In the 5/31/18 edition of eNews, we reported on the newly released overview of the findings for this year’s Madison Region Workplace Diversity & Inclusion Survey.

As reported earlier, that survey was conducted in February and March when a random sample of 1,903 employers with 10 or more employees were asked to participate.  Of that number, 367 companies and organizations completed the survey, for a confidence level of plus/minus 5%.

Since the release of the overview findings in May, the final report has been released. As this was the third year using the same survey, we are now beginning to develop a baseline of results to better identify potential trends moving forward.

Comparative highlights from the 2016, 2017, and 2018 surveys:

• When reviewing the composition of boards of directors, top-level leadership, and other supervisory positions. the participation rates over the three years for non-Whites and women vary within a narrow range, As such, the data to date does not indicate definitively that participation by non-Whites and women in these positions is increasing or decreasing. Any such trends will be more identifiable with data from future surveys.
• The percentage of organizations with a separate written diversity statement has increased since 2016, from 14% that year to 22% in 2018, indicating progress.
• The percentage of organizations with staff dedicated to diversity and inclusion efforts has shown a modest increase from 10% in 2016 to 15% in 2018, indicating progress.
• Since 2016 there has been a statistically significant increase in the percentage of organizations that have workforce demographic goals, from 11% in 2016 to 17% in 2018, further indicating progress.
• The percentage of respondents who believe their turnover rate for non-white employees is equal to white employees has remained within a narrow range of 67%-71% between 2016 and 2018.
• The percentage of organizations with a diversity supplier program has changed little between 2016 and 2018, increasing from just 2% to 4%, but the trend is positive.

 “A number of the metrics measured in the survey are moving in a positive direction over time, which is encouraging,” said Gene Dalhoff, MadREP V.P. of Talent & Education.  “However, there is much work for our region to do before we are seen as a model for diversity and inclusion in the workplace.”

 To view the complete survey report, please visit the Research & Reports page on the MadREP website.  For more information, contact Gene Dalhoff at gdalhoff@madisonregion.org.

The Madison Region’s manufacturing sector includes a number of innovative companies employing advanced processes and materials.

In Baraboo, Teel Plastics engineers and manufactures plastic tubing that finds its way into products used in industries as diverse as aerospace, automotive, construction and medical.

Products made for the medical sector, for example, include catheter packaging, swab sticks, pipettes and tubing for IV sets.

A division of the company, Teel Analytical Laboratories, is involved in material science and polymer analysis.

Teel Plastics was named a Wisconsin Manufacturer of the Year in 2016, cited for its dedication to continued improvement that increased efficiency and allowed the company to create new ideas and solutions for its customers.

For more information about Teel Plastics, visit their website.

Laying the groundwork for the redevelopment of the former Oscar Mayer plant, Lt. Governor Rebecca Kleefisch today announced the City of Madison is receiving a $500,000 state grant to help finance infrastructure work on the site.

The Idle Sites Redevelopment Grant from the Wisconsin Economic Development Corporation (WEDC) will be used to assist developer 910 Mayer LLC as it reconfigures outdated infrastructure at the site to deliver gas and electricity to each individual building on the 67-acre parcel. The work also includes upgrades at the buildings to comply with the federal Americans with Disabilities Act.

Reconfiguring the gas and electrical infrastructure will cost $1.8 million–$500,000 of which will come from the WEDC grant, with the rest funded by the developer.

“While the vision of creating a modern business park that will serve multiple tenants won’t become a reality overnight, today’s announcement is a significant milestone for a project that has the potential to create hundreds of jobs and become a major economic driver in Madison and beyond,” said Lt. Governor Kleefisch, who joined other state, city and regional leaders in making the grant announcement at the plant on Wednesday. “Through the joint efforts of the state, the city and the developer, we see a bright future ahead for this century-old factory that has been a significant part of the city’s history.”

“The City of Madison is happy that less than a year after acquiring the property, the development team is taking the first steps to redevelop the site,” added Mayor Paul R. Soglin, who joined Lt. Governor Kleefisch at the announcement. “Through the partnership with the state on this grant, we remain encouraged that the former Oscar Mayer property will continue to play an important role in the city’s economy and the community fabric of the north side.”

Work is now underway to redevelop the facility into a business and light industrial park called the OM Station (Old Madison Station). Instead of a single user, multiple tenants will utilize the refurbished center.910 Mayer LLC, a partnership between Rabin Worldwide and Reich Brothers, plans to repurpose many of the existing buildings on the site and attract thoughtfully chosen tenants that will create sub-communities on the campus.

The infrastructure work, which is phase two of a six-phase redevelopment project, is now underway and is expected to be completed by July 2019. The entire $18 million redevelopment project is expected to be completed in 2025. Once the redevelopment is finished, the property is expected to be valued at between $30 million and $35 million–more than double its current value.

“The former Oscar Mayer facility was an important part of Madison’s workforce over the last 100 years,” said developer Orlee Rabin. “We look forward to working with the City of Madison to revitalize the site for multiple users and enabling the property to once again become an economic hub for the city.”

“We are grateful for the generous support of WEDC in helping us fix and modernize the electrical and gas infrastructure for the site, allowing us to jumpstart the redevelopment and bring in new users and jobs back to northern Madison,” she added.

Oscar Mayer had been at the location since 1919, and it served as the company’s headquarters since 1957. The plant officially ceased production August 2017, and 910 Mayer LLC purchased the property in October 2017.

The city is working with the new owners and stakeholders to reposition the site for future use. Mayor Soglin has appointed a 13-member Oscar Mayer Strategic Assessment Committee comprised of Common Council members, neighborhood residents, and persons with labor and business experience to oversee a public process and provide guidance along with city staff and consultants to develop a strategic assessment of the site.

WEDC’s Idle Sites Redevelopment Program, created in 2013, stimulates investment and job creation at idle, abandoned and underutilized manufacturing sites that cannot be redeveloped solely by the private sector due to their scale and complexity.

The grants may be used for demolition, environmental remediation or site-specific improvements defined in the community’s redevelopment plan. The goal of the program is to advance the site to shovel-ready status or to enhance the site’s market attractiveness to encourage business growth.

Since the program’s inception, 18 communities have received more than $15 million in grants for economic development projects expected to create nearly 5,000 jobs and have an economic impact of more than $600 million.

Madison is one of four municipalities to have received an Idle Sites Grant in 2018, joining Janesville, Hudson and the Town of Grand Chute, which also received $500,000 each.

Madison received two earlier Idle Sites Grants: a $534,000 award in 2014 for the redevelopment of the Royster-Clark site on Cottage Grove Road, and a $500,000 grant in 2016 for the redevelopment of the Garver Feed Mill.

Source: WEDC

Source: Rob Schultz | Wisconsin State Journal

Source: David Wahlberg | WiscNews

With a new headquarters going up at a prominent intersection on Madison’s West Side, Navitus Health Solutions is gaining visibility at a time when some of its competitors are trying to avoid attention.

Pharmacy benefit managers, or PBMs, have come under increased scrutiny as the country’s prescription drug costs continue to rise. The companies, which act as brokers between drug makers, insurers, employers, patients and pharmacies, help determine which drugs people can take, where they can get them and how much they will pay.

Three PBMs — CVS Caremark, Express Scripts and OptumRx — control more than two-thirds of the market, capturing rebates and fees that are hard to quantify because their contracts are not transparent, critics say.

They “exercise undue market power” and “generate outsize profits for themselves,” the White House Council of Economic Advisers said this year in a report calling for more competition.

PBMs “encourage large list prices to fuel the pricing schemes,” Dr. Scott Gottlieb, Food and Drug Administration commissioner, said in a speech to insurance companies. Madison-based Navitus, owned by SSM Health, says it doesn’t absorb rebates or differentials on what it charges patients and what it pays pharmacies, as some PBMs do. Instead, the company assesses an administrative fee.

“We pass through the cost 100 percent; we pass through the rebate 100 percent — no games, no funny business,” said Pete Beste, chief financial officer.

Navitus is five times larger than it was just eight years ago, but it still accounts for less than 2 percent of the market, Beste said.

As lawmakers and regulators look to constrain PBMs, and some PBMs enter mergers — CVS plans to buy Aetna, an insurance company, and Cigna, another insurer, seeks to acquire Express Scripts — Navitus is poised to capitalize on its model, Beste said.

“People are fed up with the PBM industry and some of the industry trends,” he said. “We believe we are a great alternative to that.”

The company has skeptics, however. Navitus may be different from the big PBMs, but it still seeks to recoup money from pharmacies for simple clerical errors and steers specialty drug business away from them, said Matthew Mabie, president-elect of the Pharmacy Society of Wisconsin and owner of Cottage Grove-based Forward Pharmacy.

“They’re the lesser of two evils,” said Mabie, who said Navitus controls about half of his business at pharmacies in Cottage Grove, Deerfield and McFarland. “They’re better than the other options out there, but they’re still a PBM. They get in the way of patient care.”

Mabie supported a bill in Wisconsin last year that would have required the state Office of the Commissioner of Insurance to regulate PBMs.

The bill didn’t pass. Neither did another measure that would have banned PBMs and insurers from including “gag rules” in contracts that prevent pharmacists from telling patients they could save money by paying cash instead of using insurance, as is sometimes the case.

SSM Health opposed the first bill, which Terry Seligman, chief executive officer at Navitus, called unnecessary. “Regulation drives up cost,” he said.

Navitus, which aims to double in size in five to seven years, plans to move in March into a building under construction at South Gammon and Mineral Point roads, near West Towne Mall.

The project, by Livesey Co., is called West Place. It replaces a building previously used by Madison Area Technical College and Famous Footwear that has been demolished.

West Place’s $28 million first phase features a five-story, 80,000-square-foot building for Navitus. It includes a two-story, 30,000-square-foot building for Lumicera, a specialty pharmacy business that Navitus started in 2014.

Navitus has outgrown the 50,000 square feet of space it has in the Arbor Gate complex off the West Beltline Highway near Todd Drive, Seligman said.

The company manages prescription drug benefits for more than 5 million people at more than 500 employers and health plans, overseeing $4 billion in drug spending annually, Seligman said. That’s up from about 1 million people and about 80 clients in 2010.

Existing clients include Alliant Energy, Johnsonville, Land’s End and Group Health Cooperative of South Central Wisconsin.

Navitus was started in 2003 by Dean Health Plan and an insurance company owned by ThedaCare, of Appleton. Its first client was the Wisconsin Department of Employee Trust Funds. In 2004, the company saved the state $25 million by reducing state worker drug costs by 6 percent after they had been projected to rise at least 17 percent, state officials said.

In 2007, Dean bought out its partners. St. Louis-based SSM Health, which owns St. Mary’s Hospital in Madison, acquired Dean in 2013.

In the past few years, Navitus has erected two buildings with a total of nearly 200,000 square feet of space in Appleton, its operations center.

The company has about 780 employees, including 500 in Appleton, 200 in Madison and 40 each in Phoenix and Austin, Texas.

Seligman said Navitus’ administrative fee model makes it more transparent than other PBMs. Clients can audit their claims and see what price Navitus got from drug manufacturers and what payments it gave to pharmacists, he said.

“If you get incented on every rebate you bring in, you’re incented to bring in higher rebates but not necessarily lower net cost,” Seligman said. “We have one lever for making revenue, and that’s our (administration) fee.”

Steve McCauley, director of employee benefits at Marquette University in Milwaukee, said the campus switched from Express Scripts to Navitus this year after its annual drug costs of more than $5 million kept going up by about 25 percent per year.

So far this year, the cost is down about 15 percent for Marquette and more than 8 percent for employees, McCauley said. The employee figure likely will rise as workers use up their deductibles, he said.

A few employees had to switch pharmacies, and nearly 9 percent had to change drugs, including some patients with diabetes who had to take different brands of insulin. But administrators at Marquette, which insures about 4,600 workers and dependents, are happy with the switch and Navitus’ customer service, McCauley said.

“There was very low noise from our employees,” he said. “It’s more of an upfront, lower cost.”

In President Donald Trump’s speech last month about his plan to lower drug prices, he attacked PBMs, which he called “middlemen.”

“We’re very much eliminating the middlemen. The middlemen became very, very rich,” he said. “They won’t be so rich anymore.”

Trump’s plan itself says the government will require PBMs “to act in the best interests of patients.”

More than half of states, not including Wisconsin, regulate PBMs through registration or licensure, according to the National Community Pharmacists Association. Twenty-two states ban gag rules, according to the National Conference of State Legislatures.

State Rep. Deb Kolste, D-Janesville, who co-sponsored the bills in Wisconsin, said the measures are needed to rein in PBMs and will be reintroduced. PBMs “control the pharmaceutical market; it’s becoming a closed system,” she said.

Navitus, which says it has no gag rules, maintains it is the antidote to concerns about the industry. Amid the growing national discourse over drug prices, the company expects more employers to switch to its model.

“We’re incented to help the client. We’re not taking a piece of everything that happens,” Seligman said. “A lot of people are waking up to this.”