As president and chief operating officer of Mereco, Philip M. Papoojian knows firsthand the challenges of running a small business and of being a manufacturer in Rhode Island, and for the last several years, he has been a leader in efforts to make things better.
He spoke with Providence Business News about some of his priorities and where he sees hope for the future, especially in health care.
PBN: What is Mereco’s market?
PAPOOJIAN: We manufacture specialty polymer components for electronics, military, aerospace and renewable energy solar cells.
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PBN: Why is Mereco a member of the Center for Business and the Environment?
PAPOOJIAN: It’s important to be cognizant of environmental issues and also to have the platform for advocacy at the federal level on environmental issues affecting small business. I’m also a participant in the [R.I. Department of Environmental Management] business roundtable … and I was also involved with the Rhode Island Greenhouse Gas Process.
PBN: Why is being green in Rhode Island important?
PAPOOJIAN: The Rhode Island Greenhouse Gas Process was a committee of concerned people from the environmental and business community – people who were concerned with the impact of greenhouse gas and global warming. Unfortunately, [it] is up in the air because of lack of funding, but I felt it was an extremely important effort in addressing the impact of global warming and greenhouse gases in Rhode Island. And I hope funding can be found to continue the effort.
PBN: What types of changes has Mereco made toward greener manufacturing?
PAPOOJIAN: We’re looking into the ISO 14001, which is basically an audit of your compatibility with best practices [in relation to the] environment. We’ve been ISO 9000, which is the universal quality standard, for over 10 years. We’re audited annually on quality and best practices. One of the things we did to enhance our environmental compliance is we switched to an environmentally friendly cleaning solvent, which actually cost us more money. But we feel it would be more beneficial to everyone concerned and the environment.
PBN: Why did you enter the discussion on Rhode Island health care reform?
PAPOOJIAN: I was kind of forced into the discussion because the premiums for Mereco went up 22.6 percent, which was another $40,000 [subtracted from] our bottom line that wasn’t planned for. … [And] I anticipate, and the small business community anticipates, that premiums will keep rising.
PBN: Is there a reprieve in sight?
PAPOOJIAN: The HEALTHPact plan was developed out of the Chris Koller’s office, the commissioner of health insurance, and it was devised by a committee of business people. [It] should provide lower premiums for select individuals in the business community. That’s going to be launched in October, and I was part of the committee that developed that plan for the state.
PBN: Will Mereco offer it?
PAPOOJIAN: We want to.
PBN: You’ve been an advocate of more dramatic reforms, adopting community rating in health insurance, as opposed to the modified community rating now in place for small groups.
PAPOOJIAN: We’re proposing a pure-community rating based on an individual mandate. For small business, the current rating system … is based on the overall performance of the small-group pool, which are companies with employees from one to 50; then there are assessments based on age, gender and family. The modified community rating, as it currently exists, has resulted in some very rapidly escalating health care premium costs.
The Summit Health Care committee, which I’m chairman of, is proposing that every Rhode Islander … has insurance – which is basically universal coverage. It’s based on an individual mandate which requires every individual in Rhode Island to have insurance and a pure-community rating for which all Rhode Islanders are in the same pool.
PBN: How would small employers benefit?
PAPOOJIAN: Insurers will tell you that the more people in a pool, the more it spreads the risk among the individuals. Theoretically, that should result in lower premiums. You’ll have all the really healthy people in the pool and all the sick people in the pool, but it gets spread over a larger amount of people, whereas now you have segregated pools. For example, in a smaller pool, if the premiums are too expensive, younger, healthier people won’t participate, so you end up with the older people who consume more health care resources, which increases the cost of the pool and results in higher premiums.
PBN: Right now, what are the biggest issues facing Rhode Island manufacturers?
PAPOOJIAN: It depends on the industry they’re in; each would probably give you a different response. But typically the fastest-rising cost in their business is health care. I would rate them as No. 1, health care; No. 2, compliance with the fire code; and No. 3, overseas competition.
PBN: How have the fire code changes in Rhode Island affected Mereco?
PAPOOJIAN: Mereco spent over $150,000, unanticipated, to comply with the new fire code regulations.
