In an effort to hold down mounting health care costs, Bethlehem Steel Corp. announced yesterday that it has reached a tentative agreement with PHP Healthcare of Alexandria, Va., to create a health care center in Bethlehem, Pa., for the exclusive use of Bethlehem workers.
If the plan proves successful, it could be expanded to other Bethlehem operations, including its Sparrows Point steel mill and shipyard in Baltimore County. A company spokesman said there was no set time on the test period.
Bethlehem officials said they hope that the new clinic, scheduled to begin in early 1993, would cut $1 million off the $26 million the company spends yearly to provide health care to employees, dependents and retirees in the Bethlehem area.
Bethlehem's total health care bill in 1991 was $239.3 million, up 26.5 percent from 1989, when the company spent $189.2 million.
"The family health center is a decisive effort to control the tremendous growth in health care costs," according to a joint statement issued by the company and four locals of the United Steelworkers of America.
Company workers in the Bethlehem area would still be able to use other health care options, such as health maintenance plans and traditional indemnity insurance. But the PHP center would cost employees less, according to Bethlehem spokesman Gary W. Graham.
The center would include a family medical practice, a pharmacy service, laboratory and diagnostic testing services and X-ray facilities.
Unlike a health maintenance organization, which accepts a set fee per member in exchange for medical services, Bethlehem would pay for the center's services, said Charles H. Robinson, chairman and president of PHP. "There is no gamesmanship in this," he said. "All the mystery is taken away."
Since the costs are "transparent" to the customer, PHP would be under pressure to keep them down. "If we don't keep costs down, we're not going be around long," he said.
Mr. Robinson said his company has about 20 such centers RTC around the country for various companies, including the Chrysler Corp.
William F. Custer, director of research for the Employee Benefit Research Institute in Washington, said the Bethlehem arrangement was essentially a "captive" HMO operation. The advantage of being exclusively for Bethlehem workers is that services could be tailored to their needs, he said.