BY MIKE RYAN, MAYOR OF SUNRISE
Today as the new Fiscal Year for local governments begins, our budget “season” is over, right?
Wrong! Our work begins again today.
There are certainly challenges. It takes innovative and balanced approaches, combined with a large dose of cooperation, to tackle these challenges. No city can singularly or simply choose to only cut, or find efficiencies, or increase, or build, or develop, or redevelop or regionalize in the effort find or maintain financial stability.
We know the consequences are serious. Once considered a strategy only for corporations to wrestle creditors, employees, and pensions, since 2010, 28 municipalities nationwide have sought bankruptcy protection as a last resort.
In March, I raised concerns about the pace of and sustained rise in municipal health care costs. That story is here.
Concessions have helped manage costs, but what more can we do?
Emerging Trend of Municipal Health Care Clinics
Ten years ago, the idea that urgent or walk-in clinics could be a popular alternative seemed unthinkable. Who would pass up the family tradition of waiting to get an appointment…and then waiting in a doctor’s office…and, depending on your plan, maybe seeing a doctor?
Now, clinics are in storefronts, pharmacies and grocery stores. Brick-and-mortar hospital systems are offering urgent and walk-in clinic alternatives. Even municipalities are embracing clinics.
According to a report, the 2012 Kaiser Family Foundation Survey of Employer Health Benefits found “29 percent of government entities with 1,000 employees or more said they offered an on-site health clinic. The same survey found that 22 percent of all [private] firms with 1,000 or more workers did so.” Why?
- Employees and dependents have access to localized clinics (with due regard for privacy), even allowing predictable appointment times booked on-line;
- “Preventative medicine” is part of the employee investment in the system, and even more effective when combined with wellness incentives and rewards;
- Employees pick up prescriptions efficiently and with no wait;
- Significant cost savings to the municipality and employees can be achieved through high utilization rates and substantial use of generics.
Don’t Get Too Excited, Yet
Even those in support of municipal health clinics caution it may not be the correct alternative for every city.
- If not self-insured and plan costs are rising far more slowly than the 10% average, it may not be cost effective;
- Start up costs (depending on chosen model: RNs, LRNPs or mix of doctors with staff, diagnostic equipment available) can require a 3-5 years to recapture investment;
- To achieve real savings, families must be comfortable with choosing clinics over their family physician for routine issues, commit to using the clinics and agree to always use available generics;
- A clinic does not displace need for specialists or pediatricians;
- Rural settings may benefit more than an urban market with aggressive insurance competition;
- Without employee trust and “buy-in”, utilization rates and, therefore, savings, may fall flat.
However, clinics are more prevalent than ever.
Competition amongst and availability of clinics may provide potential opportunities for municipalities.
Multi-municipality Cooperative Approach: Too Hard or Complex?
Could savings be achieved through voluntary cooperation of like-minded cities?
If a large percentage of employees and their families live in a corridor of cities, maybe a consortium could maximize utilization rates and save most costs.
Tough issues and poor track record for city consortiums? Yes, in some cases.
Is the analysis and cooperation complex? Extremely, because of the diversity of medical plan designs, actuarial rates, contribution formulas, collective bargaining agreements, budgeting and politics.
But, when alternatively faced with cutting programs, services and employees, implementing furloughs and pay cuts, and/or jeopardizing sustainable commitments to retirees and our community, maybe we must work a little harder and try to maximize cooperation to help tackle health care costs.
(Mayor Michael J. Ryan, a lawyer, was elected in 2010 and has lived with his wife and two children in Sunrise over a decade.)