Health Care Bills: From Employer to Employee?

Pharma & the Net

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Published in U.S. 1 Newspaper on June 21, 2000. All rights


Commercial Real Estate Stragglers


If the commercial real estate industry has been slow

to make the transition to the Internet, it’s for a good reason.


didn’t need it," says James Young, president of the Jameson

Group, a real estate technology services firm. "They were making

more than enough money without it, and to some extent the secret of

success in real estate is to have information that others didn’t —

to hide it. That’s a little at odds with the openness of the


Consequently, the way commercial real estate companies bring value

to their customers is going to change dramatically once information

technology is introduced — as it will and must be — to the

industry, says Young. "There’s a great parallel with the financial

services market," he says. "Their value will be negotiation,

data analysis, trend analysis, and really helping people strategize

as opposed to just helping people do the transaction."

Young will speak on "The Impact of Technology on Real Estate"

at the National Association of Industrial and Office Properties


on Thursday, June 29, at the Hyatt Regency in New Brunswick at 5:30

p.m. Princeton-based is sponsoring the meeting. Call


Cost: $75.

Young’s San Diego-based firm ( is devoted to transitioning

the real estate organization of the past century into the new digital

structure. "The way you design, buy, sell, build, and manage real

estate is a paper-intensive process, so everyone sees this new

technology as a great way to streamline the way companies do

business," he says. Soon people will sign their leases, keep track

of tenants, and handle procurement completely online, "right down

to how they change lightbulbs," says Young. "Instead of

calling someone you just jump to the Web and the guy

shows up."

Young, a graduate of SUNY Buffalo, Class of 1980, holds a degree in

political science, but moved into computers and helped automate


Fortune 500 companies after school. He started automating the


real estate industry seven years ago, when he became a broker.

The greatest challenge is getting the old economy companies to look

at the new economy, and the new economy companies to accept that the

traditional companies have a lot to offer, says Young. "It’s a

lot like talking to farmers plowing the field with horse and spade

about tractors," he says. "They’re too busy digging holes

with a shovel to learn about the tractor."

Companies that take five minutes to analyze the new tools, says Young,

will see how their commercial real estate practices can go through

the roof.

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Health Care Bills: From Employer to Employee?

If the government has its way, the United States will

have the best health care coverage that no one can afford, says Paul

Langevin of the New Jersey Association of Health Plans


an organization that represents the nine largest health insurers in

the state. "We have many mandates that are driving up the


he says. "We cannot just offer an HMO product, we have to offer

a point-of-service product, set up claims payment system, make


for out of network benefits, et cetera. It’s kind of like saying


in New Jersey who wants to drive a car has to drive a car with


transmission, power windows, and so on, which is great for people

driving cars because they’ll have luxury standards, but they’ll be

a lot less people driving them."

There could be fewer people with health insurance in the future too,

says Langevin, who speaks on Tuesday, June 27, at 8 a.m. at the


Chamber meeting, "Health Care and Your Business: What is Happening

to the Cost in New Jersey," at the DeVry Institute. Also speaking:

State senator Jack Sinagra, Harvey Holzberg, CEO of Robert

Wood Johnson University Hospital, and Melanie Willoughby, executive

director of the New Jersey Retail Merchants Association. Call


Cost: $15.

As a result of government regulations, an aging population,


increases in pharmaceutical costs, and the consolidation of the health

plan market, health care costs are approaching double-digit inflation

rates, says Langevin. "There has been less artificial suppression

of premiums in order to gain marketshare, so now premiums actually

reflect what it costs to cover the real medical costs," says


who spent 21 years working for the State Health Department before

joining the NJAHP in 1995. He has a BS in environmental science from

Rutgers, Class of 1975, and a masters in public administration from


The New Jersey Association of Health Plans is an advocate and lobbyist

for Aetna U.S. Healthcare, Americaid, Amerihealth, Cigna, Horizon

BlueCross/Blue Shield, Americhoice (formerly Managed Health Care


Oxford Health Plans, Physicians Health Services, and United


"There seems to be a movement in legislative circles to eliminated

closed-panel HMOs," says Langevin, "and what they’re trying

to do is make the HMO panel look like indemnity insurance used to

look, where there were no questions asked and usual and customary

charges were paid." The healthcare customers would simply receive

service, pay the bill, and then send the claim to the insurance


and they pay back the customer directly.

Under the current system, where employers pay premiums, however, the

real cost of health care is hidden from the consumer. "The whole

idea was to have a market that was responsive to market demand,"

says Langevin. As people grew frustrated with the limited network

offered by HMOs, and moved to an open network health insurance plan,

costs have been driven up to the point that even the health insurance

companies aren’t making a significant profit, says Langevin.

"There’s some sense that the insurance industry is making so much

money that you can continually add requirements to the insurance


and that it can be absorbed without any effect," he says, "and

that’s absolutely not so. We probably sell about $4.5 billion in


per year, and in 1998 we lost money on that."

Employers have been absorbing most of those healthcare costs as a

way to attract employees in a tight job market, but if the economy

takes a bad turn, says Langevin, the costs will eventually be passed

on to the consumer. "The economy is moving at a fever pitch now

and we’ve all become pretty comfortable, but we could be in for a

very rude awakening," he says. "If the economy turns and


goes up, employers will feel less inclined to provide health coverage

and health costs will be passed on to employees, or employers will

drop it altogether."

If employers drop health insurance, fewer people will be paying for

the coverage of all. One of the options currently being discussed

by businesses and healthcare providers is moving from a defined


(employer-funded) health plan to a defined contributions


health plan, says Langevin. In a defined contribution system, an


gives employees an allotted amount of cash to shop around for their

own health insurance.

If that happens, says Langevin, individuals — especially young

healthy individuals — may choose to opt out and not buy health

insurance at all. "A 25-year-old male who is single does not


to become ill and doesn’t require routine physical checkups may decide

that $5,000 is better spent on a car," says Langevin. "They

get out of the insurance pool altogether, which means the people left

in the pool will have to pay for their own health insurance. Prices

will go up dramatically."

Top Of Page
Pharma & the Net

Running on steam generated by the school’s new MBA


in pharmaceutical management, Rutgers Graduate School of Management

hosts a conference on "How Pharmaceutical Companies are Using

the Internet," on Tuesday, June 27, at 8:30 a.m. at Rutgers’


Auditorium in Newark.

Bill Tremayne, president of the Healthcare Institute of New

Jersey, and Howard Tuckman, dean of the graduate school, will

give the opening remarks. The keynote speaker is Joel Lewis,

district manager for Internet services for AT&T, who discusses the

current trajectory of the Internet. There will also be a panel


on Web-based initiatives already in place in the state’s


companies, and how physicians, healthcare providers, and customers

will soon be using the Internet commonly for health care needs.

Call 973-353-5177 for reservations.

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