By Kyle Munzenrieder
By Kyle Munzenrieder
By Terrence McCoy
By Jeff Weinberger
By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
Dr. Steven Scott's medicine show has parked its wagon outside the offices of the Miami-Dade County School Board, and it ain't movin' until somebody buys a health tonic. United Teachers of Dade union boss Pat Tornillo, a steely-eyed fireplug of a senior (he's 76 years old), surveys the uneasy rabble of bureaucrats and politicians milling about the wagon. Beside him überlobbyist and school board kingmaker Eric "Ric" Sisser offers a few bright baubles to the first to step up. The two experienced hawkers smell a sale.
Dr. Steven M. Scott, a kind of junk-bond specialist when it comes to health care plans (he collects ailing ones, resuscitates them, and tries to turn them into moneymakers), is peddling a multimillion-dollar insurance offering from HIP Health Plan of Florida that will likely prove too expensive for many of the school district's employees. But with Tornillo and Sisser pushing for him, he may well get what he wants when the school board votes August 22. For Scott keeping a piece of the huge Miami-Dade school contract is essential to a much larger play for dominance in Florida's rapidly changing health insurance market. For workers it's about whether they can afford to take Junior to the doctor.
Since January the school district has been in the throes of deciding which two or three insurance companies will get a share of the $153 million fringe-benefits plan it will offer to about 39,000 employees next year. The school district gives its full-time employees $330 per month toward health insurance, which the employees can use toward one of the medical plans offered by the district; they also can buy into a number of extra benefits, such as dental or vision care, dependent care, or a 401(k) contribution. Over the past seven months, school district staff, outside consultants, and a handful of labor unions have attempted to make intelligent, reasonable recommendations (such as the two current health plan favorites, Cigna and Humana) to Superintendent Roger Cuevas based on the needs of most employees. In the end, though, none of this matters.
What matters is that Tornillo really wants HIP Health Plan of Florida to get a piece of the action, and he has the leverage to make it happen. The old union boss has led UTD for exactly half his life and through a combination of clever politicking and sheer chutzpah, has proven his ability to coerce management. Negotiations for the medical insurance package are a part of the union's collective-bargaining process with the school board. Part of Tornillo's plan is to use some of the money the district contributes to health insurance premiums to pay part of a four percent salary increase he's promised union members. Employee salaries and benefits use up more than 60 percent of the district's budget, and Tornillo has shown himself willing and able to field hundreds of teacher demonstrators if negotiations don't go his way. Tornillo also has pull with several board members who don't want to risk angering him. "The politics is absurd," remarks the leader of another union involved in the insurance talks. "It's a logjam because of the politics."
Hardly a new circumstance. Five years ago Tornillo used exactly the same tactics to prevent competition for the company he backed, HIP Health Plan of Florida, by making sure another HMO, AvMed Health Plan, was excluded. It was 1996, an election year, and a majority of school board members (most of whom had received union endorsements and help from the Sisser fundraising machine) gave him what he wanted. HIP currently enrolls about 15,000 employees in its HMO, a customer base worth about $43 million in 2001.
If Tornillo is a one-man platoon of shock troops, Ric Sisser is the life-infusing Red Cross of political campaigns. And HIP Health Plan of Florida is willing to pay an astounding commission to Sisser, its supereffective lobbyist who has helped elect many a public servant in Miami-Dade County since the early Eighties. A state examination of the company's books in August 2000 revealed that HIP paid Sisser "more than a million dollars in a year," according to Belinda Miller, lead attorney for the Florida Department of Insurance. The money was Sisser's cut of the insurance premiums he'd helped the company obtain. "It sounded like a lot to us," Miller remarks. "We did not let them pay that last [check to Sisser for $121,000]." The exorbitant compensation disturbed school board member Marta Perez so much when she heard about it that she returned two $500 checks to Sisser that he contributed to her 2002 re-election campaign. "I called and asked him [about his fee], and he said, “It came in with the low bid, so who cares how much they paid me,'" Perez remembers. (Sisser's office advised he was out of town last week and could not be reached for comment.)
HIP Health Plan of Florida will need its heavy lifters more than ever for this new sales pitch because of the company's erratic financial fortunes in the past couple of years. A year ago the Department of Insurance was going through the books at the company's offices in Hollywood and threatening to put it in receivership. It likely would have died a horrible, lingering death had Scott not swooped in two months later with a $40-million buyout offer to its original parent company in New York, where financial difficulties also were extreme. Steven Scott, of Boca Raton and Durham, North Carolina, has been on a bit of a buying spree, in fact, collecting four failing HMOs in Florida in the past year (plus the customer base of a fifth). Scott has infused these companies with huge amounts of cash and will eventually consolidate them into a monster health care empire that will rival national health insurers, such as Aetna and Humana, currently operating in Florida. Whether the ambitious plan to bring about 500,000 customers under one roof will turn out to be madness or genius isn't yet clear. "It's a big gamble, but the strategy is good," Scott told Florida Trend in May. The Miami-Dade school district isn't as willing to gamble.