Monday morning, and only time for three observations on municipal health care reform. We have heard some statements on health care reform that on the surface make sense, but upon cursory review just fall apart. Lets look at them.

1) It was the municipalities who made these deals on health care, and they should not look to the state for “rules changes” that would help them get out from under their own mess.

You usually hear this from state officials talking about why this has not been done up to this point, and why the locals should be grateful for any movement on this question. Of course what they fail to point out is that it is the rules imposed by the state that insure that once a “bad deal” is reached it can never be reversed. They also start to shift uncomfortably when you ask about the state legislative action (outside of collective bargaining) that reversed the “bad deal” the state had with MBTA over 23 and out and health care for MBTA retirees, as well as the forced migration (outside of collective bargaining) of active MBTA employees to the GIC. The discussion tends to end when you ask about state legislative action that has placed municipal workers into the GIC without the benefit of collective bargaining (see Lawrence, City of. )

2) The issue of “sharing” the “savings” with municipal unions. This notion sounds equitable, and many mayors and managers, under current state rules, would contemplate exactly that. But I notice that the request is not to reinvest the savings into municipal job retention. It has been the case all along that the “savings” was going to go to municipal unions, as cities and towns look to stave off service cuts and layoffs. They would be helping to provide job retention for their most junior members. The notion of “sharing the savings” is code for changing the “municipal/employee split” through the back door, and has the potential to create additional job losses for union members, and service cuts for taxpayers. Yes, it sounds good but upon closer inspection it does not help either union members or taxpayers. Scott Lehigh had this one right in his last column.

3) Forced entry into the GIC is a “pay cut” for employees and on that basis should not be contemplated. This fact (a de facto pay cut) is undeniably true, but with the “commodity” of health care rising by double digits every year it is not logical to think that employees could be indemnified against ALL increases in health care costs. I can point to the health care negotiation in Methuen last year that led to major plan design changes, including the imposition of $1000-$2000 deductibles. The employees took on a plan that increased their costs in some areas substantially, but the taxpayers of Methuen saw an increase of $1.6 million in this account. It is just not reasonable to expect that all of the costs increases in health would be taxpayer borne. The final point on this is that if health care costs continue to rise as they have the argument will become moot, as all municipal resources, and all employee pay, would eventually go to cover health care costs. Without cost containment we are all out of business, management and employee alike. Management and employee have more in common here than you might think. Our collective energy should be spent fighting for real health care cost containment, instead of fighting each other.