Tuesday, September 12, 2006

Finally, a Great Idea for Milwaukee County

It appears Milwaukee County is on the verge of moving forward with some positive fiscal reforms.

David Riemer of the Wisconsin Health Project is preparing to do for Milwaukee County what he already helped to do for the City of Milwaukee and for the State of Wisconsin: consolidate its health care plan system.

Back in the 1990s, managed care swept the nation. Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs) established specified geographically-based health care networks to which patients could subscribe. The idea is that by contracting with medical providers within the network, PPOs and HMOs can negotiate greater discounts with those providers by guaranteeing them the business of the patients that are a part of the managed care groups.

Of course, not all PPOs and HMOs are created equal. As expected, plans with broader networks are more expensive than those that only contract with a small amount of providers.

Unfortunately, Milwaukee County currently treats all of its managed care plans equally, regardless of the varying costs. So when employees choose a more expensive plan, they pay the exact same amount as those who choose a less expensive plan. This, subsequently, drives up county costs.

What Riemer helped do for the City of Milwaukee and the State of Wisconsin is consolidate the health plans into tiers based upon cost and coverage. The lowest tier plans have the lowest cost, whereas the highest tier plans have the highest cost. If employees choose a plan in the lowest tier, the employer covers the entire premium cost. If employees choose a plan in one of the higher tiers, they pay a portion of the premium cost.

The basic idea of the proposal is simple, and it saves.

In the year after the State of Wisconsin consolidated its plans under Riemer's direction, it saved over $14.5 million -- and that's just on negotiation costs.

The State of Wisconsin also changed its prescription drug coverage to single payer, which resulted in savings amounting to "tens of millions of dollars" each year, according to the administrator of the system. There was no discussion in the Journal Sentinel this morning about moving to a single payer for prescription drugs in Milwaukee County, but such a move would make the proposed reform even stronger.

Riemer is pushing this same system of consolidating payers statewide through the Wisconsin Health Project, which serves as the basis for legislation that was co-sponsored in the last legislative session by Reps. Jon Richards (D-Milwaukee) and Curt Gielow (R-Mequon). Gielow's seat is up this year, and, unless a Democrat replaces him, there's little chance that health care reform will remain a focus of the legislator from the 23rd District.

I've criticized Riemer's statewide plan on this blog because it doesn't significantly reduce the number of payers in the system, which would serve to cut administrative costs that bog down the health care system in the US, but it nevertheless is a plan that moves in the right direction. And if it's the best that people can agree on at this point, so be it.

And what seems to be forcing Scott Walker to seriously consider the plan for Milwaukee County is also interesting. David Riemer was Walker's 2004 opponent in the county executive race, and he very well might be his opponent for the post in 2008.

As the JS notes this morning, the county has been offered similar proposals before and has turned them down in favor of simply shifting more health costs onto employees.

Clearly the political weight of the current proposal is coming from the Greater Milwaukee Committee (GMC), which is headed by top business leaders in the metropolitan area. Without the GMC, Walker and the county would likely have a much easier time dismissing Riemer's plan.

After all, it must be difficult for Walker to watch a potential political challenger do more to solve the fiscal crisis in Milwaukee County in one swoop then he has done in four years as county exec.


Blogger tosa voter said...

How ironic that the man who was defeated by Scott Walker in the '04 general would ride to the rescue. I voted for Walker but have been mightily disappointed by his overall lack of leadership and quality ideas to move the County forward. He basically wasted a full year galloping around the state running for gov. when he should of been at home tending to our fiscal crisis. Thats great for talking pinheads like Sykes, not so great for the future of Wisconsin's most important region.
I'm guessing Walker wont have it so easy IF he decides to run again next time. A charasmatic opponent could do some real damage and challenge Walkers short run.

September 12, 2006  
Blogger Chris Pegelow said...

I had to laugh a bit at the word "Finally" in the title of your post Seth. We (AFSCME District Council 48) proposed this health insurance reform in our initial proposal in SEPTEMBER 2004!!

Health care costs and not the "pension scandal" is what would bankrupt the County. Simply making employees pay more (and yes we do pay for our insurance) does nothing to lower the overall costs of health care.

Health insurance is killing every employer in the country not just the County. It's to bad the County has never been serious about fixing the problem.

Oh, by the way, despite what the paper says about avoiding arbitration you can make a safe bet that will not happen. It was destined from day one to go to an arbiter in order to give Walker and the County board someone to blame if/when the Union wins.

September 12, 2006  
Blogger Seth Zlotocha said...

Thanks for your comment, Chris. I did note that similar offers were made to the county in the past -- I suppose I should have reconciled that with the "Finally" in my title. I guess I was looking for a title to catch readers' eyes more than one that was 100% accurate.

I couldn't agree more that health care is the #1 issue in Milwaukee County, the state, and the country as a whole (at least on the domestic front). And the tide of public opinion is quickly turning in favor of fundamental reform -- the time for change is now. Any politician who doesn't see that will be out sooner or later.

Your take on arbitration is interesting. It seems with the GMC backing, it would be tough for the county to blanky turn down the health care proposal -- but I suppose going to arbitration would allow Walker & Co. to cloud the talks enough to get away with it.

September 13, 2006  

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