How Unions Can Transform the Way Americans Get Care

MARK BLUM: Maria’s diabetes was well out of control. This was a train wreck waiting to happen. She didn’t feel well. She already had high blood pressure. She was at risk of coronary disease. And her care was inevitably going to become catastrophic and very costly.

She worked at Sunset Mall as a grounds and sanitation worker, very heavy work in the hot sun, cleaning floors, mopping, cleaning bathrooms, other custodial work, eight hours a day.

We encountered her because 32BJ, her union, had been very forward-looking in developing high-value, high-access primary care centers in the northeast, in the New York area, in the New Jersey area. In Miami they didn’t have any comparable health care providers. So America’s Agenda with 32BJ and Paladina Health, a very innovative, direct primary care provider, designed a model of care delivery for Maria and about 700 workers represented by SEIU 32BJ in Miami. In that model, the workers had virtually unlimited access to a primary care doctor.

Maria told me she was shocked the first day Dr. Sarmiento actually called her at home to ask how she was doing after a physical that she’d gotten at the health center. They became partners in care. Maria’s diabetes became very quickly under control. There is, however, a sort of sad outcome to that story. The employer at Sunset Mall where Maria worked sold the company, the management of the mall, to another employer who didn’t recognize the union.

I do want to tell you though that Maria continued to go to the health center. The union trust fund saw fit to continue to work with Maria even though she didn’t have union representation. She continued to have no-cost access to Dr. Sarmiento who helped her find affordable access to the medications that she needed. And so Maria is — doesn’t have the same kind of care she had before when she was in the union. But the union, nevertheless, is helping bridge the gap.

SHANOOR SEERVAI: That is really amazing. Hi everyone. Welcome to The Dose. You just heard from Mark Blum, the executive director of America’s Agenda, which brings together labor unions, businesses, and health care providers so that union members can get good care. And that’s what we’re going to be talking about on today’s show, how unions are changing the way that health care is delivered.

Mark, welcome to The Dose.

MARK BLUM: Good to be with you.

SHANOOR SEERVAI: All right, so let’s get started talking about what Maria’s story tells us about how much health care in the U.S. costs. Because I imagine that that was a big concern for her when she was first diagnosed with diabetes and some of the other conditions you described.

MARK BLUM: Yes, it was. Costs were rising, roughly at the same rate as they are across the country, about four to five times faster than wages.

That rate of increase has been going on for nearly three decades. They’re rising also by multiples of employers’ revenues, too. So the problem is felt jointly by employers and the unions.

SHANOOR SEERVAI: And unions have found a unique way of getting at this problem of costs. Can you tell me what they’re doing?

MARK BLUM: Well, Shanoor, let me put it this way. If health care costs are rising more rapidly than corporate revenues, the first impulse of an employer is to shift those costs onto workers to prevent the growth of costs. Typically, most Americans without union representation have experienced their costs are increasing for health care relative to their wages. Unions are in a unique position because they’ve got the ability to bargain those health benefits.

SHANOOR SEERVAI: So what you’re saying is that because unions have this power of collective bargaining, they’re able to find a way to keep costs under control for the health plan that they have access to?

MARK BLUM: I’m saying because unions have the power of collective bargaining, they have the power to resist cost-shifting from employers. Now if a union can say, “You can’t shift the cost up to me,” then in fact the incentives of employers and unions become aligned. Instead of fighting over cost-shifting, we are aligned in wanting to redesign the way care is delivered to attack the cost drivers and to ensure that costs rise more slowly.

SHANOOR SEERVAI: So Mark, explain to me how cost-shifting isn’t effective?

MARK BLUM: If workers have the power to resist cost shifting and can engage employers to becoming workers’ partners in — in designing a more efficient way to deliver health care that provides high-quality care at lower cost, then we can bargain together over how to share the savings rather than bargaining over how to shift the cost. That aligns our interests. That makes collective bargaining a foundation for really a harmonious, coordinated interaction between employers. Cost-shifting is a fight. If, in fact, we can redesign health care delivery to bring down those costs, then we create savings which can be shared between employers and workers.

SHANOOR SEERVAI: Okay. So now give me an example of how care is being redesigned.

MARK BLUM: Sure. There are so many, Shanoor. But one, I’ll look at the meatpacking industry, where United Food and Commercial Workers partnered with America’s Agenda just a few years ago to redesign care delivery across the packing house industry, the industry that creates proteins, poultry, beef, pork, consumed by America.

Copays were typically 30, 35 dollars per visit. That was enough for workers in the industry not to be seeing primary care doctors. Of course, if you’re not getting primary care, if you’re not getting disease prevention and partnership from primary care providers in management of disease, your health outcomes are going to be worse and costs are going to go up.

So we took away all financial barriers to worker access. Workers had guaranteed same-day/next-day access to doctors for urgent care, and very fast access, generally next-day access, even for scheduled appointments. Workers said almost across the board that the removal of copays and deductibles from primary care enabled families, that’s children included, to be able to afford to bring their families to see primary care doctors.

We got up to 90 percent of the workers engaged in a new model of primary care, smaller groups of patients under care of a doctor, no cost-sharing, and expedited access to those doctors.

The net outcome of that was, after 18 months emergency and urgent care utilization had fallen by nearly 50 percent.

SHANOOR SEERVAI: One of the things that’s come up on previous episodes of The Dose is that doctors are really time-strapped, and especially primary care doctors see patients for, you know, a few minutes at most. How are the doctors who are part of these union health plans managing this?

MARK BLUM: In the fee-for-service world, in the conventional, the mainstream health care delivery model, doctors are paid based on the number of appointments. And so they’re kind of on a treadmill to see more and more patients.

In the models we’ve designed we’ve gotten at that time problem by having much smaller groups of patients assigned to each doctor. The typical primary care doctor in the fee-for-service world sees 3,000 to 4,000 patients. Our physicians see 700 to 1,000 patients, no more than 1,000 patients apiece. That gives the doctors the gift of time to build relationships.

SHANOOR SEERVAI: Doesn’t that make it more expensive to provide care if you just say that doctors are seeing less patients?

MARK BLUM: Yes. It makes it more expensive to provide primary care. But remember, less than 5 percent of our total expenditures in health care are at the primary care level. Primary care becomes more expensive but, in fact, when we reduce the demand for the inappropriate use for expensive specialist care, for emergency room care, and avoidable hospital care, those are much higher costs. So the trade-offs between more expensive primary care and much less unnecessary use of specialist and hospital care leads to much greater savings in the overall health care spend.

SHANOOR SEERVAI: Earlier we talked about the Brooklyn Health Center in New York, and you described it as cradle-to-grave coverage. Can you elaborate on that?

MARK BLUM: Sure. The Hotel Trade Council and the employers sponsor a jointly governed fund for hotel workers in New York City, provide care to its covered workers, which is cost-free to those workers. They made a conscious decision decades ago that encouraging access to health care starting early will lead to longer savings over time. And many of these workers are hotel employees over their entire carriers, over their lifetime. Their children, from the time they are born, in fact the prenatal care before they’re born, become patients in the health plan and they’re seen at facilities in each of the five boroughs in New York City, which are, in fact, some of the most modern health care facilities in the entire New York region.

They provide comprehensive care, primary care, specialist care, everything except hospital care. And retirees, that have worked the requisite number of years continue to be able to access that system as Medicare beneficiaries. So it is real cradle-to-grave care.

But what is really important here is that the cost per capita of cradle-to-grave care, which is arguably the highest-quality care available to workers in the New York region, costs about $13,000 a year, whereas the same kind of care, it’s not cradle-to-grave, but the kind of care that you could buy in a commercial insurance plan in New York costs about $26,000 a year.

SHANOOR SEERVAI: So, Mark, what you’re saying is that the Brooklyn Health Center is actually able to offer care to union members at half the costs than nonunionized workers have access to. But does this mean that all union members across the U.S. have access to this kind of care?

MARK BLUM: No, I wish that were the case, Shanoor. The fact is that union-represented workers in general have better health benefits and share a lower part of costs than workers who don’t have union representation, because they have collective bargaining. They can resist the cost shift. But in fact it’s — it’s only the most innovative unions that are actually going beyond fighting the cost shift through collective bargaining to reengineering the way that care itself is delivered.

SHANOOR SEERVAI: Mark, when we first spoke you had a great story about truck drivers in Tulsa, Oklahoma.

MARK BLUM: Our director of clinical culture, Dr. Suzanne Gehl, at SolidaritUS Health found that there are occupationally related health hazards to being a truck driver. You’re sedentary for hours a day. When you’re sedentary you have a high risk of obesity, of heart disease, of high blood pressure, and other health problems. So she began working with those truck drivers to train them to integrate exercise actually into the way they work. Instead of going around with a metal baton once around their trucks, hitting the tires on their 18-wheelers, they were to walk around it six times each time before they got in the cab, for example.

SHANOOR SEERVAI: What I’m hearing there is that you don’t need to take somebody who has a job that requires them to be sitting and driving a truck for 12 hours a day, and tell them, “Hey, you need to spend 30 minutes at the gym every day.” But instead, what you need to do is find a way to build exercise into the life that they are already living.

And it sounds like such a simple fix. But it also sounds like something that requires a doctor who is really able to engage with her patients at a deep level and think about their specific needs.

MARK BLUM: Dr. Gehl has been a real visionary in training those physicians to the goals of looking at health care not as a clinical interaction, but at the doctor being a coach and a partner in changing behavior throughout everywhere — at home, at work, everywhere that the patient lives.

Dr. Gehl likes to say to our union members — or to our doctors — that we’ve got to bring better health to where the patient is.

She also realized, however, it was the family units that mattered. That a truck driver who’s tending towards obesity often had family, spouses and children who were struggling with weight problems. That what they ate, that nutritional customs in the family, also drove towards obesity and other health problems. So she began working with those family units and actually, ultimately, began working with the entire company bringing those families together to support each other in changing nutrition, in changing exercise routines, in measuring and actually competing over water intake.

The net result was a real drop in the weight of folks — the entire company with spouses of truck drivers actually taking the leadership in enforcing the new standards and supporting their husbands or their wives and bringing their children along.

SHANOOR SEERVAI: I love that. I love the idea that health care is something that a whole community is engaged in.

MARK BLUM: That’s something that’s difficult for an employer to do alone.

SHANOOR SEERVAI: Mark, it occurs to me that we haven’t really backed up into this question of how and why American workers, whether they are part of the union or not, rely on their employers to give them health care.

MARK BLUM: Yes, well, there are historical reasons for that. In the 1930s health care was individual. In World War II towards the end — in 1942, in fact, the Wage Stabilization Act froze wages because the U.S. government was seeking to avoid inflation while we were in the midst of production for World War II. They didn’t freeze health and pension benefits. And so collective bargaining focused on negotiating better benefits for health and pension because wage bargaining was not permitted.

As we come out of World War II, that employer-focused system that was really created during World War II endured.

SHANOOR SEERVAI: So this was really something that started as a — well, as many things, temporary wartime measure. And then has turned into the way our entire system is designed?

MARK BLUM: Yes, it has.

SHANOOR SEERVAI: Do you think now maybe we could shift gears a little bit and talk about a very interesting example in New Jersey of how unions were able to save the state, if I’m correct, $1.6 billion?

MARK BLUM: That’s right, billion with a B. $1.6 billion, yes. It’s simply this, prescription medicines are the fastest-growing component of health costs. Unions wanted to focus jointly with the employer, the State of New Jersey, and local government and school districts, on reining in the galloping costs of pharmaceutical medicines.

The problem is that the state, in fact health plans typically don’t buy those drugs from the manufacturers, they buy those drugs from PBMs.

SHANOOR SEERVAI: What are PBMs?

MARK BLUM: They’re pharmacy benefit managers, entities that are little known. They’re middlemen in between pharmacy manufacturers and health plans and also pharmacists that actually set the prices for pharmaceutical drugs. They are in a great position standing between the suppliers of drugs and the patients and health plans that are the consumers of those drugs, because drug pricing is extremely complex. In fact, when you buy a health plan from a PBM you don’t really know what the cost of those drugs are. Because of ignorance of price on the part of consumers, they can set prices to maximize profits to themselves. And the unions, after careful analysis, realized that a lot of the drug price increase was a result of PBMs taking more and more profits out of the drug supply chain.

SHANOOR SEERVAI: So just so that I understand. Because people don’t really know how much drugs cost, they’re letting PBMs set the prices at whatever the PBMs find most profitable? And they’re then —

MARK BLUM: Exactly correct.

SHANOOR SEERVAI: — forced to pay for them?

MARK BLUM: Yes. So here’s the solution that America’s Agenda designed together with the public-sector unions in New Jersey and, ultimately, with the state government in New Jersey. It was decided we’ll create a competitive marketplace for PBMs. Well, how do you do that because we don’t know the price?

So in New Jersey in 2017, an auction was run with the design that was proposed by the state unions. The big PBMs all competed. They made their proposals. The proposals were costed out, projected, and the PBMs actually competed in an online auction. And as a result of competing with each other, their price — the price for the plan the state wanted fell $1.6 billion over a three-year contact compared to the current contract. Those were huge savings that resulted in health care premiums, for example, for public teachers, which had been increasing at 14 percent a year, fell to zero increase this year as a result of the drug savings.

Now other states are looking to replicate the innovation that unions brought to the State of New Jersey. This was a game-changer of revolutionary proportion around probably the hottest issue America is debating today: how to bring the costs of prescription medicines under control.

SHANOOR SEERVAI: And it is a game-changer because what you’re saying is that unions in New Jersey changed the rules of the game. And what they said is, “Hey PBMs, you don’t get to tell us how much things are going to cost. You have to compete with each other for how much they should cost.” And so instead of drugs being costed out in a black box and then presented to the people who have to buy them, PBMs have to come up with the most competitive prices. Am I getting that right?

MARK BLUM: You’ve got it exactly right. In fact, the union proposal created a dynamically competitive marketplace for PBM bidders in which consumers won. The state won. Taxpayers won. There were no cuts to drug benefits, but taxpayers had to subsidize public employee plans by $1.6 billion less over the life of that contract.

SHANOOR SEERVAI: So this leads me to a question about how we can replicate this for other health plans, health plans that serve nonunionized workers. What do you think Mark? What’s the scalability here of what these incredibly innovative unions are doing?

MARK BLUM: That’s exactly our goal in America’s Agenda. We believe that unions, unionization can do models for how our successes could be replicated for all Americans, not just union-represented workers.

We are actively engaged in a number of ways of trying to transform health care across entire communities where we have high densities of union workers that are able to lead these kinds of innovations. For example, SolidaritUS Health is exactly a union-owned advanced direct primary care provider entity which is opening its doors to union- and nonunion-represented populations in the Tulsa area. It started with the union-represented UAW. Now bricklayers are entering care there. The ironworkers in the region are talking about participating in SolidaritUS Health care. But we are also talking to the local chamber of commerce — most of the employers there are not union-represented — about their employees coming in, too.

So SolidaritUS Health is becoming a union-owned and -designed provider that’s actually driving care deliver transformation across the whole community where most employers and most employees, in fact, are nonunion. Our goal is to transform U.S. health care, not just health care for union-represented workers.

SHANOOR SEERVAI: I mean, that’s an ambitious and noble goal for sure. And it seems to me that union workers are in this unique position because of a culture of collective bargaining and a culture of working together, where they’re really able to articulate to their employers what their needs are. And they found a way to make it so that their incentives — which is to have good health care — align with the incentives of their employers — which is to keep costs low. And in this care delivery transformation, that really seems to be the secret sauce. You’ve got to have — you’ve got to align everyone’s incentives and then have them working together.

This has been really fantastic, Mark. Thank you.

MARK BLUM: I’m very happy to be with you today. Let’s continue the conversation. Thanks, Shanoor.

SHANOOR SEERVAI: That’s it for today’s episode. Thank you all for listening, and I’ll see you in two weeks.