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Fighting Health Care Costs

October 4, 2011
By Bendix Anderson

The cost of Healthcare is a weight on the backs of unions and working people everywhere. Here are some ideas that can make that weight easier to carry.

“The cost of health care is very, very high,” said City Council member Mathieu Eugene, one of the speakers at the LaborPress/ MedReview Conference on Health Care, held September 22 in Manhattan. “It is our responsibility to provide the highest quality care to our people.”

The conference speakers agreed on the scale of the problem. From 2001 to 2010, the cost of health more than doubled. Many employers who now provide health benefits to their workers are considering cutting of those benefits — estimates range from one-in-ten employers to nearly half, according to health experts. That would force millions of workers to buy their own health insurance or do without.Mitra Behroozi, Executive Director of 1199 SEIU Funds

But workers and union health plans can fight back. For example, the main benefits fund for Local 1199 SEIU, which provides health benefits for more than a quarter million people, only saw a 75 percent increase in healthcare costs over the last decade. That’s still a huge increase, but it’s much less than the rest of the nation.

The main 1199 SEIU fund achieved this without any cost shifting. “Our members never have premiums and they don’t pay out-of-pocket costs if they follow the rules,” said Mitra Behroozi, executive director of 1199 SEIU Funds. Instead, 1199 SEIU focuses on preventative medicine and disease management, healthcare utilization reviews and careful negotiations with healthcare companies.

Strength in numbers
The 1199 SEIU Funds negotiate preferred rates with providers in exchange for steering Local 1199’s members toward these preferred providers, who offer the best care at the lowest price. Members pay no point of service charge if they use a preferred provider, but they face out-of-pocket costs if they chose a non-preferred healthcare provider.

For example, members pay nothing for prescription drugs if they follow all the rules of the plans — so members won’t fail to take needed medication to save money. However, if members choose non-generic medications when generics are available or choose another drug instead of the Plans’ preferred medication, members will have to pay the difference in price. Because of its strength in numbers, the 1199 SEIU Funds have been able to negotiate reduced prices for its preferred medications even for brand name drugs like Lipitor.

“In a way we are acting like a group purchaser for our members, negotiating the highest value for the lowest cost,” said Behroozi. The negotiation brings some of the strengths of the free market to health care, as the 1199 SEIU Funds shop for the highest-quality care and best deals in a way that individual members never could on their own.

Healthcare experts also continue to press for more information their negotiations with providers like drug companies. “It’s got to be an open relationship,” said Gregory Rucinski, president of Tricast, Inc., based in Milwaukee, Wis. “You have to be able to test and audit: What is a generic and what is a brand? What is the actual price of a drug… the ingredient cost?”

Utilization review

Healthcare utilization review is also an important part of the strategy for union benefit funds like the 1199 SEIU Funds. Organizations like NYCHSRO/ MedReview, Inc. can save huge amounts of money for benefits plans by carefully reviewing claims.

Joseph Stamm, President and CEO of NYCHSRO/ MedReviewFor example, MedReview examined the case of a 17-year old girl suffering from Lupus who was admitted to the hospital for joint and muscle pain. The hospital listed her secondary diagnosis as Nephritis — however the documentation does not support that diagnosis. MedReview changed the secondary diagnosis coding to Hyponatremia, which is supported by the facts of the young woman’s case. The hospital agreed to the change. The original hospital coding of Nephritis pays $34,708. The revised coding of Hyponatremia pays $13,195 — a savings of $21,513.

“This is just one of thousands of cases like this,” said Joseph Stamm, president and CEO of NYCHSRO/ MedReview.

Health and wellness

“We have to do preventative medicine and health education.” Council member Mathieu Eugene. He has a long history of advocating for health screening and participating in information sessions fro his constituents on common health problems.City Council member Mathieu Eugene

Blue Cross now gives its members access to registered nurses who can answer their healthcare questions. “I think of cost containment as health and wellness,” said Lisa Mast, Director of 360 Health at Empire Blue Cross. The money that Blue Cross invested on its preventative medicine program in recent years has more than doubled itself in cost savings.

Experts also stressed the need to unions to work with politicians to protect their right to affordable healthcare. “Unless we present a united front, we will be run over by other interests,” said Richard Winsten, a partner and the chair of the government relations practice at Meyer, Suozzi, English & Klein, P.C.

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