Town Square

Palo Alto treads toward health care reform

Original post made on Feb 5, 2013

As medical costs continue to soar, Palo Alto officials are exploring ways to revamp the health care plans the city offers to its employees and retirees -- an effort that is already creating anxiety and threats of lawsuits from labor unions.

Read the full story here Web Link posted Tuesday, February 5, 2013, 12:12 AM


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Posted by Outsource
a resident of Barron Park
on Feb 5, 2013 at 12:35 am

Looks like the entitled, overpaid union bureaucracy will dig in again to keep its spot at the taxpayer trough. The solution: start outsourcing to the private sector. The city should not be allowed to directly employ more than 100 or so people (beyond police) to manage and hold accountable the private workforce.

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Posted by Hmm.....
a resident of Another Palo Alto neighborhood
on Feb 5, 2013 at 1:23 am

What, you mean high-priced "consultants" who would feed at the taxpayer trough? Being single-minded and ideological is expensive regardless of which extreme we're talking about.

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Posted by common sense
a resident of Midtown
on Feb 5, 2013 at 4:01 am

Just migrate all employees to Obamacare - put employees on the state run insurance exchange, and have the city pay the Obamacare penalty. It's alot cheaper.

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Posted by Privatize
a resident of Midtown
on Feb 5, 2013 at 9:12 am

I agree with Outsource that it is about time tax payers were treated fairly and with some respect. Most of us who work for the private sector see an increasing percent of our taxes being diverted towards gold plated pensions and healthcare for "public" employees. While pensions and healthcare were a fair exchange in years past when public sector salaries were significantly lower, that is no longer the case. It is infuriating as a tax payer to see and hear unions demand things as rights that they should be grateful for as a privilege. I am sure that some folks will jump up and say "hey read the contact - we are entitled to it". While contracts that bankrupt the public or a city may have been negotiated in the past, they are no longer financially viable. At some point unions need to realize that the average tax payer will not accept this since they cannot afford either the ever increasing tax or put up with the ever decreasing service. Enough is enough. Privatize and outsource!

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Posted by Bob
a resident of Community Center
on Feb 5, 2013 at 9:59 am

Go 'across the street' and see how Stanford does it. First of all, employees contribute to
Social Security and Medicare like most employees everywhere and must pay a monthly premium for personal and family health insurance. Retirees still pay into Medicare each month (My Mom pays about $100 out of her SS check) and in addition pay for various supplemental retiree health plans (e.g. Kaiser, Blue Cross, and Health Net, etc. and, for dental plans. ) There's no free lunch across the street. It's time to switch new PA employees to Social Security. And no double dipping. Also most Stanford employees do not have a union - and Stanford operates in the black. The damage was done to Palo Alto long ago by previous city councils and management. The unions got control. Solution? Privatize and take drastic action...NOW or face the specter of bankruptcy.

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Posted by Nurse's Kid
a resident of another community
on Feb 5, 2013 at 10:53 am

Until she returned recently, my mother, a surgical nurse in the neurology department at Stanford Hospital, had Kaiser for medical insurance. Basically, is she or any of her children for sick, we went to Kaiser, even though our mother worked for Stanford! We were not allowed to receive the quality of care she gave to others for a living.

When I was fourteen, for instance, kaiser diagnosed me with gallstones and said surgery was unnecessary. All I needed was a 100% fat free diet, no meds, no surgery, And I would be fine. The next two,years were hellacious, as a 100% fat free diet is simply, realistically impossible. Daily nausea, vomiting, and abdominal pain ensued, yet Kaise chastised me for " falling off the fat-free wagon" and did nothing.

One afternoon I was sent home from school in sever abdominal pain, vomiting uncontrollably. My mom took off work without pay to take me to Kaiser emergency, where I was kept until 7:00 THE NEXT MORNING when the decision was finally made to remove my gallbladder. By that point, the surgeon found that my gallbladder had necrotized and laparoscopy was not possible, so I have a four inch scar. my gallbladder literally was removed in pieces, and due to infection, I was hospitalized for a week.

This is the wonderful healthcare Stanford Hospital gives its employees and their families.

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Posted by Crescent Park Dad
a resident of Crescent Park
on Feb 5, 2013 at 11:15 am

@ Kid --- don't you think Kaiser should shoulder the brunt of the blame for the mis-diagnosis and then subsequent personal pain?

I can see Stanford's reason here - they don't want fellow employees treating their colleagues and friends. Not a good mix.

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Posted by Neilson Buchanan
a resident of Downtown North
on Feb 5, 2013 at 11:18 am

Dear City Manager, I have worked in the healthcare sector since 1968 and my advice is "to hope for the best; plan for the worst." Nevertheless, here is some perspective.
1. Healthcare insurance costs have outpaced inflation for as long as I can remember and will continue to do so. Why: continuous tech advances; aging demographics; baby bust slowly adds risks to the insured pool; growth of uninsured, ie so many citizens out of the risk pool. No new news here.
2. Yes, study and adopt most of Stanford Univ. health insurance policies: keen attention to price and quality for its employees
3. Yes, seek best health plan design, pricing and quality outcomes via CalPers. COPA is too small to get long term price/quality advantages.
4. Shifting costs to employees gives some short term, one-time advantage to any employer. Make city health plans competitive with upper tier employers. But cost drivers arent addressed by cost shifting. Very regressive to lower paid families.
5. BEWARE of cafeteria plans and consultants who recommend them. Too complicated to explain here, but employees (especially those with working spouses) are extremely savvy and rational...they seek the highest economic value to both wage earners; consequently, risk pool advantages often tip away from naive employers seeking to spice up the overall benefit program.
6. COPA is blessed with local expertise. Just sit down individually with Stanford, Kaiser and Palo Alto Medical Foundation and ask them the best way to purchase healthcare insurance programs. Then use your consultants...they are necessary evils.

My free advice; worth only what you have paid for it.

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Posted by Retired Staffer
a resident of another community
on Feb 5, 2013 at 11:49 am

I am a retired Palo Alto employee and here's what I get:
1. I get a small pension from CALPERS.
2. I get Social Security, but my benefit is reduced by 20% because I get the small CALPERS pension.
3. I pay the Medicare Part B premium from my reduced SS benefit.
4. I get "Medigap"coverage through Kaiser that is paid for by the City.

That's it. And I am grateful to SEIU for negotiating this package.

I hope this clears up some of the confusion. I don't feel as if I'm "ripping off" anyone.

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Posted by Anon.
a resident of Crescent Park
on Feb 5, 2013 at 11:51 am

Extend Medicare to all and force health insurance companies to compete in the supplemental insurance market. This is what most health care professionals and people who have studied the problem suggest.

For goodness sake, Republican go on and on about small business, but one of the biggest issues for small business, and small towns, is health care. Removing the link from health care to employment would be a good thing for people and small business alike, but a bad thing for the very corporations who use health care to extort workers and funnel more money to the leviathan corporatocracy.

This is ultimately going to happen because there is no way to care for everyone with the current system, and pretending that people can and will go to Emergency Room is a very think lie.

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Posted by Anon.
a resident of Crescent Park
on Feb 5, 2013 at 11:55 am

Nurse's Kid ... when I had a chance in the company I worked for to choose Stanford I did thinking surely Stanford is the best and most advanced place around here for health care. When I went there ... and I am not talking Stanford Hospital by the way, I was severely disappointed at their performance. Only lately have I been hearing from other health care professionals that Stanford really does not have such a great reputation. Sorry for what happened to you, that must be a lifelong pain that you cannot get rid of.

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Posted by Jake
a resident of another community
on Feb 5, 2013 at 12:06 pm

The same managers who week after week preach gloom and doom to the Council are a huge part issue, Keene, Benest, Shen, Etc come to PA late in their careers and then retire with the same or as it is now, better benefits than CPA employees who've worked 30+ years for the CPA!
That never should have been done in the first place, and retiree medical costs have spiked recently partly because CPA employees are retiring in droves because CPA is now defaulting on agreements it made in years past. Sone CPA employees didn't take raised in good times for better retiree benefits. Instead of CPA funding accounts for those future benefits they gambled and lost. The 30 year CPA employees should be paying the price for short time managers and CPA's failure to fund future costs.

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Posted by Mark
a resident of Barron Park
on Feb 5, 2013 at 1:09 pm

City of Palo Alto: can't fix our roads,can't figure out shuttles/buses for kids (keeping parents on the road/more traffic) or the public, can't decide on an "art" fountain without making it into a political issue, can't manage traffic, can't get any response about issues unless you are on their side, doesn't listen to residents (except those with same view), doesn't listen to businesses but not only will we pay for your over the top salaries but wait, must be great! Staff from City of Palo Alto must be laughing all the way to their big homes in other Bay Area cities!

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Posted by Jason
a resident of Crescent Park
on Feb 5, 2013 at 3:20 pm

Retired Employee...Thank you for shedding light on your situation. Often people love to say cruel and rash comments without realizing that people on all sides are affected by these decisions.

Jake..You are right on...Benest elected to push and get approved the 2.7 @55 and then jumped ship...then Keene get's on board, get's it for him, along with medical for life and then switches it for others, mainly new employees. And yes, to my understanding City Council elected to keep their medical for life benefit after serving one term in office...they stated if they did away with that it would cause qualified candidates to not want to run for office! We have too many council members and too many managers that get hired on later in life and do 5 years and then leave...while employees working 20-30 years suffer the harshest treatment from management, and criticism from the public.

Mark...City workers I have dealt with work hard and have gone overboard in my opinion. If they are laughing all the way to their must be all the way to Tracy because your right, they can't afford anything in this area.

Let's get real people! We could have 1 great library, with another one as a secondary source and one or two book mobiles. Let's get with the times!

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Posted by Wondering?
a resident of Another Palo Alto neighborhood
on Feb 5, 2013 at 4:29 pm

> I am a retired Palo Alto employee and here's
> what I get:

> 1. I get a small pension from CALPERS.

> 2. I get Social Security, but my benefit is reduced
> by 20% because I get the small CALPERS pension.

Well, there's a lot of missing information here.

1) How many years of employment are involved here?
2) Most SIEU types claim that they don't get SS and CalPERS pensions. Did you work in the private sector before working for the City? If so, how many years in the private sector, and how many in the public sector?
3) What was your exit salary when you retired from your last employer?
4) How many years have you been retired, and drawing benefits?
5) Does your spouse draw any retirement benefits, if you are married?
6) Just how "small" is "small"?

Any chance you can fill in the gaps for us?


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Posted by common sense
a resident of Midtown
on Feb 5, 2013 at 6:44 pm

If I remember correctly, back in 2005/2006 the city council enriched the pension benefit to 3% per year worked, in exchange the unions gave some back on the medical. Supposedly, this was to solve the escalating medical costs in the city budget.

Instead, we the taxpayers got escalating liability for pension benefits and it didn't solve the escalating medical costs.

Klein is the only remaining council member who was there, and vote for this.

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Posted by skeptic
a resident of Meadow Park
on Feb 5, 2013 at 6:59 pm

I don't get why there is a problem. Obamacare was supposed to fix all of this by causing health care costs to decline across the board.

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Posted by Enough-Is-Enough!
a resident of Another Palo Alto neighborhood
on Feb 6, 2013 at 11:02 am

Buy the way, CalPERS claims that its average retiree draws about $36,000 in pension benefits, whereas Social Security claims its payouts are closer to about $12,000-$16,000 a year.

With the current generation of retirees, a goodly percentage now making over $100K to $200K--pensions for these people will be 82% to over 90% (for public safety employees). The salaries for Redwood City and Mountain View were printed in today's Daily News, so it's not hard to see how many of these people are now making over $200K, and some are now pushing $300K yearly salaries.

The idea that the taxpayers should be paying for lifetime healthcare for retired employees who are drawing over $200K in pension payouts boggles the mind!

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Posted by who cares
a resident of Old Palo Alto
on Feb 7, 2013 at 8:14 pm

ObamaCare will fix everything, so whats the problem? Maybe Keene and Klein are worried how they are going to pay for the multi-million dollar over expenditures on the restored library and California Ave. fiasco. By listening to those posting comments, I guess Keene's effort to divert public attention to himself and his senior management staff's inabilities as managers and costing taxpaying residents millions of dollars in cost overruns is somehow acceptable. Nice thing about Palo Alto residents is their attention span lacks longevity and can easily be diverted.