By Kathryn G. Menu
As the Mayor of Southampton Village, Mark Epley knows firsthand the frustration of watching a municipal budget all but consumed by healthcare and pension costs, and without drastic changes to the way healthcare is managed, he imagines it will only get worse.
This is why Mayor Epley is leading an effort to convince East End municipalities to fund a study to ascertain whether or not creating a collective, privately operated health insurance program for local towns and villages will help reduce the cost healthcare.
Last week, Epley and Cook, Hyde & Hall Insurance & Risk Management Senior Vice President J. Scott Bradley pitched the concept to the Sag Harbor Village Board of Trustees, and this week made the same presentation to the East Hampton Town Board.
According to Epley, the concept was born in December 2009, when New York State Assemblyman Fred W. Thiele, Jr. approached the East End Supervisors and Mayors Association announcing that changes in state law would allow the creation of a cooperative health plan on the East End.
Epley has seen increases as large as 14 percent in his healthcare costs under NYSHIP — and those costs are expected to double in the next five years. Epley’s also looking down the barrel of a possible two percent property tax cap, which means finding a long term solution to curbing healthcare expenses is a critical issue.
“We can control a lot of things, but we can’t control pension and health insurance costs,” said Epley at the Sag Harbor Village Board meeting last Tuesday night. “This program, I believe, will help control healthcare costs.
Under the law, a minimum of three public entities with 2,000 total employees is required to form an Article 47 Municipal Cooperative Health Benefit Plan, which allows public entities like municipalities and school districts to share the cost of self-funding employee health benefit plans.
Epley noted there are 10 municipal cooperative health benefit plans already in place in New York State, the most recent was formed in Tompkins County, which pooled 13 municipalities in the Greater Tompkins County Municipal Health Insurance Consortium, a merger expected to save close to $900,000 in health benefit costs in its first year.
If adopted, the East End Cooperative Health Plan Initiative would serve as an alternative to the New York State Health Insurance Program (NYSHIP), but would provide the same kind of benefits as that program.
In addition to taking local control of healthcare costs, the initiative aims to achieve long-term sustainability in a three-pronged approach.
“Banding together solely for the purpose of achieving scale will not produce sustainability,” said Bradley.
First, the initiative would harness a network of East End medical providers that utilize patient-centered medical home practices, which provides coordinated healthcare for adults and children, in an effort to streamline the costs and provide better healthcare.
Primary care physicians would be paid more as a result of being a part of the initiative and would coordinate all healthcare for an individual patient, including with specialists and hospital care. The goal, said Bradley, is to reduce duplication of testing, but also prevent errors while providing more comprehensive care.
Bradley said existing models show lower per person costs as a result of this kind of system, as well as fewer hospital visits, increased wellness and higher patient satisfaction with their healthcare.
The second prong is creating a network on the East End of local health care providers through The East End Health Alliance, made up of Eastern Long Island Hospital, Peconic Bay Medical Center and Southampton Hospital.
The network would connect the medical community — hospitals, doctors, labs and pharmacies — through electronic medical records and office management systems, some of which may be funded through federal healthcare reform policies.
Lastly, the East End would need to develop a culture of health and wellness, said Bradley, aimed at preventing the chronic illnesses like heart disease, obesity and diabetes that make up a whopping 75 percent of healthcare costs.
The wellness program would target “at risk” individuals and provide incentives towards living a healthier lifestyle and participating in wellness related programming.
While the concept for the East End Cooperative Health Plan Initiative is fully formed, right now Epley and Bradley are seeking municipalities to sign on for a $70,000 study to show its effectiveness before the program can become a reality.
Each of the five eligible towns — East Hampton, Southampton, Riverhead, Shelter Island and Southold — are being asked to pitch in $8,750. The villages — Greenport, East Hampton, Quogue, Southampton, Westhampton and Sag Harbor — are being asked to contribute $4,375.
Southampton Village was the first to sign up, with the Village of Westhampton Beach expected to join the study this week, said Epley. The Town of Southampton is also interested, and Epley and Bradley planned to pitch the concept once more to the whole of the East End Supervisors and Mayors Conference yesterday.
“We as elected officials need to think outside the box because the challenges in Albany and with what they are hitting us with locally, we can’t do anything about the retirement system,” said Epley. “If we get hit by a two percent tax cap, what are our options? To reduce services?”
Sag Harbor Mayor Brian Gilbride seemed skeptical it would work for Sag Harbor, and wondered if the village’s involvement was necessary for the cooperative study to move forward.
“Without the commitment from all, it does not work,” said Bradley, although he added school districts are eligible and he has had interest.
Trustee Robby Stein said he was familiar with these models and they work as long as there are enough participating healthcare providers.
Bradley said there would be a local focus on healthcare, but that there would also be a national network, ensuring people still had access to institutions like Memorial Sloan Kettering Cancer Center.
Similar hesitation was also found at the East Hampton Town Board on Tuesday morning. The board questioned the financial benefits as well as whether healthcare would be improved by the initiative.
“Can I look you in the eye today and say with certainty that this will deliver savings? No,” said Bradley. “I can tell you that today we have a much greater chance of putting together a plan that saves the taxpayers money and allows us to manage our budgets better than ever before.”