Health Care Reform and the Ombudsman Role

9 September 2009

OO has been following the progress on health care reform all summer.  Nope, you won’t find me in the chaos of a town hall meeting, but you will find me reading Senator Max Baucus’ “Gang of Six” proposed framework as it changes and progresses into something worth serious consideration.

Quoting from the framework PDF: “In 2010, states would be required to establish an ombudsman office to act as a consumer advocate for those with private coverage in the individual and small group markets.  Policyholders whose health insurers have rejected claims and who have exhausted internal appeals would be able to access the ombudsman office for assistance.”

Most likely this would be an expansion of the existing National Long Term Care Ombudsman Program administered state by state and supported with federal funding.

A major problem with the proposal as it exists today are the fines and penalties to American’s who exercise their “freedom of choice” not to participate in a health care insurance program.  I’ve emailed my view on this to Washington advocating instead a “pay as you use” feature instead of fines, taxes or penalties; and this would be linked to computer systems and auditing in the framework linked to W-2 or SSN for tracking.

Let’s see what happens as America may finally catch up to the rest of the world and have coverage for all Americans finally.


The New Ombudsman and Payment for Services

5 June 2009

In my “other practice” a majority of clients are having  “cash flow” issues including one client I have as their “business adviser” for their Bookkeeping, Accounting and Auditing firm.  This is just one case, but virtually ALL of the places I am “virtually” are filing more complaints and issues about not being able to reconcile Accounts Receivables, Invoices and even POS or Point of Sale transactions later “charge back”.  Traditionally these go to a collections department in a big company, but what do we do when our “one person office” has such a large percentage of dead accounts.  We “paradigm shift” do we not?  If I’m observing this across the board in the last 60 days… it’s “melting” quickly out there as it’s my job to “know” before clients get stung.

I’ve noticed now if I go into a pub and even some restaurants, they treat me like it’s “fast food”.  I suspect lower prices to compete in the current economy were the main “driver” to this.  I’m reflecting on my last experience in a recession in the 80s where more than once I was asked to “leave the table” with my party so they could seat another “paying party”.  Indeed, it was back in the 80s many changes in financial transaction procedures began.  Hotels “blocked” out payment on your reservation by phone in advance for the full stay and gas stations started “pay first” before you pump.  Also I’ve noticed that often my credit card is requested when I place my drink order.  “Why”, I ask, “do you need my credit card now?”  With a big smile and flip of some hair and hips, “we are just opening your tab now, that’s all”.  Translation:  “We want to make sure you are good for it now and not find out at the end of your meal you can’t pay”.  Indeed, they “block” out about $100 in advance to “see if I’m good for it” before my drinks and meal come to the table.  Have you noticed any of this?

I am eavesdropping and reading and “chat”ing with professionals who all do business over the Internet and 100% are now saying business has been drastically OFF the last 30-45 days and started declining 60-90 days back.  A lady psychologist and friend has told me she has no new clients this year at all.  For me personally, my number of clients is up, but my fee per invoice is down, BUT I’m surviving.  Why?  Lower fees for services and advance payment policies.

It’s time everyone moves to “advanced fee payment” cycles.  I’ve advised clients to begin doing this.  Net terms and credit cards are fast obsolete as we can’t risk discovering 90 days later that the client took services or products and now they are BK.  Many people are shocked, humiliated and embarrassed as they discover their bank, no notice, cut their credit card limit significantly.  These “surprises” are what is driving this change and my recommendation here to you.  This is the best “free” consultation you’ll get from me this year.  My advice is “our profession” should begin to take fees in advance, even legal firms, psychologists, CPAs and “me” are all doing this now just like the hotel, pub and gas station.  If it’s a huge project, consider an “escrow” account similar to buying a house.  If fees are over small claims limits locally, set that as the point to move to escrow with “terms” for payment and anything “under” that limit is “cash in advance” please.  Once the work is complete it’s the mutual decision that requirements have been met.  This works well for fixed fee contracts, but can also work for projects that expand outside of the original time and scope projected for completion.  The idea is the clients want a result or solution and we want assurance they can pay for services.  There is “risk” here, but it is not related to funds anymore if clients deposit the fee, the risk shifts to “ethics, quality, resolution, satisfaction” from all parties for your work.  Collections agencies are a joke right now, over burdened and no way to collect from “defaults” where people can’t pay as the economic tidal wave slowly moves across America.

You also have an excellent option with which more and more professionals are using.  It’s gaining in popularity.  Again, the client(s) deposits cash, you perform your “ombuds role” with a clear “self directed” result (service agreement terms) and the clients “release” payment from account.  They do take a percentage of the transaction based on amount of the transaction, but it’s worth it to “assure” payment and it’s tax deductible as “banking fees” for business.  They will also “investigate” if you and the clients cannot come to terms, additional fees for this, but if it’s clear this is “self directed” then risks of additional disputes are lowered and the conclusion of the ADR services should happen without a negative consequence.

So, your choice, continue to bill… give net terms and hope to get paid or change your “habits” to up front advance fees and/or escrow procedures.  These times require that we adapt to survive.    All of my clients and myself now take payment in advance.  My Bookkeeping, Accounting and Auditing client has had “no resistance” to this for all of May.  I used to offer “half day” rates as a minimum block of time, lately I’ve offered 30 minute phone consultations to be more affordable and this scenario has “many takers” lately and is leading to longer term “commitments”, which is the goal.

Ombuds Metrics for Community Ombudsmanship Intervention Roles

1 June 2009

In some recent reading on Community Outreach Programs some “team intervention” models and costs were outlined for impacting community related conflict and violence.  The basis of the discussion compared “ad hoc” intervention as a result of conflict and violence from domestic family, workplace and gang related “disputes” resulting in “traditional” city services intervention using police, fire, district attorney, public defender, prison/jail system, community clinics/hospitals and all types of social services that try to deal with the problem after the fact.  While Ombudsman participation was not specifically outlined, they did site “community mediators” and “collaborative facilitators” as a member of the very effective and quantified team model.

The key success of the intervention model was to structure a team of about 5 people in various roles and each member would “take the lead” contingent upon the type of “dispute”.  By example “ex gang members” were used for gang violence and “ex spouses” were used for domestic abuse interventions.  Also key was the cooperative efforts of governmental agencies to notify the team that intervention was necessary based on social worker, police reports or medical emergency reports with indicated “harm” in person to person conflict versus work accidents.  Team members participate as part of their “time on the job” where decision makers and managers “rotate” human resources and assign members towards conflict intervention strategies versus the financial consequences of handling the event after the fact and after “damage is done”.  This is the KEY in that no significant extra cost for city budgets is needed yet the impact of the program is 100% successful where intervention was provided prior to any escalating of conflict.

Some of the numbers used to benchmark the benefit and justify cost structuring for the program were CDC figures stating that the average “personal” dollar cost from conflict and violence was resulting in loss of income was $57,000 per person nationally.  An additional $24,000 in medical expenses per person annually was also a national average.  Worst of all, if the “incident” escalated to a felony assault or crime the cost of processing through the legal system and first year incarceration was $486,000 per person to TAX PAYERS.  Please keep in mind that one city has published data, OO previously reported this, that “legal staff” costs about $94,000 a year per employee in a 1998 published study.  To sum up, worst case scenario, total cost per person, per incident, could be over $500,000.

I’m writing this to enable all types of “peace builders” with just a little data to justify their “discussions” with potential clients, agencies, groups, individuals, parties to current conflict and many more “at risk” people so as to get their project or programs up and running.  Currently, on regular posts by Ombuds Blog, universities are “incorrectly” determining that they can no longer “afford” an ombudsman program or are abandoning preparations to implement or hire ombudsmen.  In reality the university ombuds infrastructure is well positioned to leverage expertise “externally” to their immediate community, it just takes some minor adjustments to the Terms of Reference.  Further justification for this is that as the “economy melts” now, tensions are higher and news reports are about the increase in gun sales as city services now have problems meeting “call demand”.  Reports of divorce and domestic disputes are up.  In my business practice I have increased weekly inquiries regarding disputes business owners are facing from employee stress and anger to vendor supply “no notice” increased pricing and property management or landlord issues who are manipulating the law to their advantage without regard for the business owner, employees and the greater community good.  It’s a mess out there and it’s going to get worse as the tax base revenue for cities declines and deficits for “bail out” increase and large companies “price adjust” to “recover losses”.  All of this begs the “real core issue” and question, “should we provide intervention and prevention with slight increases in budget projected costs OR hope we can deal with uncontrolled “hyper inflated” costs related to the aftermath of conflict and violence?”

I also write this because, like me, most ombudsman or mediators practice “alone” and more and more, as with the classical ombudsman model for some cities, it’s a team approach that makes the real impact for positive “damage control” and lasting individual transformation towards “peace” when made aware, vicariously or first hand, of the “real cost” of uncontrolled emotions and chaos.  Do your best…

The “Ombudsmanship” Opportunity & Role

11 March 2009

As many of you know and as I’ve communicated here before, I’ve often expressed the opportunity for the ombudsman role under other business titles or roles.  I call this “ombudsmanship” and you can check the TERMINOLOGY tab for my definition as this word is not in any dictionary.  I’ve also written that I have played such roles in my corporate, business and organizational development practice over the last few decades; and with good success, saving damage to relationships and sometimes, not always, saving a profitable project.  Given the size of the professional ombudsman field and “number of us” out here, it could be beneficial to simply begin promoting the concept with entities that are not yet fully familiar with what we do.

To demonstrate this you might want to look at this recent “job post” for a Director of Business Development.  No doubt this link will expire once the job is filled, so look now, scroll down to the 6th bullet counting up from the bottom of the first set of bullets.  It reads, “Serve as an ombudsman for conflict management between the client and SEI”. Indeed, we are seeing more and more of this, it’s a trend that’s happening more and more.  The strategy here is “customer retention” and “contract management risk mitigation” so as not to get into costly contractual disputes, which can result in a loss of revenue, or worse, a loss of possible key contracts and significant revenue to the company.  I don’t believe anymore, even for small and medium size companies that it’s wise to file for litigation or even begin arbitration.  Many profit margins in today’s economy are “too narrow” to jeopardize and lose profits that can cost jobs and cause “stability” issues.

Again, I always like the opportunity to “prove my case” and this job post is a current example of how “ombudsmanship” is being asked for in the corporate and business levels of companies now.  In terms of organizational development, there is the opportunity here to contact HR of any company and offer ADR, CM or Ombudsmanship training to all levels of management in a company or even organizational ombudsman contract services.  If you do this, don’t forget to show them the “value chain” and cost savings of such an approach.

Finally, if you were to need someone with such a background, I don’t usually “promote myself” here at all normally, but this is the basis of my experience and please contact OO and we can provide collaboration as required.

An Ombudsman’s Metrics

27 January 2009

This blog has provided some unique opportunities to “virtually” meet people recently and discuss the profession and exchange bits of knowledge.  Several ongoing discussions have been about the advantages of ADR or Alternative Dispute Resolution and cost metrics with regards to “traditional American style” problem solving.

My “debates”, where I have to “take sides” for a moment, are in fee structure with potential clients.  After over 21 years of corporate, business and organizational development these “formulas” come very easily for me.  First, I look to the “macro” business environment for ad hoc research on costs.  One of millions of examples was a research study  in 1998 where  a US state began benchmarking  and tracking “legal services costs” for millions of “legal services” employees; a tremendous undertaking  if you think about it.  Average cost per employee, per year in 1998 were determined at around $97,333.  10 years later, still tracking, all benchmark categories have held “flat”, with the most increase 10 years later  in the “legal administration” line item.  So, costs in 2008 are up significantly, but they have not publicly published the overall results… they don’t need to, “we” all feel it, do we not?

The best “tip”, for all those asking, who are in the profession, is to get comfortable with your own “value chain” (look it up) for your services based upon the industries you work in.  These are multi-dimensional, constantly “in flux” with todays economy and “ripple outwards” with impact from internal organizational loss of jobs out to the general external community in terms of shareholder and stakeholder economic impact and dozens of “dimensions” in between.  I can add layers with ease, valid and reasonable “assumptions” to make “my side” of the debate on fees with a client… impartial and fair.  For years though, I’ve worked on the “cost” plus “value add” basis simply stating that my fees are very resonable if you project out the “value add” you’ll receive on a “real cost” basis.

If you doubt this, don’t.  The best example I can relate to you is that I teach this model in class, more detailed of course, and “feedback” from one student at the end of the quarter was that his company landed a multi-million dollar contract with the government of Mexico after they improved the  “added value” they’d not considered before.

Hope this helps…