Friday , December 14, 2018

September 2013

Featured In This Issue

September 2013


     Charlotte-based OrthoCarolina has positioned itself to provide high-level, cost-conscious service driven by the economics of U.S. health care and the Affordable Care Act.

     OrthoCarolina provides a continuum of care: physicians who are specialists in foot and ankle, hand, hip and knee, shoulder and elbow, spine, sports medicine and pediatrics as well as such services as physical therapy, MRI and post-surgical support.

     The regional practice has grown to 130 doctors, nearly double since Charlotte Orthopedic Specialists and the Miller Orthopedic Clinic merged in 2005, partly by adding six other practices in the past five years. It employs more than 1,000 people.

     That size provides the economies of scale, top-quality staffing and opportunities for innovation that can address inefficiencies in care delivery, says Dr. Dan Murrey, the firm’s CEO.

     In particular, OrthoCarolina leverages technology and patient engagement to establish a track record of affordable, successful care that will be vital to success under bundled-payment plans facing the scrutiny of payers and accountable care organizations.

     “Orthopedics is sort of on the front end of the experimentation that the Affordable Care Act anticipates,” Murrey says. “We’re mostly in the business of improving quality of life and reducing pain. The treatment of orthopedic problems tends to be pretty episodic. A lot of entities around the country are experimenting with what are called bundled-payment programs.

     “We’re building the tools so we’ll be able to do that and go to the public and say ‘This is what you’ll be able to expect from us if you come to us with carpal tunnel syndrome or knee arthritis.’ We want to be more transparent not only about the outcomes, but what the cost of care will be.”

     Federal rules aside, cutting costs is crucial for convincing employers to continue providing health benefits, Murrey maintains. Per-capita costs have doubled in the last 10 years, and health care accounts for 18 percent of the GDP.

     “We realize that health care costs are a huge problem for the business community. It’s a real drain on businesses to have to pay as much for health care as they currently have to pay, and those costs have gone up dramatically,” Murrey continues.

     “What we’re hearing from employers is that they were paying more and more. But without quality outcomes reported, such as return-to-work rates and quality-of-life measures, they didn’t know what they were buying.

     “Every year, if they are paying 10 percent more, our fear is that employers will get out of the health care business altogether.

     “We felt that for those economic reasons we had to respond. The Affordable Care Act put some structure to it, but these were changes that needed to take place anyway, regardless of whether the Affordable Care Act passed or not. It was becoming unsustainable for the economy and for the businesses.”


Benefits of Scale

     OrthoCarolina’s growth in recent years enables it to make the investments necessary to address these problems.

     “We’ve increased our size and our footprint to as far as two hours from Charlotte,” Murrey says. “Our overhead has progressively gone down as we’ve grown. One way it’s happened is that for medical practices, there’s a lot of capital investment, especially in information technology and electronic medical records.

     “I think we have a real opportunity, having the concentration of orthopedic specialists we have and the volume of patients we have. We can devote time to enhancing protocols.”

     OrthoCarolina’s scale enables it to keep legal, human resources and IT support in-house, saving more costs, and its numerous locations keep talented specialists busy full-time, enhancing patient care.

     “We have subspecialty centers,” Murrey explains, such as concentrations of surgeons for hip and knee replacement, spinal surgery and hand surgery. “That probably has a greater benefit from the patient care standpoint, for patients to get the benefit of all the people in that subspecialty rather than an individual doctor if they have a challenging or controversial case.”

     The firm has used electronic records for more than a decade now, which avoids the needless duplication of services, and adopted a data analytics tool five years ago to reduce costs.

     “We’ve done some things to really try to drive down the cost of care for patients,” Murrey says. Among other things, OrthoCarolina has opened five orthopedic urgent care centers so that patients can avoid emergency room visits when they need help at night or on a weekend.

     “They’re seen for the cost of an office visit rather than emergency room charge,” he says. “People know if they’ve injured an extremity. They can generally decide for themselves to go to an orthopedics facility.”

     As the soaring cost of health care has generated increased cost-shifting to patients, they have become more engaged in their own care, Murrey acknowledges, and OrthoCarolina has elevated efforts to assure patient satisfaction.

     “Patients historically have not paid for their own health care,” Murrey says. “Now, as people are experiencing higher copays, higher deductibles, they’re getting more involved in the pricing decisions. I think that’s been a positive thing. It’s forced everybody to be responsive. Physicians want to be responsive to their patients. The cost of care is now a part of satisfying patients that previously was not a big part of the equation.


Quality Care Experience

     “We’ve done a fair amount of work in trying to standardize what we do and report the outcomes. Currently we use a database that allows people to input their health information directly into their medical record through an email link or an iPad in the office. We’re now starting to add to that, to add modules to educate them about their disease process or the surgical procedure they’re contemplating. We can report out what their progress has been.”

     Several years ago an internal, cross-functional process improvement team started looking at patient complaints, both solicited and unsolicited, to generate improvements.

     “We processed all that information and mapped out the care experience so we could see where the breakdowns were,” Murrey explains. “We’ve since expanded that program to include patients and their families. Over the summer, we shadowed over 500 office visits, care experience and surgeries with patients to get their take on what was good and what wasn’t good.

     “We’re taking all the data we accumulated over the summer and creating action teams that will include not only our staff but also some of those patients to find solutions that will be preferred solutions for them. Those are the kinds of things we need to be doing—looking at the world through our patients’ eyes. The patients will tell us what they need.”

     Transparent pricing in bundled care is a key to bending the cost curve in a field where even physicians sometimes don’t know the cost of service until it appears on the bill.

     Murrey says now, “You know what the price is up front. There aren’t these surprises and bills that come for months and months afterwards. The provider makes sure you get exactly what you need, not more or different.

     “We have to be a lot more intentional about the entire episode of care—not just what we do as surgeons, but all the other things you might interact with during your surgical episode.”

     Consumers have found pricing of medical procedures is so arbitrary that “medical tourism” is growing—Americans going abroad for procedures like knee and hip replacements at a fraction of what the cost in the United States.

     “There’s no question that the costs of implants are way too high,” Murrey says. “We’re working to try to reduce those costs as well. We believe that there’s a lot of opportunity to reduce supply costs and implant costs in orthopedics. The incentives haven’t been set up to do that. What we like about this new way of pricing is it forces everybody to take a hard look at the added value.

     “Spending more does not always generate better quality. Even though we spend more than any other country, our life expectancy is not as high as dozens of other countries. We’re probably not getting value for all we’re paying. We’re trying to do what we can to figure that out and advocate for patients.”

     The goal, Murrey says, is a care experience that starts when the patient calls. The practice provides the appropriate and necessary care for the person’s needs and circumstances, a navigator helps guide the patient through the process, the physicians’ track records and the costs are transparent, the patients get progress reports, and the practice engages the patients to help improve the system.

     “I think if we offered that package of improvements to people, they would be excited to have it,” he says.


The Anatomy of the Practice

     OrthoCarolina’s prides itself as being one of the nation’s most comprehensive orthopedic practices. It provides advanced specialty care and general orthopedics, supported by physical medicine and rehabilitation, physical therapy, advanced imaging, an occupational medicine program and orthopedic urgent care centers.

     The origins of the practice are well-storied. For more than 80 years the predecessor groups of OrthoCarolina have provided quality orthopedic care to patients in the Charlotte region.

     In the 1920s, Dr John Stuart Gaul, grandfather to the current Dr. Gaul III, pioneered an orthopedic practice rehabilitating wounded soldiers from WWI, and earning a General Washington Offices Award of Merit for his dedication. Nearby, Dr. Oscar Lee Miller was also starting a practice that would grow to become the Miller Orthopedic Clinic.

     During the ’40s, prior to the development of the polio vaccine, Drs. Miller and Gaul worked to manage and treat the effects of polio throughout North Carolina, and share the knowledge and techniques with others, locally and internationally. Both practices continued to grow through the ’50s, and in 1955 a third orthopedic group, the Charlotte Orthopedic Clinic, was established resulting in 17 orthopedic surgeons in Charlotte and the surrounding communities.

     The ensuing decades saw expansion of the practices with residency programs as well as the first surgeries at the Orthopedic Hospital of Charlotte. The expansion continued into the ’90s as the practices strengthened ties with community hospitals, while simultaneously striving to remain independent.

     In 1993, Gaul Orthopedic merged with Charlotte Orthopedic Clinic to form Charlotte Orthopedic Specialists (COS), and late in 2004 the Miller and COS practices merged to form the present day practice.

     Murrey expects that OrthoCarolina will continue to grow, through alliances as well as expansion and acquisitions, so that people in more communities can enjoy the advantages.

     “What we’ve been able to achieve is to bring some of these procedural advantages or technological improvements to a lot of communities that didn’t previously have them or wouldn’t have been able to afford them,” he says.

     “I think there are other opportunities to do that. The groups that have invested in infrastructure and have the kinds of governance that allows them to do those things make good partners as we work through this pretty massive transformation that health care is going to go through in the next decade.

     “If we can figure it out together and get a solution that works, others shouldn’t have to struggle through it on their own. I think we’ll continue to grow. I think we’ll see more groups coming together,” Murrey affirms.

     The shift from fee-for-service to new care models, including implementation of the Affordable Care Act, will take time but offers promising possibilities, he points out.

     “We were not incentivizing the things that are desirable,” Murrey says. “This gives us an opportunity to create some changes in the system that ultimately could benefit the people. It’ll take a generation to figure this all out and make the changes that are necessary, but I think all in all it’s going to move us in a direction that’s going to make us more responsive to patient needs. At least we have the opportunity to do that.

     “I think it’s incumbent on the physicians in the community to lead that process. If we don’t take a leadership role in doing it, we’re letting our patients down. We’re intent on being leaders in that.”

     Physicians Choice Laboratory Services, or more briefly known as PCLS, is built on a foundation of synergy, vision and endless possibilities. These core values are why this cutting-edge laboratory exists today—literally.

     When Philip McHugh Jr. first set out with software developers Marcus Sowinski and Doug Smith, their goal was to create a company that would help laboratories improve their efficiency and their relationships with the doctors they served. They had no intention of starting a lab themselves, but rather to subcontract with laboratory partners.

     Out of the seven labs they approached, only two said yes. McHugh describes the relationships with both as “very challenging,” and says, “After six to nine months of working that way, we made the decision to open our own lab.” From there, PCLS was born.

     Today, PCLS is a premier clinical laboratory offering a wide spectrum of services ranging from testing and therapeutic monitoring to specialized programs.

     “I’m just a regular person who saw an industry and relationships [with doctors] that could be better,” remarks McHugh. While McHugh’s been successfully starting businesses since he was 17 years old, he had no lab experience when he co-founded PCLS.

     “I’m a big believer that it’s sometimes the person on the outside who can give a fresh look at something and do exciting things,” he explains.

     That philosophy and vision led McHugh, president and chief creativity officer, to build a strong leadership team starting with Joe Wiegel, who had a sales background and had sold PCLS its first laboratory instrument. Wiegel came on board first as a consultant and then as a recognized co-founder and president of operations.

     The team also included Mark Roth, vice president of operations. Reflecting on the early days as one of the company’s first employees, Roth recalls, “When we started out, there were very few of us, so everyone multitasked. It was like ‘all hands on deck.’ We all had the same mentality—do whatever we need to do to survive.”

     Then, the company then literally expanded overnight. After landing a large client, it went from being a 5-10 samples a day operation to 50-100 samples a day operation.

     “The 10- to 20-fold increase in business early on was a big deal,” adds Roth. “We definitely had to learn on our feet, but it helped us understand where we needed to be in terms of reporting and customer service.”

     The company’s accelerated growth is attributable in large part to the advent of more powerful prescription drugs whose metabolic effects are not fully understood, and also to an increase in their abuse.

     “There is a heightened need for testing to make sure people who aren’t supposed to be on drugs, aren’t in fact on drugs,” says Roth, “as well as to measure some of the unknowns about how the body is metabolizing these powerful drugs.”

     Since 2009, growth at PCLS has continued to accelerate at an unprecedented pace.

     “We were on a hockey stick growth pattern,” says Wiegel, remembering when he joined the PCLS team full-time and joking, “We were growing so fast that I spent my first three months hiring staff and finding parking spaces for them to park their cars.”


Synergized Health Care

     A primary goal of PCLS is to be a strategic partner for physicians and provide more than just reliable test results. They also want to help streamline operations and costs with proactive management solutions.

     PCLS testing services include toxicology, genetics and cytology. The company also offers specialized programs ranging from pain management to cardiology, with the goal of improving and streamlining patient care.

     A unique faction of the larger lab market, PCLS differs from a traditional lab by specializing in toxicology and performing urine and oral fluid drug testing for substance abuse programs and clinicians supervising patient pain management. It is also one of the first labs to offer Synthetic Cannabinoid testing and to test oral fluids and bath salts.

     Through innovation, PCLS has successfully created synergy between its two service lines. One includes supporting the pain management and narcotic prescription base to help a doctor ensure a chronic pain patient is compliant with their prescription medicine.

     The other entails providing personalized medicine—known as pharmacogenetics—to examine how an individual body metabolizes a specific drug and help doctors understand if the drug is going to provide the beneficial results they hope for. PCLS methodologies can detect more than 50 drug compounds and metabolites.

     Quality service and the differentiators built into its service help set PCLS apart from its competitors. A broad service menu includes IT connectivity solutions, fast turnaround time on lab tests, and a live customer service center. They also have the capability to run history on a physician’s patient population and assist physicians with compliance.

     “We go at this by trying to identify what value-added services we can bundle up with our testing to help the doctor provide better care,” explains Wiegel. “If we’re going to have any chance to survive in this turbulent world of health care, that is the one stable ballast that will help us navigate these waters.”


Efficiency Innovators

     One of the ways PCLS ensures quality service and efficiency is by building a strong team and providing thorough compliance training for employees. The average Science Department employee goes through six months of training before working independently.

     It also teams up with institutions like York Technical College to help with technician training. PCLS is currently working to leverage a similar workforce partnership with the North Carolina Research Campus.

     In addition, the company recruits specialized roles, such as Brent Dixon, Ph.D., NRCC, chief scientist at PCLS and a leading expert in mass spectrometry, which tests how patients metabolize medicines to help prevent adverse drug reactions.

     “In the clinical world, mass spectrometry is not necessarily used as routinely as other traditional clinical techniques,” says Dixon. “I was able to come in and increase throughput through automation and through reducing the runtime for each sample. We have also trained the staff to operate instruments more efficiently and consistently.”

     “Without adding any new equipment or staff, we were able to process twice as many samples with our existing equipment, and thus continue our marketing and growth,” marvels Roth about Dixon’s expertise.

     “I truly believe that it’s the leadership of Joe, Mark and Brent, and looking at things in a different way that can lead to exciting things,” adds McHugh. “To me PCLS is all about finding the right people, with the right vision and focus on the goal, and keeping everyone energized. If you can do that, then your future is endless.”


Ahead of the Curve

     In just four years, PCLS has transformed from just three employees and 400-square-foot office to 220 employees and a brand new $24 million 104,000-square-foot facility modeled after the Mayo Clinic Laboratory. Previously spread among seven office buildings in south Charlotte, the entire company is now based in Rock Hill, S.C., and is the first occupant in the city’s Riverwalk Business Park.

     “We are well ahead of our growth pace,” says Wiegel of PCLS’ plans to have 364 employees by 2017.

     The PCLS state-of-the-art lab includes Ultra-High Performance Liquid Chromatography in tandem with Triple-Quadrupole Mass Spectrometry (LC-MS/MS)—the most advanced technology in the drug testing world.

     “Investing in new technology is one of our strong points,” comments Wiegel. “We’re not afraid to invest in new technology that looks promising before it’s proven to be promising.”

     Adds McHugh, “By building a new facility, we loaded up on the technology to anticipate what we need in the future as best as it’s available today. Once you lay this foundation, there is so much you can do on top of it. It’s endless. It’s exciting. It’s fun. It’s creative. It’s right in line with PCLS.”

     Case in point is the new PCLS Live that is currently being rolled out. Inspired by FaceTime and in line with its goal of improving physician relationships, PCLS has created a sophisticated system whereby a doctor can push a button and ask questions via phone or video to one of its laboratory technicians.

     “We want doctors to have the best relationships with our laboratory for great patient care,” emphasizes McHugh.

     The company is also committed to achieving constant compliance to ensure effective patient management and secure data for the clients in the 39 states they serve. COLA-accredited, PCLS uses testing methodologies that must pass exacting standards for each drug tested in association with the College of American Pathologists (CAP). Its quality system also meets and exceeds the requirements of the Centers for Medicaid and Medicare Services (CMS) and the Clinical Laboratory Improvement Amendments (CLIA).

     Committed to staying ahead of the curve on testing, PCLS sometimes faces science outpacing bureaucracy when it comes to how to pay for certain services and how to handle data sharing.

     “Science is moving on a high speed rail and bureaucracy is on a horse and buggy,” says Wiegel. “We hope that we’re reaching a tipping point where there’s enough knowledge in the marketplace on the side of the doctor and the side of the patient that demands will start requiring bureaucracy to be faster.”

     For services such as genetic testing where one test could be used across multiple applications, there is no way to know if that test has been performed on a particular patient.

     Adds Wiegel, “The more we get involved in genetic testing, the more urgent the need becomes to archive and keep track of this data. The question is, who is going to deliver those services to the industry…and there is no good answer to that because of patient privacy issues. Right now our approach is to work on services that help the doctor that don’t put us as risk of violating patient privacy.”


Broader Spectrum of Services

     As part of its path for continued growth and success, PCLS will continue to add more services for doctors as well as increase testing. This includes launching a Women’s Health initiative and Cytology Branch later this fall to help curb prescription drug abuse in pregnant women.

     “Prescription drug abuse is a real thing and there are a lot of neonatal cases where they are basically born addicted to the narcotic. The cost of delivering care to these infants can be 20 times the cost than treating a baby not impacted at birth,” says Wiegel.

     “We think there is a real need and real business opportunity in working with ob-gyns to provide screening and patient advocacy,” explains Wiegel, adding that they would like to work with ob-gyns to implement both routine medication testing and testing for drug and alcohol abuse. If a patient tests positive, they will have access to the PCLS Advocacy Program.

     “The idea is to keep the patient clean during pregnancy to produce a better health outcome for the child when born and reduce the total costs on the system,” adds Wiegel.

     “We are constantly pushing efficiency improvements on our core values by adding more tests and tons of automation,” comments Roth. “Much of our company metrics are based on how much testing we can do with the resources we already have.”

     “You’re never done when you’re done,” says Wiegel. “With a lot of things we are doing, our energy is going into expanding those and bringing them to a wider set of doctor customers.”

Photo: Fenix Fotography

     It may sound odd to call an insurance broker a boutique firm, but it’s the preferred term for Alan Wise, president of Charlotte’s Trinity Insurance Group.

     “We offer customized insurance solutions for our clients,” says Wise. “We are a strategic, consultative partner and we operate our business with a high-touch relational approach. Trinity is a boutique agency.”

     Trinity offers insurance products in three areas: employee benefits, property and casualty, and 401(k) retirement plans. Wise describes it as a middle-market firm, a company that works with businesses who employ from 50 to 2,000-plus employees, meeting a “huge growth opportunity.”

     While large insurance brokerages siphon off the big companies and the small mom and pop shops take care of smaller businesses, Wise says mid-sized companies are seeking the services plus extra guidance that they can’t afford to have in their own staffing.

     “We work to demystify how brokers are paid,” says Wise. “We offer an a la carte cost ‘menu,’ or fee-based services, so that we can be transparent and build the programs our clients need. We charge only for what they need.”

     With its footprint in Charlotte, Trinity also has clients in Greensboro, Raleigh, Spartanburg and Greenville. Most clients are from the Carolinas with some national clients in Texas, Florida, Kentucky and Atlanta, Ga.

     “We have the resources of the large national brokerages and the touch and feel of a local firm,” says Wise, who credits it with much of their success to their customers, clients and employees.

     Trinity works with about 200 clients, Wise says, and about 20 of them have been with Trinity for 20 years or longer, earning a place on the Trinity’s new Wall of Fame, a display space in the office that includes photographs and descriptions. Wall of Fame clients are treated with “cupcake ceremonies,” annual celebrations of the partnerships. Trinity brings cupcakes and milk to clients’ workplaces for employees.

     “It’s a good way to pause and say thank you,” says Wise, who boasts the firm’s 99 percent client retention rate, expecting the number of Wall of Famers will continue to rise.


Building a Firm Foundation

     Starting with just a handful of employees in 2001, Trinity was opening in a tough business environment surrounding the 9/11 tragedy. But Wise says he had planned in advance and was able to bring with him several larger clients to help carry the young company. In just one and a half years, the company grew to 30 employees.

     Each client at Trinity has an account manager and support team. One of those clients is Warco Construction, Inc., a business that began working with Wise more than 20 years ago. Hans Warren, CEO of Warco Construction, says the people who work at Trinity are one reason why he appreciates working with the insurance broker.

     “Trinity is a smaller firm that has experienced fewer turnovers in its personnel,” says Warren. “We have been dealing with the same representatives for many years.”

     “In fact,” Warren acknowledges, “they attend our company picnics and outings in an effort to get to know our employees and be available to them.”

     Wise says that employee retention is an important metric at Trinity. “In 12 years, only one employee has left the company. Bonding and community service days encourage employees to believe they are ‘part of something bigger,’ and provide value-added service to customers,” he affirms.

     “This is how we carry out our core values which include serving our customers, employees and carriers in a way that brings glory to God,” says Wise.

     Those values and exemplary service also extend to the Charlotte community where Wise, as a member of the Charlotte Leadership Forum, helps mentor young leaders in the community to be leaders in their families, occupations, communities and churches.

     In 2008, Wise’s former college roommate Harry Floyd joined at Trinity, and brought his expertise in CPA processes to help build deliverables for the growing company.

     “We had a vision for the company,” says Floyd. “Business is always changing, so we needed a dynamic business model. We brought a unique service model to the table. We will listen, learn and surround ourselves with successful practices.”

     Floyd emphasizes that Trinity works hard to court new customers and show clients that they are valued within the company. “The competitive insurance market in the Charlotte region means that clients make decisions based on the capabilities of the firm and the right fit of the people,” he assures.

     Initial client meetings focus on the culture, resources and capabilities of both firms to see if there’s a “good fit,” between them. Trinity spends time “learning about the client’s issues and concerns, not just quoting insurance prices,” describes Wise. “Our goal is to consult and provide advice and counsel to our clients. Our clients want to find out the best way to provide services for their employees and they are looking at the value of adding differentiated services.”

     “How can we help you? What are the services you are looking for in a brokerage?” questions Floyd. “Marketing is a part of what we do, so after we learn about the client company, we can show different products with different prices.”

     Trinity provides consulting services in three main areas: benefits work which comprises about 60 percent of the business, property and casualty work which comprises approximately 35 percent, and 401(k) and retirement planning, a new line of business they’ve begun this year.

     Trinity analyzes the risk of the company, looking at the benefits and the property and casualty lines to determine the company’s exposure. After reviewing the loss control and claims management, Trinity looks at how the processes can be improved.

     For health benefits, that might be in offering wellness programs, reviewing plan benefits, or communicating with employees. For property and casualty, that might be reviewing loss control and claims management. For 401(k) or retirement plans, it might be looking at employee education and compliance issues.

     “By operating as a fee-based company, Trinity can craft and price 13 or 14 service items and build a program around the client’s specific needs,” Wise says.

     “We are very transparent with our pricing,” he continues. “Our goal is to match what you want with what we have and price it fairly for both parties. We want to demystify the broker commission process. We work especially hard to ensure that each and every one of our clients has positive experience.”


Making Sense of the Affordable Care Act

     The Affordable Care Act poses potential hurdles to mid-size companies as they work to implement the new requirements to provide health insurance. Trinity can help, says Wise, by providing counsel about the changes in the law.

     “There is great concern in the business community about this new health care act, which gives employers and employees the opportunity to review coverage, care and premiums,” says Wise, “and, it comes down to two main issues: quality care and choice.

     “What will the exchanges offer and what kind of subsidies will be available?” asks Wise. “How can I educate our clients to make good choices—both for their companies and for their employees?”

     Employees are the most valuable asset for any company, according to Wise, so it makes sense to spend the time to both educate them about their health and offer valuable benefits to retain them. A new wellness program, he says, can be put in place in three to five years, including design, implementation and execution.

     “Trinity is able to offer a comprehensive solution for companies,” assures Wise.

     Trinity offers year-round support for health care benefits including business analytics, planning, wellness measures, and communication portals for employees, and compliance monitoring to help provide and measure the effectiveness of employee health benefits.

     Wise acknowledges that, “one size doesn’t fit all in wellness.” He touts the Trinity Health Quotient, which is a product developed in-house, which uses biometric employee data to provide individual health assessments for employees, making them more aware and accountable for their health status. Employees receive a personal health report and measures to help monitor their own health concerns such as weight management, smoking cessation, hypertension, or heart issues.

      “Technology is an important part of the mix,” affirms Floyd, “Picking the right technology can help employees with enrollment and engagement around health benefits and healthy lifestyle choices.”

     It’s important to get employee buy-in to help control health care costs, explains Wise, since 75 percent of all health care costs are related to lifestyle.

     “Robust educational measures can help drive behavior and lower premiums,” he says. “When we help high-risk employees manage their conditions, we help them improve their health, and that improves the health care costs to the company.”

     It can also lead to employer incentives that could be used to prompt healthy lifestyle changes. They might include a lower premium cost to employees who lose weight and have lower hypertension, for example, or a contribution to a charity for improvements in lifestyle conditions.

     Warco Construction uses Trinity for its group health, dental and vision benefits.

     “Trinity is important each time we come up for renewal,” says Warren. “They help us navigate the increases in health care expenses by sharing different options we us so we can pursue both plan designs and carriers.

     “Whenever questions or concerns arise about claims, they do an excellent job in supporting our staff and employees,” he says.


Maximizing Value by Minimizing Risk

     Property/casualty insurance, says Wise, helps companies protect their investments. Property insurance helps protect a company’s physical property, while casualty insurance helps protect the company against legal liability for potential losses caused by injury to people or damage to property.

     Understanding the choices in environments where risks change and compliance is the service provided by Trinity. Trinity can provide advice based on staff assessment that includes engineering and environmental experts.

     “We work hard to help clients make good choices—first when it comes to choosing the carrier, and second when it comes to working out claims with the carrier,” says Wise.

     Edifice, Inc., a general contractor for construction based in Charlotte, uses Trinity to cover its general liability issues. “Alan has been a great business partner,” says Eric Laster, president and CEO, who has worked with Trinity for 20-plus years. “We moved with him when he formed his business.

     “He’s handled my liability coverage and managed my health care,” says Laster speaking for his firm of 55 employees with annual services of $125 million. “Year after year, Trinity has provided health insurance and worked to manage the continuing and escalating health care costs.”

     “If you are not happy with a carrier’s action, we’ll be the intermediary, the person who is there to solve the problems in a high-stress environment,” explains Wise. “We are the servicing arm.”

     “I’ve found Alan Wise to be an honest, resourceful and creative partner,” attests Laster. “I would recommend him to other businesses.”

     With its new full service retirement planning division started in January, Trinity now helps its clients design and provide employee benefit plans. Meeting regulatory requirements is a necessary part of the review process, and Trinity, with its fee-only service, can offer non-biased consulting on current plans, says Wise.

     Service is the key differential, maintains Wise, and helps drive all of Trinity’s actions.

     “We have a service heart,” says Wise. “Our DNA is around serving and helping others to achieve their goals and dreams. Trinity is a conduit for our clients. To the extent that our clients are successful, so will we be successful.”

     When Jim Snyder first came to Charlotte, he didn’t know anybody. But he felt it important on becoming CEO of ODELL to reach out to Charlotte’s decision-makers.

     Much to his surprise, each and every one he called readily accepted his invitation to meet. To say he was impressed is an understatement. It spoke for itself about the quality leadership of the firm’s founder and the good name and reputation the firm had developed over the years.

     Arthur Gould Odell Jr. of Concord founded Charlotte-based ODELL in 1940. “He was part of the group of community and business leaders that created the vision and foundation of the Charlotte we enjoy today,” offers Snyder.

     “ODELL has never been just an architectural firm,” continues Snyder. “We have always believed in being a stakeholder and steward of our community, helping to influence creating special places to live, work and play.”

     Indeed, founder Odell worked alongside business and community leaders such as John Belk, Hugh McColl, Bill Lee, Ed Crutchfield and other visionaries to grow Charlotte into an important southern city. In the early 1970s, he developed the city’s first comprehensive Master Plan. Today, Charlotte’s uptown, medical centers and sports arenas reflect the vision of that Master Plan and all reflect close to 75 years of Odell’s and the firm’s continuing impact.

     Most of ODELL’s design projects are familiar household names: Bojangles Coliseum, Ovens Auditorium, Time Warner Cable Arena, the former Charlotte Coliseum, Independence Center, Bank of America Plaza, Charlotte-Douglas International Airport, the first Charlotte Convention Center, University of North Carolina at Charlotte, The Federal Reserve Building, Westin Hotel, 525 North Tryon Plaza, the original Knight’s Stadium and now, the soon to be completed BB&T Ballpark, to name a few, plus numerous projects for the Carolinas HealthCare System—from the original bed tower built in the 1950s to recent buildings—as well as the Novant Health Care System.

     Together, these projects form a timeline of Charlotte’s progress towards becoming the banking, health care, international transportation, hospitality and professional sports city that it is today.


Building Up to Success

     From its founding, ODELL has maintained its headquarters in Charlotte. The company opened its Richmond, Va., office 35 years ago. Snyder, with ODELL for 27 years, ran the Richmond office as president until relocating to Charlotte two years ago. He was named chairman and CEO of the entire firm in 2008.

     The firm’s footprint was enlarged again in 2011 with a client-driven expansion to Houston, Tex. “Now, we are in the three strongest growth states in terms of economic development,” claims Snyder. Overall, the firm expects to reach $15 million in revenue in 2013. Over half of its 76 employees are licensed architects. Eight principals lead and direct the firm’s activities and include (in addition to Snyder and Woollen) Brad Bartholomew, Terry Moore, Bruce Brooks, Max Gray, Richard Morton and Dale Hynes.


     ODELL’s work in Richmond is represented by a similar list of landmark places, and spans Florida to New York in work for the Bon Secours Health Care System. The firm’s major client in Houston is the Memorial Hermann Health Care System, part of the largest health care system in Texas.

     Other projects around the country include the world-recognized BOK Center in Tulsa, Okla.; the RBC arena in Raleigh, N.C.; the Bi-Lo Center in Greenville, S.C.; the Raleigh PNC Arena; and the North Carolina Blue Cross Blue Shield Headquarters in Chapel Hill. International projects range from the Middle East to India to Latin America to China and represent approximately 10 percent of ODELL’s work.

     ODELL offers integrated architecture, planning, engineering and interior design services. The firm is structured around market sectors as opposed to geography. Aptly named Heal, Work, Play, Move, Learn and Live, the firm focuses on the design of environments supporting health care, corporate and commercial business, sports and entertainment, aviation, higher education and senior living and multi-family residential clients.

     “I am the director of Play,” laughs Woollen, obviously delighted by the concept and play on words. “It’s a great job.” Woollen also heads up the office in Charlotte. The firm’s architects primarily work in one market sector although they are very active in the various locations where the firm has presence. Moore leads the Work sector; Brooks leads the Heal sector and heads up the office in Richmond. Health care has become nearly 70 percent of ODELL’s business.

     “Instead of being reactive, waiting for work to come to us, we seek opportunities for providing transformational ideas to help move important projects along,” says Woollen.

     “Strategic partnerships and collaboration are key,” adds Snyder. “It’s not just about now—it is looking beyond today in creating special places informed by the client’s vision designed to optimize the enterprise.”


Hitting Some Home Runs

     Woollen’s job has been especially exciting through the design and building of the new BB&T Ballpark which is scheduled for completion in the spring of 2014.

     “We are thrilled to be a part of bringing the Charlotte Knights to uptown. That it will be in our own neighborhood is particularly rewarding,” says Woollen. ODELL was also the architect of the current Knight’s stadium located off Interstate 77 in Fort Mill, S.C.

     In the 1980’s, Knight’s owner George Shinn anticipated rapid growth in the South Charlotte area that would leapfrog the state line. “His assessment was that the area would grow a lot faster than it has,” says Woollen. That property is now scheduled for redevelopment for a distribution and mixed-use development.

     The trend now is to build sports stadiums in center city in creating unique mixed-use live, work and play destinations.

     “The new ballpark will be much more user friendly with superior sight lines, amenities, two club areas, more picnic terraces and easy access,” continues Woollen. “Because of the ballpark there will be new development along 4th Street and along Graham Street which will continue to revitalize the Third Ward.”

     Several features make the new ballpark unique, according to Woollen. A pair of dugout suites at home plate provide for a worm’s eye view where he says, “You’ll be looking at the field like a catcher or umpire does.”

     The lower home plate club will hold approximately 900 people and will have fixed bars, indoor and outdoor seating. The other will be able to accommodate 300-400 people for game days and other catered functions. “It will be busy every day of the year,” anticipates Woollen, proudly.

     Construction of the stadium is 65 percent complete. The first game is scheduled for April 11, 2014.

     ODELL entered the Play sector in the mid-1950s with the design of what is now the Bojangles Coliseum. The firm also designed Ovens Auditorium next door. Next came the Coliseum on Tyvola Road in 1984 which was replaced in purpose 22 years later by the Time Warner Cable Arena in uptown. In between those, ODELL designed the Barnhardt Student Activity Center at UNC Charlotte.

     “It’s a more specialized field now,” says Woollen. “When we were working on the Coliseum, I knew that I could do this for the rest of my career.” Undoubtedly, ODELL has been a huge player in preparing Charlotte to be a center for professional sports.

     Like most others in the building and construction industry, ODELL was impacted by the downturn in the economy. “It sure wasn’t a very good time to become CEO of an architectural design firm—when the bottom fell out of the economy,” states Snyder referring to his taking over the reigns in 2008.

     “The reason why we’ve done as well as we have is that we have changed our firm by adapting our business model to the times and we are relationship-minded in everything we do. Consequently, with our 90 percent repeat business track record, our clients believe in us as much as we believe in them.”

     Both the diversification and specialization of the firm were also important factors, according to Snyder and Woollen. “If anything has changed all our lives, it’s 2008,” says Snyder. There were lots of very reputable firms that are not here any more. Firms that see change and embrace change are the ones that will weather the future.” This is true whether referring to the economic climate or competition, according to Snyder.

     “Most architectural firms are small; with less than 10 staff. The 1,000-plus firms are unusual. However, at 76, our staff is strong across our footprint. We are considered a large firm,” continues Snyder. “But in our particular market sectors, the competitors are usually 10 times bigger than we are. When we compete for projects in our markets we have to be more creative and savvy in terms of how we respond; we have to be able to respond and adapt very quickly,” continues Snyder.

     Woollen sums it up: “We’re the swift boat; our competition is the cruiser.”


Design for the Future

     Snyder was raised in a military family that moved around a good bit—from Kansas to Europe, Texas and Bowie, Maryland. “I was an artist—a sculptor—and there was very little creativity around me as I was growing up,” remembers Snyder.

     “My father said if I wanted to pursue art, I could pay for my own education. He recommended that I go to Texas A&M and join the military to serve our country like my brother did. So, I did. I joined the Corps of Cadets and ultimately discovered architecture.”

     Owing Uncle Sam some time after graduation, Snyder worked for the Surgeon General of the U.S. Army stationed at the Pentagon and designed hospitals all over the country as well as in Asia and Europe. “I learned how hospitals work from the nurses, physicians and clinicians from the inside out. We hired ODELL to design a project for us and that’s how I came to know the organization.”

     Snyder came on board at ODELL in 1986, the same year Mr. Odell sold the company to seven partners. “We bought the last partner out a few years ago,” says Snyder. “Mike and I, along with Brad, Terry, Max, Bruce, Dale, Richard and our senior team—we’re third generation partners.”

     “When I think, I diagram. I think through my hand when I draw,” continues Snyder. “There are few things that people do to create peace of mind—that’s what my art does for me. When I draw, I don’t think about anything else.”

     Still, Snyder didn’t connect the dots until graduate school spending time in Chicago exposed to the works of master architects. “I realized what architecture is all about. It’s a journey you’re on to develop your ideas about how space can enhance and influence the lives of those who experience the space.”

     Snyder moved to Charlotte in 2011. His partner, Max, had called him up and said, “Jim, it’s time you came to Charlotte.”

     “Charlotte is a great, great city, says Snyder. “You won’t see anything like our urban environment anywhere else for the size we are.” Snyder has both a son and daughter, both schooled at the University of Virginia.

     Woollen grew up in southeast Charlotte. He acknowledges, “That area was very rural then—not much architecture to look at.”

     As a boy, Woollen loved to hang around construction sites and watch the builders, especially the carpenters: “I would gather scraps of wood and go all over the neighborhood building treehouses. The first time I saw a modern building, I freaked out—loved it! From then on, I admired all things modern—buildings, cars, art, clothes.”

     Woollen graduated from North Carolina State University and started with ODELL in 1981. In the mid 1990s, he was recruited away by another firm and moved to Florida for 12 years where he worked on the Miami Heat arena and then to Dallas to work on sports and entertainment projects domestically and internationally including a great project for the Dallas Cowboys.

     “Over time, several of our former partners tried to recruit Mike back to the firm,” says Snyder. We finally did in 2010. I feel really great about Mike being with us in Charlotte.” Woollen is married and has a daughter and granddaughter who reside in Charlotte.

     “I tell people I meet all over the country Charlotte has boundless aspirations. After the bright light that shined over Charlotte for the DNC, now the conversation is about bringing home the Super Bowl,” exclaims Snyder. “There are many communities this size that wouldn’t dream of that; this community dreams of that and more each and every day.”

     The firm is also involved with the city now to redevelop the Bojangles Coliseum to create an amateur sports destination.

     “This brings in tens of thousands of kids,” says Woollen who envisions a renovated arena, new indoor facilities, hotels and other developments around the project.

     “I’ve witnessed an energy and pride in ODELL that I’ve never felt before,” says Snyder. “We believe in and inspire each other to do great things. Our passion is in making a difference.”

     “It’s more about the whole than yourself or the part,” he continues. “We believe that being active leaders in our community is truly important to our enterprise. If we’re part of a dynamic, growing, aspiring community, there is opportunity to create wonderful places.”

     Based on its success and longevity, the ODELL firm will always be a stakeholder and steward of Charlotte.

Photo: Fenix Fotography

     Between October 1 and January 1 Americans will be intently focused on the Affordable Care Act (ACA). For most of us, it will be with a mix of anticipation, trepidation, excitement, frustration, hope, fear, and undoubtedly confusion.

     Dr. Nancy Fey-Yensan, dean of the College of Health and Human Services (CHHS) at the University of North Carolina at Charlotte (UNC Charlotte) has studied and prepared for the ACA. As the overseer of 3,000-plus undergraduate and graduate students who will soon work in the new health care order, she understands better than most its promise and its peril.


Lighting the Way

     Although she has concerns, Dr. Fey-Yensan is an advocate of ACA.

     “The Affordable Care Act is shining a light on care-for-all,” she attests. Until the congressional debates of 2009, few considered care-for-all a realistic part of the American dream. The cost of caring for uninsured millions made it appear impossible.

     “But,” says Fey-Yensan, “the societal costs of not caring-for-all are greater than the cost of doing something. Health is central to America’s success. Without good health,” she maintains, “education suffers, jobs are lost, and families fall into poverty.

     “I’ve been in health care for 30 years and there has been a growing concern that health care needs to be proactive, comprehensive and accessible to all,” she says.

     The War on Poverty that began in the ’60s kicked off those conversations, but it took a change in outlook to move the United States from a concern for economic opportunity to the Affordable Care Act.

     “We have moved away from a health outcome perspective to a patient outcome perspective,” comments Fey-Yensan. “The old emphasis was on making medical procedures more effective and developing best medical practices. With the cost of a day in an American hospital averaging $2,000, that can’t go on,” she emphasizes.

     Today doctors and hospital administrators pay attention to patient satisfaction, quality of life and informed individual decision-making. Many physicians are now compensated on the basis of patient outcomes. As Fey-Yensan says, “We are thinking more now about how to make individuals and families healthier and how to keep them out of the acute care system.”

     The heart of the ACA is primary care—checkups and prevention. That is the starting point, the floor for the ACA’s minimum standards. In order for a health plan to be approved for uninsured individuals under ACA, it must have a strong benefit package and limited out-of-pocket costs.

     The ACA’s Essential Health Benefits package ranges from wellness and pediatric oral and vision care, the prevention piece—to emergency services and hospitalization, the acute care benefits. The minimum standard for deductibles and co-pays is a 60/40 cost sharing, the so-called Bronze level. It’s the plan with the lowest premium and the highest out-of-pocket cost. For a higher premium, individuals may opt to have their plan pay 70 percent (Silver), 80 percent (Gold) or 90 percent (Platinum).


New Models and Methods of Care

     “An important part of the ACA is that now there will be benchmarks for success. Organizations that meet those benchmarks will be rewarded,” explains Fey-Yensan. “The benchmarks are related to quality of care, safety and cost.” For example, recurring, redundant and unnecessary medical tests may be one irritant that benchmarks eliminate.

     A novel way to achieve quality, safety and cost savings is the “medical home” model of care. The ACA supports this coordinated, proactive, patient-centered approach. Key to the medical home is a team of providers working together to meet a patient’s health care needs.

     Much like hospice care for the past 40 years, medical home teams include physicians, physician’s assistants, nurse practitioners, nurses, nutritionists, pharmacists and social workers. Medical homes have extended office hours, communicate regularly with patients over the phone or Internet, and rely on shared data from electronic medical records.

     In his keynote address at the 2012 Charlotte Chamber of Commerce Health Care Summit, Harry Reynolds, director of health industry transformation for IBM went so far as to say, “We will not work with an insurer that does not offer medical home.”

     Teams dominate Fey-Yensan’s conversation. There’s good reason. She explains that, with 55 million previously uninsured Americans soon to be seeking community-based medical care, there are not going to be enough medical doctors to serve them. In the future, medical doctors will supervise interdisciplinary teams and provide less face-to-face care.

     Ready to fill the M.D. gap are two new professional degrees offered by CHHS. The newest, a Ph.D. in public health sciences, debuted in August 2013. It follows closely the college’s Ph.D. in nursing practice which was approved earlier this summer. The latter degree is designed to take the place of the nurse practitioner. These 21st century professionals will be trained to work in non-traditional settings where inter-disciplinary, culturally competent teams make many of the clinical decisions typical of 20th century physicians.

     CHHS coordinates the education of four disciplines at the bachelor, master and doctoral levels: Social Work, Public Health Sciences, Nursing and Kinesiology. Students wishing to start early and blur the lines between their related disciplines can apply for the college’s Health Connection program.

     Beginning freshmen year, those accepted into Health Connection take classes together, participate in community service, develop teamwork skills and live together in the same residence hall. When they graduate, these social workers, nurses, occupational therapists and policy advisors will not only communicate with each other, but they will also fully understand and appreciate what the other is saying.


Big Data is a Big Driver

     “Data drives everything we do,” says Fey-Yensan of her evidence-based curriculum. And Big Data is the biggest driver of them all. Big Data is revolutionizing every aspect of medicine from the laboratory bench to the bedside.

     Google, Facebook and Target are not the only ones to mine terabytes of customer data. Hospitals, insurers and researchers are already sifting through mountains of medical data on electronic medical records, MRIs and CT scans. Their goals are to make sense of health care data, improve care, identify value, reduce costs and cure diseases.

     In 2012, CHHS teamed with UNC Charlotte’s College of Computing and Informatics to develop the first Health Informatics Professional Science Master’s program in North Carolina.

     “This degree is to train people with solid skills of technology and analytics while being expert in the business of health and health care and making the two work together,” explains Dean Yi Deng of the College of Computing and Informatics. Half the curriculum comes from Dr. Deng’s faculty, half from Fey-Yensan’s. Their motto seems to be, ‘We don’t work in silos anymore.’

     For the past eight years, CHHS has graduated close to 50 Ph.D.s in health services research. This Big Data degree combines such diverse disciplines as biostatistics, epidemiology, sociology, social work, economics, medicine, nursing, public health, engineering, management and policy studies.

     Recently, CHHS researchers have reached across the campus to the College of Business and the College of Liberal Arts to form a Health Informatics and Patient Outcome Collaborative. With colleagues in health economics and public policy, they are studying what was once the murky topic of heath care quality. There is a lot at stake. Quality measurements are playing an increasingly important part in determining physician performance incentives.

     “The combination of Big Data and health care probably creates one of America’s most sought after professionals in health care right now,” remarks Fey-Yensan.


ACA Shortfalls

     The Affordable Care Act is far from legislative perfection. There are a number of flaws that it acquired in its journey through Congress and after its examination by the North Carolina legislature. Three of them cause concern for Dean Fey-Yensan.

     In March, Governor McCrory signed legislation that took North Carolina out of the system of state-run health care marketplaces or exchanges. These are real and virtual places where uninsured individuals and small businesses can shop for health insurance. North Carolina is one of 33 states that, for now at least, do not have their own program. The state will operate as a Federally Facilitated Exchange for 2014.

     In July, the North Carolina Department of Insurance (NCDOI) approved rates for three private insurance companies that intend to sell plans to North Carolina’s 1.5 million uninsured: Blue Cross and Blue Shield of North Carolina, Coventry Health Care of the Carolinas and FirstCarolinaCare.

     If North Carolina had a state-run exchange NCDOI’s approval would be sufficient. “Since the federal government will be operating the Marketplace in North Carolina, it will make the final decision as to which plans may be sold though the Marketplace in this state,” said the NCDOI in a July 30 press release.

     “For folks who have to go out and shop around for health insurance, they really should have a broader market to choose from,” claims Fey-Yensan. And she says, since only Blue Cross Blue Shield will have a presence in every county, “What that means is that for some folks there won’t be a choice.”

     Those seeking individual and family coverage and a government subsidy may face a long and tedious application process. Help in staying afloat in that sea of paperwork is to come from unbiased enrollment counselors aptly named Navigators under the Act.

     California expects to hire 21,000 Navigators—some proficient in Spanish, some from faith-based organizations and some from non-profits. Nationwide, estimates for the number of Navigators needed run as high as 175,000. All will be full-time state or federal employees trained in taxes, insurance and the fine points of the law.

     Some worry that the application process will be so burdensome that even with help from Navigators many uninsured will opt for a fine. Insurance companies have a different concern. They assert that the uninsured will be confused between Navigators and the more familiar insurance agent and broker since ACA requires that Navigators cannot be health insurers.

    “The problem is that there will not be enough Navigators,” maintains Fey-Yensan.

     To fill the gap, Certified Application Counselors and In-Person Assisters may be added to the mix. These latter groups have had years of experience working with applicants for Medicaid and the Children’s Health Insurance Program.

     In the next month, local groups like Legal Services of Southern Piedmont and MedAssist will play a role in closing the information gap. “We are part of a consortium of 10 agencies and on August 15, we were awarded a grant to become Navigators,” says Kelly Musante of MedAssist.

     Graduate students from UNC Charlotte are also planning to help, but they have too much on their plates to be full-time Navigators. According to Cicily Hampton, a public policy grad student, there is a university-wide steering committee working on immediate volunteer efforts as well as long-term involvement. Hampton points to a problem many of us share: “Those obtaining health care insurance for the first time may not understand co-pays and deductibles.”


Medicaid Expansion

     There are two ways the Affordable Care Act envisioned the expansion of health care coverage. One was through standardized individual health care plans. The second was the expansion of the Medicaid program for low income Americans. It is this second tier expansion—or, more accurately she says, the lack of it—that concerns Fey-Yensan.

     “North Carolina is one of 15 states that voted not to expand Medicaid. We still have 700,000 people who will not be eligible for Medicaid, all under the age of 64. These folks are going to be in trouble.” She explains that states that expanded Medicaid realized that, without expansion, low income Americans would continue to use the hospital emergency room for primary care.

     Closer to home, expansion would have had a direct impact on UNC Charlotte’s students. “An increasing number of jobs would have come from Medicaid expansion,” says Fey-Yensan. “Expansion would have been an economic driver for North Carolina.”

     The future of the Affordable Care Act depends more on colleges like UNC Charlotte’s Health and Humans Services than it does on what happens in the next three months. Look down the health care highway five or 10 years. In that more expansive view, Charlotte will witness the explosion of enrollment at the College of Health and Human Services, already the fastest growing school there.

     “The demand for primary care providers who are not medical doctors will be huge,” maintains Fey-Yensan.

     When the dust settles, Charlotteans may come to realize that it is not only cost-effective to be seen by non-M.D.s, but also more personal, holistic, satisfying and health-promoting.

     Five or six heads may turn out to be better than one.

     Like the Affordable Care Act itself, we may need to live with that idea a while. But those heads belong to the professionals graduating from Fey-Yensan’s programs and they are leading the way forward in American health care reform.



Overcoming Common Objections: Part Two


     As we introduced in the last article, the common objections that tend to hold back owners from selling their businesses are usually based upon some combination of the following:


·      “The business isn’t worth enough to meet my financial needs.”

·      “The employees (or customers) will leave when they discover I’m trying to sell.”

·      “I will be required to work years for a new owner.”

·      “The sale process will take too long and cost too much.”

·      “Given the tax bite on sale proceeds, it makes more sense to stay, enjoy the cash flow and get paid over time.”

·      “What will I do after I sell and leave the business? This business is my life!”


     Now we will discuss the last four common objections that can affect your decision to cash out of your business and move on to the next stage of your life.


I Will Be Required To Work Years For A New Owner

     If one of your exit objectives is to leave the business as soon as possible, it is important to make that objective known to your exit planning professional and it will be a prerequisite of any sale. That objective will determine which type of buyer you should seek. There are categories of buyers (“strategic buyers”) who typically do not require the former owner to remain with the company beyond a short transition period—usually no more than a few months—provided your management team is strong and is “tied” to the company by incentive arrangements (“stay bonus”) and non-competition agreements.


The Sale Process Will Take Too Long And Cost Too Much

     Cost, of course, is a matter of perspective. But the only way for you to make the determination whether the sale process is too expensive or not is to discuss costs and expenses with your advisors before you hire them. It usually takes from six to 18 months to sell a business. The more you know, the better prepared your company can be for sale. Better preparation on your part can mean less time and expense on the part of your advisors.


Given The Tax Bite On Sale Proceeds, It Makes More Sense To Stay, Enjoy The Cash Flow And Get Paid Over Time

     With proper tax planning, Uncle Sam’s cut of the sale proceeds can be minimized so that you are in a better position to meet your financial and personal objectives upon your exit from the business. But planning— and implementation—can take years to be fully effective. Delays in beginning to plan works to reduce time available and can increase taxes.

     As an example, if your company is currently taxed as a C corporation, built in gains are effectively double-taxed upon the sale of your company in the event you sell assets instead of stock. You can avoid this double taxation by converting your C corporation to an S corporation, as long as you wait at least 10 years after the conversion to sell the assets of the S corporation. However, if you are considering selling in 2013, and you converted your C corporation to an S corporation at least 5 years ago, you can avoid the built in gains tax if you sell before year-end.


What Will I Do After I Sell And Leave The Business? This Business Is My Life!

     For many business owners, the old “fire in the belly” is gone, but there is nothing to replace it. Many, therefore, hang on to their businesses, willing to accept what they know because they fear that the unknown may be even worse. Yet, many owners don’t know what they will do when they exit. However, exiting a business can end up uncovering new and exciting opportunities for owners to pursue after the sale— some of which may be provided by the chosen buyer.


Final Thoughts

     Certainly, the decision to sell the business you created and nurtured is an intensely personal decision. No one is more qualified to know what to do with the rest of your life than yourself, especially when it comes to the decision to sell your business. The fear of the unknown is natural, but you do not have to venture on this journey alone. Seek out a professional experienced in exit planning to help guide you through the process of preparing for the biggest financial event of your life—the sale of your business.

     The legislature and governor of North Carolina made comprehensive tax reform one of their top priorities for the 2013 legislative session.

     The previously existing North Carolina tax rates were high compared to neighboring states, making North Carolina relatively unattractive for relocation. Also, the state’s revenue streams were too dependent on income tax, a less predictable and thus more risky revenue stream in poor economic conditions.

     The final deal reached in the negotiations did more to lower tax rates than to reduce reliance on the income tax, ultimately rendering the change to be more of a tax cut instead of the tax reform it was set out to be.

     This article will highlight some of the key provisions of the recently passed North Carolina legislation and its effect on businesses in North Carolina. Many other changes in the new legislation apply solely to individual tax. You should consult with your tax adviser to understand how your personal as well as your corporate taxes are affected by the new tax law.


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     Businesses that operate in the forms of partnerships and S corporations pass through their income to the individual tax returns of their owners. The tax of those entities is not paid at the corporate level, but at the individual level. Therefore, the reduction of individual tax rates in North Carolina will affect the amount of business profits that need to be set aside for income taxes.

     Income that has been taxed at rates of 6%, 7%, and 7.75% will be taxed at a flat 5.8% in 2014 and then to a permanent 5.75% beginning in 2015. The new top rate goes from the highest in the Southeast to the lowest among surrounding states, other than Tennessee, which has no broad individual income tax.

     The corporate tax rate is reduced from 6.9% to an even 6% in 2014, and then to 5% in 2015. The law contains the possibility of further reductions to 4% in 2016 and 3% in 2017 if the state meets revenue growth targets. The corporate franchise tax applicable to C corporations and S corporations was not changed by the new law.

     The research and development credit has been extended for two years through 2015.

     North Carolina continues it’s decoupling from first-year bonus depreciation claimed on the federal return. This difference from the federal law required 85% of the bonus depreciation deduction claimed on the federal return to be added back to the North Carolina return. Amounts that were added back on the North Carolina in those years are deducted ratably over the next five years.

     For 2010 through 2012, while a federal section 179 deduction for fixed asset additions was available up to $500,000, North Carolina limited the deduction to $250,000, with an 85% add back for the excess federal deduction. Like the add back for the bonus depreciation, amounts added back for the section 179 deduction are deducted equally over the next five years.

     In 2013, the federal Section 179 deduction will again be limited to $500,000, but the North Carolina limit is $25,000, with a phase out of the deduction dollar-for-dollar if total fixed asset additions exceed $125,000.

     The active business deduction of up to $50,000 on an individual return available in 2012 and 2013 will no longer be applicable in 2014.

     Retail businesses should also be aware of sales tax changes that will apply beginning January 1, 2014. First, the sales tax holidays for school supplies and Energy Star appliances will no longer be provided. In addition, sales taxes will begin to apply to service contracts that are sold along with their related products.

     The North Carolina estate tax has been eliminated effective January 1, 2013, and the repeal applies to the estates of decedents dying on or after that date. Consequently, business interests owned at death will only have to deal with a potential federal estate tax for the owner.

     Elected officials in North Carolina are trying to help the state economy grow through tax policy. This is one of the most far-reaching pieces of tax legislation that has been passed by the North Carolina legislation in years. What this means to each taxpayer is unique to his or her tax situation. You should contact your tax advisor to help you better understand how this piece of legislation will affect you not only in 2013 but in 2014 and beyond.

The Kaiser Family Foundation has put together a brief history of health care reform efforts in the U.S. that is quite interesting and in large part excerpted here.


     The country has been on the verge of national health reform many times before. In the early 1900s, smaller proposals began to pave the way. In 1912, Roosevelt’s Bull Moose Party campaigned on a platform calling for health insurance for industry; and as early as 1915, Progressive reformers ineffectively campaigned for a state-based system of compulsory health insurance.

     The prominent reformers of the 1920s, the Committee on the Costs of Medical Care, proposed group medicine and voluntary insurance—modest ideas, but enough to raise opposition, and the term “socialized medicine” was born.

     Over the years the American public, as measured in opinion polls as far back as the 1930s, has generally been supportive of the goals of guaranteed access to health care and health insurance for all, as well as a government role in health financing. However, support typically tapered off when reforms were conditioned on individuals needing to contribute more to the costs.

     Historians debate the many reasons national health insurance proposals have failed, including the complexity of the issues, ideological differences, the lobbying strength of special interest groups, a weakened Presidency, and the decentralization of Congressional power. However, major health reforms have been enacted in the latter half of the 1900s that have proven to be broadly popular and effective in improving access to health care for millions through Medicare, Medicaid and the Children’s Health Insurance Program.

     Important lessons can be gleaned from how these major reforms were accomplished. As the nation prepares for the rollout of marketplace exchanges under the Affordable Care Act (ACA), it is helpful to understand the economic and political context in which prior reforms were enacted and the key reasons they fell short of universal coverage.


1934 – 1939: The Depression and the New Deal

     The Great Depression (1929-1939) had been preceded by a period of growing income inequality and a shrinking middle class. The worst years were 1933-34 with unemployment as high as 25 percent. Income disparities in access to health care had grown much worse, medical costs were rising, and sickness became a leading cause of poverty. More physician and hospital care went unpaid and welfare agencies began to help pay for medical costs for the poor.

     The Social Security Act was introduced and passed in both houses with a wide margin in 1935. By 1938, southern Democrats aligned with Republicans to oppose further government expansion, in part to protect segregation, making additional New Deal social reforms nearly impossible to pass.


World War II and After

     During World War II, The War Labor Board ruled in 1943 that certain work benefits, including health insurance coverage, should be excluded from the period’s wage and price controls. Using generous health benefits then to draw workers, employers began to bolster group health insurance plans.

     The economy expanded greatly following WW II, building and responding to the needs of growing families, in an era when American capitalism flourished. Large American businesses (e.g., U.S. Steel, GM, AT&T) faced little competition and were sufficiently profitable that unions could successfully negotiate for greater fringe benefits, including health insurance.


1960 – 1965: The Great Society: Medicare and Medicaid

     Productivity swelled in the 1960s as did the middle class, with a well-educated workforce financed by the G.I. bill and following the peak of labor union membership in the 1950s. President Kennedy sought to accelerate economic growth through increased government spending and decreased taxes. From this base, Johnson followed and began to build his “Great Society.”

     When the House Ways and Means Committee began its work on the Medicare proposal from the White House in 1965, there were two other proposals on the table as well: an expansion of Kerr-Mills (“Eldercare” supported by AMA) and a proposal for federal subsidies to purchase private coverage (“Bettercare” from the insurer Aetna).

     Elements of each were eventually merged into a single bill with three layers: Medicare Part A to pay for hospital care and limited skilled nursing and home health care, optional Medicare Part B (paid in part by premiums) to help pay for physician care, and Medicaid, a totally separate program to assist states in covering not only long-term care for the poor but also to provide health insurance coverage for certain classes of the poor and disabled.

     After Johnson’s landslide election in 1964, he made Medicare his highest legislative priority and acted quickly. Both Medicare and Medicaid were incorporated in the Social Security Act as it was signed by President Johnson in July 1965. The confluence of presidential leadership and urgency, Johnson’s political skills in working with a large Congressional Democratic majority, growing civil rights awareness, public support, and the support of hospitals and the insurance industry contributed to the achievement of the most significant health reform of the century.


1970 – 1992

     In 1971, President Nixon instituted wage and price freezes in an effort to curb inflation. With the implementation of Medicare and Medicaid, health care costs had grown rapidly from 4 percent of the federal budget in 1965 to 11 percent by 1973, while millions of those under age 65 still had no health coverage. An era of health care regulation began, leading to certificate-of-need programs, state hospital rate-setting, requirements on HMOs (in return for support to help them expand) and health planning to control growth.

     In 1974, President Nixon expanded upon his own proposal. His Comprehensive Health Insurance Plan (CHIP) called for universal coverage, voluntary employer participation, and a separate program for the working poor and the unemployed, replacing Medicaid. Requiring employers to contribute 65 percent of the premium cost was controversial, but fundamental to the plan’s financing. This package failed.

    Senator Ted Kennedy proposed that private insurance plans compete for customers who would receive a card to use for hospital and physicians’ care. The cost of the card would vary by income and employers would bear the bulk of the cost for their workers, with the government picking up costs for the poor. Insurers would be paid based on actuarial risk, and payments to providers set through negotiated rates.

     President Carter released his own plan one month after Kennedy’s plan, proposing that businesses provide a minimum package of benefits, public coverage for the poor and aged be expanded, and a new public corporation created to sell coverage to everyone else. Neither the Kennedy nor Carter proposals had much of a chance.

     Debate on hospital cost-containment during this period however laid the foundation for the Medicare Prospective Payment System enacted in 1983 which changed the way the government paid for hospital care in a major way—from a charge-based system to a predetermined, set rate based on the patient’s diagnosis.

     Under the Reagan administration’s policies in the 1980s—that included substantial tax cuts, large increases in defense spending and moderate cuts in domestic programs—federal debt reached record levels. Health care costs continued to escalate rapidly up to and through this period. Even some in the business sector came to accept that fundamental health reform was needed as the health care sector grew to comprise 12 percent of the nation’s GDP in 1990.

     A large and varied mix of proposals surfaced: market-oriented reforms expanding the private system, public single-payer plans, employer mandates (play-or-pay), and from President Bush, health care tax credits and purchasing pools.


The Clinton Years

     Newly elected President Clinton initially hoped to send Congress a health reform plan within one hundred days of taking office. Clinton’s plan, the Health Security Act, called for universal coverage, employer and individual mandates, competition between private insurers, and was to be regulated by government to keep costs down. Under managed competition private insurers and providers would compete for the business of groups of businesses and individuals in what were called “health-purchasing alliances”. Every American would have a “health security card.”

     Support for the complex Clinton plan from key stakeholders was often conditional and eventually waned. Some labor unions and other public health advocacy groups did not want to be seen as opposed to Clinton’s plan, yet backed the single-payer bill.

    In 1997, with a Republican Congress and bipartisan support, the Children’s Health Insurance Program was enacted, building on the Medicaid program to provide health coverage to more low-income children


The 21st Century Begins

     The Medicare Modernization Act (MMA) passes, creating a voluntary, subsidized prescription drug benefit under Medicare, administered exclusively through private plans, both stand-alone prescription drug plans and Medicare Advantage plans.

     Medicare legislation creates Health Savings Accounts which allow individuals to set aside pre-tax dollars to pay for current and future medical expenses. The plans must be used in conjunction with a high deductible health plan.

     Medicare Part D Drug benefit goes into effect in January 2006.

     Massachusetts passes and implements legislation to provide health care coverage to nearly all state residents. Legislation requires residents to obtain health insurance coverage and calls for shared responsibility among individuals, employers, and the government in financing the expanded coverage. Within two years of implementation the state’s uninsured rate is cut in half.

     Census Bureau estimates 45.6 million uninsured (15.3 percent of the population) in 2007.

     Mental Health Parity Act is amended to require full parity. Insurance companies must treat mental health conditions, including substance abuse disorders, on an equal basis with physical conditions when health policies cover both.

     The House of Representatives passes the Senate bill, the Patient Protection and Affordable Care Act (voting 219-212) and sends it to the President for signature. House also passes the Health Care and Education Reconciliation Act of 2010 that amends the Senate bill to reflect House and Senate negotiations and also includes reform of the nation’s student loan system.


March 23, 2010

     President Obama signs the landmark legislation, the Patient Protection and Affordable Care Act, into law. The historic health reform legislation requires that all individuals have health insurance beginning in 2014. The poorest will be covered under a Medicaid expansion. Those with low and middle incomes who do not have access to affordable coverage through their jobs will be able to purchase coverage with federal subsidies through new American Health Benefit Exchanges. Health plans will not be allowed to deny coverage to people for any reason, including their health status, nor can they charge more because of a person’s health or gender. Young adults will now have the option of being covered under their parents’ plan up to age 26.

     It is expected that many more changes will be implemented as voters instruct and the government responds over time.


Source: Kaiser Family Foundation, National Health Insurance—A Brief History of Reform Efforts in the U.S. (March 2009),

Publisher's Posts

     The Affordable Care Act did not just happen because Democrats went into a huddle and delivered a bill to President Obama for his signature.

     This Act is the result of over 50 years of legislative actions, one on top of another, that have brought health care to where it is today. It began when Congress approved legislation during World War II that allowed businesses to provide health care coverage to their employees without taxing those benefits. That was the reward to workers while wages were frozen.

     Following the war, more and more companies competed for workers and provided health care coverage as a benefit for their employees. Out of concern for the elderly and the poor, Congress enacted Medicare and Medicaid in 1965.

     Our population began living longer, longer than anyone expected. Health care improved with new technology and new drugs greatly expanding life expectancy. In the ’60s, people lived on average 68 years; now, people are living on average 79 years.

    With increasing costs of health care for the uninsured, decreased enrollment of healthy individuals, and inadequate funding for Medicare and Medicaid, health care providers have shifted costs to the private sector—primarily employers purchasing coverage for their employees and families, further escalating premiums.

     Since the original debates around “Hillary Care” in the early ’90s, cost-shifting in the health care system has become even more pervasive and complicated, both on the delivery level and the insurer level. Fee-for-service medicine and medical liability have only exacerbated the problem of costs.

     On the purchaser side of the health care transaction, employees have taken huge advantage of their employer-provided and paid-for coverage. Those without coverage have avoided care except to get the most expensive care—ending up the emergency room or needing advanced care well beyond the costs more simple treatments that could have been effective much earlier.

     Health care spending has grown to nearly 20 percent of our Gross Domestic Product (GDP). That is way out of line with most countries which tend to average eight to 10 percent of GDP. We simply cannot afford these expenditures.

     Our Medicare budget is currently at $560 billion and expected to double in the next decade. Nearly 10,000 baby boomers are retiring every day and fall under the Medicare system. The number of workers paying into the Social Security System and to Medicare is declining.

    When the Medicare program was started in 1965, there were 4 workers to every retiree. That ratio has fallen to less than 3 workers per retiree and will decline to two workers to every retiree by 2040.

     The Urban Institute reports that the average couple will receive about $387,000 in Medicare benefits, while only paying into the system about $122,000.

     Demographic shifts and trends produce burdens that are unsustainable. Obvious to those witnessing it firsthand, the ACA was supported by the American Hospital Association, the American Academy of Family Physicians, the Pharmaceutical Association, the American Nurses Association and many, many others.

     The consensus was formed that systemic reform was essential for the future of our health care system; establishing incentives and requirements so that everyone pays into the system and everyone receives coverage—not excessive coverage, but good coverage. Everybody takes part. That is the mandate.

     The irony in our current “debate” (government shutdown, whatever) over Obamacare is that the concept for the ACA originated with The Heritage Foundation, a conservative think tank, and the University of Pennsylvania. For the longest time, it was a Republican plan. In fact, that is where Romney latched onto it as governor of Massachusetts and implemented it there.

    The ACA is being implemented as a both an individual and an employer mandate. It is full of challenges and difficulties. Many of them would be worked out if our two political parties would sit down and work out the changes and corrections that are necessary and helpful.

     Nevertheless, the ACA and these major health care reforms have been in process since 2010. It is really unrealistic to have them “undone.” We have too much at stake.

     What we need is to promote and reward healthy lives, and increase accountability of all parties—providers, insurance companies, drug and medical supply companies, patients, families and communities.

    We need to use our limited health care dollars wisely. Everyone plays an important role in reducing costs and improving care while providing access for all. There are so many pieces to this puzzle, but we have to make progress. We have much work to do.


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