Better health care, smarter choices

Jeff vonKaenel

While there’s a lot of talk about how Americans pay almost twice as much for health care as people in other wealthy countries, there are few examples of people who are able to reduce their organization’s health-care costs while improving health-care outcomes.

Ken Stuart, the administrative manager and chief financial officer of the San Diego Electrical Health and Welfare Trust, is such an individual. For the past 28 years, he has been overseeing the health benefits for roughly 5,000 International Brotherhood of Electrical Workers union members. He’s had tremendous success at reducing health-care costs for his union. Per member hour worked, they pay $6.91 for health care. Other California IBEW unions pay as much as $17.41 per hour. According to Stuart, Sacramento’s IBEW pays about $11.63 per hour.

These figures, which include both the employee and employer contribution, are impressive, and so with the recommendation of California Labor Federation health policy wonk Sara Flocks, I set up a meeting with Stuart at a diner in San Diego.

Stuart lived up to his billing. Familiar with the work of the California Public Employees’ Retirement System, or CalPERS, which offers a value-based health-care plan with reduced costs for evidence-based behavior, Stuart has also had the practical experience of representing a self-insured union, where every bill, every extra procedure and every overcharged service comes out of the union fund.

He acts as if it was his money. At lunch, Stuart agreed with other experts who say that one of the biggest factors driving up health-care costs is “fee for service” health care, where the health providers making the diagnosis are often the same ones doing the procedure. Heart surgeons overprescribe heart surgery. Orthopedic surgeons are often too enthusiastic about joint replacement. Physicians like to do things and are paid to do things. Some may not be necessary; some may even be harmful.

Stuart’s organization uses Best Doctors, a company with 50,000 medical experts, to consult with a patient who is facing a major medical procedure. With access to the patient’s medical history and records, Best Doctors consults with the patient’s physicians to determine the best recommendation. In 62 percent of the cases, the original treatment plan is revised. The end result is, according to Stuart, better and less expensive care. (PinnacleCare and the Cleveland Clinic’s MyConsult Online Medical Second Opinion are among other companies providing a similar second opinion service.)

Stuart is also focused on health-care billing procedures. Instead of paying for each individual procedure separately, Stuart, like CalPERS, advocates for bundled pricing. With bundled pricing, the health-care insurer would agree to pay a set negotiated price for all the procedures that go into a medical event such as a knee replacement, or the birth of a baby. This seems like common sense. Unfortunately, the words “common sense” and “health care” are rarely found in the same sentence.

This lack of sense is expensive. In America we pay $5,000 more per person per year for health care than other wealthy countries. For 328 million Americans, that adds up to 1.64 trillion dollars. It’s enough to make you sick.

In addition to his union work, Stuart is the head of the California Health Care Coalition, which includes different organizations working to together to develop common sense solutions to deal with our trillion dollar problem. Stuart has shown that this effort can make a major difference. We need more people like Stuart.

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About the Author

Jeff vonKaenel
Jeff vonKaenel is the president, CEO and majority owner of the News & Review newspapers in Sacramento, Chico and Reno.