Local Politics

Friday, Jan 25 2013 05:04 PM

County plan would give employees a break if they go to KMC

BY JAMES BURGER Californian staff writer jburger@bakersfield.com

County officials hope to convince many of Kern County government's 8,000-plus employees to use Kern Medical Center as their primary hospital in exchange for a smaller healthcare bill.

The county would offer workers a new healthcare plan that could help shore up the finances of the financially-troubled, county-owned hospital, which has long needed more paying customers to compete in Bakersfield's healthcare market.

The county's largest union and a key taxpayer watchdog group support the health plan pilot program.

"I have been advocating that the employees use KMC for five years now," said Michael Turnipseed of the Kern County Taxpayers' Association. "The financial situation at KMC would be solved."

ORGANIZATION

On Tuesday, the Kern County Board of Supervisors will consider committing $1.47 million from the KMC budget to hire 15 new employees to build and manage the new healthcare plan.

The "EPO," or exclusive provider organization, would be launched as a pilot program on July 1 and designed to serve up to 5,000 people -- county employees, their spouses and children.

If the program is successful, said Kern Medical Center CEO Paul Hensler, it will be opened to all county employees in November.

The county EPO plan would not be mandatory. Employees could still choose other healthcare options.

"The last thing I want would be a mandatory plan," Hensler said.

But county officials have tailored the program to make it cheaper for employees than any other competing option, while potentially routing at least $2.7 million in additional revenue to Kern Medical Center annually if at least 2,000 individuals sign up.

PRIMARY CARE

Employees would still get their primary care from community doctors through a contract with a network of physicians, Hensler said. But they would go to KMC exclusively for their pharmacy needs, specialist care, testing and hospitalization.

In exchange, a power-point outline to be presented to the board Tuesday shows, the county would offer serious savings for county employees.

County reports say workers would pay premiums that are about half that currently charged by an existing "EPO" program administered by Managed Care Systems -- as little as $442 a year for a single employee and $1,261 annually for a family.

Employees would pay nothing out-of-pocket for out-patient surgery, hospital stays or pharmacy medications, Hensler said.

The reduced cost may ease the blow of recent union contract changes for long-term county employees who had previously paid no premiums for their healthcare.

In the most recent round of contract deals with its unions, the county was able to have most workers begin paying 20 percent of their healthcare premiums.

Regina Kane, president of the Kern County chapter of the Service Employees International Union, Local 521 -- which represents the largest number of county employees -- said she is hopeful that the county, KMC and the employees will all benefit from the new plan.

"SEIU and the employees want to work with the county and save the county money in the long term," she said. "If the end result is good care with a lower premium, that's good for everyone."

And it is very important, she said, that employees who choose the county EPO plan would have a choice of primary care doctors.

"That still gives the participants the chance to keep their own providers that they're comfortable with," she said.

SAVINGS

Hensler said money from county EPO premiums would be used to offset the cost of hiring people to run the system. If the county can enroll 2,000 people, he said, it will break even on its costs.

Enrollment of any additional members would generate savings to the county, he said.

And even at the "break even" point, the county would be better off because it would be paying its own hospital for healthcare rather than competing hospitals.

Assistant County Administrative Officer Elissa Ladd said the county program is not designed to eliminate the existing EPO, which MCS is contracted to provide through the end of 2013.

"It's just providing another low-cost option," she said.

That contract has been the center of controversy, drawing accusations that MCS has shifted patients to three Bakersfield hospitals with which it shares ownership connections in an effort to make more money off the county.

Ladd said that the county will re-evaluate its healthcare needs at the end of the year to determine what options it will provide. The success of the county EPO would factor into that decision, she said.

Hensler has high hopes that the county program will get far more than "break even" participation and that estimated savings to the county and Kern Medical Center will materialize as taxpayer dollars being routed to outside corporations and hospitals are sent to Kern Medical Center.

"If they send the dollar out, the dollar is gone. If they keep the dollar in the county, it probably saves us 30 to 40 cents," he said.

OVERDUE

Turnipseed said the plan is long overdue.

"If they want to keep the hospital open, they've got to get more paying customers," he said, and county workers need to be the first of those new customers.

Hensler said if supervisors approve the move Tuesday, KMC will start hiring with the understanding those jobs won't exist if other county employees don't join the healthcare organization.

"There's not a whole lot of downside to it. If nobody signs up, we don't hire the people to administer the plan," Hensler said.

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