Do you know how much a routine visit to your doctor’s office costs? Not your co-pay, but the actual cost billed to your insurance company.

If you’re like most people, the answer is probably no. Consumers are largely unaware of the cost of health care services. Often, our only look at actual charges comes when we receive a copy of the bill after a major procedure or hospital stay. Talk about sticker shock!

Small, fixed co-pays and other benefit plan features isolate us from the actual cost of the health care we receive. The smaller the amount we pay at the doctor’s office, the less likely we are to take cost into account when we decide whether to seek services.

Many health benefit experts believe this isolation from actual cost contributes to higher utilization of health care – and thus, higher cost for everyone. It’s important to remember that sooner or later, we all share the cost, whether through premium increases, higher deductibles, or larger co-pays.

Sharing the decisions with employees

Facing increasing costs and declining benefits, more employers now include employees in benefits planning. Sharing information about real costs and choices and inviting employees to participate in decision-making may reduce overall benefit costs and limit conflict during bargaining.

Clackamas County is one public employer that includes employees in the process. The county’s Benefits Review Committee includes equal numbers of managers and union-represented staff. Each bargaining unit is represented by one voting member for each 200 union members.

The committee makes design decisions for medical, vision, dental, disability, and life insurance plans. With committee input, the county chooses a carrier, third party administrator, employee benefits consultant and optional benefit programs.
“Benefits are pulled out of the bargaining process,” says Clackamas County Benefits Manager Carolyn Williams. “Plans are designed by the committee with equal representation from both sides, and then costs are negotiated with each union.”

The committee was formed in the mid-1980s when the county’s insurance carrier suddenly announced a 50 percent premium increase in the middle of a benefits period. Rather than pay the huge increase, the county redesigned its benefit plan and got new bids. Brought together by the crisis, management and unions sat down together to find a solution that works for both sides. The committee has continued through the years and enjoys a high level of support. Only one union – the county’s deputy sheriffs – does not participate.