S P E C I A L
The Politics of BCIBB
Merging Contracts
With Benefit Plans
by Thomas Gallagher
th e ir members th a t other
The Bargaining Unit Bene
unions do not provide, but
fits Board was a dream that
there is no single best possible
OPEU sought during three
insurance plan. Every plan is a
legislative sessions. It's crea
compromise of cost, design
tion was one of OPEU’s
and benefits.
biggest legislative victories.
The key to spending dollars
Since the Collective Bar
wisely though, is for BUBB to
gaining Bill of 1973 enabled
maintain one plan with a large
employer contributions to
pool of employes. Any union
health and dental plans,
that wants a separate plan
unions have negotiated the
would have to break their em
amount of the contribution.
ployes out into a smaller pool
But not until BUBB did a union
to share the insurance risks. In
have a real say in where the
all cases, the smaller the pool,
money was spent. Previously,
the higher the cost.
under the Oregon State Em
T here is no le g is la tiv e
ployees Benefit Board (SEBB),
directive to BUBB to break the
unions’ need to know exactly
group into smaller pools; the
what insurance would cost
increased administrative costs
prior to bargaining and unions’
of additional plans, plus the
need to have control over the
expense of design and devel
trade-off between benefits and
opment, runs counter to the
cost were not met.
legislature’s policy of cost
Adding to this unacceptable
cutting. There are also many
situation was the number of
policy questions to be con
conflicting interest groups in
sidered in different plans.
SEBB—excluded employes,
Paramount among these is
non-represented employes
whether the legislature in
and management service em- * tended to set up a board that
ployes, as well as union
could treat represented em
members. BUBB was created
ployes differently from agency
when it became obvious that
to agency.
one board could not serve the
BUBB is not an extension of
needs of these separate
any union, hot even OPEU; it is
groups.
a State board required to vote
The goal in the 1970s was
in the best interests of the
clear—to gain a say in where
State in providing insurance to
benefit dollars were spent. But
represented employes. The
it was also im p o rta n t to
question of separate plans for
establish a second board so a
different unions will be hotly
m ore im p o rta n t o b je c tiv e
debated in the next few
could be met—to develop
months.
additional methods for gaining
It may be that BUBB is not
the maximum benefit from
the best vehicle to solve the
negotiated dollars.
problems of negotiated in
It is important to realize that
surance benefits. Perhaps
BUBB was created for all
separate union management
represented employes, not just
trust funds should be set up.
for OPEU. Other unions can
Perhaps the directives of the
join BUBB; most have stayed
cu rre n t Board should be
in SEBB. But AFSCME joined
modified.
BUBB in 1980 and other
Whatever answer is devel
unions are considering joining
oped in fu tu re legislative
BUBB. The board has con
sessions, it is clear that, one—
tinually said that they have no
OPEU had the wisdom and
objections to bringing other
political skill necessary to
unions under the BUBB plan
begin the process of merging
and at their October 1981
contract monies and benefit
meeting they adopted criteria
plans—and, two—OPEU wel
fo r accepting other unions into
comes any ideas from other
BUBB.
unions to improve this pro
The controversies that sur
cess.
round BUBB and SEBB stem
from one fact—all unions want
Mr. Gallagher is executive
to get the best possible
director o f the Oregon Public
insurance for their members.
Employes Union and a mem
There is competition among
ber of the Bargaining Unit
unions to provide benefits to
Benefits Board.
Page 6
fho pays How Much on Medical Bills Each Year*?
•The average annual medical expanse was $245 per person in 1975.
(This overview of statistics is compiled every five years; data for 1980 is not yet available.)
SEX
Male
$223
Female
$265
EDUCATION
OF FAMILY HEAD
Under 9 yrs.
R E P O R T
To Contain C osts
Wellness Programs
for Employes
by Cindy Parrish
In the past 15 years, insur
ance costs have risen over 400
percent. This trend will con
tinue during the next 10 years
as anticipated medical costs
skyrocket from $206 billion
last year to $821 billion in 1990.
State employes have been
caught in this astronomical
spiral. Last year their health
insurance rates increased by
up to 43 percent. The state
agreed to pay fo r these
increases this year, but next
year they will pay for only an
average 15 percent increase.
If insurance costs for state
employes are not brought
down—with employes and
BUBB participating in cost
c o n ta in m e n t p ro g ra m s —
benefits will either be cut or
employes out-of-pocket ex
penses will increase. In short,
insurance may no longer be
free to employes and their
families.
$200
9-11 years
$222
12 years
$250
Over 12 yrs.
$294
PLACE OF RESIDENCE
City
$251
Suburb
$254
Rural
$226
T o he lp em p lo yes ba ttle rate
Why Are Health Care Costs So High?
by Chuck Mendenhall
Ironically, rapidly escalating
health care costs are the result
of our pursuit for a better
standard of living. We have
applauded medical science’s
ability to provide us with cures
for most life-threatening mal
adies, but the cost of health
care has paralleled these
tremendous medical achieve
ments.
In an outstanding panel
presented at OPEU’s annual
convention, Doug Welta, M.D.,
outlined the seven most sig
nificant factors contributing to
rising health care costs:
the gas pump. In fact, inflation
may have an even greater
impact on health care than
many other areas of the
economy;
Utilization—More people are
using insurance for more
reasons.* Insurance plans are
o ffe rin g broader coverage
(some like HMO have no
deductible) and this drives up
insurance rates;
Malpractice— D octors fees
reflect the high cost of mal
practice insurance, which is
increasing because of the
number of suits and the size of
awards;
Longevity—The percentage of
population over 65 years will
increase from 10 percent in
1980 to approximately 20
percent to 30 percent by 1990;
Physician Surplus—As more
physician time becomes avail
able, patients are allowed
more personal contact, which
can result in higher fees; and
Technology and Research—
The cost for new medical
equipment and the ability to
perform long and complicated
surgery will continue to have a
profound impact on insurance
rates;
Indigent Care— Doctors and
hospitals lose m illio n s of
dollars annually in fees they
are unable to collect. Their
losses are passed on to
premium payers in the form of
higher fees.
In flatio n — In fla tio n is n ot
unique to the supermarket or
Few of us would either
red ire ct d ollars spent fo r
i medical care or dispute the
I need for medical advances
made through research and
development. Even so, there
are two questions each of us
must face—how much longer
can we afford spiraling health
care costs and what can we do
about containing these costs?
The Oregon Legislature is
keenly interested in these two
questions. Two members of
the leg islative Ways and
Means Committee—Rep. Vera
Katz and Sen. Tony Meeker—
outlined several concepts that
need to be explored.
“ Currently, insurance plans
offer very few incentives to
encourage wellness,” Katz
said. “ In fact, many insurance
plans encourage overuse and
this drives up costs.”
Meeker concurred with Katz’
assessment and added that
incentives and controls for
I acountability must be imple
mented throughout the entire
insurance industry in addition
| to insurance plan design.
The primary problem is that
i there is no coordinated effort
to keep costs under control,”
Meeker said. “ Doctors, hos
pitals' insurance companies
and policy holders all point the
finger of guilt at one another.”
Katz and Meeker both stres
sed that the legislature, the
B a rg a in in g U n it B e n e fits
Board, OPEU and each state
employe needs to evaluate the
medical cost dilemma and be
willing to participate in a
coordinated effort to get a
handle on rising health care
costs.
Some areas of reform and
concepts that Dr. Walta enum
erated are beyond our scope
and need to be addressed at
the federal level. But he did
p o in t out tw o s ig n ific a n t
concepts that can be ad
dressed by BUBB, public
employe unions and state
employes:
Design insurance plans that
provide positive incentives for
wellness; and
Implement ongoing par
ticipatory programs for health
fitness and preventative medi
cine.
increases, BUBB has made a
major commitment to cost
containment. This commit
ment has three integral parts—
wellness programs, a reserve
fund and employe education.
BUBB will implement well
ness programs much like a
highly successful program at
the Pilot Rock School District.
That program, which began in
1979, is designed to improve
physical fitness and nutrition
and to reduce stress.
The program features:
• “Waistliner” lunches;
• Nutrition breaks that include
fruits and juices;
• Bulletin boards and inform
ational materials promoting
fitness; and
• Fitness programs, district
intramural programs and com
munity sports programs.
Among the many benefits
that the Seaside program has
produced are a considerable
reduction in the number of
employes who are overweight,
a significant decrease in sick
leave, a demonstrated willing
ness by management to pro
vide time for fitness in the
workplace and the long-range
potential for reduced prem
iums.
A reserve fund has already
been established by BUBB. It
w ill help offset any rate,
increase above the 15 percent
that the State has agreed to
pay next year. The fund will
total all insurance monies that
OPEU negotiated with the
State, but were not used to pay
insurance claims. In the past,
these monies stayed with the
State.
Employes will also need to
be educated. They must be
made aware of the costs of
insurance and how to bring
these costs down. As patients,
employes only pay for six
percent of their medical bills;
the rest is paid by government,
private insurers and charities.
But who pays for government?
State employes pay taxes that
are used to provide the benefit
programs. They pay insurance
premiums that rise with the
cost of health care and they
donate to charities.
Each employe has a direct
stake in the cost of health
insurance. Our success in
limiting the insurance rate
spiral will only be as effective
as employe participation in
cost containment programs.
Ms. Parrish is administrator for
the Bargaining Unit Benefits
Board.
Participate in Wellness Programs
Mr. Mendenhall is chairman of
The Bargaining Unit Bene
fits Board is looking for people
who are interest in helping
establish wellness programs in
their work areas or in distrib
uting health care information
to fellow employes.
the Bargaining Unit Benefits
Board.
Cindy Parrish, administrator
for the BUBB board, is compil
ing a list of work-area contacts
to help in establishing these
programs. If you are inter
ested, contact Parrish at 373-
1174 in Salem or 1-800-452-
7813 toll free or write her at
BUBB, P.O. Box 12159, Salem,
OR 97309.
Page 7