January 9, 2006

Combined purchasing power reduces
health care, insurance costs

By County Supervisor Jim Beall
Special to the Times

The escalating costs of health care and insurance premiums are financially challenging employers in both the public and private sector. Santa Clara County, its 15 cities, school districts and other agencies may need to consider additional service cutbacks to cover these skyrocketing costs.

Working people need to be insured by their employers. Our deputies, nurses, road workers, paramedics, firefighters, social workers and park rangers all require adequate health and workers’ compensation insurance just like everyone else in the workforce.

This financial dilemma has become the challenge of our time. We must all explore long-term solutions to keep people adequately insured.

One helpful remedy is to increase the purchasing power of the consumer by buying into larger group health and insurance plans. The health care and insurance industry consistently charges less per person based on the size of the group.

This is why I have organized a meeting of almost every public agency in Santa Clara County on Jan. 6 at DeAnza College. I want to reduce costs by combining forces as we negotiate with health care providers and the companies that provide the insurance we require.

Like others, public agencies need adequate insurance to cover health care, property damage, liability, workers compensation and vehicles. Our combined purchasing power can get these costs down.

In a way, it’s similar to “single payer” health insurance. This is when people are all insured, in one comprehensive insurance program, and are able to choose the health care provider of their choice.

Some worry that this means the government becomes the sole health care provider. Actually, the government only organizes the lower cost (per person) group insurance plan. The insurance plan becomes the “single payer” that assumes strong purchasing power and the ability to leverage the health care industry.

The inaugural meeting of the Santa Clara County “Health Benefits Coalition” will also help local agencies in other ways. We will be able to demand better transparency in pricing for common procedures, develop better options for part-time employees and better monitor the quality of various providers. By working together, the greatest benefit will be the reduced costs per employee. This will save taxpayer dollars as increases in overhead costs are reduced.

I intend for this effort to be a challenge to health care providers and the insurance companies that provide the coverage we require. We want them to become more competitive, standardize costs and help us get the lowest rates available.

If you would like more information about the progress of the new Health Benefits Coalition, just call my office at the County Board of Supervisors at (408) 299-5040.