Operating Engineers are changing the landscape of health care

By Katie Sanders Members of Local 49 of the International Union of Operating Engineers are accustomed to reshaping huge tracts of land with heavy equipment. But the union is also changing a different kind of landscape – health care – through an innovative approach that focuses on prevention. Union officers said the steps they began taking more than five years ago have not only saved lives – they saved millions of dollars and helped Local 49 keep health care costs under control.

“What is more important than health care?” asks Jim Hansen, recently retired treasurer and assistant to the business manager for Local 49. Health coverage is one part of the overall package negotiated in contract talks between the union and contractors. The package designates a certain amount per hour for wages, health coverage, pension, training and other items. For many years, health care was relatively low – perhaps 5 cents an hour per member.

“Then 2005 was the turning point for health funds,” said Martha LaFave, the 49ers Health Fund coordinator. “It was no longer a nickel.” Union members were facing the prospect of paying 75 cents per hour and having a reduced level of benefits.

“It would have been the whole raise we negotiated that year,” Hansen said.

In these situations, most unions respond by either trying to get more money from the employer for health care or by lowering benefits. But Hansen and LaFave say it didn’t take long to realize they couldn’t keep going to the well to pay higher health care premiums. “The day of asking for more money is over,” says LaFave.

Hanson believes nearly one-third of every dollar was being spent on overhead, misdiagnosis, providing the wrong care and, in some cases, too much care. The union also had no handle on the quality of care.

Local 49 is keenly aware of health care costs because it, like many Building Trades unions, operates a Taft-Hartley multi-employer health care fund and representatives of the union sit on the funds’ board.

In September 2003, Local 49 enlisted the help of Health Dynamics, a Milwaukee-based company with whom LaFave worked previously. They started to create a new approach.

Focus on prevention

Rather than waiting for symptoms of illness, the 49ers actively encourage members to participate in an annual health screening (see related article). The two-hour exam is more than anyone customarily gets walking into a physician’s office, even when ill. The test covers 20 different blood panels, resting and active heart rates, spirometry, diet and lifestyle choices.

The screenings help identify health issues, particularly chronic problems like diabetes and heart disease, that need to be addressed in a holistic way through not only medication, but also diet, fitness and lifestyle choices. Local 49 works with Health Dynamics, a national system of providers.

Health Dynamics operates in over a dozen states and works with more than 30 Taft-Hartley funds and some self-insured companies. Unions like Local 49 provide health care for not only active members, but also retirees, across Minnesota, North and South Dakota.

“It makes sense for the Taft-Hartley trades to keep their members healthy in the long-term,” said Les Balk of Health Dynamics.

Health Dynamics helped Local 49 set up a system to track member health over the course of many years.

“We look at how many of the people who were at a risk level who are now improving,” Balk said. “We know the people who are improving cost less.”

Focus on quality

Another key component of Local 49’s approach is a focus on quality. The health plan uses Laird Miller of Health Systems Management, Inc., to help members choose the best health care providers. For example, Miller can direct a member to the physician with the most experience in doing knee surgery. By analyzing government data and other information, he also flags providers, hospitals and other facilities that have higher-than-normal failure rates or incidences of infection.

Hansen and LaFave said they know the program has saved lives. The 49ers have found that sometimes a reluctant member or retiree can be convinced to go to the doctor through their spouse (usually the wife). In one case, a member’s wife first went through the program as part of their effort to get her husband to do so. The doctor found she was in the early stages of leukemia.

“It would never have been caught had she not gone through this. We get these stories all the time,” said LaFave.

Added Hansen: “We have dozens of stories like this. If we can get people into the door and to the assessment, amazing things happen.”

He and LaFave are on a mission to sell the comprehensive, prevention-based approach to their members – and to other unions. At regular meetings with members, retirees and their spouses, the union provides briefings on the aggregate data and makes recommendations.

Hansen has presented the program to other unions, but found others are slow to change. To take advantage of the program’s benefits, such as keeping down health care costs, unions must get more involved in the health care process. In particular, they need a hands-on administrator like LaFave and an on-going effort to educate members so they participate.

“We, at the [health plan] trustee level, are the people who can change things,” said Hansen.

Read more about how Health Systems Management and IUOE Local 49 team up to build the best health care system in the country, including stories from participants in the program.

Watch "A Model for Health Insurance" on the Mary Hanson Show, featuring Jim Hansen and Martha LeFave.