for heath reform.

1. Stabilize the rising costs of health care
2. Increase access to health care
3. Increase quality of care

“We have a long way to go when it comes to health reform in this state and in this country,” said the governor. “I want to have a robust discussion, frank and open, to see if we can’t find some solutions.”

One innovative solution is the Utah Health Exchange, which allows employers to give a defined contribution to their workers who then go purchase health insurance on their own with the same financial advantages that traditionally come only from buying in bulk for an entire organization.

The governor shared the story of Le Bus, a Salt Lake City-based transportation company that joined the Utah Health Exchange. The move saved Le Bus significantly on health insurance and ultimately led to more employees taking advantage of health care opportunities.

Rich McKeown, the CEO of Leavitt Partners and the panel moderator, said past efforts to reform the health system have demonstrated “the desire of this country to extend its compassion to allow everyone to have some type of health coverage.

He says that while that compassion has driven our decisions in the creation of Medicare and Medicaid, the biggest driver today is the economy.

“The place we are at now is a significant fork in the road,” he said, pointing out Medicare and Medicaid began as a 0.25 percent of GDP only to see that rate skyrocket to nearly seven percent today. “The economy is going to drive remarkable change. It normally drives us to either compassion or reality and this time it needs to be reality.”

“This is a train wreck waiting to happen,” said Scott Hymas, CEO of RC Willey and former chair of the Chamber’s Health System Reform task force. He says there are three types of CEOs when it comes to health care: small business owners who face the high cost by declining to provide coverage for employees, those that are frustrated and don’t know what to do and those that are trying to solve the issue.

“For many businesses this is to the CFO and CEO level—not the human resources level,” he said. “This involves strategy. They just want good health care at an affordable cost.”

Additional Photographs

Utes A.D. discusses Pac-12 opener with Capitol Club

Wednesday, September 28th, 2011

Three days before the University of Utah hosts its first Pac-12 football game, Utes Athletics Director Chris Hill visited the Salt Lake Chamber Capitol Club to discuss the opportunities that come to our community thanks to the move.

Hill says the opportunities for the state that reach far beyond the five conference football games.

“For better or for worse, the athletics program is the first impression people have of the university,” said Hill. “We want the economic development. We want this to be a boost to the economy.”

The U is going to great lengths to make fans and alumni feel welcome in Salt Lake City. He says even parking attendants have been trained to welcome guests with a smile.

“We are a whole different deal than we were a year ago,” said Hill “We’re jumping from non-BCS to a BCS conference. It is essential that our experience begins with the airport, and continues to the parking lot and into the game.”

Part of the new experience is to make a Utes game more than just three hours at the stadium. Hill’s off-field team is working with the business community to make a Utah game a 48-hour experience. Programs like Paint the Town Red encourage downtown businesses to decorate their buildings in red during home game weeks, and UNight, a program that brings local business leader together with influential alumni from fellow Pac-12 schools, are both part of the Red Movement.

“This is an opportunity to align ourselves with Seattle, Phoenix and Los Angeles,” said Hill. “We were associated with Colorado Springs, Albuquerque and Wyoming. We want to make the most out of this new opportunity.”

Hill also discussed some of the challenges his athletics department faces. The Utes have the smallest budget in Pac-12, just $4 million compared to $13 million for a school like the University of California at Berkley. He says to compete, every resource has to be used to the fullest.

“We’ll never have USC money, but we are out raising money,” he says. “When you move up a step, things cost you more.”

Hill says the Pac-12 is impressed with Utah, but both the conference and the Utes know they have “a lot of work to do.”

For now, that doesn’t mean expansion of the stadium. Some Pac-12 schools are actually planning to reduce their seating capacity. Hill says there will be improvements to the football facilities, specifically a media center to accommodate national broadcast requests and an updated sports medicine facility.

TV money will be a big boost to the Utes. The new Pac-12 TV deal kicks in next year and jumps the Utes’ take from $1.2 million last year in the Mountain West Conference to $15 million by the fourth year of the new deal.

Hill will gladly take the money, but the real benefit comes in notoriety.

“This is a boost to student and faculty recruitment,” he says.

Hill also discussed the international element of the move. To compete in some sports, the Utes will have to recruit from other countries. He believes the Utes and the Pac-12 will have a significant presence outside the U.S., specifically in the Pacific Rim.

Chamber economist appointed to governor’s job panel

Friday, September 23rd, 2011

Getting Utah’s 102,000 unemployed workers back on the job is the top priority of the business community. This week, Salt Lake Chamber Chief Economist Natalie Gochnour was appointed by Gov. Gary Herbert to serve on the 12-member Governor’s Economic Development Coordinating Council. The council’s charge: come up with a plan to create 100,000 jobs over 1,000 days.

The governor has wisely given some of the state’s top business minds the task of mapping the path to a stronger economy. Jobs are created in the private sector, and while the government plays a role in job creation, that role is both limited and critical. It is to facilitate, not to create.

“We are creating jobs in our state but we need to accelerate that growth,” said Gochnour. “I welcome the opportunity for business leaders to develop a plan for the governor’s consideration.”

Gochnour notes the panel includes a broad range of business leaders who will each bring a valuable and unique perspective to the task. She says the Utah economy is changing, which will require additional funding for education and retraining workers to fill the types of jobs we are attracting.

Nine months ago, the Salt Lake Chamber released its own jobs agenda. Gochnour believes ultimately the state is best served if we move forward with a single plan, and she’s committed to building upon the Chamber’s work to strengthen the GEDCC’s proposal.

One of the Chamber’s strategic partners is also represented on the GEDCC. Lew Cramer, president and CEO of the World Trade Center Utah will be the export champion on the panel.

Utah exports doubled over the past five years, reaching an all time high last year at $13.6 billion dollars. Those exports create jobs. In 2007, exports supported nearly 55,000 Utah jobs. That number grew to 65,775 in 2010.

“Exports are going to continue to play a significant role in our economy and we need to build on the momentum we have right now,” said Cramer. “Helping more Utah businesses sell their products and services outside our nation’s borders must be part of our recovery and push for long term prosperity.”

Governor’s Economic Development Coordinating Council
Spencer Eccles, Governor’s Office of Economic Development
Mel Lavitt, Board of Business and Economic Development
Dinesh Patel, USTAR
Spencer Cox, Rural Development Council
Will West, Utah Capital Investment Corporation
Jeff Edwards, Economic Development Corporation of Utah
Scott Anderson, Zions Bank
Lew Cramer, World Trade Center Utah
Randy Shumway, Cicero Group;
Rich Walje, Rocky Mountain Power
Pat Richards, formerly of Wells Fargo Bank
Rob Behunin, Utah State University
Natalie Gochnour, Salt Lake Chamber

The importance of trade

Wednesday, September 21st, 2011

A Council on Foreign Relations independent task force report released this week says trade policy has stalled because Americans don’t believe it is a benefit. More than half of Americans believe trade has hurt the U.S. And fewer than 20 percent believe it has helped.

We sat down with Lew Cramer, president and CEO of the World Trade Center Utah, to discuss the importance of free trade for the nation’s economy, the current state of pending free trade agreements with South Korea, Panama and Columbia, and why opponents of free trade are wrong.

Utah named one of the nation’s “richest states”

Tuesday, September 20th, 2011

A new ranking shows Utah is the eight richest state in the nation. That’s according to 24/7 Wall St. which compared median income to poverty rates.

The Beehive State’s median income is just under $60,000 while the poverty rate is the third lowest in the nation at jus 9.1 percent. Utah also has the 23rd highest rate of citizens with health coverage and the 15th lowest unemployment rate in the country.

The report says, “Utah has the third-lowest poverty rate in the United States. While the Salt Lake City metropolitan region, and nearby Ogden and Provo, make up only a small part of the state, a huge percent of the state’s population lives in the area. All three are flourishing with young populations and diverse economies bolstered by technology, health care and several large universities. And because these cities represent most of the state’s population, the state’s median income is high. Davis County, which is part of the Ogden Metropolitan Statistical Area, is home to roughly 10% of the state’s population. It also has a median income of $66,220, the third-highest in the state.”

You can read the entire article here.

Utah Valley Chamber makes good on bet, flies Ute flag in Cougar Country

Monday, September 19th, 2011

You’ve got to hand it to the Utes, they were dominant in the big rivalry game last weekend. You also have to hand it to Utah Valley Chamber of Commerce President Steve Densley, he’s true to his word.

After the Utes dominating 54-10 victory over the school down south, Densley was obligated to fly the Utes red flag at the Utah Valley Chamber. When asked for a comment, he replied, “these are the times that try men’s souls.”

Indeed.

You can read more about the wager here.

“We were hoping for a good game and a Utes victory,” said Lane Beattie, president and CEO of the Salt Lake Chamber. “I guess we’ll have to settle for one of the two. Now we’re hoping the Cougars win the rest of their games this season, and we want to the Utes to show their new conference they’re a force to be reckoned with.”

The Salt Lake Chamber (and, just as importantly, the Utes) are now 3-1 in the rivalry game over the past four years. For the record, we do have a BYU flag just in case and it’s practically never been used.

The Downtown Alliance is busy painting the town red to get ready for the Utes’ first home game against a Pac-12 opponent (Oct. 1 vs. Washington). It’s nice to see Utah County is already getting into the spirit.

In all seriousness, we appreciate the Utah Valley Chamber’s willingness to place a friendly wager each season. We look forward to doing it again next year.

Chamber presidents renew wager on BYU-Utah game

Thursday, September 15th, 2011

Steve Densley, president and CEO of the Utah Valley Chamber pays up after the Utes victory over BYU last year.

It may seem a little early on the calendar and it’s no longer a conference game, but the rivalry between BYU and Utah is just as strong. For the fourth consecutive year, Lane Beattie, president and CEO of the Salt Lake Chamber and his counterpart “down south,” Steve Densley,(president of the Utah Valley Chamber (above), have jumped into the fray, placing a wager on the big game.

The stakes are the same as previous years. If the Cougars win the game, the Ute flag will fly proudly over the Utah Valley Chamber and if the Utes claim victory, the Cougar flag will fly at the Salt Lake Chamber.

“We’re a very united community but we take one weekend off each fall to cheer for our team,” said Beattie, whose chamber is officially cheering for the Utes. “With a year of bragging rights on the line, both teams know there’s more on the line than just a victory. We’re looking forward to seeing a Utes flag fly in Utah County.”

Through three years of the friendly wager, the Salt Lake Chamber (and, technically, the Utes) boasts a 2-1 record. Utah won the games in 2008 and 2010, losing in 2009.

Normally played in colder weather around Thanksgiving, the Cougars and Utes will square off this year earlier in the schedule, a result of Utah’s move to the expanded Pac-12 and the Cougars break from the Mountain West to become an independent program.  Both teams are 1-1 on the season. BYU won its opener at Ole Miss before dropping a heartbreaker against the Texas Longhorns in Austin last week. Utah is also 1-1, posting an opening week victory over Montana State at home before losing its first conference game at USC last weekend.

Neither chamber officially condones gambling, gaming or any other form of wagering outside of friendly BYU-Utah related matters, and both like their chances of coming out on top.

“The BYU-Utah game is a fun tradition that evokes a great deal of passion from fans of both schools,” said Beattie. “We’re excited for a good game, and we’re excited to show off some of our great natural beauty to a national cable audience.”

Business leaders get insight on pathways to tax reform

Tuesday, September 13th, 2011

An overhaul of the federal tax system has been a frequently discussed topic on the heels of the debt super-committee and the beginning of the 2012 presidential campaign.

Today, members of the Salt Lake Chamber got some details on how that could work from Jim Gould (above, right) and Tucker Shumack of Capitol Counsel.

They pointed out the U.S. corporate tax rate is 35 percent, nine percent higher than the Organization for Economic Cooperation and Development (OECD) rate. This rate incentivizes businesses to set-up shop outside the U.S. By setting the rate too high, the U.S. costs itself any piece of the pie.

Another concern is too many Americans have become exempt from paying taxes. In 1985, 20 percent of Americans paid no income tax. By 2010, the number jumped to nearly 50 percent.

Gould shared his insight on the debt super-committee. He’s concerned that the eventual proposal will get an up or down vote on the House floor without going through the normal amendment process.

“Democrats don’t want to talk about spending cuts without discussing tax increases and republicans don’t wan to talk about tax increases,“ said Gould. “I don’t know how they bridge that gap.”

A number of business leaders expressed their concern about the upcoming debate over the super-committee’s proposal—particularly with the timing set for the holidays, a key time for the economy.

Shumack also dicussed the proposed American Jobs Act, the president’s proposal to create jobs. He says it is directly tied to the work of the super-committee

“Will the entire thing be passed as is? No way,” said Shumack. “But parts and pieces of it will get done. Whether they can get together on how to pay for it is another question.”

World Trade Center Utah pres. reflects on 9/11

Tuesday, September 13th, 2011

The over 300 World Trade Centers around the earth join in the remembrances of the terrible events of a decade ago.  The attacks, directed against the headquarter buildings of our World Trade Centers Association, were deliberately focused on striking a crushing blow against a key actual (and symbolic) pillar of the U.S.—and international—economy. We at World Trade Center Utah extend our thoughts and prayers for the thousands lost that tragic day in New York, Washington, D.C., and Pennsylvania.

Part of the irony of the attack being directed specifically against the World Trade Center headquarters was that the longtime motto of the World Trade Center Association has been: “Peace and Posterity Through Trade.”  When peoples and nations increase their trade with each other, the atmosphere for peaceful relationships is significantly enhanced for everyone.

We all are likely reflecting on our memories of that sad day ten years ago. Please forgive my personal reminiscences, but I will not forget the pure coincidence of leaving a very beautiful Washington, D.C. early that September morning in 2001 and traveling up to New York City on the Acela Express Train for meetings that afternoon on Wall Street.  Just as our train was barreling through New Jersey, shortly after 8 a.m., we all looked out to see the distressing sight across the Hudson River of smoke coming from one of the WTC towers, and then suddenly, a large burst of smoke and flames from the second tower. By the time we emerged from a frantic Penn Station in Manhattan, the world had turned upside down.  With stunned silence, my colleagues and I joined a large crowd gathered on a traffic-deserted 5th Avenue to watch the first WTC tower collapse like a pancake. After a long and frantic day of sorrow and confusion in Manhattan, I was fortunate enough to catch apparently the only train back to Washington that night—there to be confronted by the smoke and chaos of D.C. under siege for the next several days. It was time of serious introspection for all of us.

From that 9/11 experience, my D.C. business partners at the time agreed that one of our primary aims going forth would be to find increased ways to build international harmony by more projects focused not just on profitability, but also on enhancing personal relationships and expanding peaceable trade around the world.  Toward that goal, Gov. Jon Huntsman and Lt. Governor (now Governor) Gary Herbert deliberately commenced operations of the World Trade Center Utah on the fifth anniversary, September 11, 2006, of that unforgettable day to honor those whose sacrifices allowed us to enjoy our freedoms today.

Part of our honoring them includes our mission to expand economic development, increase international understanding and focus Utah on becoming more globally engaged.  In the midst of this time of remembrance, World Trade Center Utah on its fifth birthday commits itself to continue this legacy of service to our state, nation and the world.

Business leaders get insight from former Medicaid and Medicare administrator

Tuesday, September 13th, 2011

Containing rising health care costs was a major topic for the 57 business leaders who heard from Kerry Weems, senior vice president and general manager with Vangent, Inc. Mr. Weems has held a number of high-level positions in the Department of Health and Human Services.

“Half of the American workforce won’t pay income tax this year,” said Weems. “Dependency on government is at record levels. We have voted ourselves rich.”

Businesses are concerned with the uncertainty created by massive changes in the nation’s health care laws with many expecting health care costs to continue rising.

“It’s a roller coaster that only goes one way,” said Weems.

He says there are two ways to control health care costs:

First, stop purchasing health care “by the yard” with no linkage between what consumers receive from their provider and what they pay providers. And second, change the incentives. Under the current system, a patient has a very low stake in the value proposition.

“Having more skin in the game, makes a difference,” said Weems. “If we are paying, as individuals, our full co-payments and full premiums, that’s a game changer.”

Weems says we have “voted ourselves rich.” He says Americans demand the best health care but have voted for tax policy that doesn’t fund it.

The session concluded with Weems reading from a letter from his son who is serving in the Peace Corps and assigned to Armenia. In memorable commentary, the younger Weems reflected on the greatness of America. It was a poignant reminder to Utah business leaders of our ability as Americans to tackle complicated issues like health care.