Mayor Miller Asks Opponent, "What Happened?"; Martin Responds - KCBD NewsChannel 11 Lubbock

4/7/08

Mayor Miller Asks Opponent, "What Happened?"; Martin Responds

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Mayor Miller Poses Question

After months of dispute between the City of Lubbock and its former health insurance administrator, Mayor David Miller Monday explained the business decisions made during his tenure to put a stop to rising health insurance costs.

Because of a four-month-long gag order due to legal proceedings between the former administrator and the City of Lubbock, Mayor Miller has been unable to speak about the issues - until a judge's lifting of the gag order last Friday.

"Shortly after being elected Mayor in 2006, it was brought to my attention the amount of money the city was costing taxpayers as a result of alarmingly rapid rising health care costs," Miller explained.  "It was obvious to me that we needed to re-evaluate our healthcare program and go out for bid to secure better pricing immediately."

Nationally, healthcare premium increases slowed each year between 2005 and 2005, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.  However, since changing healthcare administrators, the city's cost for health insurance - largely driven by claims - had gone up at a much faster rate.  From 2000-01 through 2003-04, the city's cost increased from nearly $6.96 million to almost $7.8 million per year - an average growth of 4.5 percent.  During the first year alone of the ICON/AAG contract, costs escalated upward by more than 33 percent - from $11.3 million to $15 million.

"So, my first question is what was the overriding consideration for Mr. Martin in not taking the recommendation of an insurance evaluation committee that overwhelmingly advised the Council to stay with Blue Cross/Blue Shield?" Miller asked.  "The committee was made up of both insurance experts and business people who had used various healthcare administrators.  Why would my opponent ignore the advices of these experts?"

Miller also questioned by City staff was instructed to cancel the bidding process which had been started to get new bids for lower pricing on the City's health insurance.  City Manager Lee Ann Dumbauld, who was the City's Chief Financial Officer at the time, was instructed by Council in open meeting to conduct a bid proposal process, but was later instructed privately by Martin and other Council members to cease the bidding process."

"Why, Mr. Martin?," Miller asked.

"After Ms. Dumbauld had advised Council about the healthcare costs spiraling upward, she contracted with a qualified auditor to look into the situation,"  Miller explained.  "But, she instead was directed by Council to terminate the contract with the auditor and was instructed not to hire another firm.  When I was elected your Mayor, it became top priority for me to curb these skyrocketing costs to keep this burden from continuing to be passes along to our taxpayers."

Now that the city has changed to its current health insurance provider of Blue Cross/Blue Shield of Texas, Miller added, taxpayers are realizing a savings that will keep more money in their pockets.

"As your mayor, if you ever have to ask me ‘What happened?' I will continue to answer you with all the facts," Miller concluded.  "I have been, and always will be open and honest, and that is why our current Council worked so hard to find the lowest health insurance rates for our city - so those premiums would not be passed along unknowingly to our citizens."

The City of Lubbock is not alone in experiencing higher costs with the same insurance provider.  The Lubbock Independent School District - who had also employed the same insurance provider from 2002-03 - realized more than $5 million savings in claims the following year after switching to Blue Cross/Blue Shield of Texas, and another $3.6 million in savings for the 2005-2006 school year.

Tom Martin's Responds

Mayor Miller is apparently trying to divert our attention for many mistakes he has made in the past two years. Now, in his attempt to get re-elected, he is blaming others for the health insurance litigation.

Mayor Miller's handling of the insurance dispute has been a spectacular drama that will continue to cost Lubbock taxpayers in dollars, lost jobs, and reputation. And Mayor Miller is refusing to take responsibility.

The solution to settle the dispute was simple: First, go to arbitration, as the contract specifically requires. If there is proof that there were overcharges those would be reimbursed to the city by the overcharging entity. Instead, Mayor Miller chose to file an expensive lawsuit.

I'd like to take this opportunity to respond to the questions that were posed this afternoon.

  • 1. With regard to why we did not accept the bid from Blue Cross/Big Shield, it was simply because we could not afford the unfunded liabilities that accrue under that type of plan. It is better to pay as you go.

    We had three bids. The second lowest bid came from FirstCare. We did not accept that one because at the time, they would not agree to include UMC. It is bad public policy to exclude a hospital that is funded by the tax payers of Lubbock.

    Then we went to the Parker Group. We asked if they would include UMC in the plan and they agreed. They also agreed to match the rates initially offered by Blue Cross/Blue Shield. It was written into the contract so the Council chose that plan.
  • 2. In the request for new bids in 2005, we lost the opportunity to get new bids when Scott Snider, senior city staff member, and acting within his authority but without City Council knowledge, renewed the Parker Group contract for the third year.
  • 3. In regards to the audit, it was never brought to Council for a vote.

This is just another spin attempt by Mayor Miller that demonstrates his willingness to put his personal interests in front of the tax payers. Mayor Miller's lack of common sense and poor judgment has gotten us in the mess we're in. His tactic? Blame the previous council for doing its duty to try to save the city from serious financial difficulties that faced the city at that time.

Stay with NewsChannel 11 and KCBD.com for the latest on this developing story.

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