1. Economic Crisis: Health Care Impacts
by P. Parham
Vice Chancellor, Human Resources
Ventura County Community College District
The United States has the most expensive health care system in the world and is projected to double by In President Obama’s inaugural address he pointed out that the system is “too costly” and called for reform that will “raise health care’s quality and lower its costs.” Right now consumers pay about 15 cents out of every dollar on health care with the rest paid by government (50%) or insurers (35%).

2. Issues Reform initiatives
Responsibilities in health care cost management
Cost cutting strategies
For the next few minutes we will look at health care reform initiatives and studies intended to address this crisis, discuss the responsibilities of labor and management in health care cost management, what can reasonably be achieved at the bargaining table and identify a few possible cost cutting strategies

3. The Path to A High Performance U. S
The Path to A High Performance U.S. Health System- The Commonwealth Fund
5 Essential Strategies for Reform
Affordable Coverage for All
Align Incentives With Value and Effective Cost Control
Accountable, Accessible, Patient-Centered and Coordinated Care
Aim High to Improve Quality and Health Outcomes- Infrastructure and Public Health
Accountable Leadership and Collaboration to Set and Achieve National Goals
The commonwealth fund commission, a private foundation working toward a high performance health system published a report in February of this year that focused on a 2020 vision or health care in the US and the policies necessary to pave the way. The commission identified 5 essential strategies for comprehensive reform. Central to their strategy is an insurance exchange that offers a choice of private and a new public plan, reforms to make coverage affordable, ensure access, and lower administrative costs.

4. The Path to A High Performance U. S
The Path to A High Performance U.S. Health System- The Commonwealth Fund
Key Initiatives
Establish a health insurance exchange that offers enhanced choice of private plans and a new public plan
Require individuals to have coverage and employers to offer coverage
Strengthen patient centered primary care through enhanced payment and comprehensive care coordination
Integrate health care delivery systems that reward quality and outcomes
Accelerate adoption and use of Health Information Technology (HIT)
Provide transparent information to drive innovation through benchmarks and other tools
The report recommends policies to change the way the nation delivers and pays for care moving from a fee-for-service to a more bundled method that encourages care coordination and provider accountability for outcomes. They suggest investments in information systems to improve quality and safety and promote health. They recommend instituting insurance market reforms that focus competition on outcomes and value. Investment in health information technology and centers for comparative effectiveness to enhance knowledge. They contend that stimulating competition and delivery system changes aimed at providing more effective and efficient care the policies could yield substantial savings for families, businesses and the public sector.
Transparency – costs, outcomes, and quality
Comparison in effectiveness – costs, access, quality
Medical tourism- travel to other countries to access quality specialized health care

5. Who is Responsible? Providers Insurers Employers Labor Management
Who is responsible for cost containment in our plans? Employers, employees, labor, management. I contend we are all responsible. We can’t assume someone other than ourselves will take care of these issues and we do not have a responsibility. What is the role of the individual in controlling health care costs? What is the role of employee representatives? What is the role of the employer? What can we realistically achieve?
In California, there is a state-wide coalition of employers and employee organizations committed to addressing runaway health care costs in the public education sector. The coalition is called CECHR-California Education Coalition for Health Care Reform. This coalition is committed to educating groups to improve the quality and cost of health care. It provides training to employees on three topics.: Joint-labor-Management Health Benefits/Insurance Committee, Making Informed Choices, and Current Trends. The presentations are done by a representative of both labor and management. Their intent is to assist parties to form health committees, educate groups on insurance terms and ratings.

6. What will be achievable in negotiations?
Cost shifting
Cost containment
Partnerships
Commitment to reform
Cost shifting- plan design changes, cap on employer contributions, Plan Participation, Retiree Benefits.
Cost containment – agreement to look at alternative insurers but will this address the issues raised earlier?
Utilization – Claim/Premium Analysis
Prescription Drugs & Medical Costs
Plan Design
Plan Participation
Retiree Benefits
How about partnerships, Labor/Management Committees designed to reduces costs and improve quality.
Release time for participation on committees

7. Joint Labor/Management Committees
Ask questions
Analyze claims
Understand renewals
Trend
Margin
Large claims
Educate subscribers
Promote alternatives
Committees can think out of the box and promote alternatives to save $$ to the plan, the employer and the participant. Employers alone without the support and momentum from labor can not achieve the same results. As an example, a member our my VCCCD’s committee is now recommending that we “the collective we” develop a program that encourages employees to purchase prescription drugs directly from COSTCO. Why? Because he read a letter to the editor of our local paper that told a story of a person who recently lost his RX coverage. This gentleman could not afford COBRA but needed the RX. The pharmacist called his name to pick up the drug and told him the full price was $ (Kaiser’s pharmacy cost) the man called Vons’ a local grocery store and found the same drug for $90. The pharmacist told him they could match the price of other pharmacies and checked COSTCO for him After finding out the COSTCO price was $10 the pharmacist told him he should but it there.. The man paid $9.59 at COSTCO for the exact same drug that Kaiser was charging over $600. recognize of course the employer will realize that expense in the form of premium and has may not have any other option in difficult economic times than to shift a portion of that cost to the employee.
Plan Design
Premium Contributions
Opt-out Feature
Covered Lives
Medicare Coordination
Bidding/Carving Out
Education

8. Cost Cutting Strategies
Dependent eligibility audit
Electronic enrollment
Volume pricing
Audits are finding 5-10% of dependents do not meet eligibility criteria. Employers can perform audits themselves or hire a firm to perform the audit. Audit vendors are wiling to guarantee return on investments. At VCCCD our audit found 9 dead people. Of course, while claims from dead people are slow claims from their ineligible dependents still flow in and impact our plan. Our retiree medical coverage ceases when the retiree dies. We also found over 100 people who were enrolled in Medicare and whose Medicare information we did not have on file. Why is this important? Medicare is primary when you are retired. Our employees did not tell us they had Medicare because they did not like the paperwork involved in coordination of benefits. When our committees realized the impact to the plan costs the committee recommended Medicare counseling upon retirement. The retirees were invited to hold a chair on the committee to encourage communication on this and other issues.
Electronic Enrollment-reduction in printing costs, improves employee communication, eligibility rules automated
Volume Pricing- offers an opportunity t have better control over rising RX costs, purchasing power of a coalition provides level of saving no individual client could achieve on their own.
Minute clinics-There’s really no secret behind Minute Clinic's better approach to diagnosing and treating common illnesses:
Quick (about 15-minute visits and no appointment needed).
Affordable (treatments between $30 and $110, and reimbursed by most insurance plans).
Convenient (open 7 days a week, located near pharmacies).
Our ability to put together these simple pieces, results in top-quality health care, a history of rapid growth and high customer satisfaction and substantial media coverage. Guiding us toward our goal of quick, affordable and convenient health care is a seasoned management team.
Plan Design
Premium Contributions
Opt-out Feature
Covered Lives
Medicare Coordination
Bidding/Carving Out
Education