Note: Due to a medical emergency, Mr. Rogers did not speak at the May 19th Press Briefing as scheduled. This statement was released in his absence.
Statement Of James E. Rogers
Chairman, President and CEO of Cinergy Corp.
National Coalition on Health Care
Health Care Crisis Panel
May 19, 2003
The nation’s health care delivery system faces skyrocketing costs and needs a sweeping overhaul.
Cinergy’s annual health care tab is $100 million and is growing at more than 15 percent per year. Cinergy is currently spending $10,000 per full time employee on health care. At the current growth rate, our costs will double every five years. This liability absorbs huge amounts of our income and capital – dollars we could be using for other priorities, including other employee benefits.
This is happening at the same time that there are other economic pressures facing utility companies such as significant expenditures for pollution control equipment and new generation capacity to meet the growth in demand.
Cinergy is looking for solutions to keep costs under control without diminishing the quality of the health care we provide our employees. We have found ways to decrease the escalating costs by increasing co-pays, deductibles, and the amount employees pay to maintain desired levels of benefits. We are also improving disease management programs, workplace fitness centers, wellness programs and safety programs.
Another approach has been to give our employees more choices and options in benefit plans. Given the differing needs of our large workforce, a one-size-fits-all benefit plan approach to health care no longer applies.
But these measures will not really turn the situation around. This country needs real health care reform at the state and federal levels, including tort reform. Without legislation to reform our healthcare delivery system, our efforts to curtail costs will fail. For Cinergy and its employees and their dependents, the consequences of failure are serious and unpleasant. It will mean that employees will pay a larger share of their healthcare costs while choices, flexibility and overall quality will decline.
Cinergy takes pride in providing a positive workplace for its employees. Our peers in Fortune magazine have ranked Cinergy as the third-most admired company in the Energy sector in 2002. We have been ranked in the top 10 percent of Fortune 500 companies for employee pay and benefits. And, we have been included on Working Mother magazine’s list of the 100 Best Companies for Working Mothers for the last six consecutive years. (For five of those years, we were the only energy company on that list.)
But this strong record can only continue with real health care reform. The innovative approaches to reduce costs that Cinergy and other companies are pursuing will help. However with costs increasing at a national rate of 16 percent annually, new health care solutions must be found. Therefore, Cinergy has joined the National Coalition on Health Care as a means of teaming up with other stakeholders to find a comprehensive policy response to this problem. Cinergy is committed to supporting legislative reform that will result in controlling costs and increasing access to healthcare. I think the basics of any legislative proposal must include flexibility to employees and employers as well as cost containment. Cinergy and the other members of the Coalition look forward to engaging Congress in a true bipartisan effort to find a viable answer to this crisis.