Streamlining Commission-Where’s the Focus?

October 27, 2009

The much ballyhooed Louisiana Governmental Streamlining Commission is under fire for getting off to a slow start and not considering immediate options to reduce state spending.  The legislatively created commission approved by Governor Bobby Jindal was charged to review the structure of state government and adopt ways to streamline, consolidate, and reduce the cost of running various public agencies.  But observers of the commission’s work so far see no concrete approach to the job, but instead a hodgepodge of suggestions being thrown out for the commission to consider.

Respected governmental watchdog C.B. Forgotston dismissed the whole idea of a commission as a waste of time and money, suggesting that the appointed group is little more than a cover for the legislature and the governor, both who should be the ones doing the streamlining.  And the one member who has put forth a number of good ideas, State Treasurer John Kennedy, seems to be receiving little enthusiasm from his fellow members. Kennedy deserves credit for at least taking the initiative on major issues like having one board to govern higher education, rather than the mishmash of the four board system now in place.

A major problem caused by the legislature in setting up the commission was not to spell out any specific goals. There was nothing more than a general baseline charge to review and streamline with no apparent  benchmarks other than to try and save taxpayer money. But where does such an effort begin?  What are other more progressive states doing?  After all, since Louisiana is regularly at the bottom of most achievement lists, there certainly ought to be a few ideas to steal from other states.

Here’s the charge the new commission should have received.  Do major comparisons of what is happening in both other states and other countries that are getting results. What productive changes could be adopted and integrated in the Louisiana system? Then set out special goals, including a timeframe that

Louisiana should be aiming for.  Define just what goals the state should strive to achieve.  Not just in the next four years.  But where does

Louisiana want to be 20 years from now.
To assist in this effort, I would urge the commission, as well as members of the legislature to read four books in the coming weeks. There is time this fall, since little is happening around the capitol right now.  Four books.  Each that would help the commission establish specific priorities in the years to come.

First on the list is Outliers by Malcolm Gladwell.  A New York Times best seller for months, Gladwell talks about how one can “catch up” when they are far behind in any given area.  If a state lags in educational attainment and needs to make huge leaps as does Louisiana, it’s not just important to adopt what other progressive states do.  Louisiana is behind, so there has to be a quantum leap forward.  Gladwell follows the same reasoning put forth in Thomas Friedman’s The World is Flat. A kid in a small mountainous village in

China has access to the same information as the student at a major American university, and thus has quickly closed the learning gap.   Say “computers.” Basic laptops are being given to students in a number of states.  Less than $100. And large numbers are being donated by both local businesses and foundations. 

Louisiana is not in this mix.  Why not?
Next, Greg Leroy’s The Great American Jobs Scam.  Simply put, quit buying jobs from other states.   It’s a giant waste of money.  Louisiana has paid out billions of dollars in recent years to bring new jobs into the state.  Leroy argues convincingly that these inducements do not work, and are never a major reason for a company moving for one state to another.  He cites numerous examples or CEOs saying, “of course we will take your money, but these state programs are never a significant reason for our company to move.”  These companies were coming anyway.  They just played the stare for all it was worth and bilked taxpayer dollars

.Add to the list Harvey Silvergate’s Three Felonies a Day, where productivity is being sniffled by the unjustified expansion of too many new crimes being passed by both the legislature and congress.  Louisiana has adopted a litany of new criminal laws affecting both businesses and individuals alike, many that no rational citizen could have viewed as illegal. He suggests that the average Louisianan is committing several crimes a day unwittingly because of vague laws.

And finally, Start -Up Nation, by Dan Senor and Saul Singer. It’s a story of Israel’s economic miracle, but there are a number of good lessons for Louisiana.  Israel has no natural resources.  They are abundant in

Louisiana. 

Israel produces more start-up companies than does most of the world’s major industrialized countries. 

Louisiana has few start up companies.  Israel has more companies on the NASDAQ than those from all of Europe, Korea, Japan, Singapore, China and

India combined. 

Louisiana has one listed company.
The key, Senor argues, is how universities are brought into the mix.  Private-public think tanks have been formed and the state has encouraged venture capital with tax breaks taking an aggressive pro new business attitude.  No outright efforts to “buy” companies as does state government in Louisiana, but a business-state partnership that have produced bountiful new higher paying jobs. (Dan Senor will be the guest on Meet the Press this Sunday, October 25th).

Is the Streamlining Commission a waste of time and taxpayer dollars?  Yes, if it does little more than play with the state budget.  That’s the job of the governor and the legislature.  But there is a need for a concentrated review of what direction Louisiana will take in the years to come.  A long-range master plan, filled with ideas taken from the best and brightest concepts in place all over the world. Such a roadmap should have been developed years ago.

                                                                        *****

“Long range planning does not deal with future decisions, but with the future of present decisions.”

Peter F. Drucker.

Peace and Justice

Jim Brown

Jim Brown’s column appears weekly in numerous newspapers and websites throughout the gulf south.  You can read all his work at www.jimbrowqnla.com.

                                                                                               
 

Blues executives reflect on breakup

Central Penn Business Journal April 13, 2007 | Olenchek, Christina REGION Prospect of rejoining stirs mixed reactions In 2002, the breakup of the decades-old business partnership between health insurers Capital BlueCross and Highmark Blue Shield was the talk of the benefits world in Central Pennsylvania.

Dauphin County-based Capital BlueCross said the move would increase competition in the marketplace. Highmark Blue Shield, then called Pennsylvania Blue Shield, said the split would lead to confusion among consumers and duplication of services.

It’s a difference of opinion that continues today as the two companies’ paths have diverged. Pittsburgh-based Highmark Inc., which does business as Highmark Blue Shield in this area, has grown into a national player through acquisitions and mergers. Capital has stayed focused on its core markets of Central Pennsylvania and the Lehigh Valley.

“We were just on different business philosophies,” said Anita Smith, Capital BlueCross’ president and chief executive officer.

Smith and Michael Fiaschetti, senior vice president for the MidAtlantic region of HighmarkBlue Shield, recently sat down separately with the Business Journal to reflect on the past five years and what they’ve meant for their companies and the region’s health-insurance market. Their comments have been edited for space and clarity.

CPBJ: Looking back over the past five years, what do you feel have been the biggest benefits and drawbacks to this split?

Fiaschetti: I think the biggest benefit is the innovative products and the innovative services that Highmark was able to bring to Central Pennsylvania. I think the negative is that costs have actually gone up. You would think competition would lower costs, but that’s not the case. There’s a lot of duplication, a lot of confusion.

Smith: We were very concerned (about confusion). We didn’t “want (customers and providers) caught in the middle of a decision they had no part of… (One of the benefits) is that I’m very involved in the economic development and viability of this region. We saved 2,800 jobs that wouldn’t have been here had we (been) absorbed in a national platform. And because we started from scratch in this transformation, we had the opportunity to change everything we did, from how our systems work to how our service works to how our rates and pricing is done. Frankly, the third thing is that we were the first ones to bring real competition to this market. website highmark blue shield

CPBJ: One of the biggest concerns about this split was that it was going to cause confusion among consumers. Does that confusion continue?

Fiaschetti: There was a lot of confusion when we started out because people didn’t know that Blue Cross and Blue Shield were two different companies. There’s much less confusion today, but there’s still confusion. On a scale of l-to-10, confusion was a 10 then. It’s probably a 4 or 5 now, Smith: I think still there’s some confusion five years after the fact, but I think largely that’s behind. I think people understand that (Capital and Highmark are) different companies.

CPBJ: Capital BlueCross often highlights its focus on the local market. Do employers care much about that?

Fiaschetti: I think many companies want multiple product lines … Companies want solutions. The business need is to keep their health costs down. I think we have gone a long way in terms of our care-management technology and our health and wellness approach. We’ve invested a lot more money and a lot more effort and energy into those things.

Smith: I don’t think the issue is so much local (as in being based in the area). It’s not so much that you’re staying here in Harrisburg, or you’re in Lehigh Valley or Reading or Lancaster. It is, however, ‘do you understand this region? Do you have the wherewithal to act and innovate in the region? Are you an influencer in the region?’ I think that makes a significant difFerence. I think there’s a significant difference when they can call a CEO up who lives in the region.

CPBJ: Do you think Highmark and Capital BlueCross will ever merge? highmarkblueshieldnow.net highmark blue shield

Fiaschetti: My own personal opinion (is that) I think it would be best for this community if we got back together. We could derive economies (of scale), we could reduce expenses, and we could operate more efficiently. Highmark has a very strong social mission. If we were combined, we could do even more along those lines. I’m almost surprised that state government doesn’t require us all to come together.

Smith: Prudent businesspeople always keep options open and dialogue open because the bottom line is what is best for the organization in terms of delivery of what the market expects. At this point, however, Capital (BlueCross) is focused on serving its region.

CPBJ: What is the future of Central Pennsylvania’s healthinsurance market? Do you foresee more competition or less?

Fiaschetti: I think in the near term, two to three years, it’s probably going to stay pretty much status quo. I think long term will depend on what the state does from a regulatory perspective. It’s hard for me to imagine too many more competitors. And that’s not a bad thing in this industry, by the way.

Smith: There’s a lot of competition at the moment. I foresee that Capital (BlueCross) will definitely be there leading the charge. We’re tenacious competitors. At the same time that we’re tenacious, we’re compassionate and committed. I believe that’s what has made us successful.

[Sidebar] “There’s much less confusion today (about the Blues breakup), but there’s still confusion.” Michael Fiaschetti, Highmark Blue Shield [Sidebar] Why they split Before the end of their business partnership, Capital BlueCross and Highmark Blue Shield had worked together for about 60 years. Capital Blue Cross paid hospital bills, and Highmark Blue Shield, then called Pennsylvania Blue Shield, paid doctor bills.

In April 2001, Capital Blue Cross announced plans to offer products that would cover both services. Highmark Blue Shield spent much of the summer pursuing a merger between the two companies. When those attempts failed, Highmark terminated the insurers’joint operating agreement. The carriers’ competing products debuted in April 2002.

Capital BlueCross is based in Dauphin County. Pittsburgh-based Highmark Inc. has operations in Cumberland County and does business as Highmark Blue Shield in this area.

-Christina Glenchek [Author Affiliation] BY CHRISTINA OLENCHEK chriso@journalpub.com Olenchek, Christina


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