Workers Shoulder Health Care Cost

by KEN CARLSON
MODESTO BEE Staff Writer

November 24, 2004

Judging from the average payroll stub, workers pay for about 25 percent of their health insurance premiums.But that one-quarter portion is a bigger bite when premiums go up and wages remain flat, RAND Corp. senior economist Dana Goldman says.

And that is what has been happening in recent years: stagnant wages and double-digit increases in health insurance premiums. Family coverage now costs $8,000 to $10,000 a year.

Goldman said a chart of premiums and compensation over time shows that workers today shoulder about 85 percent of health insurance costs.

Goldman, director of health economics for the RAND Corp., a nonpartisan research institute, presented an analysis of health care spending at a conference last week at California State University, Fresno.

The conference brought together people from health professions, labor and government to discuss what the researchers perceived as a costly, ineffective health system, and what might be done about it."I hope we understand that whatever solutions we come up with, we have to pay for this and the people who pay are the workers," said Robert Brook, a University of California at Los Angeles professor and director of RAND's health division.

"And it is up to us to decide how to spend this money."

Today, health care spending accounts for 15 percent of the gross national product of the United States. California, at $150 billion a year, ranks fourth in the world in health care spending.

But it doesn't buy very good care, said Elizabeth McGlynn, RAND's associate director of health.

A two-year study involving 6,700 adults found that those patients received the recommended care about half of the time. The study, released in May, looked at how the patients were treated and monitored for such common ailments as asthma, high blood pressure, pneumonia and heart disease.

"I guess you could look at it as the glass is half full, but it was surprising that people were not getting the right care more often," McGlynn said.

The care provided in other developed nations, when compared against the same standards, was no better and no worse, she said. Brook said he is convinced that the public won't accept reforms until something is done to curb the wasteful spending.

He contended that some common conditions, such as high blood pressure, could be effectively treated at less cost. But, in some cases, government regulations need to be removed to permit innovative treatments.

Mandatory insurance

The public's gripes about the health care system are likely to spawn another round of state legislative initiatives in the next several months.

To come up with ideas, state Assemblymen Joe Nation, D-San Rafael, and Keith Richman, R-Granada Hills, led a discussion with panelists from San Joaquin Valley health agencies, labor, insurance and the pharmaceuticals industry.

Randy Gahn, chief executive officer for the Central Labor Council of Fresno, Madera, Tulare and Kings counties, said organized labor will support taking a new approach along the lines of Proposition 72, either in a bill or a future voter initiative.

Proposition 72, calling for all largeto medium-size companies to provide medical benefits for their workers, suffered a narrow defeat in the Nov. 2 election.

Panelists suggested that efforts to impose mandates on employers include tax breaks for smaller companies that insure their workers.

Laurie Primavera, a health policy coordinator for Fresno Metro Ministry, said more resources need to be devoted to address the exploding rate of Type 2 diabetes, which is linked to obesity and a sedentary lifestyle.

Unfortunately, she said, the health care system tends to emphasize "sexy" — and expensive — medical technology over less exciting public education programs.

Bee staff writer Ken Carlson can be reached at 578-2321 or kcarlson@modbee.com.