Friday, June 13, 2014

NPRI Researcher Cites Sierra Madre As Having the "Most Expensive Health Care Plan I Have Seen To Date"

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(Mod: You would think Sierra Madre's Water Department has enough problems already. Bad tasting and oddly colored water, the potential for possibly deadly nitrification blooms later this summer, and a Moody's bond rating that persistently edges towards complete junk (link). This despite a huge water rate increase that continues to incrementally fall into place, with the next 18% installment of this hike now scheduled for July 1st. The author of the following article, Robert Fellner, has done an enormous amount of research on public employee compensation in California. In this excellent report on exploding government health care plan costs (link), he cites one city as leading all he rest.)

State and local government spending on health insurance grew by twice the national rate for 2012 - One of the more alarming data points I have come across while compiling the necessary records for the Transparent California website has been the large sums of money spent on health insurance for public employees. As our site groups together the cost of pension payouts and health insurance in order to present the information in a uniform and understandable manner, the cost of individual health plans was not something we were particularly focusing on.

However, in the course of formatting and uploading the necessary records to TransparentCalifornia.com, several agencies jumped out at me due to their alarmingly expensive health insurance plans. First, it was the $20k+ plans in Corte Madera, Calif. and the Contra Costa Community College District. Then I saw the $30k+ plans in Beverly Hills. Finally, I came across what remains the most expensive plan I have seen to date — a $37,815 health insurance plan for the Water Superintendent of Sierra Madre, California (link).

I suspected this was not a problem isolated to the handful of agencies whose numbers happened to catch my attention but, rather, indicative of a systemic problem likely to be found in many other public agencies. This sets up a situation where taxpayers are effectively taxed twice for these plans — initially, to fund the public employee’s compensation itself and, again, when they find themselves paying an artificially inflated premium for their own health insurance.

Pew Research confirms these suspicions. In 2012, state and local government spending on health care increased by 8 percent; double the amount total U.S. healthcare spending grew during that same time period. The larger trend is terrifying — state and local government spending on health insurance premiums has increased an inflation-adjusted 444% from 1987 to 2012. The agencies above are merely symptoms of a much larger problem.

The farther the distance between consumer and provider, the less reason either has to economize, which is a factor in the out-of-control prices we see nationwide in the health-care sector. When a government is willing to spend $37,815 of your money on one health plan, what financial incentive does an insurance company or anyone in the medical system have to work on lowering prices?

While there are a plethora of factors responsible for the current health-care crisis in this country, the third-party-payer system, especially when that third party is using other people’s money, like a government agency does, is one of the core issues that demands immediate attention.

(Mod: Given the kinds of problems we have been seeing with our Water Department, some questions do come up. Here's one: exactly what have they done to deserve some of the most expensive health care plans in the entire State of California? Here is another: was a reason for the water rate hike currently underway the absurd amount of money being spent on health care plans? Below is a portion of the Pew Research article cited in the NPRI report.)

Pew Research: State, Local Government Spending on Health Care Grew Faster Than National Rate in 2012 - Total U.S. health care spending grew slowly in 2012, rising about 4 percent, but the story for state and local governments was dramatically different. Health care spending by states and localities increased 8 percent, according to the latest data from the Centers for Medicare and Medicaid Services, consuming a larger share of revenue—about $3 of every $10—than has been the case for such expenses since at least 1987, the earliest year for which complete data are available.

As state and local governments continue to navigate the aftermath of the Great Recession, health care spending remains a main source of fiscal pressure.

(Mod: And to think that, in California at least, Sierra Madre is the very worst offender. For the rest of this Pew Research report click here.)

http://sierramadretattler.blogpost.com

50 comments:

  1. The article makes a good point. the only way to contain health care costs os to establish a closer relationship between the seller (doctors et al) and the buyer (the patient). Only then will the costs be better monitored. I personally like my Health Savings Account plan. I put funds into an interest bearing account and then when I go to the doctor or dentist for routine visits I pay out of that account. f I am hit by a bus, I have insurance to cover it.

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  2. We're #1!!!

    City Hall should pass out two kids of "foam fingers " - like at the ball park.

    First, City employees get the one with the raised index finger.

    City tax payers get one with the mid - er, another finger raised.

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    1. # 1 in incompetence and self serving agendas at our expense

      Council needs to fix this and now

      we are a tiny little city and we are paying employees at the rate of a city of 5 million

      just plain stupid and we elect Councilmembers who endorse this cause they get special favors and projects done by the city manager

      and we also overpay royally for a city attorney

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  3. Hmm. I have my thinking cap on now, and I am trying to remember if the cost of water department health care plans came up during the City Council's water rate increase public hearing. Anybody remember? I don't recall it coming up. Maybe the City Manager mentioned it? Or Bruce Inman? Anybody? I just don't remember the topic coming up.

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    1. The consultant didn't mention it. Maybe we didn't pay him enough.

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    2. Think it's buried in operating expenses.

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    3. None of this has ever been discussed in a public forum. None of it.

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    4. When this city talks about transparency, they;re hiding something.

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    5. I think you misunderstand the concept of transparency, 11:31.
      It's enough for city staff to say the word, repeatedly.

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    6. and the city started the entire UUT conversation based on a blatant lie and knew it

      thanks John Buchanan,, you were so "great" for the city

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  4. But we get such great results from the money we spend! Where else do you get water that is colored for free?

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  5. The $36,000 health care plan comes with the "you rock" award. It is an exciting employee incentive.

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    Replies
    1. When we pay for the city staff's insurance, are we also paying for their dependents? Are we covering whole families? I can't see how the premiums could be so much otherwise.

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    2. Others cities provide health care plans for employees with family. None are paying $36,000 to do it, though.

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  6. Now that we are importing all our water, why do we need a Water Dept.? At least dump the over recompensed Superintendent

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    1. Good question. Why deal with the middle man?

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  7. The Gold medical plans for the city employees match the golden color water the City is piping into our homes. Color coordination is everything.

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    1. I don't get it. Why is it the only way we get to find out about this is on a supposedly controversial blog that got it from transparency activists located in Nevada?

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    2. Because everyone needs The Tattler.

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    3. This comment has been removed by a blog administrator.

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    4. City staff feels entitled.
      They don't realize that Sierra Madre was really working class and not all that desirable. Then developers ran out of land elsewhere, and hey presto, we're affluent. The truth is that only some people here are well-off, and their incomes skewer the average.
      I'd be willing to bet the majority of residents are just making a living - and not one as cushy as staff's.

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    5. Sierra Madre got run over by a pack of Santa Monica wannabees. Those that couldnt' afford the actually affluent neighborhoods moved here and tried to turn SM into what they couldn't afford and would not be accepted in South Pasadena or affluent areas of Pasadena or LaCanada.

      about 90% of our Councilmembers over the last 15 years wouldn't be given the time of the day and looked as laughable buffoons in other cities

      Amazing that LaCanada and Altadena do well with the Sheriff's department but we are insistent on a substandard police department that consumes over 50% of the city budget

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  8. Time for a do over.

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    1. Who needs a Forensic Audit when city hall charges residents for water which they failed to own?

      It was my understanding that Earl Richey filled 4 written complaints to the D.A.'s office regarding city documents provided by Elaine Aguliar stating that the "City charged city residents for more water than the city pumped",

      That's criminal - that's fraud

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    2. I guess Earl was Wrong

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  9. Forensic audit? Anyone?

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    Replies
    1. Only Zimmerman push for one.Nobody else would touch it.It's remains a no no to this day.I wonder why!

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    2. That has been suggested a number of times, and never made any progress.

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    3. To this day I cannot figure out why MacGillivray and Watts did not go for this. Aguilar and Buchanan fought this like it was the life of their first born at stake. We came that close to rolling up the old regime. That close.

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    4. I recall 2 reasons given:
      1) city hall records were destroyed by a disgruntled employee, so it wouldn't do any good anyway
      2) said employee had sued, was suing, will sue, so be quiet and stop asking

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    5. This comment has been removed by a blog administrator.

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    6. The argument that records were destroyed and therefore an investigation could not happen was fallacious. Records were destroyed, and therefore a crime was committed. That is why you would have a forensic audit. We never got the truth. It was buried.

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    7. does this Council have the courage to act?

      not as long as Harabedian is around.

      let's not forget, he's one of the best and brightest lawyers in California - or so he tells us

      could be worse, we could have elected Noah Green, another lawyer who knows more than us and loves to tell us this

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    8. I agree 12:05, and am sure that a good auditor could recover many records by consulting all the organizations we were dealing with. Not every firm has employees who destroy evidence.
      It has also ocurred to me that the slush fund that used to be the Water Dept. is part of the reason this all has to remain hidden. It's common knowledeg that before the Water Dept. was known as a 'cash cow.'

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    9. Absolutely. Money that was supposed to be used to maintain water infrastructure like pipes was quietly pulled out of the water department and used for unknown purposes. Then the records were destroyed. Now we have pipes that are decrepit and dirty. Couple that with choramines and we could now have a situation this summer where our water is a health hazard. This needs to be investgated. Crimes were committed. Kurt Zimmerman was right. It is time everything came out.

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    10. This comment has been removed by a blog administrator.

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    11. I understand that money was paid back to the water department through a loan taken out at what is now Bank of the West. The loan was then paid off slowly but surely through the General Funds. Employees were fired, but not before destroyed the records were destroyed. There has to be some record of the loan however. Anyone?

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  10. Off topic, but equally important. Today is the only Friday the 13th in the year 2014. Be careful. Drink lots of fluids. But not water.

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    1. Only Friday the 13th in 2014 AND a full moon.

      I'll drink...wait for it...moonshine.

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    2. The Wolfman is going to be very hard to deal with tonight.

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  11. What on Earth does a health plan like that include?

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    Replies
    1. Good question. Medivac? Organic painkillers imported from Bhutan? Medical marijuana? Aroma therapy?

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  12. The reforms that the health insurance business has been forced into certainly means that all health plans at city hall need to be revised.
    There should be a much more reasonable total for city hall's coverage.

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  13. FYI
    John Crawford

    Just think....
    Maybe working around all those bad water chemicals causes cancer...
    that could explain why city hall is paying $37,815 health insurance plan to the Water Superintendent of Sierra Madre, California

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  14. We meed Delmar and Arizmendi to get to the bottom of this.

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    Replies
    1. Delmar has agendized the outrageous benefits problem.

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    2. Both council members have successful experience in management.
      Bet that surprises and discomforts city staff.

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    3. Watching Delmar give Aguilar some pointers on employee productivity at the last city council meeting was fun.

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  15. You know the residents get what they deserve. We pay people an exorbitant sum and there not only is no accountability, they get rewarded for their incompetence. Maybe I'm in the wrong line of work.

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    Replies
    1. Maybe having the water turn colors is a way of reminding everyone that they deserve a raise.

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