The labor union SEIU 32BJ provides health coverage for around 200,000 union members and their families in the Northeast. Their members work mainly in the building trades and consist of building services workers, porters, doormen, janitors, and airport workers. 

By analyzing its claims data, eliminating price-gouging providers from its network, and directly contracting with price transparent providers, the union has saved approximately $100 million a year in healthcare costs. These savings have allowed the union to boost member wages by the largest amount in the union’s history and give them each a $3,000 bonus. 

The union's runaway healthcare costs were putting its self-funded health plan on insolvency. It estimated that 40 cents out of every dollar it won at the bargaining table went back out the door to pay for runaway healthcare costs. These funds otherwise could have improved member wages, pensions, and working conditions. The union concluded that if its healthcare costs had merely risen at the inflation rate over the last decade, its members would have nearly $5,000 in additional annual salary

After analyzing its claims data, SEIU 32BJ determined that New York-Presbyterian Hospital was charging 358 percent more than Medicare for the same care, significantly higher than competing hospitals. Its claims data showed massive price fluctuations for the same care, including C-sections that ranged from $17,000 to $55,000, depending on the hospital. In a move that other unions and employers can emulate, the union decided to drop New York-Presbyterian from its health plan network, delivering significant savings to its members.  

The union also created other initiatives to cut its healthcare costs. It directly contracted with so-called "Centers of Excellence," which are high-quality, price-transparent surgical and medical centers. It has also swapped out its conflicted pharmacy benefit manager with a transparent alternative that shares savings from drug manufacturers for its members’ medications. And it has emphasized primary, preventative care to identify and treat conditions before they worsen and become more expensive. 

In addition to the $100 million in annual savings and significant pay increases associated with these health plan changes, the labor union is also able to routinely offer care to its members with no copays. 

SEIU 32BJ estimates that if the New York City government followed its approach and took control of its healthcare costs, the city could save $2.4 billion per year. That money can dramatically improve the city's social services and quality of life. Yet all employers, public and private, union and non-union, big and small, can follow SEIU 32BJ's lead to significantly save on their healthcare costs and reward their employees with higher wages.