|
Health Care Cost Crisis Affects All
Posted 3-24-2002
One of the hottest issues in the United States today is that of health
insurance. It has become a very contentious issue in the county's bargaining
with its largest union, Service Employees International Union Local 585. The
fact that the United States is the only industrialized country in the world
that still has health insurance tied to employment makes one wonder, but
that is a discussion for another time.
Over the past 35 years,
America has tried many ways to contain health care costs. In the 1960s,
there were Medicare and Medicaid. In the mid-1970s, wage and price controls
were threatened. In 1980, there was a voluntary industry-wide effort to keep
health care costs down. In the mid-1990s, managed care was thought to be the
vehicle to keep costs down. Nothing has worked for very long.
The challenge for county
government, as an employer of nearly 2,000 employees, is managing that
escalating cost. The cost of health insurance may not be a concern for the
employees, but, for us, it is a more difficult issue to manage than wages.
We are certainly not alone in dealing with that challenge. Across the
country, employers are looking at double digit increases in premiums, and
the days of low co-payments are gone. Managed care, which helped stem the
increases in health care costs, will undergo a transformation. That seems to
be a growing opinion of health insurance CEOs from across the country.
Part of the problem with
health care has been managed care's success. Low co-payments led more people
to visit the doctor, sometimes unnecessarily, and waiting rooms became full.
But, low co-payments have given people a false impression of how much health
care really costs. Many Americans have come to believe that low-cost health
care will go on endlessly.
That brings us to
Westmoreland County government's health care costs and our union
negotiations. In 1997, our health care costs were $6.8 million, a 7.6%
increase over the previous year. In 1998, after a high claims year, our
costs went up 16.5% to $8.1 million. In 1999, we took a guaranteed rate from
our sole insurer at the time and held the increase to 2.5%.
We knew that after 1999, we
would be smacked with a much higher rate based on utilization. So, the new
Board introduced competition between health care providers and moved our
non-union people to other insurers. In 2000, costs still rose 3.5% even with
the competition. But, the effect of competition paid off in 2001 when we
negotiated a better rate with our largest insurer. The negotiated rates,
added to better rates for our non-union people, kept the percentage increase
to 0.7%. This year, we have budgeted $9.2 million for health care an
expected 5.7% increase.
Our job is to continue to
aggressively manage this very volatile part of personnel costs. The
co-payment increases we have asked from the union are increasing
prescriptions from $8 to $10 on generic drugs and $10 to $20 on brand name
drugs. We have asked for doctor visits to go from $10 to $20, and emergency
room visits from $20 to $50. These are the first increases in co-payments
since managed care was introduced for county employees in 1995.
I realize no one ever wants
to pay more for anything. But, we live in a county, and a country, where
everyone is paying more for health care. We aren't the only employer asking
their employees to pay more. I'm sure many of you contribute toward your
insurance premiums. We aren't asking that our employees even do that. We
cover them and all their dependents FREE with NO contribution for premiums.
We also live in a county with
a large number of senior citizens, and many of them pay for Medicare
supplements. We also have many working people with no health insurance at
all. The commissioners are asking our SEIU employees to contribute a
slightly higher amount toward their health insurance co-payments, as a way
of helping to contain our rising health care costs. It is prudent fiscal
management, not an attempt to be insensitive. We do not operate in a vacuum
in county government and, as the world changes around us, we must change
with it. |
