Welcome Baywalk readers to the September edition of Creating Success Viewpoint on Baywalk.com. In this issue I finally take the time to talk about a subject near and dear to my heart -- health care. I hope you enjoy: "Trick or Treat?"

Greetings. No, this is not my Halloween article, but for many of you it may be very scary nonetheless. I wanted to take some time to discuss how companies approach the issue of purchasing health care coverage for their employees. January is the month with the largest volume of health care coverage changes, so I thought this would be a good time to challenge each of you regarding your decision for health care coverage in the year 2000.

The focus of this article is the company process or lack of process surrounding this large budgetary expense. Yes. Large budgetary expense. A few years ago, when the Clinton administration was highlighting health care issues, studies showed that most companies were spending 10% to 15% of annual revenue on health care benefits for their employees. Surprised? You shouldn't be. But if you are, you are definitely not alone.

Most companies treat the task of purchasing health care benefits (or if self funded, a similar process) as if they are being ask to deal with the plague. It is a hot potato of responsibility that no one wants to accept. Why? Because it is not sexy. It does not have the same excitement as creating a new product. Making a big sale. Acquiring another company. Buying a new computer system. It isn't even as much fun as dealing with who will be in the dunking machine at the company picnic.

Who generally is stuck with the task of dealing with this issue? -- usually human resources. If not human resources, then finance. Ever wonder why these departments "get stuck" with health care coverage? Certainly neither department, generally speaking, has any knowledge, training, or expertise when it comes to evaluating health care companies or their products. In most cases they rely on the services of an insurance agent/broker to help them make their choice; and the agent/broker is motivated by commission.

Let me come at this from another perspective. If you are a manufacturing company and utilize a specific type of steel that must have a certain tensile strength, you normally will spot-test the product you are buying from your vendor to ensure you are receiving the quality of product that you agreed to purchase. Did you ever think about checking the quality of health care coverage you are buying? Did you ever ask to see your claims history to evaluate the necessity of the premium increase your insurance company has demanded for the next benefit year?

If you answered "no," feel good that you are not in the minority on this question. The unfortunate truth is that only a very small percentage of companies make any effort to effectively review the quality and financial aspect of their health care coverage. Feel better? You shouldn't. As a leader of your company, you have a fiduciary responsibility to manage the company's revenue wisely. I am willing to bet there is not an exemption under the topic of fiduciary responsibility concerning health care expenses.

Hold on. Am I whining about something that is not really financially material in the bigger scheme of things? That is a question that each one of you must answer. But I ask you to consider this:

If you are a $100 million dollar company, 10% of annual revenue for health care benefits would be $10 million dollars. I consider that a material amount of company funds.

So feel empowered to make a difference for your company. Don't play trick or treat with your health care benefits, only to race home to discover that you got yucky candy/benefits.

For 10 to 15% of your annual revenue, make the effort to buy quality. After all, if you are going to spend the money, why not get the best product money can buy? -- See you next month!