Perspective on Municipal Health Care Reforms

Last week, the legislature finalized agreement with the Governor on a new approach to changing municipal employee health care plans. No issue, with the possible exception of gay marriage, has been more controversial during my tenure as state representative.

Against the background of Wisconsin, some had framed the issue as a critical battle in the ongoing war between “corporations” and “the middle class”. Many commentators just weren’t sure what to say when negotiations led to a final bill that had union support — anti-union commentators suspected a cop out. However, the leading business advocates for change — Mike Widmer of the Massachusetts Taxpayers Foundation and others — declared the bill a win, joining with the unions in final support.

The truth is that the bill is a huge win for everyone who wants to preserve good quality municipal services at a reasonable cost. It is also a very fair outcome for municipal workers.

As a former Selectmen, with experience overseeing the negotiation of health care benefits, I had a firm conviction that change was necessary and was an early supporter of the controversial reform.

The basic problem was that, in order to make any change in the design of an employee health plan, municipal negotiators had to bargain simultaneously with all of their unions. Most collective bargaining is bilateral — involving a single union. But, since, by law, all employees of a single municipality have to have the same health care plan (or plan options), health care changes involved all the unions at once. Just scheduling the meetings was a big job, never mind actually bargaining to conclusion.

A few municipalities were able to make smart health care changes under the old regime — Belmont was won of them — but most couldn’t, and municipal health care costs were rising much more rapidly than state employee health care costs. The rare successes took years and a huge amount of management focus.

The new process is simple and should swiftly lead to a predictable outcome — municipalities will, with a couple of months of effort, be able to either change their health care plan to look like the state’s employee health plan or, in the alternative, to join the state’s plan. The state’s plan is well-managed and uses sophisticated cost-control approaches. The details of the new process are explained here and here.

The process change is the real long-term win for taxpayers. Early in the legislative session, over-heated rhetoric from some union leaders framed the proposed process change as a fundamental violation of collective bargaining “rights”. That ideological framing made agreement impossible and also obscured some legitimate union concerns.

Cooler heads prevailed later in the session, and, in the end, union leadership was able to focus constructive attention on valid concerns — the protection of unhealthy or injured workers from excessive out-of-pocket costs. The final bill assures that some of the savings will be allocated through a conversation with unions and may be devoted to protecting those vulnerable employees.

One of the common errors in understanding the change is to assume that all of what municipalities save will come out of workers pockets as copays and deductibles. Many employees will experience higher out-of-pocket costs, but the emerging plan designs also encourage more cost-effective health care decision making, which leads to slower long-term total cost growth. Lower municipal employee health care costs mean more jobs and better services.

As difficult as it was, this legislation has a narrow focus — municipal employee health care costs. Later in the session, we hope to face the larger challenge of general health care costs control.

Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.