On Our Radar Today Interactive

Eddie Slovik. We predicted it. It had to happen. And it looks like it has. A major insurance broker based here in Atlanta, Beecher Carlson Holdings, had  two laptops stolen from employees attending an off-site company meeting last January. Someone always has to be #1 and Beecher who is #29 on the 2009 BI Top 100 broker [...]  Read more...

Eddie Slovik. We predicted it. It had to happen. And it looks like it has.

A major insurance broker based here in Atlanta, Beecher Carlson Holdings, had  two laptops stolen from employees attending an off-site company meeting last January.

Someone always has to be #1 and Beecher who is #29 on the 2009 BI Top 100 broker list is now a true industry leader – in the abuse of client data!

In fact is a grand slam – a HIPAA/HITECH breach and a Massashusetts state law breach!! Add in identity theft issues and you get Red Flag, GLBA as well. Any Nevadans in there? That would be a 5 bagger.

This is the type of power the Braves looked for all winter!! Little did we know we had it in town already.

The laptops contained names and Social Security numbers for employees of Beecher Carlson’s clients, including 1,012 people who live in Massachusetts.

Congratulations Beecher Carlson, CEO Tom Golub and your venture investors, this little mistake highlights the entire issue that HITECH and these other laws were created for in neon letters.

“Passion. Innovation. Accountability.” Nice corporate slogan, how does reality work here?

Well, Beecher settled with the state of MA for $92,000 for 7 residents data that was compromised. A real bargain. My college classmate Martha Coakley must have been feeling weak after her Senate loss to Scott Brown.

Ah, “Accountability”…lets examine that for a moment.

There are five questions to examine here:

• What has the breach cost in terms of  identifying and notifying the clients involved. A 3 year audit of MA client alone must have cost alot more than $92K.
  • BCBS of TN has spent $7M to date on their breach issue just on this.
  • How about from a reputation perspective? Any lost clients or new deals??
• What will an HHS/OCR audit turn up at Beecher in terms of corporate compliance with HIPAA HITECH?
  • Is there “willful neglect” here?
• Assuming Beecher has conducted belated privacy/security audit of its entire operation what has that cost them?
• Have all Beecher’s insurers requested audits as a result of their BA agreements?
• How about all their clients who are CE’s under HIPAA?

Frankly, in Beecher Carlson’s defense,  this  could happen to anyone reading this and I suspect that truth be told all the big boys have had these issues and we don’t know about it. I’d take odds on that in Vegas!

You need to do a full risk assessment and develop an action plan from it – whether you are in the BI Top 100 like Beecher Carlson – or Bob the local broker.

Beecher had to deal with this issue and seems to have done so as best they could.

It has to have cost them in hard dollars several million, if not a lot more on lost clients.

As we predicted their E&O policy didn’t cover any of this. As an $82M revenue business – they just raised a new $12.9M from their deep pocketed VC’s. Interesting that this very small capital raise is announced within a few weeks of this becoming public.

Having raised a bit of venture capital myself I am sure this “infusion” was quite costly to the insiders from a personal equity positon, as it should be.

“Accountability” – the management team’s lack of attention here has cost them dearly.

It will be interesting to see if HHS finds “willful neglect” here.

Is it your turn next? What would you do if this happens to you? Where would your capital infusion come from? Let alone the ability to repair your reputation?

The lesson – Get compliant, stay compliant and encrypt your computers and data! We’ll show you how..

Filed under: brokers, Business, Employee Benefits, Healthcare, Healthcare Insurers, Healthcare Reform Tagged: Beecher Carlson, brokers, Employee Benefits, Healthcare, hipaa, hitech theindustryradar Beecher

Data security in general ranks highly int he minds of health managers, 90% of whom told Forrester that this was a critical or high IT security priority as they were entering 2010.

In a survey conducted for Fiberlink, a communications company, Forrester found that 89% of health care organizations have some employees working out of the office at least one day per week, and 87% of companies have employees telecommuting from home at least once a week. Furthermore, 95% of health companies have employees using smartphones for work -- in addition to laptop computers.

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Couple of posts that I caught over the weekend that made me go hmmmmm: She Said: Heather Hamilton at Microsoft has a great post over at One Louder about the insanity of style over service at the Apple retail store:...  Read more...

Couple of posts that I caught over the weekend that made me go hmmmmm: She Said: Heather Hamilton at Microsoft has a great post over at One Louder about the insanity of style over service at the Apple retail store: "Apple does a lot of things right and I really respect their design discipline and marketing. Their ability to build a loyal following is impressive, even if that following has cartoon-style swirly eyeballs and walks all zombie-like to the beat of anything that Steve Jobs says. Ah, I joke, fanboys. I absolutely appreciated my iPod for many of the years I owned one and before I got a Zune. And there's a place for both in the market. Anyhoo. I was in an Apple store to buy a gift card for my friends' kid. And for some reason I cannot even begin to fathom, all of the Apple employees were on the sales floor doing all of their business. So the person that wanted to buy a gift card (me) had to wait in the same line as the people that had questions...lots of questions. The only employee that wasn't four deep behind a line of customers/inquisitors was the gal at the front who was, like, greeting people.  And when I asked her who could help me (ring up a freaking gift card), she sent me back to the line because she could totally not help me. Not at all. Because she was awesome at "Hi, welcome to the Apple store," and she was also awesome at "How can *they* help you? Because I'm not a *genius*." He Said (that's me):OMG. I know there are tons of apple fanboys out there, but let's face it, it's nearly impossible to get service in a quick fashion on a transactional item in an Apple retail store. All Heather wanted was a gift card - she either had to wait for one of the roamers to get free from a rambling 30 minute discussion or... wait for it...set up an appointment. My wife has a great story on this.  iPod stops working. Dead. She takes it in to the Apple store (her first time in the store).  Goes to to the same person Heather's writing about and says, "hey, this is dead, I just want to drop it off to have one of your folks look at it.  Greeter: "You'll need to make an appointment for that.  My wife: "No, I'm cool with just dropping it off".  Greeter: "We don't work like that, you have to make an appointment for that". My wife: When's the next available appointment?" Greeter: "Tomorrow at 5:30 pm" (thus a return trip to the store at peak traffic time).  Picture smoke coming from my wife's ears.  Which is why there will always be a non-Apple alternative in every market there are in. She said: HR Maven on HR pros not caring or having time to be bothered by social media: "Back to my (local SHRM)chapter meeting. I inquired about speakers for the year. Great topics on the calendar -employee relations, benefits, COBRA.  Good stuff. But no one is scheduled to talk about SoMe this year.  In fact the person putting together the agenda actually said that she didn't have time to learn this stuff. I recounted a story of a candidate I interviewed for a job. I asked her if she needed a copy of the job description.  Her response?  No, I have a copy on my phone."   He Said (that's me): That's the best line/story I've heard as a retort to a HR person who doesn't have time to learn about social/mobile for their little world.  No, I have a copy on my phone.  Priceless, thanks for sharing Maven...    

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I don't know if anyone else saw this, but my favorite HR organization, SHRM, decided it was time to start selling upgrades! That's right, for the low, extremely value conscience amount of $295 you to can get a special ribbon...  Read more...

I don't know if anyone else saw this, but my favorite HR organization, SHRM, decided it was time to start selling upgrades!  That's right, for the low, extremely value conscience amount of $295 you to can get a special ribbon on your badge at the 2010 SHRM National Convention as part of your "New Annual Conference Premium Package."  But wait, it doesn't stop there, here's what else you get: 24/7 Virtual Access to all sessions of the conference- PLUS - you can earn all of your re-certification credits through your virtual access! (Does that mean that I pay the extra $295 and I get like 100+ Recert Credits for every single session I can't attend? Really, I want to know this - because if that's the case I'll take this entire post back, and sign the praises of what a great bargain this is! - I will also write another post on what a sham re-certification will now become - but I digress!) Free Time- Yes, this is a feature of the Premium Package. Now, after registering for the conference, making reservations for a hotel, going to Dillard's and buying the fake tanning lotion, flying out to San Diego, paying for transportation to the Hard Rock Hotel San Diego (the official FOT hotel of the 2010 SHRM National Conference - not really, but if they want to give me a free room, fab! I have some pull with the FOT editorial staff and I can make things happen!). NOW - for the low price of $295 you don't even have to show up in the morning after the 3am Tweet-Up - or CareerBuilder Party - which is better than the Monster Party. Personal Conference Consultant - I think this must be for newbies to the conference world, or for just plain idiots.  Not sure who needs a Conference Consultant to attend a conference you are already attending - but believe me - for $295, me and my conference consultant will be having some late night, long conversations on Dress Code and other very important HR issues (I think the kids call this drunk-dialing) Autographs and Pictures with China Gorman! Well, this wasn't really in the package, but if you invite China to your Tweet-Up and buy her a drink, I'm fairly certain you can talk her into both the picture and the autograph - that has to be worth $295! A FREE Book  - Well, again, if you call $295 free, than yes, it's a free book.  But it's one of those really thick text book HR type books - you know like the one's on your credenza that you never read, but make you look real smart! Now, I was one of the lucky one's who SHRM actually sent out a pre-survey to (oh, wait, you got that to?) - so I also filled out a pre-survey to this idea - in which I tried to get across the point - NO! DON'T DO IT! But, alas, I was just one voice, which has very little influence (as seen by me still be considered "TBD" by my fellow HR Influentials).  If you didn't fill out your survey (which was sent to those of us who did early-bird registration) you missed out on some of the other ideas, that didn't make it to the "New Annual Conference Premium Package for $295" - including - VIP seating for all General Sessions and Entertainment (excuse me! Conference Consultant - can you please remove this lowly "regular" conference attendee from my seating section! You only paid $1295 conference registration, please get out of my front row seat - I paid an extra $295 - so I could show up late from my Tweet-Up hangover and still get a seat in the front-center).  I actually think the seating idea was the only good idea they had in the survey - but I'm snobby that way - I would easily pay $295 to walk in right as every session was about to start, and go right to the 4th row center seat, next to my girl, Punk Rock HR, while all those suckers were standing on the sides without a seat - and believe me, we would point, stare and laugh. That would be so cool! Or maybe it wouldn't be - especially with a Tweet-Up hangover. I'm all for SHRM and anyone else making money - it's why we all do what we do (ok, to all you tree-huggers doing HR for free - except you).  The problem I have is when someone tries to sell me something they should already be giving me for what I'm paying.  SHRM National is not a cheap conference - so to charge an additional amount is like McDonald's charging me for ice in my Diet Coke - it just doesn't seem right.  It also doesn't seem right, that for a profession that screams to get respect, that we should just be handing out Recertification Credits to those with the largest checkbook.  This coming from a current SPHR, who has paid his dues in getting re-certified for the last 9 years. SHRM - You made a mistake and I only hope the membership lets you know it was a mistake - but I fear you'll get 1% who will pay and that additional "profit" will be large enough to act as ear plugs.Editor's Note: Tim Sackett, SPHR is the Executive Vice President of HRU Technical Resources in Lansing, MI. Tim loves everything talent acquisition and believes every corporate recruitment department in America can and must get better.  He has 15+ years of human resource leadership experience, across multiple industries, on both the corporate and agency side – so he gets it from both sides of the desk.  Want more?  Um, OK... He has a Masters of HR and....well, he was recently voted #5 best assistant little league coach of his son’s five team league.