Casey scoops again: Sal trumps Patrick on containing health care costs for municipalities?
House Speaker Sal DiMasi has floated the idea of allowing communities to join the state’s health insurance plan without first negotiating with unions – a move that would significantly expedite a cost-saving plan proposed by Gov. Deval Patrick.
The plan is to allow communities to adopt the state’s much cheaper health insurance plan for its employees, thereby freeing up more money for communities to use for police, schools and other local services.
From what I know, Sal’s right and Patrick — who is said to have “responded cooly” to the idea — is wrong, or not right enough. In any event, Patrick should jump at the opportunity to help out municipalities while having DiMasi take the political heat off of him. The unions won’t like it; the unions will be OK. Sometimes you have to say no to your friends, right?
It’s weird, but actually, I like how this partnership is working so far. Keep it up.
The original version of the bill was going to force towns to adopt healthcare coalition bargaining language that was so anti-management that only 8/351 had adopted it (don’t remember which chapter it is). Basically, it said that we have to form this healthcare bargaining unit with proportional representation for each union. AKA the teachers union have complete say over everything for everyone since they’re usually bigger than the rest put together. I love teachers more than probably any other profession but that’s not a workable system.
<
p>
Good for Sal. I’d like to see how he’s doing at balancing that budget without the 200 mill from the loopholes.
For once, the heat can be on someone other than Deval. Massachusetts needs to learn how to pool our resources and avoid redundant/more expensive (and getting less out of it) old habits.
Deval’s plan didn’t make much sense to me because the municipalities in most need of the remedy offered would not be able to get their unions on board. This left his proposed remedy some what useless. The DiMasi plan is a true remedy. Health insurance is a major contributor if not the major contributor to escalating municipal budgets. This could offer our cities and towns some real relief.
…friend take the political heat off you. DeMasi is politically secure. Patrick, um, not so much. Not yet, at least.
<
p>
Two points.
<
p>
One, I don’t really understand what the issue is regarding GIC. If GIC is used as a baseline, and if the municipal unions want to negotiate with their muncipalities for more, as far as I can tell, there is nothing that prevents them from doing so.
<
p>
Two, my spouse is a retired MA government employee, and he (now we) have had GIC’s reimbursement for virtually ever. It is not a bad plan. (His only objection is that it doesn’t cover accupuncture–or at least it didn’t the last time he checked, which was a long time ago.) One thing that is nice is that it covers us internationally. In 2000 when we were in Munich he had a deep vein thrombosis (diagnosed by our physician over here with his ultrasound device that I’ve mentioned here elsewhere). He spent a week in Krankenhaus Muenchen-Pasing (the local hospital). They gave him great care and performed dozens of tests. And GIC paid every pfennig of it, no questions asked. I’m not exactly sure what more one can ask of an insurance plan.
Don’t the municipalities have a current contract with unions that covers health care? How can the municipality change that part of the contract without union consent? Is that legal? Is it ethical?
A municipality joining the state system would not take effect until current collective bargaining agreements expire.
makes sense to me.
<
p>
Now, if the current union contract was worth $x in salary and $y in benefits, and $y is being reduced because the GIC isn’t as generous as the current plan, won’t the towns be in a tight position to raise $x?
The mistake you are making is assuming that $y is being substantially reduced.
<
p>
Actualy, $y would remain essentially the same since the GIC is basically as generous as most City plans (obviously, there are some differences but they aren’t substantial).
<
p>
The cost difference is largely the result of the GIC’s increased economies of scale and negotating powers. Not reduced benefits.
<
p>
However, the unions still are very reluctant to give control over plan design over to the GIC. Not because they would really be giving up many benefit (employee share, for example, would remain unchanged) but because it lessens their negotiating power when $y is off the table and $x becomes the main bargaining issue.
I’m not saying you’re wrong, and I’m sure there are specific cases where the benefits are exactly as good in the GIC.
<
p>
But, I do recall some folks pointing out that the employee contribution percentages, copays, etc of the current union plans in their town were more generous than the GIC. I don’t have the data, so I have no idea… but in cases where the benefit of $y (not the price, but the “cost” of an employee using the health care, ie the health care benefits) is reduced should the plan move to GIC, the unions are going to demand something in return for giving up some received benefits, and that shouldn’t be surprising nor frowned upon.
<
p>
If your employer decided to trim your health care benefits, you might ask for a bigger raise to compensate too.
is that the muni unions are upset about this because they dont want to lose the bargaining issue, not because the benefits of the plan are substantially different. Even if “Y” is the same, they don’t like DiMasi’s plan because they lose power in future negotiations. They want to negotiate over the co-pay for new eyeglasses, etc., even if it’s of nominal benefit to its members.
<
p>
Also, mandatorily putting the muni plans into the GIC wouldnt preclude the unions from negotiating for higher wages, i.e., more “X”. But it inverts the negotiating process. They would have to make that argument on it’s own merit in salary negotiations rather than holding up the GIC migration.
<
p>
Finally, a lot of the “y” savings here arent hurting the members. It’s not like moving to GIC plans will increase their premunims. When the towns save money because of economies of scale through entering the state system, it’s not like it’s coming out of the members’ pocket. So it doesnt make sense to me why all the “y” savings would have to be translated into “x” increases—before adopting the GIC, as under Deval’s plan—rather than using the savings to solve the recurrent revenue problems facing cities and towns.
<
p>
Are you sure? My impression is that, at least in some cases, the premiums, co-pays, or other fees will increase, and that in other cases, coverage will change slightly. You can argue about whether or not they’ll move toward a rate that’s more appropriate, but from the perspective of the union worker, it sure smells of reduced benefits.
<
p>
If done “mid-contract”, that’s blatant disrespect for a contract. If done between contracts, then I still don’t see how, if the value of the insurance coverage $y decreases how the towns won’t be pressured to make up for it with an increase in $x to make up the difference, plus an additional increase in $x for COLA, etc.
<
p>
So, it will look like the unions got a z% pay raise, when what they really got was something less than z% pay raise plus a salary increase to offset reduced coverage value $y.
<
p>
Am I craxy here?
That’s why I want a proviso that towns will be forced into GIC ONLY IF the GIC premium is lower than the one they have!
I have to confess I’m not the most informed person in the world on this. And you’re probably right that in some cases, premiums (money withheld from paychecks for insurance) will slightly increase. In those cases, I think it’s entirely reasonable that the unions would expect dollar-for-dollar replacement with higher salaries.
<
p>
Where it gets complicated is in the areas where it’s harder to quantify the benefits changes. Like co-pays for instance… members have different usages, so it would be hard to determine precisely how to compensate for an increase from $10 to $20 for a given prescription. And then there’s even softer issues, like changes in eligible provider networks. I can’t think of how you’d even start to put a dollar figure on that one. And how to offset all of these against any gains that employees might get from joining GIC.
<
p>
Under Deval’s plan, it will be next-to-impossible to get cities and towns to migrate into GIC because the default rule is to stay separate and because any move would require the approval of a super-majority of the municipality’s employees. Perhaps some oxes may be gored by DiMasi’s plan… but we should heed the fact that ever-increasing healthcare spending on public employees is crowding out other priorities (including HIRING more teachers, firefighters and police officers!).
the difference in premium is easily calculate-able. Delta(per week) * 52.
<
p>
The difference in benefits, co-pays, prescription fills, etc is much harder to calculate. If you change those — even if the wage-earner’s premium price is identical — you’ve changed $y, and it’s damn hard to calculate just how much.
That’s not to say that forcing the switch to GIC (upon contract re-negotiation) isn’t a smart thing to do… it sounds reasonable at first glance. I’m merely pointing out that it won’t be that simple come negotiation time, that’s all.
Point one, apparently DiMasi is offering to open up GIC to municipalities, he isn’t requiring them to accept the offer.
<
p>
Point two, I don’t know what the MA state statutes are governing labor contracts for MA state and municipal unions, but clearly the federal labor laws would not apply. That was pretty much the implication of the Seminole Tribe vs. Florida and Alden vs. Maine line of US Supreme Court cases.
I think we really are seeing a budgetary dance going on between the Governor and the Speaker. See this
Anyway, the relevant quote is towards the end of that article.
-DiMasi, cerca yesterday.
And no, I’m NOT a fireman or cop, nor is any family member.
<
p>
Two towns on the Cape, Dennis and Yarmouth, are facing overrides to cover costs due largely to the skeweed ch. 70 formula, which has shortchanged the region for 14 years.
<
p>
That said, during a presentation by the superintendent and finance officer of the region, the GIC thing came up. It turns out that on Cape there is a municipal health care buying collaborative with BC/BS. Due largely to the fact that we have essentially one hospital (imagine THAT, BMG’ers – perople in P-Town have to drive 40 miles to a hospital!) BC/BS is able to set a more stable rate instead of one based on cost of care at several hospitals, and that 15 town plan is cheaper than GIC!
<
p>
So – Mr. Speaker – let’s make this mandatory for towns that haven’t ALREADY cut a cheaper deal without your ‘help’!
Once upon a time, I was a TA in the Healthcare MBA program at USC. There was a course on the philosophies of health care. The Professor’s main theme was that the spiral in healthcare costs (present even in 1978) was driven by i) primarily, doctors who because of their training and belief that they had to ‘fix’ people at any cost ii) secondarily, doctors who were pressured to fill beds in the hospitals where they practiced. It all comes down to Doctors, so the thinking went.
<
p>
Anyway, I’m not surprised, based on that theory, that Cape BC/BS is by comparison in contol: limited beds because there’s one hospital and therefore less pressure to fill more beds that otherwise exist in a larger metropolitan area.
<
p>
Not sure if that 1978 thinking is still endorsed, but it makes sense. All the single payer harpies like to attack the big Pharma and big insurance (an easy, pitiless, target), but ignore the fact that European doctors earn about $55,000 while the average GP in American earns $155,000.
<
p>
Good for DiMasi. A feather in his hat.
<
p>
Unforunately for Governor Patrick, I believe the house speaker will become increasingly influential in inverse
proportion to that of the governor.
<
p>
The governor is a nice guy who gets up there and says nice things and then retreats to his office. The guy just doesn’t exude leadership. One leads by setting the good example and going out there and putting words into action, popular and sometimes unpopular. Governor Patrick just isn’t doing it. Tepid doesn’t even come close as a descriptor.
<
p>
Where is T. Murray?
Waiting. With a smile on her face. Just hoping one of these bozos is dumb enough to patronize her. She knows every nickel in the State budget, and how to wring value from it.
I find it inconceivable that Deval could be wrong or make a mistake and even more staggering that BMG could make such a suggestion.