Who Buying Whom?

By Stan Coombs, Director

We’ve all paused at some point, when we heard that a company that provided important services – a major utility, a large pharmaceutical producer, a grocery chain – has been purchased by a larger firm providing the same services, and wondered if it meant higher prices for all of us due to decreased competition.

Some of us remember “Ma Bell,” the telephone giant that was broken up by the courts. An antitrust lawsuit was filed by the Department of Justice against AT&T, the sole provider of telephone services for most of the United States and some of Canada, and indirectly the provider of most telephone equipment on the continent, giving them almost total control of U.S. communications.

During litigation, AT&T proposed they be broken up, and operating rights were eventually distributed to seven “Baby Bells” plus two subsidiaries that were only partially owned by AT&T. The settlement was finalized in 1982.

That breakup resulted in increased competition, one could argue. Long distance rates fell. Local residential rates, previously subsidized by long distance revenues, rose. The seven-plus–two Baby Bells eventually lapsed into inter-company competition, and at least one reconsolidation.

So, why is this of interest to retirees? Because it’s a lesson in waiting about monopolistic practices decades ago that may provide options for today.

Ever heard of Sutter Health? I hadn’t, but this is Southern California and Sutter is a health giant in Northern California. Sutter started as a medical service in Sutter’s Fort in the 1860’s (and thus the name), and is now a non-profit chain with 24 hospitals, 34 surgery centers, 5,000 physicians, and operating revenues of nearly $13 billion. It serves more than 100 California cities and towns.

Sutter became large by aggressively buying hospitals and physician’s practices. One of those added in 1995, California Healthcare Systems, owned the four largest private hospitals in the San Francisco Bay area. The two systems were described as having assets of more than $2.1 billion and serving more than a million patients.

Sutter was sued in 2014 by 1,500 self-funded health insurance plans, according to reports, accusing them of anticompetitive behavior and charging inflated prices. And California Attorney General Xavier Becerra followed with a separate antitrust case last spring.

Becerra alleged Sutter used their market power to control prices by keeping health insurers from providing low-cost health plans from patients, and setting excessively high out-of-network prices. He argued that Sutter impeded cost transparency by restricting publication of provider cost information, and mentioned that Sutter’s assets had increased from $6.4 billion in 2005 to $15.6 billion in 2016. The two cases have been joined, plaintiffs requesting damages of $900 million.

Sutter denied it engaged in such behavior, and said the suits aren’t about prices, but insurance companies trying to maximize profits, and reportedly called the Attorney General’s allegations, “a sweeping and unprecedented effort to intrude into private contracting.”

Sutter’s alleged abuse of their market power is described by some observers as including an “all-or-nothing approach.” An insurer wishing to include any single Sutter hospital or clinic in its network allegedly had to include all Sutter hospitals and clinics, even though it would be cheaper to exclude their more expensive facilities.
Sutter claimed the “all-or-nothing” practices actually protect patients, who, when unable to choose their hospitals in an emergency situation could be vulnerable to surprise billings from out-of-network hospitals or doctors.

Even the consolidation issue is debated. Proponents claim medical consolidations reduce costs by providing economies of scale, allowing better deals with insurance companies, doctors and medical suppliers. But a 2018 study by the University of California at Berkley seems to refute that, reporting health care costs in Northern California, Sutter’s home turf, 20% to 30% higher than in Southern California.

At least one study indicates quality of care decreases with increased consolidation, reporting that a decrease of 10 percentage points in hospital market concentration resulted in a 3% decrease in 30-day mortality for heart attacks. According to the author, “When prices are set by government, hospitals don’t compete on price; they compete on quality.”

It’s rare for large suits to go to trial due to laws allowing triple damages, and on October 16th a tentative settlement was announced in the Sutter case. No details were revealed. And the court may not approve the proposed agreement during approval hearings next year, but the outcome could provide a deterrent to the national hospital industry, if the State of California wins.

This is not an only case. There has been a surge of consolidations. The American Hospital Association reports 800 mergers involving 1,870 hospitals, between 2007 and 2017. In an interview, one law professor specializing in hospital consolidations is quoted, “To date there’s very little evidence – I venture to say none – that the mergers over the past 20 years have generated any efficiencies.”

He concluded, “Reducing competition increases price.” ◾

Pension Facts
Volunteer Community Service is Routine for RESDC Board Members

The 13 retirees serving on the RESDC Board of Directors are volunteers, and several of them donate their time and abilities to other community service organizations and non-profits. Here are some examples:

President John McTighe served on the East County YMCA Board of Management for 25 years and was a Board Member of the El Cajon Community Development Corporation from 2007-2011. He also volunteered teaching English to Syrian and Iraqi refugees in 2017 and 2018.

First Vice President Stan Coombs served on the San Diego Mayor’s Growth Management Task Force and served as a member and then President of Navajo Community Planners. He also served on the San Diego City Central Planning Committee.

Second Vice President Chris Heiserman served on the Board of Directors of the Spring Valley and San Miguel Fire Districts for 18 years. He has been a member of the Spring Valley Kiwanis Club for 30+ years and has coordinated the club’s annual Safety Officer Appreciation Dinner for 20 years. This dinner recognizes the service of local Sheriff Deputies, firefighters, and Senior Volunteer Patrol members of both the Sheriff Department and California Highway Patrol. He is also President of the Dictionary Hill Open Space Advocates (DHOSA), which celebrated the acquisition of Dictionary Hill by the County of San Diego in 2017, conserving 175 acres of Coastal Sage Scrub Habitat for everyone to enjoy in perpetuity.

Secretary Carlos Gonzalez served three terms on the SDCERA Board of Retirement (1992-2003). He is on the Executive Committee of the California Retired County Employees Association (CRCEA), a statewide organization of retiree groups like RESDC in the 20 California counties constituted under the 1937 Retirement Act. Carlos is CRCEA’s Treasurer.

Director Leila Attar is a long-time Board Member of CRASH, Inc., a non-profit agency providing substance abuse services in San Diego. She also consistently supports environmental and animal rights causes.

Director Chuck Brown is a founding member and current President of the San Diego Concert Band, which has been performing several community concerts annually for 30 years.

Director Charles Morgan and his family are very involved in animal welfare and rescue efforts, and have founded and direct a beagle club that rescues and fosters beagles.

Director Merrill Roach has served on the non-profit religious-based Board of Directors of Newbreak Church since 1986.

Director Carl Silva served as a Board member of the Jamul-Dulzura Union School District and has volunteered for several organizations.

Director George Shoemaker, a RESDC member for more than 30 years, is a past RESDC President and also served as an alternate member on the SDCERA Board of Retirement. He was a past President of the California Retired County Employees Association (CRCEA) and chairs its Retirement Security Committee. He was the Treasurer and a Board Member of San Diego Safe Harbor, Inc., a transitional housing program for the homeless that achieved an 87% success rate for 20 years.

New Director Bruce Silva volunteers at the Vista County Library and participates in the County Sheriff Department’s Senior Volunteer Patrol program.

Military Service

Several RESDC Board Members have also served in the armed forces. RESDC Treasurer Frank Bittner retired from the U.S. Navy as a Lieutenant after serving nearly 30 years before joining the County of San Diego. Carlos Gonzalez served his country in the U.S. Marine Corps, retiring as a Gunnery Sergeant.

Chris Heiserman and Carl Silva both served four years in the U.S. Air Force. John McTighe served in the Army National Guard for six years, ending with the rank of Staff Sergeant. George Shoemaker joined the U.S. Navy in 1948, attended The Navy School of Music in Washington, D.C. and was a member of President Harry Truman’s Inaugural Band.

Volunteer service comes naturally to RESDC Board Members. Perhaps there’s a link back to our County careers where helping and serving people was more than just a job. Brief biographies of all our Board Members can be viewed on the RESDC website (https://www.resdc.net/). If anyone is interested in getting more involved with RESDC, we have volunteer opportunities on committees and we have Ambassadors who help us with events. ◾

Theo and Evelyn Yakel Scholarships 2020

By Carlos Gonzalez, RESDC Scholarship Committee Chair

The Theo and Evelyn Yakel Scholarships are available again this year from the Yakel Scholarship Fund through the San Diego Foundation. To be eligible, the applicant must be a high school senior, an American citizen, and must plan to attend a two-year or four-year college in the United States. The scholarship must be used for tuition, books, or fees. All children, grandchildren or great-grandchildren of a RESDC member may be eligible to apply for the Yakel Scholarships.

The two-month application period opens December 4, 2019 and closes February 5, 2020, at 2:00 p.m. Applicants should go to www.sdfoundation.org and fill out the Common Scholarship Application to be considered for the Theo Yakel Scholarship as well as other scholarships they might qualify for. For further information, please call the San Diego Foundation at (619) 814-1343.

A sponsor certification letter verifying that the sponsor (parent, grandparent, or great-grandparent) is a RESDC member must be attached to each application filed. This document can be obtained by calling the RESDC office at (866) 688-9229 or sending an e-mail request to resdc@resdc.net. The foundation requires this document be verified and signed by a RESDC staff member and will not accept an application without this document.

PLEASE NOTE: All eligible high school seniors ARE ALLOWED to apply for both the Yakel and the RESDC Scholarships. Details concerning the RESDC Scholarship Program will be in the January and February issues of The NETWORK. ◾

2020 RESDC Budget

The following 2020 RESDC budget was prepared by Executive Director Mark Nanzer and Treasurer Frank Bittner. The budgeting process includes reviewing annual budget vs. actual amounts to ensure budgeted costs are in line with Board approved policies and ongoing administration of daily RESDC activities and events coordination. Additionally the budget is reviewed by the RESDC Audit committee and was approved by the Board of Directors at its October 2019 meeting.

*Please note: The hard copy, mailed version of The NETWORK contained an incorrect version of the 2020 RESDC budget. The corrected version of the 2020 budget will be submitted to members in attendance at the December 12th Annual Membership Meeting & Holiday Luncheon for adoption. Members who wish to obtain a copy may contact the RESDC office.

◾

Bits and Pieces

John Cantor retired from County Clerk in 1979. He and his wife, Lois, celebrated their 77th wedding anniversary in October! They were honored with a party with friends and family. John is 102 years old and lives in Rancho Bernardo.

Paul Cornell retired in 1980 as a Deputy Sheriff and Bailiff for Judge Orfield. In August, Paul and his wife, Gwen were treated to a celebration for their 70th wedding anniversary! They live near their daughter and her family in Maryville, Missouri. Paul will be 94 years old this month!

Antonio and Pazleona Espejo (Tony and Pat) celebrated their 50th wedding anniversary in June! They renewed their wedding vows at Saint Michael’s Catholic Church in San Diego. A reception followed at the Sweetwater Summit Park Community Building in Bonita. Tony retired from the Sheriff’s Department and Pat retired from Health and Human Services.

Jane Griffin, celebrated her 91st birthday in September! She retired from the Welfare Department, as an eligibility tech. Jane moved to East Lansing, Michigan in 1998 to live near her children. She has a sweet cat named “Kitty”. ◾

Recent Events

• New Research Brief: Why Are 401(k)/IRA Balances Substantially Below Potential? The center for Retirement Research at Boston College recently released a research brief with the following key findings:
  • 401(k)s/IRAs have the potential to provide significant wealth.
  • But a typical 60-year-old with a 401(k) in 2016 had less than $100,000 compared to a potential $360,000 in combined 401(k)/IRA assets.
  • Four factors could explain this gap: the immaturity of the 401(k) system, the lack of universal coverage, leakages, and fees.

  To access the research visit: https://crr.bc.edu/.

• County Board Approves Four Satellite Voting Locations. The County Board of Supervisors recently approved funding for four satellite voting locations for the March 2020 Primary Election. Traditional polling places will remain in place, but the satellite voting locations will act as offshoots of the Registrar’s office. They will open three days before Election Day and will be staffed by Registrar employees.

  The move came after the recent passage of state Senate Bill 72, which requires the Registrar to allow conditional voter registration at every polling place starting with the March 3^rd election. That means anyone who wants to register to vote, re-register to vote after an address change, or change their party preference to vote for a presidential candidate, can do so on Election Day. During the last election, conditional voter registration was allowed only at the Registrar’s office, creating long waits for people. ◾

See’s Candy Certificates
Great Holiday Gifts!
Purchase from RESDC for Less!

See’s Candy is now priced at $21.00 per pound if you buy it at one of their stores. RESDC members can purchase See’s gift certificates from us at $18.00 each.

If you would like to order certificates from our office, please address an envelope to RESDC, 8825 Aero Dr., Suite 205, San Diego, CA 92123. Enclose a check for $18.00 for each certificate.

Also enclose a business size (#10) self-addressed stamped envelope, as the certificates will not fit in a small envelope. To order up to five certificates please  put one forever stamp (currently 55¢) on a self-addressed envelope. If you order over five certificates, please put 70¢ postage on the self-addressed enclosed envelope. Please include a stamped envelope for every 10 certificates. Candy certificates are redeemable at any of the See’s retail stores for ready-packed or specially packed boxes.

These certificates do not have an expiration date. See’s Candy certificates are available through RESDC all year long. ◾

RESDC Online Services

Did you know that RESDC has an online Member Directory, which is accessible only to logged-in RESDC members? This is a great way to stay in touch with former co-workers. You can opt-in and choose what information to share by logging into your member self-service account.

The Member Self-Service website can be accessed by going to www.resdc.net and clicking on the menu item for “Member Login.” Please note that you must have an email on file with us in order to log-in. If you don’t currently receive emails from RESDC and would like to like to join both our email list and the member website, send us your full name and email address by contacting us at resdc@resdc.net or by calling (619) 688-9229.

We encourage you to also follow RESDC on Facebook and Twitter. We share photos from our events, news from around San Diego County, articles related to retirement and pensions, and notices about community events.

Facebook: https://www.facebook.com/RetiredEmployeesofSanDiegoCounty

Twitter: https://twitter.com/RESDC

And on the main RESDC website, www.resdc.net, you can:

• Read current and past editions of The NETWORK.
• See an overview of all available member discounts and benefits.
• View photos from our events.

Stay up-to-date on pension and retirement news through our News Now page, a curated list of recent articles in the media. ◾

Recent Event Photos

• Team RESDC at the 2019 Walk4ALZ San Diego on October 19, in Balboa Park. Team RESDC surpassed their goal of raising $750 for San Diego Alzheimer’s with a total of $1,225.
• RESDC Members gathered for the 2019 Health Fair Picnic on October 16th at Admiral Baker Field. See more photos from the 2019 Health Fair Picnic.

Annual RESDC Holiday Luncheon
NEW LOCATION!
DoubleTree Hotel Mission Valley Hazard Center

When: Thursday, December 12, 2019, 11:00 am – 2:00 pm
Lunch is served at 11:30 am

Where: NEW LOCATION: DoubleTree Hotel Mission Valley Hazard Center
7450 Hazard Center Dr., San Diego, CA 92108

Menu: Roast Turkey or Vegetarian Lunch

Cost: $24 per person

Program: President’s Welcome, introduction of guests, approval of the 2020 budget, and music performed by Silverwood Quartet, a premier music ensemble.

Click map to view larger.

Directions: From I-8 E or W, take Hwy 163 N, exit Friar’s Road East and turn left; from Hwy 163 S, exit Friar’s Road East and turn right. Turn right on Frazee Road. Turn right on Hazard Center Drive. Turn right at Hazard Center West Driveway (2nd light) and go straight back into the “Hotel Self Park” parking. Take a ticket, which you can get validated at the luncheon check-in table for free parking.

There is a San Diego Trolley stop conveniently located across the street from the hotel for those interested in riding the trolley to the luncheon. The name of the trolley stop is Hazard Center. For more information please access the San Diego MTS website at www.sdmts.com.

Registration: Registration forms and payment must be received in the RESDC office by Thursday, December 5th. There are no refunds for cancellations after December 5th.

Reserved tables will be provided only for groups of ten who pay for the entire group with one check or one credit card. No exceptions.

If wheelchair seating is required, please call our office at (619) 688-9229, or you may inform us on your registration form.

Name badges and opportunity ticket packets should be picked up at the check-in table at the event. They will not be mailed.

• Register Online: Go to www.resdc.net/events and click the green “Register” button. Use the email associated with your member account. Click “Add guest” to add additional registrants for $24 each. To pay for yourself and guests, click “Pay Online” and pay with credit card.
• Register by Phone: Call the RESDC Office at (619) 688-9229 during our hours of 9 am – 2 pm Mon-Fri.
• Register by Mail: Fill out the Registration Form. Make a check payable to RESDC for $24 per person. Mail registration form, along with check to RESDC, 8825 Aero Dr., Suite 205, San Diego, CA 92123 ◾

Welcome New Members

Rolando Q. Bondoc – Health & Human Services
Myrna M. Fernandez
Heather E. Kenney – Sheriff
Colleen A. Murray – Health & Human Services
Carlos V. Soriano – Sheriff
Josefina L. Soriano – Sheriff
Kim Vegas-Witham – Public Defender

The surviving Spouse of a member is eligible for RESDC membership. For enrollment assistance, please call: (866) 688-9229. ◾