To hear insurance executives and business experts tell it, small business owners are a lot like typical teenagers. They don’t listen to anyone except their friends in this case other small business owners. These days, insurance companies are exerting parent-like pressure in order to get small business owners to listen to their advice and offer health insurance to their employees. Michael Chee, spokesman for Blue Cross of California, echoes Valley hospital administrators when he says that the main problem in getting all Californians insured is education. According to Blue Cross’ research, one third of those 6.5 million uninsured Californians qualify for some sort of state sponsored program, and another third can afford some kind of private insurance; they just aren’t aware of their options. Included in this two thirds are some of the people across the state working for small businesses that don’t offer insurance. Chee is certainly ready to present a case to those businesses. “There are studies out there that show health benefits help retain and attract loyal employees and more productive employees. Businesses that offer health insurance compared to those that don’t show higher profitability and a higher long-term success rate. Employees feel more devoted, loyal and grateful to the company,” Chee said. Many business owners have individual insurance, he said, and they aren’t aware of flexible new programs that insurers have developed over the last few years or of state laws that guarantee coverage for employees. In an attempt to break through to this potentially rich market, Blue Cross launched its new BeneFits program in January aimed at small business owners, who can participate with as few as 60 percent of their workforce and pay as little as 25 percent of premium costs. Employees in this program choose between different plans with varying degrees of cost and coverage. The company has launched a direct mail campaign and a moderately successful radio campaign aimed at convincing small businesses to sign up for the plan. Appearing last week before the Latino Coalition Small Business Economic Conference in Washington, D.C., Larry Glasscock, CEO of Blue Cross parent WellPoint, said that 84 percent of the groups enrolled in BeneFits were previously uninsured. Blue Cross has also partnered with the U.S. Small Business Administration to present a series of free seminars for small businesses throughout the state. There are presentations on maintaining cash flow, obtaining business loans, taking advantage of financial and technical assistance programs, boosting productivity and several other topics. Naturally, Blue Cross also includes an informational session in which it explains its health plans like BeneFits to the gathered business owners. Negative views Chee is also aware that plenty of people working in health care consider private insurers to be as much the problem as they are the solution to the state’s problems. “Have a look at the health plans, look how profitable they are,” said David Levinsohn, chief executive officer of Sherman Oaks Hospital. “Blue Cross makes $350 or $400 million a quarter . . . that money goes right out of health care, that does nothing for health care. They’ll tell you ‘Oh we’ve got a wellness foundation,’ and stuff like that. But look at the stock price of Blue Cross, Health Net, PacifiCare. The people that are making money in health care today are the health plans.” Anthem Inc. (now WellPoint Inc.) received some criticism from Insurance Commissioner John Garamendi last year when it was acquiring WellPoint Health Networks because it agreed to pay WellPoint chairman Leonard Schaeffer $47 million in cash in addition to the $187 million in stocks he held. In response to hospitals’ claims, Chee said that Blue Cross and other companies can only be responsible for taking care of their investors and clients. Private plans are only responsible for the people that pay into the plans, Chee said, not for hospital costs that don’t involve patient treatment. “Historically, government players like Medicare used to be the deep pockets, they provided a large amount of revenue for hospitals, but all that changed dramatically when federal Medicare laws changed,” said Chee. For a while, hospitals were able to squeeze better rates from insurance companies by consolidating. Insurance companies have become more vigilant in combing over hospital invoices and deciding what they should be covering. Bobby Pena, spokesman for the California Association of Health Plans, said that hospitals, because they are required to constantly purchase new equipment and pay for seismic improvements, are also a big factor in the increase in medical costs. He said that health plans, through disease management programs and managed care, have actually tried to slow the rising costs as much as they can. Before managed care, Pena said, doctors that treated the same patients were often duplicating their work and causing cost overruns. “The average patient would say ‘I have a heart problem, I’m going to my cardiologist,’ or ‘I have a stomach problem, I’m going to my gastroenterologist.'” A lot of times, physicians weren’t talking to each other. Managed care has improved quality through coordinating better management.” Pena said small businesses have the most to gain from insurers’ cost saving efforts, since they feel the pain of rising premiums most acutely. Kaiser Permanente, a private nonprofit health plan, avoids many of the conflicts between hospitals and insurance companies because of its unique model. Kaiser’s doctors work directly for the insurance company at Kaiser hospitals. As a nonprofit, the company doesn’t have to worry about paying dividends and keeping shareholders happy. “For more than 60 years now, Kaiser Permanente has been in the business of keeping people healthy we are and always have been about disease prevention and the promotion of wellness. It is far more cost effective to keep people healthy than to treat them once they become ill,” said Jane Finley, Senior Vice President for Kaiser. “Beyond this, the best way to control costs is to make sure that delivery systems are operating in the most efficient and effective manner possible. The way Kaiser Permanente ensures this is through integration of patient care services. Our services have always been integrated meaning carefully coordinated via primary care physicians, specialists, health educators and pharmacists working as a team.” Expanding choices Finley said that, through its cost saving efforts, Kaiser has also been able to expand its health care choices for small businesses, offering relatively inexpensive plans. Neither Chee nor Finley was prepared to offer a solution to the state’s rising health care costs, but each company is driven, whether by profit or otherwise, to insure as many people in Southern California as possible, they said. Covering the uninsured is the necessary first step, Glasscock said. “There is no single, simple solution to the challenge of the uninsured but we can solve the problem,” Glasscock said. Attempts to regulate health plans or set up a single-payer system are greeted with skepticism. Health care experts and laypeople think that such a switch that would only lead to a rationing of care. Legislative requirements that have been approved such as a requirement that new mothers spend at least 48 hours in a hospital after delivery are dealing with matters best left to doctors, Pena said. When legislators approve these mandates, Pena said, the people that end up paying for the increased costs are individuals and employers.

Even as city officials prepare an interim control ordinance that could halt development in Warner Center for up to two years, developers are continuing to propose new construction in the area. The latest application comes from the owner of a 330,000-square-foot parcel of land that is currently home to the Canoga Park Swap Meet. Montel Associates, a unit of Simms Commercial Development, which owns the property, is proposing a mixed use residential project on the property, at Vanowen and Variel streets. “It’s self-evident why these kinds of applications are coming in,” said Benjamin M. Reznik, chair of the land use practice at Jeffer Mangels Butler & Marmaro LLP who represents the developer on the project. “In general the highest and best use in a lot of these commercially zoned and, in some cases, industrially zoned (properties) is multifamily.” The business opportunity that multifamily housing development poses has accelerated building so much that the Warner Center area is on target to reach the number of housing units first planned when the Warner Center Specific Plan was adopted in 1993 about five years early. Worried about the traffic and congestion additional building might create, residents asked Los Angeles City Councilman Dennis Zine, whose district includes the Warner Center area, to introduce a motion that would put a temporary stay on new residential building. The so-called interim control ordinance motion is now in the hands of the city’s planning department. “It’s being written as we speak,” said Tom Henry, planning deputy to Zine. While the specific plan anticipated that about 3,000 new housing units would be built in the Warner Center area by 2010, virtually all of the development activity for the first 10 years occurred in the commercial sector. “So no cap was put on the housing,” said Henry. “(Now) the amount of commercial growth has been stable, but the amount of housing proposals has just spiked to where we are very close to actual project approvals for 3,000 more dwelling units,” Henry added. Henry said the increase in traffic in the area came to light in studies conducted during the investigation of the Ahmanson Ranch development proposal (which has since been defeated) to the West. “Traffic has increased by 15 percent over what was projected,” Henry said. “So the councilman said, we stopped Ahmanson, but now we’re going to have the same growth take place in Warner Center, and we don’t have the traffic mitigation in place.'” If instituted, the interim control ordinance would be issued for one year with an option to renew it twice, each time for six additional months, Henry said. The idea behind it is to provide time to review and amend the specific plan. While in effect, building permits would be accepted and considered until the maximum of 3,000 housing units was reached in the Warner Center Specific Plan area which stretches from Vanowen Street to the North, the Ventura Freeway to the South, De Soto Avenue on the East, and Topanga Canyon Boulevard on the West. “The interim control ordinance is based on building permits,” said Henry. “So you could have 5,000 project approvals, but the first 3,000 that come in for building permits win.” Projects being proposed first go through a specific plan compliance review, and if approved, begin the permit process. Henry anticipates that project compliance reviews take about four or five months, so a project that is going through the review now, will probably come under the interim control ordinance by the time the review is completed. Developers, however, are optimistic that the need for housing will outweigh the concerns about additional housing, and the ability of developers like Montel seeking to build housing on property zoned for commercial use are not likely to be adversely affected. “The swap meet is commercially zoned,” Reznik said. “When you think about the traffic impacts or other impacts from several hundred square feet of retail versus four hundred apartment units, the residential is a lesser impact.”

Adult entertainment company Vivid Entertainment has announced that overseas sales have increased markedly for its herbal virility supplements. The company reported a sales increase of 158 percent for its Herbal Vivid virility products in Asia. Vivid attributed the surge in Japan, Hong Kong, Taiwan and China to a broadened distribution plan, an aggressive new global advertising campaign and the use of Vivid girls to help promote the products. For the supplements, Vivid has partnered with Buccone Ltd., which has sold herbal products in Asia for years. Vivid has also announced that it has increased its marketing of herbal products in the United States and Canada, where it has ramped up commercials on television and cable. Herbal Vivid commercials now can be seen on the Spice, Playboy TV and Hot Network channels and the product has also been promoted on radio programs such as “The Tom Leykis Show,” and “The Howard Stern Show.”

Camarillo-based power conversion manufacturer Power One, Inc. has announced that is Board of Directors has authorized the repurchase of up to $20 million worth of the company’s outstanding shares of common stock over the next 18 months. Shares may be purchased in the open market or in block trades from time at the discretion of the company’s management. The number of shares to be purchased and the timing of the purchases will be based on the level of the company’s cash balances, market and general business conditions.

American Realty Advisors announced that it has acquired the Safari Business Center, a 1.14 million square foot multi-tenant industrial property made up of 16 buildings in Ontario. The property is the large multi-tenant industrial project in the Inland Empire. The Class A property was completed in phases between 1989 and 1998, and is situated near the Interstate 15 and state Route 60. “Our investment in the Safari Business Center represents American’s ongoing commitment to acquiring quality industrial assets. The vicinity of this property to major distribution channels will be beneficial to tenants, as well as to the rapidly growing Inland Empire market,” said Stanley Iezman, president of American. “This asset will serve as a perfect complement to the other investments we have made on behalf of our clients.”

Northridge-based SmartSound Software announced that it has entered into a partnership with Artbeats, a provider of royalty-free stock footage to provide its soundtrack creation tools and royalty-free music to Artbeats’ customers. Artbeats customers who purchase video footage products can receive SmartSound software and music as part of a bundling deal. SmartSound provides audio and music software and products targeted at adding audio content to video productions.

Time Warner Cable, ha announced the launch of a new service available to its subscribers in the greater Los Angeles area,Nuestra Tele On Demand. The new service allows Time Warner customers to watch a variety of Spanish-language programming from different networks at any time of day. Using Time Warner’s VOD technology, viewers can watch all or part of a program at their convenience, suing their emote control to pause, fast forward and rewind, similar to a VCR. Nuestra Tele On Demand is part of Time Warner’s free VOD platform.

Vital Express Inc., a Valencia-based logistics and delivery company, has sold its first franchise. The franchise territory will cover the San Gabriel Valley. Vital Express, an eight-year-old company, opened its franchise group late last year. The company has said it hopes to open 500 franchise locations.

IndyMac Bank next week will hold its grand opening ceremonies for its 12th branch opening in Encino. The Encino branch specializes in consumer savings and mortgages, the company said. The ribbon-cutting ceremonies will take place on Tuesday, May 24 at 4 p.m.

The California Department of Health Services announced it will award Health Net of California a contract to provide Medi-Cal benefits in Los Angeles County. Health Net has been provided Medi-Cal benefits since 1985 and the new eight-year contract will generate $560 million annually for the company. In 2004 and 2005 Health Net either renewed or will initiate Medi-Cal services in Fresno, Kern, Stanislaus and Tulare counties, in addition to serving Riverside, Sacramento, San Bernardino and San Diego counties. Health Net serves over 600,000 people in the nine counties. The DHS administers Medi-Cal benefits under two plans in most counties. One plan is organized by local health authorities, and another is administered by a commercial health plan. “We are gratified and honored to serve Los Angeles County Medi-Cal beneficiaries with a full range of needed health care services,” said Stephen Lynch, president of Health Net of California. “We value the opportunity to be a part of an economical solution for the state of California as it searches for ways to affordably serve the Medi-Cal population.”