Would single-payer healthcare help resolve the TriMet labor impasse?

Apologies for going off topic somewhat–healthcare is not a primary topic of this blog. However, the big issue in the dispute between the union and TriMet isn’t pay, but healthcare benefits. Costs for have been growing without bound, and are expected to grow. Health care costs for public employees are taking an ever bigger share of public budgets. And the beneficiaries of this largesse aren’t bus drivers, teachers, cops, or firefighters–who simply want to have access to decent healthcare–but the medical industry (including insurance), which is a continually growing segment of the economy.

The Affordable Care Act (more commonly known as Obamacare), which fully takes effect in 2014, will help somewhat, but a primary focus of the ACA is providing affordable healthcare options for the poor, particularly those who presently don’t qualify for Medicaid, but are priced out of the private insurance market. Obamacare generally doesn’t replace private health insurance for those who have access to group policies for their employer.

The dirty linens of Obamacare

Any government involvement in the healthcare industry seems to annoy conservatives, particularly in today’s polarized climate–such proposals draw comparisons to Soviet gulags and other examples of tyranny. This despite the fact that the ACA is similar to conservative proposals advanced in the 1990s as alternate proposals to Hillarycare (and is also quite similar to Romneycare, the health plan which is law in Massachusetts). But several aspects of the ACA have annoyed liberals as well–chief among them is that it doesn’t drive healthcare costs down sufficiently. It helps in many regards, by providing baseline insurance to the poor and uninsurable, and thus discouraging the common practice of indigent persons showing up at the ER for minor complaints, knowing that they cannot be denied treatment for an inability to pay (and stiffing the hospital, and the rest of us, with the bill). Instead, the poor can have access to preventative care in doctors offices, a far more cost-effective way of practicing medicine. However, it lacks the primary advantage of single-payer systems (including Medicare): by having a government monopsony being the primary purchaser of health care, prices can be driven down. (Which is bad for doctors and pharmaceutical companies, but good for the rest of us). Of course, a public option was DOA on arrival in Washington DC for this reason (among others).

Another interesting aspect of Obamacare is that it largely leaves traditional employer-provided group plans alone. Workplaces, particularly larger ones, provide good risk pools for purchasing insurance, and employers enjoy tax advantages in buying health insurance that individual purchasers do not. A particularly controversial aspect of Obamacare was organized labor’s insistence on no provisions taxing or levying a surcharge on so-called “Cadillac health plans”–high end plans, generally enjoyed by high-value employees (such as executives) and by unionized labor. The health plan enjoyed by TriMet’s workers would undoubtedly be considered a “Cadillac” plan, were that provision included in the ACA.

The provision protecting Cadillac plans was naturally denounced by many conservatives as union pork. However, organized labor (in particular, the AFL-CIO) have long taken the position that they would be willing to abandon “Cadillac” plans in exchange for a public option.

And the saving grace

Given the political constraints and implementation choices of the ACA, it probably isn’t going to help resolve the present TriMet/ATU debate, even when it comes fully online in 2014. While Obamacare will reduce health expenses by ending certain wasteful practices, the lack of cost controls doesn’t attack the primary problem, and the ACA is focused at the low end of the market–those unable to afford (or qualify for) insurance. However, the ACA contains an important escape clause: it makes it easier for states to experiment and set up their own healthcare systems, so long as the levels of coverage provided are as good or better as the national baseline. Oregon has long been an innovator with the Oregon Health Plan, a limited single-payer system which attempts to close the Medicaid gap, and OHP’s champion is once again in the governor’s mansion.

A greater hope lies in California, which is the state which has come closest to implementing single-payer on a state level. Bills to implement single payer have previously passed in both houses, only to be vetoed by the Governator; the current governor, Jerry Brown, has stated an intent to sign such a bill if it passes. A proposal this session failed to pass, when several conservative Democrats turned against it.

The current legislative session is almost over in Salem, and given the 30-30 split in the Oregon House, a single-payer system here would be unthinkable this time around. But if Democrats retake control of the House, and keep or expand their hold on the state Senate, could it happen here? And would a single-payer system, which would presumably obsolete the existing healthcare arrangements between TriMet and its drivers and mechanics, receive the support of organized labor in the state?

(Or as an alternative–would a state government employees health plan, covering all public-sector workers in the state, regardless of union affiliation, be a possible proposal?)

Could the current crisis in public employee healthcare costs be the impetus for the state to do what so far the healthcare industry has resisted? After all, it’s our money that pays for public employee insurance. And the current fight over benefits for bus drivers vs service cuts and fare hikes is not an enjoyable one–instead of arguing about who gets what slice of an ever-shrinking pie, maybe labor, ridership, and TriMet management can come together in support of an arrangement which is mutually beneficial, not just to TriMet employees and customers, but to everyone in the state.

37 Comments

37 Responses to Would single-payer healthcare help resolve the TriMet labor impasse?

  1. Cameron Mulder
    February 24, 2012 at 12:09 am Link

    There has been some talk in the Oregon legislature about an idea to basically put all government employees onto the Oregon Health Plan.

    Of course the details are much more complicated but that is a general idea on one way to manage public sector health expenses.

    Being that i work for a University i am shocked at what is in the health plan. They cover many things that have no been proven to have any medical value. We should at least do what the UK does and have an agency that ensures medical spending is used only on useful treatments.
    http://en.wikipedia.org/wiki/National_Institute_for_Health_and_Clinical_Excellence

  2. EngineerScotty
    February 24, 2012 at 12:31 am Link

    Cameron,

    What therapies does OHP cover that you think have limited value? This is outside my area of expertise, but I was under the impression that the OHP treatment schedule was, if any thing, too stringent, with many useful therapies excluded from coverage. (In particular, the OHP has been criticized for aggressive triage policies with regard to late-stage cancer care).

  3. Aaron G
    February 24, 2012 at 3:55 am Link

    Scotty,

    I can’t know what he was getting at, but I didn’t think university employees were on OHP. Here at PSU, Aetna covers the students and I would assume the faculty too.

    They will pay for you to receive pseudoscientific treatments such as acupuncture, and chiropractors. They’ll even pay for you to go see a naturopath and homeopathic (ie. zero active ingredient, placebo) medications.

  4. dwainedibbly
    February 24, 2012 at 4:46 am Link

    “Obamacare” is a term that implies great negative bias. Is that your intent?

  5. Chris I
    February 24, 2012 at 7:14 am Link

    I, too, have an issue with the term “Obamacare”. This was a term created by the conservatives that carries with it a negative connotation. It would be similar to referring to the Iraq War as “Bushwar” or “Bush’s War”. In both cases, the administration initiated the idea and the action, but the end product is the result of the entire government’s work.

  6. John Reinhold
    February 24, 2012 at 8:25 am Link

    “Obamacare” is a derogatory term created by opponents of President Obama without any real consideration for the details of the actual Act itself. Saying “more commonly known as Obamacare” is a fallacy and a way of trying to excuse your derogatory nature of use. The Act itself is almost entirely positive and helpful for all Americans. As a result the only way the opponents could paint it in a negative light was to piggy-back on the Right’s dislike for President Obama and label the Act “Obamacare”. That way people who dislike Obama would want to oppose the health care Act – without even looking at the details to find out if it would benefit them or not.

  7. EngineerScotty
    February 24, 2012 at 8:41 am Link

    FWIW, I’m a supporter of President Obama (this is NOT an endorsement, just to keep things kosher under nonprofit rules), and I don’t consider the term “Obamacare” to be particularly pejorative, even if it is frequently used in such fashion. (Daily Kos users, for instance, routinely use the term in a neutral sense). Obviously, some readers here disagree. I don’t want to get into an argument over this, and this will be my last post on the subject, but it is not my intent to be insulting.

    I consider the Affordable Care Act to be an improvement over the prior status quo, and support it for that reason. That said, I also agree with many critics that it doesn’t go far enough. (However, I disagree with those critics who consider its passage a defeat; that’s like punting on fourth down on your opponents 20 yard line because you are unwilling to settle for a field goal).

  8. al m
    February 24, 2012 at 9:01 am Link

    You keep framing the question as “us vs them” buying hook line and sinker the TriMet propaganda.

    I got news for you Mr Johnson, Trimet’s DEBT SERVICE (aka credit card bill)PAYMENT IS HIGHER THAN OUR HEALTH INSURANCE!

    But it’s ok for TriMet to make the bankers richer and richer every year but its not ok to buy its employees health care.

    It’s sickening to watch the complete stupidity of the population in buying the hype.

    You might as well as call your blog JOHN CHARLES’S
    PORTLAND TRANSPORT.

  9. al m
    February 24, 2012 at 9:31 am Link

    Unions are (Not!) Destroying America

  10. EngineerScotty
    February 24, 2012 at 9:43 am Link

    Al,

    I’m trying to NOT frame things as “us vs them”, at least as far as labor vs management, or labor vs service, goes.

    Like it or not, failing to pay bondholders would be a Bad Idea for TriMet to do. The bondholders would still come get their money, they’d just send a bunch of goons (OK, lawyers) to make sure it happens, and you likely wouldn’t recognize the place once they left. :)

    And were I to be channeling John Charles, I would likely be calling for TriMet to be privatized and unsubsidized. You’ll find I’m not doing that.

  11. AL M
    February 24, 2012 at 10:13 am Link

    Your a ‘closet” privateer!

  12. AL M
    February 24, 2012 at 10:15 am Link

    You DEFEND the bond holders?
    wow………

  13. EngineerScotty
    February 24, 2012 at 10:33 am Link

    I think the term for a closet privateer is a “pirate”. :)

    And no, I’m not “defending” the bondholders, merely noting that as creditors to TriMet, they have a right and expectation to get paid, and TriMet’s failure to do so would have negative consequences.

    Who holds TriMet-issued bonds, I have no idea. Probably a mix of private individuals, mutual funds, and institutional investors, like most municipal bonds out there. TriMet bonds are sold and traded on the open market, in arms-length transactions. If you’re suggesting that bondholders are somehow in cahoots with TriMet management to pillage the public treasury, and thus ought to be stiffed under some doctrine of unclean hands, as accessories to some crime, I’d suggest you’re barking up the wrong tree.

    (If, however, you want to limit TriMet’s ability to do large-ticket capital projects by torpedoing its ability to finance them with debt, defaulting on a bond would be a good way to accomplish that).

  14. AL M
    February 24, 2012 at 10:58 am Link

    I think TriMet needs to STOP ISSUING BONDS LIKE A JUNKIE ADDICT!

  15. Chris I
    February 24, 2012 at 11:16 am Link

    If they don’t issue any new bonds, they definitely won’t be buying new busses any time soon.

  16. AL M
    February 24, 2012 at 11:53 am Link

    They aren’t buying buses with bonds, they are buying buses with cash, FEDERAL FUNDS.

    The bond measure was defeated.

    If this company has to borrow every time it needs something then forget it, just forget transit in Portland, let the car be king, which it is anyway..

  17. AL M
    February 24, 2012 at 11:59 am Link

    BTW-you privateers will be happy to know that the ranks of American unemployed have just increased by
    35,000 , no more health care for those Americans, tough luck, its MARKET DEMAND at work.

  18. AL M
    February 24, 2012 at 12:01 pm Link

    As long as Fred Hansen gets his MARKET DEMAND pension of $15,700 a month and we don’t get our health care the world is right.

    OBAMA care is not single payer, its a fake version of an HMO to funnel more tax payers money into the pockets of privateers.

  19. EngineerScotty
    February 24, 2012 at 12:03 pm Link

    I remember during the debate over Measure 26-117, one of the arguments against is that busses don’t last long enough to finance with bonds. Municipal bonds generally have 30-year maturities, and busses last 12-15 years (at least those not operated by TriMet tend to be scrapped after 15 years).

    As the son of a retired postal worker, I can assure you I take no pleasure at the current plight of the Post Office.

  20. Jason McHuff
    February 24, 2012 at 12:06 pm Link

    My apologies I have once again not been able to contribute to the discussion; I do hope to try to catch up.

    But it does seem that health care is the major sticking point in the current contract dispute and what is sinking governments and employers overall. See this video.

    And TriMet may be worse off if they are giving more retiree care than usual, and if their premiums are higher due to a having a group with more health issues (some of which may be ironically caused by an attempt to save on the health care burden though squeezing operator breaks).

    However, I think one of the worries with “single payer” care is having government in charge and making decisions. In addition, having “free” care may not discourage overuse and unhealthiness.

    My idea is to instead just have government provide the funding and let individuals take care of their care. I would like you all to read it and give feedback. Note that it is a draft and that the second half may be disjointed.

    If it can provide the possibility of good coverage that gets labor and citizens behind it, cost control and assurance that gets employers behind it, better deals for doctors and other care workers, and the elimination of the hassles of dealing with insurance for all, I think it could pass.

  21. EngineerScotty
    February 24, 2012 at 12:28 pm Link

    Al,

    The ACA is indeed not single payer, as noted in the article.

    Jason,

    As I understand it, you are proposing that Americans be provided, essentially, with health care accounts (paid for, one assumes, out of general fund taxes), with which they can purchase health-related products and services, including insurance, or direct care.

    One of the interesting properties of “health insurance”, is that it has two essential functions from the POV of the consumer. One is the traditional role of insurance–hedging against potentially catastrophic losses. The other, however, is greater purchasing power. One does not file a claim against one’s auto or homeowner’s policy when one needs to change the oil or clean the gutters–insurance in these fields is only used to cover large (and unexpected) losses. But with health insurance, routine things like filling prescriptions or receiving physicals are billed to insurance–the reason this is convenient (for the customer) is the insurance company demands the doctor offer a lower price in exchange for payment; otherwise the insurance company will not provide the doc with any business. (As you note, some doctors will grant the same discounts to cash patients, charging nobody the sticker price, essentially; others do not. And many doctors refuse to treat Medicare, Medicaid, or OHP patients, as the discounts demanded by these plans are steeper than those demanded by many private insurers).

    At any rate, does your proposal contain a formulary–a list of therapies it will and won’t pay for? Does it cap payment amounts for routine procedures?

  22. Jason McHuff
    February 24, 2012 at 12:31 pm Link

    A couple other things:

    -I’ve read it was none other than Ron Wyden who put in the opt-out provision.

    -Regarding the “aggressive triage policies with regard to late-stage cancer care”, I’d like to point out that the woman in the Wikipedia article died soon anyways (as in even with the medicine).

    -Government employees are NOT currently on OHP. The idea to expand it to them is being considered.

    -For TriMet, I think any plan really needs to provide for retiree care that’s not on the agency’s dime, so they’re not paying for people who are no longer employees.

    -I believe they are using bonds repaid with payroll tax revenue to buy buses.

  23. al m
    February 24, 2012 at 2:02 pm Link

    As the above article explains, our fight at TRIMET is really the microcosm of the larger fight,
    THEY SAY THERE IS NO MONEY TO ‘SUSTAIN US’
    but the reality is there are BILLIONS OF DOLLARS for all kinds of goofball projects and HUGE PENSIONS FOR THE EXECUTIVE CLASS!

    You guys over here at Portland Transport want to fall for this nonsense, be my guest, don’t expect me to join your club.

  24. Aaron G
    February 24, 2012 at 3:30 pm Link

    Al, are you against the idea of Oregon moving to a single-payer system, do you think it would be bad for TriMet, it’s riders, or employees? I certainly don’t think John Charles or the CPI would support any such a thing.

    Who does Mr. Johnson refer to?

  25. EngineerScotty
    February 24, 2012 at 3:31 pm Link

    TriMet ups the rhetoric, and TriMet lobbyist Olivia Clark–in remarks somewhat relevant to this thread–asserts that a tax increase is unlikely, as voters (and/or elected officials) are unwilling to raise taxes if it is perceived as buying health care benefits.

  26. EngineerScotty
    February 24, 2012 at 3:49 pm Link

    Mr. Johnson would be me–while I blog under a pseudonym, my real name is no secret to anybody.

  27. bjcefola
    February 24, 2012 at 4:54 pm Link

    I like single payer as a concept, but am deeply skeptical about its feasibility. As Scotty notes the crucial element is the provider price setting mechanism, by banding together society can effectively force providers to accept lower payments. But to get a taste of how complicated that is, here is a quote from Vermont. They are much further along than California in pursuing single payer, VT passed it into law and is in the process of figuring out how to make it work. This passage is from a state report trying to quantify the savings:

    “Each of these [payment reforms] has its own set of difficulties. For example, what is the right price to pay for a medical service? Is it the amount it costs to produce? Is it the amount at which an adequate provider supply is available? Is it the amount someone without insurance would be willing to pay for it (and who – Bill Gates or someone working at a minimum wage job)? Finally, is it the amount we as a society can afford to pay?”

    To imagine a functional single payer system is to imagine us as a state or country agreeing on how to answer those questions. That’s possible, but I don’t see it happening soon.

    I think HEM and the CCO reforms are much more feasible tools for cost control in the near term.

  28. Nick theoldurbanist
    February 24, 2012 at 4:55 pm Link

    How much money comes out of Trimet’s pocket for Capital Projects, excluding federal and state grants, etc?

    What % of the deficit would that sum equal?

  29. bjcefola
    February 24, 2012 at 4:57 pm Link

    Cameron, here is a good article on the politics of medical effectiveness. The ACA does try to address this through an agency called PCORI, hopefully it will fare better than past efforts.

  30. Jason McHuff
    February 25, 2012 at 3:06 am Link

    As I understand it, you are proposing that Americans be provided, essentially, with health care accounts (paid for, one assumes, out of general fund taxes)

    Close. I see it as something that would be done in Oregon as I don’t foresee Congress passing such a concept (plus, we’d have a unique benefit). And I’m thinking of a dedicated tax, one that captures the private (and public) money now being spent on health insurance/care.

    hedging against potentially catastrophic losses

    As I note in the article, there would need to be a way to provide for catastrophic costs. There really wouldn’t be any “losses”, just maybe a need to adjust the tax rate if they were to be directly paid for.

    the insurance company demands the doctor offer a lower price in exchange for payment

    Are we sure that’s really necessary to get lower costs? Wouldn’t competition control costs? It works for most other things we purchase. And the state could suggest or negotiate fair prices based on researched costs.

    Moreover, what about the paperwork and restrictions that insurers require, and the lack of incentive for either the patient or provider to control the amount of care because someone else (the insurer) is paying?

    This article (linked to in my essay) is what has shaped my questioning.

    a list of therapies it will and won’t pay for?

    No. It is really a funding plan, but the idea is that the patient would decide whether a treatment is worth the cost (as well as side effects, risk, etc).

    Lastly, note that people could choose to use their fund for comprehensive insurance like exists today.

  31. ws
    February 25, 2012 at 3:21 pm Link

    @al

    “I got news for you Mr Johnson, Trimet’s DEBT SERVICE”

    Of course TriMet’s debt service is a problem, but many riders at least see some improvements in the system via capital expenditures (despite reduced services we’ve seen lately).

    No rider gains *anything* from a bus driver getting gold-platted health insurance.

    I’m baffled as to why you’re not understanding why so many people are upset about the benefits of the unionized employees at TriMet, and why this is brought up time and time again.

  32. You wrote “bad for doctors”. Here is a significant clarification about that for family physicians, followed by some clarification about specialists:
    http://www.mforall.org/p/830#physinc
    http://www.mforall.org/p/830#specinc
    In addition to the positive impact on family physician income is the positive impact on their job satisfaction, being able to focus more on patients and a whole lot less on administrative activities.

  33. I respectfully suggest that the term “Obamacare” seems to be a generally accepted alternative title for the Affordable Care Act of 2010.

    Referring to J. Rheinhold’s comment that “The Act itself is almost entirely positive and helpful for all Americans,” we had a special investigation team of two persons review the entire law. It took six weeks. The result is NOT pretty. You can see for yourself.

    http://www.mforall.org/p/830#aca2010

    When you go there, be sure to select the link to the side-by-side comparison of the Affordable Care Act (ACA) of 2010 to single-payer, improved Medicare for All. There, at the top of the table, you will find that we have a pretty dramatic choice: either INCREASE costs by over $300 billion during the next 10 years or CUT costs by over $4,000 billion during the next 10 years. Read that side-by-side comparision carefully and check out the links to more information.

    To recover and add jobs we must cut health care costs. The Affordable Care Act of 2010 increases costs and leaves us with a health care NOT for all system. We need to understand the incredible benefits of single-payer health care, IMPROVED Medicare for All.

    http://www.mforall.org/p/976

    Bob the Health and Health Care Advocate

  34. P.S. I’m out of state. Just wanted to offer those words for your information and now exit, Bob

  35. Doug Allen
    February 26, 2012 at 8:46 pm Link

    One piece of evidence supporting single payer is the fact that TriMet’s Kaiser plan costs the agency significantly less than their Blue Cross plan. Kaiser has a lot of characteristics of a single payer system. TriMet employees may choose either plan, and many choose Kaiser because they perceive it to provide better coverage with fewer co-payments (yes, TriMet employees have co-payments).

    The difference in cost between the two plans is so significant that TriMet provides a Kaiser plan to management employees for no premium cost. It does charge its union employees a small monthly amount for the same Kaiser plan, although this is being disputed by ATU.

    Other than the cost, I am not aware of why people are calling TriMet’s health plans “Cadillac” plans. I don’t believe that they cover services that are not medically necessary, although I may be mistaken. Regarding whether acupuncture and chiropractic are scientifically proven to be effective, the questions here should be: “Do they relieve suffering, and do they increase or decrease the cost of care?” (I don’t believe that the Kaiser plan covers acupuncture, although I could be wrong.) I would love to see the research, but I suspect that chiropractic care may well be cheaper than comparable placebo care or otherwise ineffective care provided by MD’s. My grandfather was an MD, and he handed out a lot of placebo pills when there was nothing else he could do. They helped people feel better, and he didn’t charge an arm and a leg for them.

    So yes, as a TriMet employee (who is not speaking for TriMet — these are purely my own opinions) I think a single payer system would help a lot all around.

  36. Jason McHuff
    February 27, 2012 at 2:51 pm Link

    I tend to think Kaiser is like the Coordinated Care Organizations that state is doing for the Oregon Health Plan. I don’t know how much care is provided internally by Kaiser, but there’s certainly no Blue Cross clinics. The downside is that some people really hate Kaiser.

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