Health care underlies many labor disputes

Geoffrey Ziezulewicz

Rising health-care cost, one of the main reasons University clerical workers are on strike, has sent others across the country to the picket lines.

From striking grocery workers in California to the collective bargaining negotiations of Houston firefighters, health care is at the center of labor disputes all over the United States, said Ken Jacobs of the Institute for Labor and Employment, a labor research program based at the University of California-Los Angeles.

Jacobs said 30 current labor disputes involve 98,000 U.S. workers, and higher health-care costs are the driving factor behind these strikes. Employees often pay more for insurance while taking pay cuts.

“The general rule is people are paying more for less,” Jacobs said.

Health-care costs have risen in the past few years mainly because of an increase in use of private health-care services, said Roger Feldman, professor of health services research and policy at the University.

Privately insured people are using more of what health-care plans offer, he said. They are buying more prescription drugs, receiving outpatient hospital care and turning to technologically sophisticated treatments, such as bypass surgery, in large numbers. The increasing needs of an aging population are also a factor.

Feldman said this increase in use means that if insurers did not raise prices, they would end up unable to cover their own costs to provide health care.

“It is not the drive for profits per se that causes them to raise their costs,” he said. He also said any company is likely to pass cost increases to its customers.

“In the insurance companies, it means higher premiums,” Feldman said.

Health-care premiums are the price paid to cover health insurance services, he said. Employers offset these higher prices by passing some of the higher premium costs on to employees.

Many workers are striking now because employers are making them pay part of their premium for the first time. Employers are also increasing employees’ co-payments on prescriptions and doctor visits, Feldman said.

The health-care plan that members of the American Federation of State, County and Municipal Employees Local 3800 rejected would require single coverage employees to pay 10 percent of their premiums when they previously paid nothing, according to a report presented to the Board of Regents in early October.

Their share of prescription drug costs and doctor visits would also increase, according to the report.

Overall insurance costs were up in the early 1990s, but by the mid-1990s they leveled off because of the rise of health management organizations, said Alwyn Cassil, senior manager of public affairs for the Center for Studying Health System Change. The center, based in Washington, is a nonpartisan organization that tracks health-care data and spending.

As HMOs declined in popularity, preferred provider organizations – which gave patients more choices of doctors and specialists – became more popular, and the lack of restrictions resulted in a more expensive system.

To pay the increased health-care expenses, employers have passed more costs to employees causing many of the strikes across the country, said John Budd, professor of industrial relations at the University’s Carlson Industrial Relations Center.

Health care is the driving employee concern at all levels, Budd said. It includes hourly and salaried workers of blue- and white-collar occupations.

But he said the University faculty is non-union and was “forced to swallow” the University’s health-care raises.

“Administration has said, ‘This is the health-care package for next year, and if you don’t like it, you can look for something else,’ ” Budd said.

Frank Cerra, senior vice president for the University’s Academic Health Center, said the University’s health-care offering was fair, given the University’s current budget situation.

Under the new health plan, the University pays 80 percent of health-care costs, he said.

Cerra also said the University has not changed the “basket of benefits” covered under the medical and dental insurance programs.

“Many employers have reduced covered service,” he said. “It is hard to find a covered service that is not paid for in our plans.”