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Monday, December 19, 2005

Greed and Disdain

This is the transcript to Mr Reilly's Greed and Disdain speech from December 15, 2005

Madam President;
"Last night there was discussion about employee health care cost and that will continue tonight under item 18 of tonight agenda. In the discussion last night the Administration talked about cost reductions. Their suggestion is to add premium co-payments. This in and of itself is not a bad idea. But in there is an underlying motive. As you know there has been discussions on how to cut health care costs and several have focused on ways to encourage employees to drop the City’s coverage when another family member also has health care coverage. The Administration stated last night that their approach to obtain this goal is to introduce premium co-payments in such a fashion that it is a “disincentive” to continue with the City’s health care plan. This is called negative reinforcement. Others have argued from the opposite approach and proposed a sharing of the cost savings by offering a percentage of the savings to the employee who chooses to drop the City’s health care and is picked up by the spouse plan. This is call positive reinforcement.

"Anyone who has taken a High School or College psychology course knows the negative reinforcement is the least effective or desirable way to achieve an outcome. Likewise; such a person would know that positive reinforcement is the most effective and desirable way to achieve an outcome. This basic principle is taught in classes ranging from child rearing to business management to leadership training. Last night it became apparent to me that members of the Administration do not believe in this basic principle, nor sees any reason to follow it. This management tactic does nothing to foster the type of work environment which is needed to bring the level of City services up to the expectations of the public, or that which is required to promote economic development.

"It is also a punitive act towards the employees who do not have the option to drop out of the City’s health care plan because a spouse dose not have health care which could be used to avoid the premium co-payment being used as a disincentive towards those who can. The City should also consider the option to pay an employee a percentage of the City’s cost to seek heath care on their own and share the savings

"One could conclude that it is only greed and distain to the City’s workforce that’s drives such an approach which causes the Administration act in such a callas way. I urge City Council to keep this in mind when this discussion comes up tonight."

To clarify what the City Administration wants to do; they what to add health care premium co-payments to employee plans to: 1. defray some of the rising health care costs by having the employee contribute, which is acceptable in today's environment of rising health care costs; 2. have the co-payments so high that the few employees that can opt out, because another family member has coverage, do opt out because it is just to expensive to keep. They call this a "disincentive".

But City's Administration forgets is there is more than one way to skin a cat. According to statements the Administration made on 14 Dec 05, it costs the City $8,000.00 for a single employee, $12,000.00 for an employee and their spouse, and $16,000.00 for family health care coverage. If the City charged an employee $50.00 per pay they would collect $1,300.00 per year per employee. But if the Administration had an incentive plan for health care such as offering $4,000.00 for an employee for joining their spouse's plan, the City would have $8,000.00 in shared cost saving; which is the equivalent of 6.35 employees paying a premium co-pay. If they offer $5,000.00 for a employee's family to join the spouse's plan, the City would have $11,000.00 in shared cost savings, which is equivalent of 8.47 employees paying a premium co-pay. If the City offered single employee's $4,000.00 to drop from the City's plan either because they feel they don't need it or because they only want major medical coverage from another insurance company that the employee contracts with themselves, there is even more shared cost savings. But for some reason, the City does not want to share. Even if the sharing would eliminate the need for a premium co-pay, or reduced the City's total health care costs if enough employees participate in a shared cost savings plan, they run from giving anything that would possibly make the work environment more friendly.

T. D. Reilly


Blue Cross of California said...

Great blog I hope we can work to build a better health care system as we are in a major crisis and health insurance is a major aspect to many.

House of Crayons said...

Thank You
the health care issues are very important to us at EU. They effect us on both the personal and taxpayer citizen levels. Right this minute some of my colleagues are in a meeting about health care savings for my workplace. We were not having any success getting the administration to join our efforts so we sought our own professionals.

Keep Reading, we really do have several phases left in the Easton Undressed project. The blog is only the tip of the iceberg.

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