Tuesday, October 25, 2016

 

That Is One Ugly Metaphor


Brookdale recently ratified a contract with its faculty union, after a bit of a bumpy ride.  I was on the management negotiating team, so I had a front-row seat for most of the process.  

I can’t disclose anything confidential, but I don’t need to.  Here’s what it boiled down to:

Union: Health insurance is eating our raises!

Mgmt: Health insurance is eating our budget!

Insurance Company (in the corner): Nom nom nom nom (burp) nom nom nom (chair collapses) nom nom nom

The bulk of the conflict was over how to divide the rapid increases in the cost of health insurance.  The rest of it was relatively straightforward.

I suspect we’re not alone in this.

The catastrophic cost -- and rate of increase -- of health insurance is the 800 pound gorilla of higher ed finance.  It’s the primary driver behind adjunctification.  It’s increasing faster than any of our revenue sources, and it seems to be picking up steam.  In negotiation sessions, it’s the sun around which every other issue orbits.  

(For those keeping score at home, that makes it a nuclear fusion powered 800 pound gorilla that knows how to drive a steam-powered car, and anchors a series of satellites.  Scary stuff.)

To make it concrete, we have three major sources of operating funds: the state, the county, and students.  State and county funding have been flat for years, and enrollment is dropping.  Meanwhile, the cost of health insurance goes up by at least ten percent per year.  Do the math, projecting out a few years.  It’s not pretty.

Labor negotiations are difficult because one of the parties -- the one getting the best deal -- isn’t at the table.  It just jacks up prices, and the rest of us pay them.  Internal disputes are over how much of each year’s cost jump is borne by whom.  Nobody internal comes out ahead.

Of course, over the long term, unsustainable trends aren’t sustained.  This one clearly can’t be.  

Our health insurance system, if you want to call it that, was an accident of history.  It emerged in its present form as an end run around wage and price controls during World War II.  With pay levels frozen, companies that wanted to recruit workers had to find other enticements, so they developed packages of benefits.  By the time President Truman (!) got around to proposing national health insurance, the AMA was able to argue that it was largely unnecessary.  Add some red-baiting (“socialized medicine!”) and the racial politics of the New Deal coalition, and the end run became the new normal by default.  

That’s why literally no other advanced country has anything like it.  

Postwar prosperity made the system tenable long enough for it to start to seem natural, but it never really made sense.  Now we’re seeing the flaws in the system get so large that they start to deform or consume other sectors of the economy.  Prospective entrepreneurs don’t start companies because they can’t afford to pay for their own health insurance.  Employers everywhere pay careful attention to maximum hours for part-time status, because the marginal cost of going over is prohibitive.  If you don’t believe me, ask your HR office what the monthly premium for COBRA is.  

Locally, we managed to piece together a deal that puts off the day of reckoning for a few more years.  I’m glad we did -- really, really glad we did -- but the basic underlying trendlines are still there. That’s not something we can solve locally.  That requires a national solution.  Absent that, I foresee the rides getting bumpier and bumpier until something breaks.

Comments:
You need to get the power back by forming a large group of insurance buyers. How about you get a whole group of colleges together to buy insurance as one unit and force the insurance companies to lower the cost in order to get your business.
 
Matt points out a grave national problem—the rapidly rising cost of medicine and the way that the American medical insurance system works. Each year, employees of organizations that offer group medical insurance are asked to pay more out-of-pocket—they are asked to pay more for their coverage, and their deductibles, copays, and coinsurance keep rising. The cost of providing medical insurance is an important reason for an organization’s reluctance to hire more full-time employees, and is perhaps the leading factor in the rise of a contingent, part-time work force, where employers don’t have to provide medical insurance. In the future, much of the American work force will become not unlike a fleet of Uber drivers, all working part-time in contingent, temporary positions.

The Affordable Care Act requires that businesses which employ 50 or more people must offer health insurance to their full-time employees. Prior to the ACA, each employer defined what is meant to be a full-time employee, but the ACA takes the step of defining what is meant by a full-time employee, namely one who works 30 or more hours per week. The ACA forced a lot of employers to cut the hours of their part-timers so that they would avoid hitting that threshold and be required to provide medical insurance. This affected me when I was teaching part-time at Proprietary Art Institute, and resulted in the number of courses I was allowed to teach being cut, and my salary to go down. But this is now all moot, since Proprietary Art Institute has augured itself into the ground, and most of the faculty have been laid off and I haven’t been offered any courses to teach in the last year or so.

I think that the way the medical insurance system works is one of the worst aspects of American life. I think that we desperately need to join the rest of the advanced world and adopt a single-payer medical insurance system, a sort of Medicare-for-all. We might get one if corporate executives would lobby for such a system. Wouldn’t they really like to get this monkey off their backs? I think that the adoption of such a single-payer medical insurance system would lead to a sudden burst of full-time hiring and the American economy would see a rapid rise.

 
@mpledger This is exactly what a number of colleges do already (can't speak for Brookdale), and ultimately, those rates keep getting jacked up as well, from what I hear from my colleagues in HR.
 
I work at a large public university, which is self-insured. It employs an insurance company to administer the health-insurance plan, but it provides the financing for it. Our premiums are going up too: maybe not as much as at places where management buys insurance from an insurance company, but still. The problem in American health care is not just greedy, corrupt and incompetent insurance companies, but the fact that all elements of it are too expensive.
 
In the Provinces--That's what Indiana University (my pre-retirement employer) does. My experience there over 25 years is that the premium increases were smaller than the national average. But the issue remains the system. And I really think that there is one part of it that never really gets addresses--the role of doctors. While this has changed, it's still the case that well over half the doctors in the US are independent businesses, responsible for their own (often highly duplicative) office space and equipment and their susceptibility to the blandishments of the drug companies.
 
Health insurance is a sarlacc, ask any of the kids in Lego Club. And it's likely to continue to continue to slowly digest everything that falls into its maw, until the policy wonks wrap their heads around price discovery and commercial freedom.

Single payer might digest everything more quickly, if the proposal in Colorado's Amendment 69 is a realistic statement of the initial revenue requirements and future tax increases inherent in public provision of coverage.

By all means come over to my cantina and participate in the bull session. Be advised that we work under conventions you'd find at a steelworkers' bar.
 


افضل شركة نقل اثاث بالمدينة المنورة تساعدك على نقل اثاثك بامان فلا داعى للقلق مع افضل شركة نقل اثاث بجدة

عزيزى العميل انت من محبى التنقل باستمرار بالتالى انت بحاجة ماسة وضروية الى الاستعانة بالمختصين في نقل العفش خاصة ارخص شركة نقل اثاث بالرياض لان الاستعانة باى من عمالة الشوارع الغير مدربة والتي لا تمتلك خبرة كافية في نقل العفش او الحفاظ علية وليس هذا فقط فقد يؤدى الاستعانة بعمالة الشوارع الى حدوث حالة فقدان وتكسير للاثاث بالتالى التاثير الضار عليك عزيزى العميل

لا تقلق مطلقاً الان بشأن نقل اي منقولات خاصة بك طالما استعنت بشركة الاول لـ نقل الأثاث في الرياض وخارج الرياض فنحن ليس الوحيدون ولكننا متميزون عن اى مؤسسة أخرى داخل وخارج الدمام وشهرتنا كافضل شركة نقل عفش بينبع
نقل اثاث بجدة
 
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