Organizations that experienced a data breach in 2008 paid an average of $6.6 million to rebuild their brand image and retain customers, according to a new study. Ponemon Institute, a research firm, looked at 43 organizations that reported a data breach in 2007 and found that roughly $202 was spent on each consumer record compromised. Following a data breach disclosure, customers who leave one brand for another, known as customer churn, was highest among healthcare and financial services companies, according to the survey.
Some counties and municipalities are holding lotteries where residents who lack health insurance and money to pay for medical care compete for health coverage openings. The lottery is just one example of the fate of the newly uninsured—the growing numbers who once had jobs and insurance and now seek treatment with neither. Neither rich nor poor, this group doesn't readily qualify for public programs such as Medicaid but often can't afford to buy insurance or pay hospital, doctor and drug bills.
Gene Winters has been named the new CFO at Haywood Regional Medical Center. Winters has served as CFO at three national healthcare chains over the past 15 years, including Regency Hospital Co., Acadia Healthcare, and Transitional Hospital Corp. He also helped to develop Summit Medical Management.
David Cecero will leave his position as adviser to the JPS Health Network board on Feb. 1, just days before a vote is taken on his successor as CEO of the taxpayer-supported hospital system. Cecero, 54, announced in April that he was retiring and would become an adviser to the board from October 2008 to July 2009. The board, however, removed him as CEO and named an interim replacement in late May. Cecero continued as an adviser and helped select an executive search firm to find his replacement.
Coventry Health Care Inc. President and CEO Dale Wolf resigned suddenly on Jan. 30 and former CEO and current board Chairman Allen Wise was named as his successor. Coventry Health didn't provide a reason for Wolf's departure. Wise was Coventry's president and CEO from 1996 through 2004 and served as its non-executive chairman from 2004 until Dec. 10, 2008, when he was named executive chairman. The company's shares fell nearly one-third in October after it announced third-quarter profit fell by half and it cut its forecast for 2008 full-year earnings sharply. The shares have not recovered since. Wolf joined Coventry in 1996 as chief financial officer and was promoted to CEO on Jan. 1, 2005.
We've been talking for months and years about a shortage of nurses and other healthcare workers. Well, that may change—at least for the short term. A couple of new reports by Longbow Research in Cleveland indicate that the recession has created a "bunker mentality" among nurses and other healthcare workers. The new data show that—like everyone else—nurses and other healthcare workers are digging in, putting their heads down, and staying put until the storm passes.
Using November figures from the Bureau of Labor Statistics—the latest available—the Longbow report shows that hospital payrolls, hiring, and turnover are all slowing considerably, while hospital employees are working a slightly longer week. Not counting executives and administrators, the hospital industry hired 123,400 "production" workers in the 12 months preceding November, 2008, an average of 10,283 new jobs per month. That represents job growth of 3.1% in a sector that numbers 4.05 million workers.
However, job growth tapered off in November, with only 6,900 new jobs reported for the month. "We are still seeing good growth year-over-year for hospital payrolls, but it does appear that we are seeing some softening in that growth rate," says David Bachman, an analyst with Longbow.
Even with slowing growth, BLS statistics show that the hospital and healthcare sectors are still outperforming the rest of the labor force as measured by jobs created and rising payrolls. Hospital payrolls increased 3% for the 12-month period, as compared with a 1.8% decline for the rest of the non-farm labor payrolls.
In a separate bimonthly survey of 33 nurse-staffing firms in 19 states, Longbow found that 73% of the companies reported year-over-year declines in the demand for temporary nurses, while only 9% reported an increase in demand. More than half of the survey staffing companies had an increased supply in nurses and therapists, while demand for allied staff is flat. Texas appears to be the only area where temp demand remains high.
"When we look at temporary staffing, that industry's business is falling off the charts," Bachman says. "Hospital nurses working in this economic environment are often the second wage-earner in the family, and they're not leaving. Right now, they're thinking 'we really need that extra income so we are going to wait this out.'"
In addition, hospitals are seeing reduced patient volumes, which reduces staffing demands. Declining patient volumes has particularly impacted hospitals in winter havens like Arizona and Florida. "We're hearing, at least anecdotally, that hospitals are seeing fewer of those season's residents because people aren't traveling," Bachman says.
Here's an oddity: Historically, hospital payrolls are counter-cyclical with the non-farm labor market. During tough economic times, hospital payrolls grow while the non-farm labor payroll shrinks. During prosperous times, hospital payrolls drop while the non-labor payroll grows. "No one has given me a crisp explanation," Bachman says. "It might be that healthcare is seen as a safe haven and a service that will always be needed. When other jobs go away people turn to healthcare jobs, which I guess makes some intuitive sense."
"Go back and look at '98 and '99 before the tech bubble burst and everybody was feeling like their stock portfolios were doing great. We saw the rate of nurses quitting the business rise pretty substantially," Bachman says.
It seems like the only winner in this dire portrait of economic gloom and misery are the chipper folks in the human resources department. "For HR, this is all a benefit," Bachman says. "Turnover is a costly for hospitals. To the extent that they are holding on to trained, experienced staff and not having to replace them, that's a positive. Reduced turnover means they've also got less money going out the door for temporary workers, so that should give them some relief on the payroll front."
I finally figured out what HR stands for: Happy Recession!
John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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