Wednesday, June 8, 2011

Health Care and Education 1

Important QOL Factors, But Who's Accurately Measuring Them?

Corporate real estate executives readily agree that health care and education are important quality-of-life factors in location decisions. But few say their firms can accurately measure their impact.
Consider this conundrum in looking at how health-care costs are impacting corporate location decisions. On the one hand, Ford Motor Co. executives have reported that they are spending the equivalent of $311 a vehicle for health care for the company’s American employees. In its Canadian facilities, though, Ford has found that it is spending some !six! times less. On the other hand, here’s a comment from a recent Site Selection survey of corporate real estate executives on quality- of-life (QOL) issues: "We rarely -- in fact, never -- have considered health-care costs as a factor in site selection."

That comment was typical of the SS corporate-side survey response: Only 13 percent of corporate real estate executives said their companies are "able to accurately measure health- care costs when considering various locations for a facility."
That low percentage of companies saying they can gauge health-care costs for potential locations is somewhat surprising in light of the fact that larger and larger amounts of corporate funds are being sucked into the black hole that health care has become in the corporate world. In the U.S., for example, health- care costs are expected to break the $2 billion-a-day barrier before year’s end.

Moreover, several of the corporate real estate executives who say their companies can accurately measure and compare health-care costs among potential locations say that the information necessary to fashion those cost comparisons is readily available. Other findings from this year’s Geo-Life corporate-side survey include:

-- Despite the survey’s finding of a general lack of accurate measurement of health-care costs in location decisions, the issue is playing a role in some siteselection decisions. Some 17 percent of survey respondents say their companies are using health care "as a tiebreaking factor between comparable sites."

-- Likewise, health care is also playing a role in the areas and countries some corporations are avoiding. Thirteen percent of responding corporate real estate executives say their firms avoid particular areas in the U.S. "because of what [the firm] considers excessive health-care costs." And in considering locations outside the U.S., 20 percent of respondents from firms with international operations are avoiding certain areas and countries "because of excessive health-care costs or the lack of available quality health care."

-- Corporations are apparently much more readily able to take a hard-cost look at health-care expenditures once the location leap has been made. Seventy- two percent of responding corporate real estate executives say their firms "can estimate health-care costs as a percentage of annual operating costs at...present locations."

-- Corporate real estate executives are apparently enjoying more success in measuring another important qualityof- life variable, education. Thirty-two percent of respondents say their companies "can quantify the educational quality of potential locations as a cost of recruiting." Another 19 percent say their firms can quantify educational quality as a cost of turnover. Here’s a more in-depth look at the issues examined in this year’s Geo-Life corporate-side survey.

Author: Jack Lyne

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