Tag Archives: health care insurance

Wooing businesses to AZ in the recession

Despite Tough Times, Economic Development Groups Continue To Woo New Businesses To Arizona

Economic development experts in Arizona hope to parlay the state’s convenient geographic location, and even a stagnant housing market, into attracting new businesses.

Toss in relatively low taxes, a freeze on new regulations and a well-honed reputation as a business-friendly state, and recruiters have a tool box full of reasons why businesses should consider relocating to Arizona.

But that’s not all the economic development agencies tout. Local experts know that businesses looking to relocate are interested in those intangible quality-of-life issues: an available and educated work force, a higher-education community that excels in research and churns out highly qualified workers, and a relatively low cost for starting up and doing business.

Television commercials are generally cost-prohibitive, officials say, leading them to rely heavily on the Internet for their recruitment efforts. Feature articles in national trade publications also represent a low-cost way of spreading the Arizona story.

Two of Arizona’s largest economic development agencies — the Greater Phoenix Economic Council (GPEC) and Tucson Regional Economic Opportunities (TREO) — are collaborating on a campaign to lure California businesses to Arizona.

Scarlett Spring, GPEC’s senior vice president of business development, says her team makes targeted trips to California at least once a month, with specific emphasis on the Bay Area, Los Angeles and San Diego. Often, GPEC invites local mayors along to give recruitment efforts an official flavor. Bringing mayors, Spring says, gives recruiters leverage and “opens doors that might not otherwise be open.”

The GPEC message to California?

“Arizona has a business-friendly environment and a reputation of having lowered taxes in some shape or form for 10 consecutive years,” Spring says. “It’s a lower-cost environment for their employees, whether through workers’ comp, competitive wages or health care insurance. Those are the operational costs that a company looks at when considering a financial move or expansion.”

Noting that virtually every phase of running a business is more expensive in California, Spring adds, “What we’re doing is trying to position Arizona as being complementary to the California marketplace.”

DGPEC also invites businesses to Arizona for special events. For example, last November biotech and solar companies from the Bay Area were hosted for a weekend in the Valley. The visit included attending a game between the Arizona Cardinals and the San Francisco 49ers. Two of those companies are close to moving to Arizona, Spring says.

Laura Shaw, senior vice president of marketing for TREO, agrees with the strategy of taking advantage of Arizona’s location. California businesses struggling under mounting operating costs have the ability to move to Arizona and still access California markets.

TREO targets such industries as aerospace, defense, biosciences and alternative energy, and only meets with companies that have been pre-qualified as likely candidates for relocation.

“Research shows that labor drives all market decisions — whether a company can find the labor that fills their needs,” Shaw says. “We focus on matching our assets with a company’s needs.”

Despite the national perception that Tucson is a low-wage community, TREO presses for higher-paying jobs.

What the Tucson area offers is a high-growth Southwestern region situated at the doorstep of California and Mexico, with young talent graduating from the University of Arizona. Tucson is also in the heart of one of the most heavily traveled trucking networks, linking Mexican markets to the California coast.

Meanwhile, the Arizona Department of Commerce, though on a limited basis because of budget cuts, continues to participate in trade shows and foreign direct investment events in Canada, Mexico and Europe. Commerce officials and hired contractors work with foreign companies that are interested in expanding to Arizona. They also help match Arizona firms with foreign customers.

Kent Ennis, interim director of the Commerce Department, confirms that a tight budget makes recruiting more difficult, yet the agency reaches out to major industries, including bioscience and solar. In fact, the Commerce Department led an Arizona delegation to a national convention of bioscience technology companies in Atlanta on May 18.

In addition, the Commerce Department assisted in the relocation of Spain’s Albiasa Solar, which in April announced plans to build a $1 billion renewable solar energy plant near Kingman. The project will create 2,000 construction jobs and more than 100 permanent positions when it is completed in 2013, Ennis says.

The Arizona Association of Economic Development, which is more of a trade organization representing Arizona firms and does not embark on recruiting efforts, nevertheless gets its share of contacts from businesses considering a move to Arizona, says Bruce Coomer, executive director of AAED. But first, he makes sure to sing Arizona’s praises. He mentions the usual advantages, but adds an unlikely twist.

Because our housing market crashed,” he says, “that’s a plus. Now there is affordable housing if a company wants to move here, especially from California. Their employees can really get some bargains.”

Richard L. Boals President and CEO Blue Cross Blue Shield of Arizona

CEO Series: Richard L. Boals

Richard L. Boals
President and CEO
Blue Cross Blue Shield of Arizona

What are some of the major trends in the health insurance industry?
In health, I think there is a shift toward an increased responsibility toward the individual. We’re asking people to take accountability for themselves. We’re giving them information that they can use to monitor their health status, but we also would hope that they would lose weight, they would quit smoking, they would wear their seatbelt and do the things that are sort of common sense, but can make their life much more enjoyable and in the net, save a lot of money.

In the business world in terms of health insurance, how is that industry looking right now in Arizona?
It’s actually, I think, very healthy. We, like every other industry, are starting to feel the pain of companies who are laying-off employees. So, we’re seeing a little bit of shrinkage within the general size of our group, but we’re growing at about 7 to 8 percent a year, so we feel very good about where we’ll be when we come out the other side of this economic downslide.

How has the recession affected the health care industry in general and health insurers in particular?
There are a couple of things that are happening. In the hospitals, they are starting to see fewer elective surgeries and to some extent that is the bread and butter of a hospital, and if people are holding off getting things done, that pulls down on their revenues. They are also seeing more cost-shifting from the government — or we’re seeing the cost-shifting from the government — and as Medicare and Medicaid pay less and less, I think it’s difficult for hospitals to make a bottom line.

What role is Blue Cross Blue Shield of Arizona taking in the debate over health care reform?
We’re trying to take a very active role both locally and in Washington. We believe that everybody ought to be covered. We’re a little perplexed that of the 40 million or so uninsured that about a quarter of them already qualify for some state or federal program and simply have not been enrolled. So as we talk about expanding the government’s role, I think we need to expand their accountability for getting people enrolled. But we believe that everybody should have access to good coverage. We believe that the government should not form a competing model, to not promote us but to try to bring us down. Beyond that, I think we’ll see what comes of it. I really believe that the government has an extraordinary opportunity here to inject energy into the health care system. My fear is that as they try to ratchet costs down and save money, they’re going to discourage innovations, and a few years from now we are going to be very disappointed that the supply of physicians and nurses and new technologies is going to be less than it is today.

BCBS of Arizona is working with the Arizona Healthcare and Hospital Association and the Arizona Chamber Foundation on what has been called “the hidden health care tax” in the state. How and why did Blue Cross Blue Shield become involved in this issue?
We’ve been interested in this issue for a long, long time. We were happy to see that others were beginning to recognize that this is a serious problem. About 15 percent of our premium is a result of a government program not paying their fair share. As the hospitals and doctors figure out that they can only push so much to the insurance companies or to the private individuals, they have to speak up and say it’s time for the government to start paying a more realistic amount for the care they are providing to their accountabilities, the elderly and the indigent.

What advice do you have for a C-level job candidate on how they can show either that board of directors or that panel they’re interviewing with that they are somebody who can successfully lead a change in a business?
I think it gets down to two things. One, it’s about the customer — you always have to have them in mind. And it’s about the people you hire to support you. Being in a C suite assumes that you are not doing the physical work, that you’ve hired a team of talented and dedicated people who are going to make you look good, and over the years I have been very fortunate; people have made me look good.

    Vital Stats




  • Joined BCBSAZ in 1971
  • Appointed CEO in April 2003
  • Board member for BCBSAZ, the Blue Cross and Blue Shield Association and TriWest Healthcare Alliance
  • Board member for Greater Phoenix Leadership, the Translational Genomics Research Institute and the ASU W.P. Carey School of Business Center for Services Leadership
  • Won the ASU Alumni Leadership Award and the American Jewish Committee’s National Human Relations and Centennial Leadership Awards
  • Bachelor’s degree in accounting from Arizona State University; completed executive development courses at Duke University, the University of California, Harvard University and the University of Michigan