Rising health care costs cut chances for wage increases, says bargaining director
AS HEALTH CARE costs rise, it is becoming increasingly difficult for city and county employees to receive reasonable wage increases, Steve Kreisberg, AFSCME’s collective bargaining director, told the October Council 2 Local Presidents’ Conference.
The reason is that all of their financial gains are going into maintaining benefits, he said.
“Every dollar that goes to pay increased health-care costs is one less dollar available for wages and other important benefits,” Kreisberg said.
Health care costs rose 76 percent from 1999 to 2004, he added. Over that time, the average cost for each active employee rose from $3,907 to $6,857.
Helping drive the increase in costs are an aging population, an ongoing cost shift from the public sector (Medicare and Medicaid) and from the uninsured population, malpractice liability costs, and prescription drugs that are advertised directly to consumers.
Employers have responded to the increasing expenses by moving the costs to employees, whose annual contributions rose 126 percent from 1999 to 2004. As a result, employees face higher deductibles and co-payments as well as higher premium sharing.
At the same time, the health status of the general population is decreasing, Kreisberg said, particularly when it comes to complications resulting from obesity and weight-related problems.
Not only are costs rising, but the quality of health care also appears to be deteriorating, the bargaining director said.
“We are paying more money for health care, but the quality is going down,” he said. “High cost is not necessarily associated with high quality.”
For example, he added, widespread errors have been documented in the delivery of health-care services; substantial evidence exists to show extensive overuse, misuse and under-use of health care services; and the poor quality of care is eroding the value of health-care purchases.
Quality and cost varies widely from hospital to hospital, Kreisberg added.
For example, an angioplasty performed at one Washington D.C. hospital was $12,441 and that at another was $42,122.
The solution is an ambitious program of national health care reform at the federal government level, Kreisberg said.
“Such a program would bring costs under control and alleviate the burden on our employers,” he said.
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