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Tomato Board Benefits From Calpers’ Purchasing Power With BC-Calpers

May 17, 1993

WEST SACRAMENTO, Calif. (AP) _ Across the sleepy Sacramento River from the capitol, the Processing Tomato Advisory Board quietly goes about its leviathan task: monitoring the quality of millions of tons of the fruit.

Yet when it comes to purchasing health care benefits, the board is strictly small potatoes. With just three full-time employees, it is like most small businesses - disadvantaged by size in negotiating favorable rates.

″I priced medical coverage independently, and it would have been exorbitant. And there weren’t many options,″ said tomato board manager Tom Ramme, who oversees the inspection of the tomatoes packaged into just about all the ketchup, paste and pasta sauce made in the United States.

But five years ago the tomato board aligned with the California Public Employees’ Retirement System, which buys health care benefits for nearly 890,000 people each year. With $1.4 billion in annual purchasing power, Calpers has the financial might to negotiate the best coverage at the best rates.

″It’s our only shot at affordable health care,″ said Ramme, seated beside a bright red ceramic tomato about the size of a pumpkin. ″Without Calpers, we’d have a lot less coverage for a lot more cost.″

While two-thirds of Calpers members are state employees, a growing segment consists of small public agencies that have few choices for medical benefits. Seventy-six percent of the 787 employers participating in Calpers have fewer than 100 people on the payroll.

The California Prune Board’s 11 workers, the Colusa Mosquito Abatement District’s four employees and the three Yolo County municipal court judges all have access to bargained-down prices, the result of joining the Calpers network.

Their experience is a working example of how small employers can band together in larger, more powerful purchasing groups with the muscle to drive hard bargains with health care providers.

The concept, called managed competition, has been embraced by the Clinton administration and is expected to be an underlying theme of national health care reform.

The managed competition model is designed partly to embrace the 37 million Americans without health care benefits. The bulk of these people have jobs, but their employers do not provide medical benefits. The uninsured typically do not make enough money to buy coverage themselves.

With Calpers behind him, Ramme and his crew not only get affordable health care, they can choose among numerous plans.

″Our experience has been great,″ Ramme said. ″Great rates, coverage is wonderful - it seems above the average of what other private employers offer.

Ramme and his staff are employed by California tomato growers and processors, but Calpers handles all the administrative services associated with health care benefits.

For about $20 a month, Ramme said, Calpers does back-office tasks such as processing the paperwork that admits a worker to a plan, funneling the premium dollars to the various plans each tomato board worker has selected and keeping workers informed on what the plans are offering.

Ramme is preparing for the busy season - five months of tomato harvesting starting in June. He will hire 350 inspectors to operate 38 checkpoints along an 800-mile stetch of prime tomato-growing land. Unlike the tomato board’s staff, these inspectors receive no health benefits because they work part- time.

Some are teachers and students earning extra money during summer vacation, others are moonlighting real estate agents and retirees. For those who have no source of health coverage, hope lies with the Clinton administration.

End Adv00

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