Chamber of Commerce, union unveil plan to cut health costs

January 08, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

Two strange political bedfellows -- labor and management -- are joining together during this session of the state General Assembly to fight a common foe -- soaring medical costs.

The Maryland Chamber of Commerce and the Maryland-D.C. AFL-CIO yesterday unveiled a set of legislative proposals that they say will help stem the rise in medical fees not regulated by state agencies.

"This is more than just a start. It's a great step towards a resolution," said Ed Mohler, president of the Maryland-D.C. AFL-CIO, the state's largest federation of labor unions.

A key provision of the four-point package calls for creation of a commission to study non-hospital medical costs. The commission would evaluate data from insurance claims to determine the cause of price escalation. Doctors' fees and medical lab charges are among costs to be scrutinized.

The need for the study comes from the experience of the Labor-Management Health Action Committee, a group of labor and management officials that has been studying health-care cost problems for several months. The committee hit a dead end when it came to finding out why non-hospital costs were increasing at such a high rate.

"Nobody had the answers," said Ernest Crofoot, chairman of the health cost committee of the Maryland-D.C. AFL-CIO and also co-chairman of the health-action committee.

He said that Maryland hospital costs, which are regulated by the state, are 9 percent below the national average. But when non-hospital costs, which are not regulated, are added in, the total goes above the national average, Crofoot said. "Let's really find out what the problem is," he said.

Besides the study, the labor-management group is also calling for the legislature to give the state Health Services Cost Review Commission the authority to determine whether fees for hospital-based specialists, such as radiologists and anesthesiologists, should be regulated.

In a break with its past positions, labor officials have joined with management to call for a low-cost basic health-insurance plan that would be exempt from the state's controversial mandated benefits.

In the past, labor unions have fought for mandated benefits, which require certain benefits in health-insurance policies. These benefits include transplants, in-vitro fertilization, mental-health care and substance-abuse treatment. In total, the state requires 35 benefits, one of the largest numbers in the country.

Mandated benefits have long been a target for business groups, while labor and consumer groups have supported them. But in an effort to provide affordable insurance to the 570,000 Marylanders without coverage, labor is willing to change its position, Crofoot said.

"Labor is gulping," Crofoot said about the state labor organization's new position, saying changes may be necessary.

Crofoot said the labor-business group has not endorsed a proposal by Blue Cross and Blue Shield of Maryland that would offer a basic health-insurance plan without mandates. He said that proposal is still "under study."

The Maryland Citizen Action Coalition, a frequent ally of labor groups, is opposed to the Blue Cross plan, saying it would undermine the state's mandated benefits system. Crofoot said he would be meeting with officials of the coalition to learn more about its position.

The last objective in the group's legislative package is a law requiring a doctor to tell a patient when he or she is being referred to a medical lab owned by the doctor. The labor-management group said studies have shown that when doctors have an ownership interest in related medical services, those costs are higher.

Health-care costs have been a major point of contention between labor and management in recent years.

Don S. Hillier, senior vice president of corporate human resources at MNC Financial Inc., said that health insurance costs range from $2,500 to $4,500 per worker and that the costs have been going up about 20 percent a year. Such an increase amounts to about $1 million a year for a company with a work force of 1,500, he said.

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