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News & Press: Pension

With state pension report near, Sweeney proposes plan to cut public employee healthcare costs

Friday, February 13, 2015   (0 Comments)
Share | 02/13/15

With a state commission report due on how to combat the skyrocketing cost of public employee pension and health benefits, Senate President Stephen Sweeney today proposed a plan of his own that would change how health care is administered to thousands of public employees and their families. Backed by more than a dozen doctors and leaders of public employees' unions, Sweeney (D-Gloucester) today said a lot of money could be saved by simply creating a new "patient-centered" health care system similar to one that exists in Vermont, and that would provide better service to patients and ultimately save money. He pitched it as an alternative to the idea that saving money on health care should center around requiring workers to pay more or cutting benefits.

"We've heard the cost of health care is too expensive and is out of control," Sweeney (D-Gloucester) said. "What we're looking to do today is to start work on a concept that will actually improve care and reduce costs. I know that's hard to believe, but it is doable - it is very possible to get done." The three-year pilot program would pay doctors a set base salary and a bonus for good clinical outcomes and patient satisfaction. The idea, Sweeney said, is to do away with a "fee for service" model in which doctors have incentives to as many patients as possible. It would be implemented in four or five New Jersey locations, for up to 60,000 public employees. Participation would be voluntary.

The program would not require legislation, Sweeney said, but would need to be approved by the two state panels that administer health plans for teachers and other public workers. The panels are split evenly between union and Christie administration officials. And New Jersey could be hit by a big federal tax on expensive "Cadillac plans" held by public workers as part of the Affordable Care Act. Sweeney said his proposal could help rein in their costs to avoid the tax.

Under the plan, doctors would be limited to a client-base of 1,000 patients. They would have to be available 24 hours, seven days a week by cell phone and email. All participating doctor groups would have to keep electronic records, and they would have to set up "high value" referral networks. The New Jersey plan was developed in consultation with "America's Agenda: Helath Care for All" - a non-profit whose board is made up mostly of labor union officials and health care company executives.

The group's executive director, Mark Blum, said Vermont's government saw at least 9 percent savings when it implemented a similar plan in 2006. Blum said that once doctors get to know patients better, they will be better able to manage chronic conditions that account for so much health spending, reducing waste and "introducing prevention in a way that simply doesn't exist in the current system."

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