Union blocks foreign healthcare plan

Carl Garrett, an Appalachian paper mill worker, had hoped to go to India this month for medical care – but it didn't work out that way.

The planned journey to New Delhi by Mr. Garrett, a Leicester, N.C., resident wasn't just about fixing his aching left shoulder. His employer, Blue Ridge Paper Products of Canton, N.C., wanted to send a message to American hospitals: Control costs or we'll give our insured workers the option of going overseas for quality, but low-cost care.

Garrett, who belongs to the United Steelworkers, would have been the first union member to go overseas for medical care. But after his pioneering trip became public, the union stepped in and threatened to file an injunction to stop it.

In response, Blue Ridge Paper withdrew the proposal to send its employee to India for surgery. So two days before Garrett was to leave, he had to unpack his bags.

The union, which recently negotiated a new contract with the milk-carton factory containing healthcare provisions for its members, worried that volunteer trips overseas to receive medical care would soon become mandatory even for children and the elderly as companies seek to cut costs and increase profits.

Garrett's case shows how the tug-of-war between labor and corporations on healthcare options "is having a tremendous impact on how we live on a day to day basis," says Norm Solomon, a labor expert at Fairfield University in Connecticut. "If costs keep going up the way they have, it's going to be difficult to maintain them in unionized firms."

American workers' healthcare costs have risen 60 percent in the past five years, according to a new study by HR consultants TowersPerrin. Those cost increases are not only being borne directly by employees, but companies are cutting an average of 1 percent off annual raises to contain healthcare expenditures, TowersPerrin concludes.

Garrett's trip was intended to be a test case for Blue Ridge Paper's plan to offer its employees and their dependents the option of seeking medical care overseas beginning in 2007. For several years, the company failed in its attempt to obtain discounts from healthcare providers for its 5,000 covered workers.

The self-insured company decided to contract with IndUShealth, a Raleigh, N.C., firm that sends patients to Indian hospitals for major savings compared with American hospital care.

Garrett quickly volunteered, mostly for the financial incentive. The operations he was scheduled to have would have cost $20,000 in India compared with about $100,000 in the US. The trip was expected to save the company $50,000, and he was being given a share of the company's total savings. Aside from not retiring in medical debt, Garrett was eager for the opportunity to see the Taj Mahal as part of a two-day tour before his procedure.

But the plan alarmed the USW. "We made it clear that if healthcare was going to be resolved, it would be resolved by modifying the system in the US, not by offshoring or exporting our own people [to receive medical care]," says union representative Stan Johnson, who stepped in to stop Garrett's trip. The USW has more than 850,000 members.

In mid-September, USW president Leo Gerard used the Blue Ridge example in a letter to Congress, calling the possibility of health insurance plans forcing workers and their families to travel overseas for care "frightening."

USW's protest comes at a time when insurance companies from Michigan to Florida, and even the state of West Virginia, are researching overseas healthcare options in order to reduce costs.

At the Blue Ridge Paper plant the union's reaction was met with dismay, says Garrett, who has worked at the company for 40 years. "People had given me so much encouragement, so much positive response, and they're devastated," he says. "A lot of people were waiting for me to report back on how it went and perhaps go themselves. This leaves them in limbo, too."

But Tom Keesling of IndUShealth calls the defunct trip an "isolated incident."

"The basic motivation of this kind of offshoring is not to take US jobs, but to preserve US jobs," says Mr. Keesling. "The challenge is there's a giant freight train called healthcare that is barreling down, so someone has to do something."