Joseph Lackman, employer co-chairman of the health and welfare fund, introduces Charles W. Breitsman and Kimberly Stein of cds.

Philadelphia 14M Pres. Andrew Douglas introduces Nick Zaffiris and Stephanie Wentworth of Private Healthcare System, which manages medical and hospital networks.

The Graphic Communications National Health and Welfare Fund's gain of 10 new groups with some 2,450 participants during the past year generated enthusiasm for the fund's growth at the annual trustees meeting.

GCIU Vice Pres. Lawrence Martinez, who serves as the fund secretary, welcomed the representatives from the new groups to the meeting and said he looks to the fund to add more groups during the current year.

The Segal Company's William A. Rivers, who serves as consultant to the fund, said "it was a sensational year in terms of the growth of the fund."

Rivers credited the gain to the work of Martinez, Philadelphia 14M Pres. Andrew Douglas, who serves as the union co-chair of the fund, and Charles W. Breitsman of cds, the administrator of the fund's benefit programs who developed a new marketing brochure for the fund. The three made frequent presentations about the fund, including one at the GCIU convention. Breitsman also praised the trustees for "passing the good word about the national fund."

Martinez noted that GCIU field staff also are spreading the word to local unions and employers that want to hold down health care costs without decreasing benefits.

The national fund was created in March 1997 out of the former health and welfare pooling fund. Unlike the pooling fund, the national fund is self-insured in most benefit areas and accepts both groups that belong to Taft-Hartley jointly trusteed funds as well individual employers whose contracts with GCIU locals require contributions to the national fund.

The fund provides medical, prescription drug, vision, dental, Medicare supplement, disability, and accidental death and dismemberment coverage. Groups or individual employers participating in the fund can choose what coverage areas they want. They also have a choice of two basic medical benefit plans and several drug, vision, and dental plans.

Trustees of the national fund include both union and employer representatives. Martinez noted that a stranger at the trustees meeting would not be able to tell the difference between the GCIU local trustees and their employer trustees because both work equally hard to make the fund strong. "This fund really shows that working together we do a heck of a job," he said.

Douglas praised the hard work of the trustees over the year in keeping the fund running smoothly. "My thanks for your dedication," he said. "The same is true for the appeals committee, which meets every month. They go through a lot of appeals and a lot of work in terms of getting all the pieces together."

According to trustees, the appeals process is a major advantage of the fund compared with traditional insurance companies whose bottom line is profit. Participants who feel they have been unfairly denied coverage can appeal to a committee made up of union and employer trustees who care about the participants.

Evansville 571M Pres. Robert Lacey, who heads the appeals committee, said there were about 90 appeals in 2000, compared with 79 in 1999. However, he noted that over the year, "the total number of lives covered doubled, yet there were only 11 more appeals." He said the turnaround time for appeals is "fairly fast." One of the most common problems associated with appealed cases, he said, are doctors that use multiple tax identification numbers and send incorrect ID numbers to network administrators.

Keeping costs low

Instead of pursuing profit, the national fund attempts to keep costs and therefore premiums for employers and employees as low as possible through discounts on medical and other benefits obtained through preferred provider organizations (PPOs), health maintenance organizations (HMOs), and nationwide networks of prescription drug, dental, and vision providers.

According to The Segal Company, the discounts achieved by Private Health Care Systems (PHCS), one of the medical network administrators, were nearly 40 percent for hospitals and nearly 34 percent for physicians over the year. Elizabeth A. Dudek of The Segal Company called it a "very good number. It shows that PHCS is delivering the discounts they promised."

PHCS representatives reported to trustees that they increased the number of hospitals participating in their network to 3,024 over the year, compared with 2,762 the previous year. The number of physicians in the network increased to 313,634 over the year, compared with 301,201 the previous year.

The Segal Company's analysis of the fund presented to trustees demonstrates that the fund's attempt to hold down increases in costs is working. While national health care spending was predicted to rise more than 8 percent in 2000, according to the Health Care Financing Administration (HCFA), the fund's costs increased by 2.1 percent last year.

Breitsman reported that other cds clients have been hit with 20 to 35 percent annual increases in medical costs and 20 to 40 percent increases in prescription drug costs. "Increases are never good," he said, "but I think that the way the fund is structured through the efforts of the executive committee and the board of trustees that the fund is well-positioned. I think that it's solid. I think it's functioning well."

The fund's administrative costs fell slightly over the year to 5.0 percent of total income from 5.3 percent the previous year.

The cost savings have helped hold premiums down for fund participants. Trustees approved a 22 percent increase for the next plan year. However, in the past five years, there was only one other aggregate premium increase – 10 percent in March 1999.

Martinez noted that the increase this year was difficult "but by the same token, when you look at it over the time period, it really is a small increase" compared to national averages.

HCFA reported the national trend in yearly increases in health insurance premiums was between 5.0 percent and 6.5 percent over the past five years. HCFA predicted that increases in health insurance premiums will accelerate to 9.3 percent in 2000 and 10.5 percent in 2001.

Prescription drug inflation

Rivers noted the "very dramatic increase" in prescription drugs costs, and representatives of National Prescription Administrators Inc. (NPA) and Eckerd Health Services, which provide prescription drug coverage to fund participants, presented strategies for holding down these increases.

HCFA predicted the increase in national prescription drug spending at 16 percent or more in 2000.

Chris A. Ruegg, NPA vice president of sales, said inflated drug costs, new drugs, and an aging population with more users of more prescriptions are driving prescription drug cost increases. "Manufacturers' number one interest is increasing their shareholders' benefits," he noted. "New drugs may be more effective but they are also much more expensive," he said.

Drug manufacturers have dramatically increased their direct-to-consumer advertising, Ruegg said. Consequently, doctors report that more patients are asking for the advertised brand names, which are usually more expensive than generic or older medicines for the same conditions. He said the top four classes of drugs being prescribed – and advertised – are antihistamines, antidepressants, cholesterol reducers, and anti-ulcerants.

The use of generics, formularies – drugs that NPA has negotiated discounts for directly with manufacturers – and mail orders direct from NPA can work to hold down the cost of prescription drugs, Ruegg said.

A complementary strategy involves prevention programs, Ruegg said. A healthy diet and exercise to reduce cholesterol and weight and smoking cessation can contribute to reducing prescription drug use related to heart disease, diabetes, respiratory ailments, and other health problems, he said.

Joseph Lackman, employer trustee of the Philadelphia 14M fund and employer co-chair of the meeting, reminded trustees that prescription drug benefits are available for military veterans through the Veterans Administration. "It's another way to reduce costs for members," he said.

Appeals committee members from left are: GCIU Vice Pres. Lawrence Martinez, fund secretary; Salem 787C Secy.-Treas. Michael A. Basham; Kansas City 235M Pres. James A. Miller; Thomas Pfeiffer of Commercial Litho, Local 235M employer trustee; Grand Rapids 550M Pres. Gordon Beukema; Evansville 571M Pres. Robert Lacey, committee chairman; Dan Daywalt, Quebecor World Group vice president/human resources and a Local 787C employer trustee; and legal adviser Martin R. Ganzglass.