Managing that money is more profitable than offering health insurance.

As if they weren’t screwing us enough already… WellPoint Inc., the nation’s largest health insurance company, ran into a snag last year while pursuing an important new business initiative.  Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank. The Federal Reserve Board eventually agreed that the company’s core insurance business could be considered financial services. WellPoint finally convinced the Fed that its mail-order pharmacy and its program for managing chronic diseases were merely “complementary” to its main business — financial services. It pledged to limit them to less than 5% of total revenue.

Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers — providers of financial vehicles through which consumers pay for their own healthcare. Like home and auto insurance, traditional health coverage is based on shared risks within broad populations of customers: a small proportion with big medical expenses and a large majority with few or none. Premiums paid by the latter help pay the costs incurred by the others and provide a margin of profit. In theory, this system serves everyone’s interests, because people generally can’t know in advance which group they’ll fall into.

Insurance companies began remaking themselves as administrators, providing employers with expert help in processing claims and negotiating rates with doctor groups and hospitals. Profit margins on these services are high because the companies can charge fees without assuming the cost of underwriting customers’ medical needs.

Among the signs of the change is the growth in health savings accounts, which allow individuals and families to pay out-of-pocket medical expenses from tax-exempt savings. As with individual retirement accounts and 401(k) plans, the money in HSAs tends to sit for long periods and can be invested in mutual funds and securities.

“There’s fees for managing the account, transaction fees, fees for investing the funds,” says John Casillas, director of the Medical Banking Project. “You’re going to see many billions of dollars moving from premium payments to professionally managed investment funds under HSA rules. Some people think that banks are going to threaten health plans by replacing them in the marketplace.”

Hence the rush by medical insurers to open their own banks. To help foster this change, the insurance industry developed a new form of health plan carrying a low premium and a deductible (the amount a customer must pay out of pocket each year before the insurance kicks in) of $5,000 or more.

Under the rules, contributions to HSAs are tax-exempt, as are their investment gains. Withdrawals are also tax-exempt if they are used for qualified medical expenses. Over time, HSA balances could grow to hundreds of thousands of dollars.

Across the country, authorities are becoming concerned that the nation’s financial woes could turn increasingly violent, and they are urging people to get help. In some places, mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full.

With nowhere else to turn, many people are calling suicide-prevention hot lines. The Samaritans of New York have seen calls rise more than 16% in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year.

“The financial stress builds up to the point the person feels they can’t go on, and the person believes their family is better off dead than left without a financial support,” said Kristen Rand, legislative director of the Washington D.C.-based Violence Policy Center.

Rising mortgage defaults and falling home values are at the heart of it. More than 4 million Americans were at least one month behind on their mortgages at the end of June, according to the Mortgage Bankers Association. A record 500,000 had entered the foreclosure process. And that trend is expected to continue through next year, despite the current programs from the government and the lending industry to refinance delinquent homeowners into more affordable loans.

Adding to financially tense households is an air of secrecy. Experts said it’s common for one spouse to blame the other for their financial mess or to hide it entirely. Suicide is never the answer.

Costs are rising, profits are shrinking and the ability of the big guys to keep prices relatively lower is drawing away customers. Things are so bad that many small enterprises, which account for about 99% of the country’s businesses, say they are hanging by a thread that may soon snap.

In barely a year, the cost of pork has jumped by 50 cents a pound, while beef is up 20 percent; a five-gallon jug of canola oil that used to cost $15 is at $40; a 50-pound bag of flour jumped from $7 to between $20 and $25. And then there are fuel surcharges of between $5 and $9 that have been added to nearly all deliveries during the past six months. As gas and food prices climb, consumers are bypassing small businesses and seeking out bargains in places like Costco Wholesale Corp., which reported a 32% jump in its fiscal third-quarter profit, surpassing Wall Street expectations.

In the meantime, wages haven’t grown and the job market is tepid, at best. On Friday, the Labor Department said the nation’s unemployment rate jumped to 5.5% in May — the biggest monthly rise since 1986.  While no data is available on how many small businesses have gone under in the past six months, federal officials are reporting a decline in the number of loans they guarantee.

Time To Suck It Up And Change You Ways As Companies Begin Firing Middle Management  

With so many companies cutting their rank and file workforces to the bone because of the tough economy, it seemed inevitable that some firms would eventually get to the fatty middle — middle management that is. They get paid more than the rank and file, but they’re not at the top of the corporate food chain. These factors create a precarious situation for middle managers, and things could get worse if the recession drags on.

So, now is a good time for supervisors with one underling, or one thousand, to start making themselves indispensable to those folks in the corner offices. But how do you do that? Author Janet Banks provides her observations of middle management layoffs and why some supervisors were able to survive.

Here’s what she had to say:  “I had to go through seven rounds of cuts at one company and I had to make the final decisions on who stayed and who would go. What I learned is that you can’t control what people are going to do but you can control how you’re going to be perceived. The ability to have a positive attitude is critical as opposed to a person that’s so fearful that they take everyone in the downward spiral with them. You’re in good shape if you can project positive energy, and look at what is most relevant in terms of the work at hand.”

One of the key characteristics of a manager that tended not to get cut was that they remained upbeat and never acted like it was the end of the world. Another big plus is being flexible, she stresses. During a downturn in the business cycle, priorities of a business can change dramatically. That means you have to be ready to shift gears and look beyond the goals you set during up times.

There’s also a lot to be said about humor and making yourself lovable. It’s all about having the right people on your side during the downsizing war. If you only concentrate on protecting your job, you’ll be out of touch with what’s happening around you. People want flexibility and a positive attitude during layoffs. It’s what this crazy world demands.

Will China overtake the United States as the world’s biggest economy? It almost certainly will.

China’s economy is now only a fourth the size of the $14 trillion U.S. economy, but given plausible growth rates in both countries, China’s output will exceed America’s in the 2020s, Goldman Sachs forecasts.

By itself, a richer China does not make America poorer. Indeed, because there are so many more Chinese than Americans, average Chinese living standards may lag behind ours indefinitely. By Goldman’s projections, average American incomes will still be twice Chinese incomes in 2050.

The real threat from China lies elsewhere. It is that China will destabilize the world economy. It will distort trade, foster huge financial imbalances and trigger a contentious competition for scarce raw materials. Symptoms of instability have already surfaced, and if they grow worse, everyone—including the Chinese—may suffer.

China strives to lock up supplies of essential raw materials: oil, natural gas, copper. If other countries suffer, so what? Both the United States and China are self-interested. But the United States has seen a prosperous global economy as a means to expanding its power, while China sees the global economy—guaranteed markets for its exports and raw materials—as the means to promoting domestic stability.

China’s economic nationalism may weaken the world economy—but if we retaliate by becoming more nationalistic ourselves, we may do the same. Globalization means interdependence; major nations ignore that at their peril.

Frozen yogurt, trendy during the 1980s and early ’90s, has made a comeback — but this time with an edge. Companies selling the soft stuff are opening stores with hip decor and pulsating music that draw a young crowd. Consumers in the LA area can now choose from chains like Snowberry, Roseberry, Berri Good, Kiwiberri, Yogurtland, Yogurberry and IceBerry.

Pinkberry now operates 59 locations in California and New York, and plans to have 75 open by the end of 2008. Red Mango operates 30 shops in seven states, with plans to open dozens more in the coming year. Leonardo DiCaprio has a Red Mango yogurt machine in his office. Paris Hilton and Lindsay Lohan have been photographed clutching Pinkberry yogurt cups while ducking the paparazzi.

Some believe the new kind of frozen yogurt, because of its tartness, might have a hard time catching on with Americans who prefer very sweet desserts. Pinkberry, Red Mango and others make their products using active cultures, which increases the healthy attributes of yogurt but also increases its tartness.

Women’s portability comes from two sources: a greater emphasis on external relationships, and conducting better research about a company before joining it.

HBS professor Boris Groysberg started to notice something quite different about the career paths of successful analysts who were female. Star women, he found, maintained their shine even after switching companies. Unlike their male peers, they thrived in new work environments.

Why the difference? Female star analysts, it would seem, take their work environment more seriously yet rely on it less than male stars do. They look for a firm that will allow them to keep building their successful franchises their own way.

Women tend to do better after a move for two reasons. One is that they are more invested in external than in in-house relationships. There are four main reasons why star women maintain external focus: uneasy in-house relationships, poor mentorship, neglect by colleagues, and a vulnerable position in the labor market.

The other reason is that women do far more due diligence when they receive a job offer than men do, because women need to ensure that the company is good for women and that they won’t be treated as token females. In the process of due diligence, star women learn a lot of valuable information about the company that helps them make good strategic decisions. They scrutinize prospective employers on receptivity to women, managerial support, latitude and flexibility, and performance measurement.

A company that is willing to double your current salary, but will not invest in your long-term success, is not a good choice. Investigate a firm’s management, its culture, its resources, the commitment it is willing to make to you. Women in a male-dominated industry realize that they are vulnerable, but men are vulnerable to bad management and cultural mismatches more than they realize.

Human affairs require adaptation and the avoidance of the repetition compulsion.

Leaders have to achieve psychological independence to enable them to apply their talents to the work at hand. This independence frees the leader to expand on his or her talents and thereby become an object to allow subordinates to identify with and to cultivate and apply their own talents in the interests of meeting and even expanding on objectives.

Through years of research work, writing, and reading it became even clearer to HBS professor emeritus Abraham Zaleznik that he was on the edge of understanding and adopting two principles: Leaders need a healthy dose of narcissism to lead, and they also need a healthy dose of paranoia to avoid the trap of group dependency.

An individual’s character is outwardly represented while it is a product of development starting with early childhood. Even when leaders try to hide and disguise their character, their traits are recognizable to others.

Character is on display as leaders structure their organizations and go about making decisions. Some prefer to be intimately involved in the decision process. Others prefer to delegate early on and to remain at a distance from the give-and-take of reaching conclusions.

Zaleznik’s latest book, Hedgehogs and Foxes: Character, Leadership, and Command in Organizations is titled from the notion of the ancient Greek philosophers that hedgehogs know one big thing while foxes know many things. Applied to leadership, hedgehogs reduce reality to one single principle, while foxes know many things and are prepared to adapt to a complex view of the world.

Managers are oriented to process, while leaders are attuned to substance. Process is concerned with establishing procedures for solving problems, while substance deals directly with the problems at hand. Process is soon related to obsessive thinking and depressive emotional states, while substance energizes and draws on imaginative thinking. Managers tend instinctively to delegate; leaders like to get involved in working toward solutions to substantive problems.

Mirror-Hires Lead to Corporate “In-Breeding”

When you recruit and hire new employees, do you often find that you’re searching for people just like you? If you do hire employees this way, then rest assured that you’re not alone.  At the same time, however, you’re also just like many bosses who are selling themselves and their companies short. 

There are several very positive reasons to hire “clones.” Clearly, you know what you want in a good recruit. You know what works in your company in terms of knowledge, skills, attitudes, outlooks and behaviors. In brief, you know what leads to top-notch performance and victory.  Therefore, it’s easy to believe, if you take that philosophy one step further, that the more candidates you hire with your specific set of skills, the more successful you and your company will be.

On the other hand, by hiring a clone, you may be missing out on a number of opportunities that may prove difficult and problematic. That’s because for the sake of conformity, you might be rejecting people with skills both complementary and supplemental to your company that would permit its culture to grow and expand with outcomes that could create a more productive, innovative, challenging and rewarding environment.

The inevitable result is that the new hires look like, think like and act like you, the boss. This “group think” situation results in employees not challenging each other, not asking enough “why” questions, settling for agreement where disagreement would conceivably produce more options, perspectives, opinions and viewpoints. 

Consider being open to diversity, not just in terms of race, gender or sexual orientation, but also in terms of skills, attitudes, interests, backgrounds and experiences. The key words here are “collaboration” and “innovation.”

You must realize that if you aren’t managing your own professional image, someone else is. 

The definition of Professional Image is a set of qualities and characteristics that represent perceptions of your competence and character as judged by your key constituents. Most people want to be described as technically competent, socially skilled, of strong character and integrity, and committed to your work, your team, and your company. Research shows that the most favorably regarded traits are trustworthiness, caring, humility, and capability.

“People are constantly observing your behavior and forming theories about your competence, character, and commitment, which are rapidly disseminated throughout your workplace,” says HBS professor Laura Morgan Roberts. “It is only wise to add your voice in framing others’ theories about who you are and what you can accomplish.” Keeping on top of your personal traits is only part of the story of managing your professional image. You also belong to a social identity group—African American male, working mother—that brings its own stereotyping from the people you work with, especially in today’s diverse workplaces.

For example, African American men are stereotyped as being less intelligent and more likely to engage in criminal behavior than Caucasian men. Asian Americans are stereotyped as technically competent, but lacking in the social skills required to lead effectively. Working mothers are stereotyped as being less committed to their profession and less loyal to their employing organizations. All of these stereotypes pose obstacles for creating a positive professional image.

Despite the added complexity of managing stereotypes while also demonstrating competence, character, and commitment, there is promising news for creating your professional image! Impression management strategies enable you to explain predicaments, counter devaluation, and demonstrate legitimacy. People manage impressions through their non-verbal behavior (appearance, demeanor), verbal cues (vocal pitch, tone, and rate of speech, grammar and diction, disclosures), and demonstrative acts (citizenship, job performance).

In order to create a positive professional image, impression management must effectively accomplish two tasks: build credibility and maintain authenticity. When you present yourself in an inauthentic and non-credible manner, you are likely to undermine your health, relationships, and performance. Building credibility can involve being who others want you to be, gaining social approval and professional benefits. If you suppress or contradict your personal values for the sake of meeting societal expectations for professionalism, you might receive certain professional benefits, but you might compromise other psychological, relational, and organizational outcomes.

People are overpaid because there are certain things consumers just don’t want screwed up.

Almost no one in America would admit to being overpaid, but many of us take home bloated paychecks far beyond what we deserve. Below is a list of the 10 most overpaid jobs in the U.S., in reverse order, drafted with input from compensation experts:

10.) Wedding photographers: Photographers earn a national average of $1,900 for a wedding, though many charge $2,500 to $5,000 for a one-day shoot. The overpaid ones are the many who admit they only do weddings for the income, while quietly complaining about the hassle of dealing with hysterical brides and drunken reception guests.

9.) Major airline pilots: While American and United pilots recently took pay cuts, senior captains earn as much as $250,000 a year at Delta, and their counterparts at other major airlines still earn about $150,000 to $215,000. The pilot’s unions are the most powerful in the industry. They demand premium pay as if still in the glory days of long-gone Pan Am and TWA, rather than the cutthroat, deregulated market of under-$200 coast-to-coast roundtrips.

8.) West Coast longshoremen: In early 2002, West Coast ports shut down as the longshoremen’s union fought to preserve generous health-care benefits that would make most Americans drool. Next year, West Coast dockworkers will earn an average of $112,000 for handling cargo. Office clerks who log shipping records into computers will earn $136,000. And unionized foremen who oversee the rank-and-file will pull down an average $177,000.

7.) Skycaps at major airports: Many of the uniformed baggage handlers who check in luggage at curbside at the busiest metro airports pull in $70,000 to $100,000 a year. On top of their salaries, peak earners can take in $300 or more a day in tips. That amounts to a $2 tip from 18 travelers an hour on average. Many tip more than that.

6.) Real estate agents selling high-end homes:  Anyone who puts in a little effort can pass the test to get a real estate agent’s license, which makes the vast sums that luxury-home agents earn stupefying. While most agents hustle tail to earn $60,000 a year, those in affluent areas can pull down $200,000-plus for half the effort.

5.) Motivational speakers and ex-politicians on the lecture circuit:  Corporate trade groups pay astronomical sums to celebrity-types and political has-beens to address their convention audiences. The national convention circuit’s shame is that it blows trade-group members’ money on orators whose speeches often have been warmed over a dozen times.

 4.) Orthodontists:  For a 35-hour workweek, orthodontists earn a median $350,000 a year. General dentists, meanwhile, earn about half as much working 39 hours a week on average, in a much dirtier job. The difference in their training isn’t like that of a heart surgeon vs. a family-practice doctor. It’s a mere two years. U.S. dental schools have long been criticized for keeping orthodontists in artificially low supply to keep their income up.

3.) CEOs of poorly performing companies:  CEOs at chronically unprofitable companies and those forever lagging industry peers stand as the most grossly overpaid. Most know they should resign — in shareholders’ and employees’ interest — but they survive because corporate boards that oversee them remain stacked with friends and family members. The ultimate excess comes after they’re finally forced out, usually by insiders tired of seeing their own stock holdings plummet.

2.) Washed-up pro athletes in long-term contracts:  Those who sign whopping, long-term contracts after a few strong years, and then find their talents vanish, who reap unconscionable sums of money. They point to owners as the culprits, yet golf star Tiger Woods and tennis champ Serena Williams earn their keep based on their performance in each tournament.

1.) Mutual-fund managers:  They’ve been long overpaid. Stock-fund managers can easily earn $500,000 to $1 million a year including bonuses.  Now we discover an untold number enriched themselves and favored clients with illegally timed trades of fund shares. That’s a worse betrayal of trust than the corporate scandals of recent years, since they’re supposed to be on the little person’s side.

Gaming manager is one of America’s surprising six-figure jobs, as compiled by Forbes.com based on the latest U.S. Bureau of Labor Statistics salary data.

Flight attendants: The top 10% of flight attendants earn $102,660 a year. Florida is the top-paying state for this occupation.

Farm, ranch and other agricultural managers:  The top 10% earn $103,660 a year. Florida is the top-paying state for this occupation.

Sales representatives, wholesale and manufacturing, except technical and scientific products: The top 10% earn $103,910 a year. New Jersey is the top-paying state for this occupation.

Network systems and data communications analysts:  The top 10% earn $105,980 a year. New Jersey is the top-paying state for this occupation.

Loan officers:  The top 10% earn $106,130. The median annual salary is $53,000. Alaska is the top-paying state for this occupation.

Gaming managers: The top 10% earn $106,220 a year. Nevada is the top-paying state for this occupation. Duh!

Real estate sales agents: The top 10% earn $106,790 a year. The top-paying state for this occupation is Hawaii.

Database administrator:  The top 10% earn $106,860 a year. Maryland is the top-paying state for this occupation.

Insurance sales agents: The top 10% earn $113,190 a year. New Jersey is the top-paying state for this occupation.

Market research analysts:  The top 10% earn $113,390 a year. Washington is the top-paying state for this occupation.

Teaching (post-secondary):  These teachers earn an annual salary in the range of $41,650 and $135,380.

The Bush administration, in an aggressive new effort to keep illegal immigrants out of the workforce, ordered all companies doing business with the federal government to begin ensuring their employees can legally work in the U.S. Thousands of firms will use a government system called E-Verify to check workers’ Social Security numbers.

The policy, which initially applies to new hires, eventually could affect millions of federal contract workers nationwide whose jobs range from serving cafeteria food to launching NASA spacecraft. The step is one of several the administration planned after Congress failed last year to pass an overhaul of immigration laws. E-Verify cleared 99.5% of qualified employees automatically. Firms doing business with the government risk losing their contracts if they break federal rules.

A handful of women have achieved C.F.O. status at major Wall Street firms. Yet none of them have moved to the top job at their firm or even to an obvious precursor position.

Lehman Brothers’ pugnacious C.E.O., Richard Fuld, chief operating officer, Joseph Gregory, and the company’s co-chief administrative officers, Scott Freidheim and Ian Lowitt are all men who oversee the army of traders and bankers who make up the capitalist heart of the company. This is not a place where you see many women, unless they’re part of the secretarial pool.

To visit the floor is to realize how remarkable the presence of Erin Callan is. Ensconced in the office next to Gregory’s, seated before twin blinking flat screens, Lehman’s new chief financial officer is the first woman ever to serve on the firm’s 15-member executive committee. A former tax attorney who started at Lehman in the fixed-income department and then rose to advise hedge fund kings like Ken Griffin and Steve Cohen, Callan led some of the most important initial public offerings in the financial world in recent years.

Yet the C.F.O.’s office may be as far as Callan gets. She begins her new job just as women’s advances in corporate America and banking in particular have entered a surprising state of limbo. No woman has ever been named the C.E.O. of a Wall Street firm, and the prospects of it ever happening seem even more remote now than they did a year or two ago.

Court Lenient Towards Expired Visas

The Supreme Court made it easier today for some foreigners who overstay their visas to seek to remain in the United States legally. The court ruled 5-4 Monday that someone who is here illegally may withdraw his voluntarily agreement to depart and continue to try to get approval to remain in the United States.