THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, September 14, 1994 TAG: 9409140462
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM HOLDEN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 80 lines
At a time when health insurance premiums continue to climb for nearly every insured worker, the cost of benefits for Virginia Beach city employees may make others sick with envy.
Some single subscribers in Virginia Beach will pay only 30 cents a month for complete health insurance, while three of the city's four family plans will cost a modest $201 a month.
The team that negotiated the new rates briefed the City Council on Tuesday and credited the lower costs, in part, to last year's consolidation of school and municipal workers into a pool of 15,000 people. A report on school employees' rates is expected next Tuesday.
With a larger, unified group to represent, city negotiators won lower rates and better benefits in a scenario similar to what many health care reform advocates in Congress envision as the model for workers across the country.
``If you can direct more people to a specific health care provider, then they'll be willing to reduce costs because of the volume of business they'll be getting,'' said Lynn G. Sachs, the city's benefits coordinator and a member of thenegotiating team. ``The administrative costs are reduced when you have more people in a program.
``If you can develop a partnership with the providers, like we have, then you can develop long-term strategies like our prevention programs.''
One particular prevention program has achieved notable success.
Four years ago, the city and its health insurers began a breast-cancer screening program. Early diagnosis and treatment of breast cancer is considered crucial to helping a woman fight the disease, which is not only deadly but expensive to treat.
The program found 60 women with breast cancer and was able to get them into treatment programs early. The result is that 58 of them were treated and returned to work, saving the city an estimated $30,000 to $40,000 per patient in hospital charges.
``I really think that's a major accomplishment,'' Sachs said. ``Not only are we saving lives but we're saving money.''
The new rates brought approving nods from council members.
``It's not very often that a merger results in better benefits and lower costs while also setting a precedent of letting people take better care of themselves through prevention programs,'' Mayor Meyera E. Oberndorf said. ``I just wish you could negotiate more contracts for the city.''
Sachs said several of the city's four health plans had their benefits increased, even with reductions in prices.
``The co-payments decreased for after-hours care and urgent care under Priority to encourage the use of primary care physicians over emergency rooms,'' Sachs said.
``Sentara and Optima benefits remained pretty much the same, but Blue Cross had a major enhancement. They have increased their co-insurance to 80 percent of the allowable charge, vs. 70 percent. They also reduced the physician co-payment from $25 to $15, and they're covering dependents for well-baby care through age 5.''
Donald A. Peccia, director of personnel services for Virginia Beach Public Schools, said the new health plans will save city workers $2.6 million in out-of-pocket costs while the city will save $1.5 million.
While appealing to workers, the low cost of some plans is actually part of an overall strategy to encourage employees to change some health care habits, Peccia said.
``We want employees to choose their health care based not so much on the cost of the plan but on the care they receive from doctors and hospital networks,'' Peccia said.
Choosing health care in this way, he said, will encourage health care providers like hospitals and physicians to provide not only good care but good care at a competitive price.
Karen G. Simpson, a deputy commissioner of revenue and the single parent of twin girls, was particularly happy about the new rates.
``It makes a real difference to me that rates are going down,'' Simpson said. ``So long as I get the same benefits, then I'm all for the savings.'' ILLUSTRATION: Graphic
HEALTH INSURANCE CHANGES
SOURCE: City of Virginia Beach
[For complete graphic, please see microfilm]
by CNB