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Fine-Tuning Measures At State Insurance Fund To Bear Fruit By 2003
BY TAINA ROSA
April 19, 2001
"The situation at the State Insurance Fund (SIF) is serious in financial terms, but we are taking all the necessary steps to solve this situation," said Nicolas Lopez Peña, the agencys newly appointed administrator. His plan to revitalize the 66-year-old ailing government corporation includes revising providers contracts and eliminating superfluous expenses. By doing so, Lopez Peña is optimistic that in just two fiscal years, the SIF will be changing lanes from rocky roads to smooth seas.
In the meantime, while, fine-tuning measures already in place are expected to have the SIFs premiums jump to $565 million this year, an increase of more than 5% from last years figures. The agencys situation has been so precarious that it recently had to obtain permission from its board of directors to take $10 million in restricted funds to cover operational expenses.
"We have already analyzed superfluous expenses. We have reduced the number of political appointments, and also transitory and temporary employees, which have been tough decisions because were talking about peoples jobs. Now we are analyzing our investment portfolios to make them more productive," said Lopez Peña. Currently, the SIF has a little more than 4,000 employees.
Among superfluous expenses, Lopez Peña said he found that during the eight years in which the past administration managed the corporation, $40 million was spent on automating information systems. "Still, the systems cant communicate with each other, and users cant post information into a database automatically so its being done manually. These are systems that are not integrated at all." About $6 million, he said, will be invested to bring the information systems up to date and integrate them.
The same will be done at the SIFs Industrial Hospital beginning in July. There, information systems will be upgraded to better serve clients, who have been having a hard time because the current system is deficient in setting up appointments, according to Lopez Peña.
In addition, Lopez Peña said he found that almost $2 million was being spent on unnecessary items. "There were 200 beepers and cellular phones being used and we have reduced that to 20 beepers and 15 cellular phones," he noted.
Regarding contracts, he said he is also eliminating external contracts for jobs that can be done by internal resources. "We have the necessary talent to perform the tasks for which external contracts were given. The SIFs employees have the technical capacity and the compromise of improving this situation. They are well-prepared academically and know how the SIF works." He added that many of these contracts were for legal services, advertising, and even a radio show. Not only does the SIF have its own legal group, it also has a complete press office, according to Lopez Peña.
Lopez Peña, who was a top banking executive before entering government service, said his experience with private corporations has given him the necessary skills to turn the SIFs precarious situation around. During his years as a banking executive, he participated in four mergers. "This helps you know which are the areas that can be trimmed to save money."
The SIF is celebrating its 66th anniversary today with a three-mile marathon in Rio Piedras for employees of the SIF and other government agencies.
This Caribbean Business article appears courtesy of Casiano Communications.