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Health premiums dominate discussion: Willmar council's special session on Rice lease mostly taken up by employee insurance concerns

WILLMAR — The goal of Tuesday's special meeting of the Willmar City Council was to give the public another opportunity to comment on the proposed lease and affiliation of Rice Memorial Hospital to Carris Health, a new subsidiary of CentraCare Health.

Instead, the meeting was mostly taken up by discussion of the increase in health insurance premiums being handed down to Rice employees. According to employees who spoke Tuesday, some are seeing increases of hundreds of dollars a month starting next year.

Council members reported receiving dozens of phone calls from worried Rice employees, some even in tears or saying they were actively looking for new jobs because of the increases in health insurance premiums.

"It would be a little foolish of us to just pass it off with little concern," Councilor Andrew Plowman said.

Councilors asked Rice CEO Mike Schramm if the affiliation with CentraCare was the cause, or had any effect, on the health insurance rates for next year.

"It doesn't have anything to do with it. We would be dealing with this whether we were remaining independent or we weren't," Schramm said, adding the causes of the increases are employee claims and utilization of the insurance.

Union employees are also upset they have to pay more of the premium increase than their nonunion counterparts. Schramm explained that the contracts for the four collective bargaining units at Rice have a specified dollar amount that Rice Hospital, as the employer, contributes to an employee's health insurance premiums. That number does not change, whether premiums go up or down. The contracts go through 2018.

"That is where the additional premium increases are coming into play, or why there is a disparity," Schramm said.

One nurse said the amount written in the contract is a minimum contribution and that Rice Hospital could contribute more if it wanted.

"They can always do better than what is in our contracts," Nicole Mages said.

A few members of Rice's staff who spoke at the meeting said the issue of health insurance was an example of what worried them regarding the affiliation and agreement negotiations. In their opinion, it showed a lack of transparency and information sharing on Rice's part.

"This is kind of an example, a real-life example, of what is going on. We're not hearing about changes until they are already in front of us. This is a slow-moving freight train that no information is brought forward until you have make a decision right now. That is very concerning to me," James Thoms said.

Schramm said, however, that the same health insurance process, including holding employee meetings to discuss changes, was followed this year as in years past. Employees will have an extra week for open enrollment this year, to give them more time to make their health insurance decisions.

While the council sympathized with the nurses and other employees affected, they also said there was little the council could do.

"I believe we can't control how premiums are going to go," Councilor Fernando Alvarado said.

There were some comments during Tuesday's special meeting which dealt directly with the affiliation agreement. Rice last month approved agreements creating the new CentraCare subsidiary named Carris Health, which will be comprised of Rice and Affiliated Community Medical Centers. The matter is before the City Council now, and Tuesday's special meeting was scheduled to hear from the public about the affiliation and the lease of the hospital to Carris Health.

Betty Rustad, a Rice nurse who works with dialysis patients, is worried that dialysis, pediatrics and the intensive care unit were not included in the core services that Carris Health is required to continue to provide at Rice Hospital as part of the lease agreement.

"It is really important we protect this for our patients and community in this agreement," Rustad said. "You are the final decision-makers. Please do right by our patients, community and staff."

Rice Hospital legal counsel Jill Radloff said the core services written into the agreement are only the minimum required, and Carris Health can decide other services are deemed necessary to keep Rice running successfully.

Sherri Klaers, a resident of New London, said for many years she worried about a healthcare giant, like Sanford Health, buying Rice and moving the control away from the local area.

"I hope you agree to this change, because I feel this keeps the connection local," Klaers said.

The next step for the Willmar City Council is the official public hearing Monday on the lease of Rice Hospital to Carris Health and the affiliation agreement documents. The public hearing and the council meeting will take place at 7 p.m. Monday in the multipurpose room of the Kandiyohi County Health and Human Services building.

After the hearing, when the public will have one last chance to comment, the council could decide to take action.

"It is anticipated the council will take formal action to approve the documents," City Attorney Robert Scott said.

The overall consensus in the room Tuesday night was support for the agreement with CentraCare, but with some concerns about the effect premium hikes might have on Rice staff and the success of the affiliation.

"Employees are needed to ensure the success of the affiliation," Councilor Shawn Mueske said. "We have to make sure the affiliation is successful. We've done our due diligence on this side, the ball is in the court of the other side to make sure this affiliation works."