Sunday, September 18, 2011
City Manager Harold Dominguez and Councilman Kendall Hirschfeld noted the receipt of "interesting bids" for health insurance for 2012. They didn't mention the request for proposal specified four plans, the current plan plus three cheaper alternatives. The less expensive plans allowed for a single provider and less benefits, i.e. higher out of pocket costs for employees.
For 2011 the City held the line on benefits, but passed premium increases to employees and retirees. It hammered dependents with draconian premium increases. Nearly 200 people, 45 employees/retirees and 147 dependents, fell from the city's insured rolls. That act carries a cost to the community, specifically Shannon Medical Center and San Angelo Community Medical Center. How much did their costs increase caring for the City's formerly insured?
Shannon's historical costs and charges from their Medicare Cost reports can be seen below:
One factor in Shannon's huge charge increases rise is its uninsured burden. Shannon takes care of 4 out of 5 uninsured patients. Price increases mean little falls through to the bottom line. Shannon does get disproportionate share and upper payment limit program payments to help care for the uninsured, but their payor mix contributes to pricing distortions.
These hospitals will have to cut the City a deal for pricing to remain the same. How will Shannon price in 160 new uninsureds from the City? How will Community charge for 40 new uninsureds and any bad debts from higher deductibles and co-pays from city workers? It remains to be seen.
One thing's for sure, while the city holds the line on "expenses", others will have to step in and pay. It looks to be city employees, retirees and the few dependents left. Should that happen, you know who to thank.
by PEU Report/State of the Division at 9:41 AM