“While most union leaders understand the need to reduce health care spending, simply shifting costs to workers is usually a nonstarter, forcing both labor and management to pursue other ways to control costs,” said Amanda E. Lechner, M.P.P., a former HSC health policy analyst now at Mathematica Policy Research (MPR), and coauthor of the study with Kevin Draper, a former HSC research assistant now at MPR.
Collectively bargained health benefits are typically provided through employer-administered health plans. In some cases, unionized workers are covered through Taft-Hartley trusts that are jointly governed by management and labor representatives—collective bargaining in this type of plan focuses only on the size of the employer’s financial contribution for health benefits. In both cases, health benefits are included in contract negotiations along with wages and other benefits.
The study’s findings are detailed in a new NIHCR Research Brief—Putting the Union Label on Health Benefits: Collective Bargaining and Cost-Saving Strategies—available here.
Other Key findings include:
- Reducing Unit Prices. Prices for health care services vary widely both across and within local markets, in part, because some providers have gained significant market power to command high prices from private purchasers. Collectively bargained plans in the study have adopted three innovations—negotiating volume discounts, reference pricing and limited-provider networks—to leverage patient volume against high-price providers.
- Promoting Efficient Care Delivery. Several collectively bargained health benefit plans in the study adopted provider payment reforms, such as accountable care organizations (ACOs), that move away from fee-for-service payment and reward more efficient care delivery and potentially reduce utilization.
- Improving Workers’ Health. Another common approach in collectively bargained health benefit plans is the adoption of wellness programs designed to improve workers’ health and reduce health care utilization in the long run. Generally, wellness programs include financial incentives to encourage activities like completing a health screening or taking smoking-cessation classes. Incentives include gift cards, premium reductions and reduced patient cost sharing.