Mental Health and Substance Abuse

I'm seeing a trend of interest in integrating mental health and substance abuse services-- and I'm seeing some implications in the way agencies are approaching the idea.

By "a trend" I mean that it has come up three times in the last couple of weeks.

Talking with a potential customer a few weeks ago I asked about their project ideas. I look for ideas that galvanize key partners, meet a key need, and involve revenue generation. One of their key priorities was to figure out a way to integrate mental health and substance abuse services in a way that makes more sense for clients, makes more sense in terms of efficiency, and looks forward to a time beyond block grants, to a reimbursement model.

To me, this sounds like a great fit for a business plan: priority need, committed partners, revenue generation required.

One week later, I got an email from a Management Academy grad from several years back. They had just received HRSA funding for their business plan, doing similar work in rural Nebraska.

Last week, a group from Maryland presented their final business plan on the same topic. The team really impressed us with their commitment to see the change through, because they really believe that they can provide measurably better care and deliver better outcomes, and also create measurable administrative efficiencies, by doing the hard work of integrating. They are committed to this path even though the reimbursement picture is foggy at best. No one is sure how this work will get compensated. The only certainty seems to be that the funding model will be changing often, and perhaps dramatically, at least for the next couple of years.

You can't plan for everything. It certainly puts you way ahead of the curve to have planned for what you can plan for, though. These teams are being proactive. They are moving with purpose toward a better future state. And they are preparing themselves, as part of their plan, for uncertainty on the revenue side of the equation.

--Stephen Orton

Texas Instruments Sales, Profits Fall On Weak Demand

Texas Instruments Inc.'s (TXN) third-quarter profit fell 30%, hurt by a broad slump in demand that the chip maker said should continue into the current period.

The company's revenue in the third quarter was higher than it expected, but it noted the quarter was softer than normal. While executives said on a conference call that the company is seeing "early signs of stabilization," they still expect the fourth quarter to be weak and below seasonal.

"Economic uncertainty continues to weigh on demand in almost every major market segment in which we operate," Chairman and Chief Executive Rich Templeton said in a press release.

TI, which makes chips used in everything from cellphones to industrial equipment, had seen a sharp rebound after the recession caused customers to virtually stop buying chips. But recent macroeconomic worries have led to softer demand for semiconductors and other tech products, weighing not only on consumer businesses but also starting to affect enterprise demand.

TI in August lowered its view for the third quarter, saying it was seeing broad-based weakness across its customers and markets. The company on Monday echoed those comments and provided lower-than-expected earnings guidance for the current quarter.

Shares, up 11% over the past 12 months through Monday's close, slipped 1.3% to $31.27 in after-hours trading. The stock had climbed 4% during the regular session trading, slightly better than the 3.4% gain in the Philadelphia SOX Semiconductor index.

Bernstein analyst Stacy Rasgon said weakness in the third and fourth quarters was broadly expected, with macroeconomic softness weighing on TI's business.

"Results weren't horrible versus where expectations were," Rasgon said. "Everyone expected it to be a messy quarter, but they actually beat this quarter."

Chief Financial Officer Kevin March said in an interview the market is beginning to bottom, with July seeing the sharpest drop in orders but the decline moderating in August and September. He said revenue hit a low in July and grew the following two months.

He said the market declines aren't driven by excess semiconductor inventory but noted customers are being cautious with orders on worries about the macroeconomic environment.

"Customers had been reducing their internal inventories, and that's causing us and our competitors in the semiconductor industry to see revenue decline more sharply than what our customers ard actually experiencing," he said.

Ron Slaymaker, vice president of investor relations, said during a conference call that the reduction in TI inventory by customers is largely past. He noted the company has a "reasonable" view of the fourth quarter but said demand beyond that is tied to what the macroeconomic environment is like.

TI predicted a fourth-quarter profit of 28 cents to 36 cents, including about 15 cents of acquisition-related costs, on revenue between $3.26 billion and $3.54 billion. Analysts, on average, were expecting earnings of 54 cents a share on revenue of $3.43 billion, according to Thomson Reuters. A year ago, TI reported fourth-quarter earnings of 78 cents a share on $3.53 billion in revenue.

TI has been benefiting in recent quarters from increased focus on its highly profitable analog and embedded-application chips, as well as its applications processor for smartphones, tablets and other devices. Last month, it closed a $6.5 billion deal for rival National Semiconductor, expanding its reach in the analog market.

The company's acquisition of National Semiconductor, while hurting fourth-quarter earnings by 15 cents a share, is helping buffer its revenue in the period, March said. At the midpoint of TI's guidance, sales are down about 2% sequentially with contributions from National Semiconductor's revenue. Taking that out, the midpoint would be down 10%, he said.

March added during a conference call that acquisition charges will total $260 million in the fourth quarter and then decline to about $150 million in the first quarter and $110 million in the second quarter. The charges should then fall by about $10 million per quarter until reaching $80 million, which is the amortization of intangibles amount. He said that would continue for about eight to 10 years.

March said smartphone demand remains "solid," but the company's other businesses are experiencing softness. Automotive customers are "being confronted by wary customers given the macroeconomic outlook," he said, while industrial demand is "weak." Communications infrastructure is slowing, while consumer and PC demand are below normal seasonality, March added.

For the latest quarter, TI reported a profit of $601 million, or 51 cents a share, down from $859 million, or 71 cents a share, a year earlier. The latest quarter included about 9 cents of costs tied to the acquisition. Revenue fell 7.3% to $3.47 billion.

The company last month forecast a per-share profit of 56 cents to 60 cents with revenue between $3.23 billion and $3.37 billion.

Gross margin narrowed to 50.3% from 54.5%.

Sales of analog chips, which provide almost half of total revenue, slipped 1.5% as earnings fell 20%. Revenue from the company's embedded processing segment declined 7% as earnings decreased 29%, while wireless sales dropped 24% amid lower demand for connectivity chips from key customers, pushing earnings down 57%.

What You Shold Know About The Gateway ID47H02u

The Gateway ID47H02u specification:

Processor Intel Core i5 2410M 2.3 GHz
Memory 4GB DDR3 1333 MHz
Chipset Intel HM65 Express
Graphics Intel HD 3000
Hard drive 500 GB 5400 rpm
Operating System Windows 7 Home Premium 64-bit
Screen 14”
Battery 6 cells

Gateway claims eight hours on a single charge, but realistically, you will get somewhere between six to seven hours of up time, depending on your workload.

Along with the impressive battery life, Gateway ID47H02u comes with one USB 3.0 port and two USB 2.0 ports. The USB 3.0 is still a rarity among mainstream class laptops. Gateway also able to pack 14-inch screen into a laptop that normally sports 13-inch screen. The laptop weighs in at 4.5 pounds, and adds another pound if you want to carry the AC adapter around.

Keystone XL Pipeline Story

In July 2008, TransCanada Keystone Pipeline LP Ltd., announced Keystone XL, an approximately $7 billion pipeline project which would almost double the size and capacity of the company’s pipeline system connecting oil supply regions in Canada with U.S. refineries and distribution networks. The project comprises an approximately 1,661-mile, 36-inch crude oil pipeline stretching from Alberta, Canada, to the Gulf Coast Region in Texas.

Despite clear advantages in terms of job creation, cost improvement, and enhanced security, the project has not yet been approved by the U.S. Department of State. In fact, the permit review of the project was delayed by almost a full year from the originally announced schedule.

In a prior study, we determined that the total impact of the construction and development phases of the Keystone XL project on the U.S. economy would include (over the life of the project) $20.931 billion in total spending, $9.605 billion in output, and 118,935 person-years of employment. These were calculated at that time in constant (2009) dollars and rise slightly when adjusted to a 2011-dollar basis ($21.979 billion in total spending and $10.087 billion in output). The delays in the permitting process have cost business activity (on a net present value basis) of $1.19 billion in spending and $559 million in output, as well as postponing 88,622 person-years of employment. Job deferrals for states along the route vary, but most states have seen in excess of 5,000 person-years of employment (one person working for one year) delayed during a difficult economic period. View more on Ray Perryman Column.

On The Road in North Platte

A week or two after launching four new groups in North Platte I'm still thinking about the amazing public health system in Nebraska.

The four teams we are working with from north central Nebraska are all rural. Very rural. In fact they would tell you that they don't have enough population to count as rural: most of their counties are "frontier," a few with densities of less than one person per square mile. The health districts themselves have only been around for ten years. The state used tobacco settlement money to establish public health infrastructure.

The teams are working on great public health prevention issues: restaurant inspections (a role not in the public health portfolio in some areas), dental sealants for kids, healthy workplace products, sustainable plans for distributing vaccinations (flu and whatever comes next).

In all four cases they are working hard to find the sustainable revenue stream to support their work over the long haul.

One more thing they all share: great partnerships. Before there were health districts, many of these rural areas had health coalitions of health-conscious partners. As a result, the health leaders in these areas all think very deeply about how to engage and empower their partners. And the partners respond.

To me, the trip it felt like a glimpse at the origins of public health agencies: energy and green shoots and wide-open spaces for the community service mission to express itself.

--Stephen Orton