Although the response to our Delta Airlines article last month was overwhelmingly favorable, one reader wanted to know what in the world the article had to do with executive search. The answer I wrote back to him is that executive compensation has a great deal to do with executive search...as do many other issues.

As executive search consultants, it is our job to understand the major issues that face the Boards and CEO's of America and to draw on that understanding while identifying and recruiting the kinds of players who are capable of addressing them. We must also assess their ability to address these sensitive issues while doing so in a manner that meshes well with the corporate culture and style of the enterprise.

This month, we are delving into another nasty issue; one that is on almost everyone's mind these days...the relentless upward spiral of health care costs in this country.

In 2002, the world's largest automaker, General Motors, shelled out $4.5 Billion on health care for its workers--more than it spent on steel (Reuters, February 7, 2003)

General Electric, which says its health care costs rose 45 % from 1999 to 2002, faced a wave of strikes in January from workers protesting over increased co-payments. (from same article)

Health Care costs jumped 13% during 2002, according to consultants Towers Perrin, and are set to rise another 15 percent this year...wrapping up four years of double digit increases during a period when general inflation has been below 2%.

The annual cost of health care in a medium-sized company of 1,000 employees, is approaching $6 Million...that works out to $16,500 a day...365 days a year...and it will soon be $25,000 a day.

One would think that with all that money being spent that we must be one of the healthiest nations on earth. Not So! According to the World Health Organization, in 2000, the USA spent more than any other nation on health care, yet ranked 37th in overall health quality. Meanwhile, Oman (a small third world country) spending less than 1/10 the amount spent here per person, ranked #8 in the world in overall health quality.

We have a serious problem in this country. According to the Medicare Board of Trustees, Medicare spending will double over the next ten years and will exceed Social Security Costs. They also project that by 2030, seventy-five percent of the entire Federal Budget will be allocated to Medicare, Medicaid and Social Security with projected benefits exceeding scheduled income by $465 trillion over the next 75 years.

While the above financial picture is moving us rapidly toward a catastrophic disaster, the underlying problem remains very simple...the steadily declining health of the American people. We are spending more than any other nation, but all of that money is not getting the job done. The simple fact is that none of the players in our extended healthcare delivery system have any financial incentive whatsoever for people to become healthy. Imagine the mayhem that would ensue if suddenly everyone in America became vibrantly healthy. About 15% of our entire economy would be in serious financial trouble. The only financial beneficiaries of such a miracle would be the shareholders of the corporations who are footing the lion's share of the bill for feeding this monster.

So, it is the corporations of America that must take the initiative to get the ball rolling in the right direction...to take steps to reverse the disastrous trend of declining health that we face today. Our only chance is for the nation's CEO's and the Boards of Directors to take decisive action to address this problem now.

As a process improvement specialist for much of my career, I believe that there is a possible solution to the above problem. Since November, I have read some forty books on the topic of health improvement. Coupling that new knowledge with my extensive background in process improvement, this whole mess is beginning to look like a problem that can be solved...but not without a tremendous amount of work and commitment on the part of corporations who choose to take on the challenge. And I am not talking about the standard wellness initiatives that have not had much of an impact in recent years...I am talking about a whole new approach that I would be happy to share with any corporate executive who is interested in hearing about it.

Here's hoping that you enjoy the most beautiful month of the year...at least it is in Atlanta; for it is that special month of unadulterated bliss sandwiched right in between pollen season and the arrival of mosquitoes in Georgia. STAY WELL!

Jim Hicks specializes in delivering value well beyond executive search. Following a 27-year career equally split between line management and consulting, he founded The Ansley Consulting Group in June of 1999. Throughout his career, he has consistently and effectively applied the principles of Continuous Process Improvement (CPI). Jim's former roles include COO of Nautica, EVP of Polo, Principal at Kurt Salmon Associates, and implementer of The Deming Method while working with Bill Conway of Conway Management. A former officer in the U.S. Coast Guard, he holds an Industrial Engineering degree from Auburn University and an MBA from The University of Hawaii.