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Published: Winter, 2006; Vol 8, Num 1

 

Health Care in America:

Cost Crisis Threatens Middle Class Life

Even back in 1988, when the LHSFNA was created, rising health care costs were a serious, emerging concern in American life and politics. The Fund has grown up with the worsening crisis, and today it shapes a great deal of the Fund’s activities.

We are not alone.

The health care cost crisis influences financial decisions made throughout American society and these, in turn, threaten middle class life in the United States.

“Unions and union members have no choice but to defend against this assault on the American quality of life,” says LIUNA General President Terence M. O’Sullivan, “but the Laborers are fortunate because our signatory employers share our perspective and join us in the struggle. Together, through our Health and Safety Fund and our health and welfare funds, we are finding ways to mitigate the crisis.”

Unfortunately, applying political pressure for reform at the federal level is not one of the ways. Though the federal government is the largest purchaser of health care services in the country, Congress has steered clear of the crisis since its 1993 rejection of President Clinton’s health care reform plan, perhaps hoping that unfolding developments would eventually offer a way out of the morass. Meanwhile, Congress has increasingly passed the cost of uninsured health care to the states. Without anyone else to whom they can shuttle the problem, state governments are cutting benefits while considering creative ways to make big business help fill their gaps.

“This is a national crisis,” says O’Sullivan, who also speaks from his position as Chairman of the Union Labor Life Insurance Company (ULLICO). “The federal government should take the lead in addressing this problem so that Americans aren’t continually burdened with concerns about their health and associated costs. Unfortunately, the government is ignoring the problem. Until that changes, we and our allies must fend for ourselves.”

Since its inception, the LHSFNA has been responsible for finding and implementing ways to contend with the crisis. In the mid 1990s, the Fund spearheaded the creation of LaboreRx, the pharmacy benefits management (PBM) program that enables LIUNA health and welfare funds to save money on prescription medications through bulk buying and mail order processing. A few years ago, the Fund took the lead in promoting health care coalitions – ones that would include LIUNA and other geographically proximate union funds – to concentrate power as union funds negotiate with local health care providers.

Local Fund Initiative

Now, the Fund is encouraging a more proactive agenda for LIUNA health and welfare funds and other union funds. “Data show that as much as a third of all health care spending in America is unnecessary,” says LHSFNA Labor Co-Chairman and LIUNA General Secretary Treasurer Armand E. Sabitoni. “Excessive and inappropriate care costs money and does not appreciably improve the quality of care or outcome. The only benefactors are the suppliers and providers of care. We want funds to be able to identify the providers that are out-of-line with the rest of the health care market and make sure they are removed from our networks.”

Sabitoni says LIUNA health and welfare funds have the information they need to save money. “Their financial and medical claims data,” he says, “show who is out-of-line. Once identified, problem providers can be given the choice of providing appropriate care at reasonable costs or being excluded as a covered, in-network provider. Experience (see story, page 7) indicates we’ll get good results.”

Workers’ Comp

The cost of workers’ compensation insurance is also soaring under pressure from rising health care costs. Over the past few years, on two levels, the Fund has addressed this escalation. “On the one hand,” says LHSFNA Management Co-Chairman and NEA – the Association of Union Constructors Executive Vice President Noel C. Borck, “we’ve surveyed states to identify available safety and drug-free workplace discounts and made every effort to make these discounts more accessible to signatory employers. At the same time,” he says, “we’ve concentrated on helping employers implement long-term company safety programs that steadily lower their Experience Modification Rates (EMRs) and control their premiums.”

This year, the Fund will make a special effort to promote the use of alternative dispute resolution (ADR) procedures as a means to enhance workers’ compensation claim management and save money. “ADR (see story) is another example of how labor-management cooperation can make life better for both workers and management,” says Borck.

“The hallmark of our approach to this crisis is a broad collaboration with our signatory contractors and other allies,” says O’Sullivan. “We refuse to be pitted against the union employers who share our goal of a solid, middle class life for all Laborers. Instead, our focus is on the health care organizations and providers that are stealing from us through inappropriate, wasteful medical care and on the corporations that impose their obligations on us by refusing to provide coverage for their own employees.”