Biotechnology Healthcare - November/December 2008 - (Page 16) Faced with staggering healthcare costs, some large companies have transferred those liabilities to a voluntary employee beneficiary association. Eager to control employee and retiree benefits, unions gladly have taken on the challenge of running a VEBA. But success in this field is hard won, and to earn it, some unions may be forced to take a harder line with health care professionals and manufacturers than employers did. BY WILLIAM ATKINSON A s employers have become more influential in managing healthcare financing and access, so too have unions begun to arise as entities with the power to manage access to care. Many unions offer supplemental benefits to their members. Some have taken an even bolder step — negotiating with employers for complete access to retiree health benefit management by establishing voluntary employee beneficiary associations, or VEBAs. Healthcare providers have always been advocates for providing broad access to treatments for people enrolled in employer-sponsored health plans. But the trend toward greater union control creates several concerns — especially with respect to costly modalities, such as biologic therapies and diagnostics. One concern lies in understanding the different ways that employers and unions look at healthcare benefits. Most employers view benefits as a recruitment tool. Some forward-looking employers have begun to think about benefit designs that dovetail with productivity and profit goals. Unions, however, tend to have different goals in mind. They want access to products and services that will keep workers on the assembly line or behind the wheel of a truck. For unions that want control of benefits through a VEBA, that presents a formidable challenge: the VEBAs EMPLOYERS TO UNIONS: learning curve. While employers have had years of experience learning how to manage benefits, union leadership is relatively new to the game. Fundamentally, VEBAs are not unlike health reimbursement arrangements (HRAs) or other consumer-directed plan offerings, where helping employees understand how to spend their healthcare dollars wisely becomes important. Unions in heavy manufacturing and transportation, for example, experience high rates of disability, and depending on how a traditional health benefit plan is structured, workers for whom high-cost therapies may help to reduce or eliminate absenteeism or presenteeism could blow through their benefits very quickly. This puts a heavy educational burden on unions, which have fought hard for access to biologics and other top-shelf healthcare interventions. Without some sort of educational effort combining prevention, health maintenance, and smart use of healthcare resources, though, those victories could be rendered hollow because of less-than-optimal clinical outcomes and a poor return on the investment (ROI) of healthcare dollars. Worse, inefficient management of those dollars could put the union at risk of running out of money to fund members’ healthcare needs. Ultimately, this may force unions to be even more aggressive than employers in managing healthcare costs. Now, pit all of this against the backdrop of fast-rising healthcare costs and a darkening economy, and it becomes clear that VEBAs represent a mine field for employees, providers, and even biopharmaceutical manufacturers to negotiate. WHAT IS A VEBA? It is virtually certain that, in time, employees and healthcare providers will become more familiar with VEBAs. “Over the next 5 to 10 years, as employers continue to face unrelenting pressures to control costs, these types of strategic responses — whether it be a VEBA or some other vehicle — will continue,” says Alan Lyles, ScD, MPH, PhD, the Henry A. Rosenberg Pro- 16 BIOTECHNOLOGY HEALTHCARE · NOVEMBER/DECEMBER 2008
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