Still reeling from this year’s round of stiff health insurance premium hikes, Rhode Island manufacturers fear the loss of a major health maintenance organization and a proposed hospital system merger could send premiums higher still. B.A. Ballou & Co.’s health insurance rates shot up 11 percent this year, and President Curt Ley said the apparent loss of his company’s HMO, Harvard Pilgrim Health Care of New England, could result in yet another premium increase for the East Providence jewelry maker.
“I think the fact that we’re losing one of the main vendors in the area is only going to make the situation worse,” Ley said. “The alternatives that we have as a company are now very limited. We just have to take what’s handed to us, and that is not a competitive environment by any stretch.”
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Ley expects the total increase in health care costs for B.A. Ballou, including this year’s 11 percent hike, to be in the neighborhood of 30 percent if the company has to switch from Harvard Pilgrim to another HMO or health insurer. The company pays 80 percent of its employees health insurance costs.
Similarly, the Rhode Island Manufacturers Association is casting a wary eye on the proposed merger of Lifespan and Care New England.
“We would hope that there would be some sort of review of their finances and operations so that, if they were allowed to merge, they would have to start using cost cutting measures in order to stem the tide,” said RIMA Executive Director Nicholas DeRosa. “We don’t want to see them continue to lose money, but at the same time if they’re saying they’re going to merge to create efficiencies, we want to make sure those efficiencies are actually made.”
Although ballooning heath care costs are a bitter pill for any company to swallow, manufacturers say their large workforces leave them even more exposed to injury than most. Just ask Peter Fuller, president of Fuller Box Co. of Central Falls and chairman of the Rhode Island-based trade association Manufacturing Jewelers & Silversmiths of America.
“What this is doing, driving up health care costs, is making us noncompetitive around the world in the manufacturing sector,” Fuller said. “That’s a concern to me.”
So what would manufacturers like to see done to rein in heath care costs?
“If I knew the answer to that, I’d be on the golf course this afternoon,” Fuller quips. “I wouldn’t be selling boxes for a living.”
However, he does believe hospitals have to contain their costs on the front lines of medicine in order to deflect health insurance premiums off their skyward trajectory. One way to do that, Fuller figures, is to extend health insurance to more people because the growing ranks of uninsured often turn to the emergency room as their only source of care.
Businesses such as Fuller Box Co., which pays 75 percent of its employees health insurance costs, ultimately pay for the pricey emergency room visits in the form of higher health care and health insurance prices.
“We’ve got to find a way to get more people on health care programs and get them ahead of the curve and get some preventative medical care done before they really get ill,” he said.
B.A. Ballou’s Ley doesn’t see any easy fixes either.
The most obvious defense against rising heath care insurance costs, he noted, is to require employees to pick up a larger share of the tab. But that’s not a very palatable option for Ley.
“Passing that along doesn’t do the relationship with our employees any good, and it only puts more pressure on them as employees because their net take-home pay is that much less,” which in turn puts pressure on the company to raise wages, Ley said. “So, either way we’re going to have to wind up paying more.”
Fuller and Ley agree that it’s not the government’s job to fix their health care woes.
“Do I like rising health care costs? No,” Ley said. “But it’s a market issue, and we shouldn’t be legislating market issues.”
Ley only sees one solution to the problem, one that doesn’t involve hospitals or HMOs or legislators.
“We’re not going to solve this problem until people start looking at health care the same way they do at their groceries,” he offered. “You and I don’t do that. We don’t go shopping when we need to have an appendix out.”
It may seem unlikely that patients will ever become medical bargain hunters, but manufacturers here say it isn’t any more feasible for them to continue to shoulder the increasingly heavy burden of providing health care to Rhode Islanders.
