Publishers Get Creative as Health Costs Rise

By: Randy Dotinga Editor's note: This is the first of a two-part series about health-care costs at newspapers.

Dinosaurs walk among us. No, not the cast of "Frasier." We're talking about newspapers that still don't charge employees a dime for health-insurance premiums.

The New York Times is one. (Single employees pay nothing; families pay $10 a month.) The Detroit Free Press and The Detroit News are also on this vaunted list.

But dinosaurs eventually go extinct, as workers at the Motown newspapers are discovering. As of Dec. 1, they'll start shelling out monthly payments for insurance as required by concessions made during contract talks.

"Health-care costs are an issue at every single bargaining table where we are engaged at the moment," said Linda Foley, president of The Newspaper Guild. "It continues to haunt us on both sides of the table."

Outside of unionized newspapers and those with "paternalistic" owners, as one health expert puts it, the financial picture is even more grim. No strangers to monthly premiums, countless newspaper employees are shouldering larger shares of their health-care costs, with the current open enrollment period bringing even more sticker shock.

"What you're seeing is much bigger deductibles, much bigger co-pays for services and prescription drugs, and other limits on services," said Tom Rice, chair of health services at the UCLA School of Public Health. While American companies are still paying 80-90% of health care costs for individuals and about 70% for families, something has to give as overall insurance expenses rise by 10-12% a year, Rice said.

Indeed, typical co-pays for doctor visits are jumping from $10 to $20 or $25, while tiers of $10 and $25 co-pays for generic and brand drugs, respectively, have become common. Some plans charge as much as $45 co-pays for drugs that aren't on lists approved by insurance companies.

Not surprisingly, publishers are exploring ways out of the death spiral of health costs, estimated to account for a third of the labor expenses at some newspapers.

Belo Corp., owner of The Dallas Morning News and other papers, is providing a glimpse into the future of health-care coverage by offering a new-fangled type of insurance known as a "consumer-driven" or health reimbursement account plan. The idea is to save money by giving employees a financial stake in their decisions about health care.

"Because of the system we've had in the past, most employees don't understand the true cost of health care," said Marian Spitzberg, senior vice president of human resources at Belo. "The increases have gotten to the point where employers cannot shoulder as much of the burden as they have in the past. Employees need to understand that some of their behaviors about health care need to be changed, so they still receive excellent health care but also control the cost."

In return for premiums that are cheaper than those for preferred provider organization plans (PPOs), Belo's plan covers the first $1,000 in health care expenses each year -- it rolls over if not used -- then the employee picks up the next $500. After that point, there's an 80-20 split between employer and employee, respectively, just like a PPO.

"The cost is something [employees] take into account when they decide whether to even go to a doctor for a symptom they're having," Spitzberg said. A 24-hour help line may make decisions easier, however.

So far, employees haven't been rushing to sign up for the consumer-driven plan, preferring to stick with Belo's three other options -- HMOs, PPOs, and old-fashioned point-of-service coverage.

Belo's experience reflects those of companies in other industries that are experimenting with consumer-driven plans. But even if employees reject the plans, the days of never seeing a doctor bill may be ending just like the premium-free era in Detroit.

Companies are "trying to get their employees to make smarter health-care purchases, share in the costs a little bit and have an incentive to be smart buyers," said Rusty Besancenez, senior benefit consultant with St. Louis-based Mercer Human Resource Consulting, which advises the Pulitzer Newspapers chain.

In other words, you may soon find yourself spending as much time shopping for a dermatologist as you do finding the best deal on a new microwave.