April 1, 2004

Report of the Faculty Welfare Committee on HealthChoice

In January, 2004, the Faculty Welfare Committee submitted a brief questionnaire on HealthChoice to the faculty, staff, and retirees. At that time, the university had been insured under HealthChoice and Pacificare for barely six months, and it was already in the process of soliciting bids from private insurance companies to determine whether there are viable alternatives to the health care plans offered by the State of Oklahoma, of which HealthChoice is the main option. Therefore, our committee decided to focus on the medical experiences of HealthChoice members rather than on rising costs or other economic problems that the university would likely face with any health care provider. We asked faculty, staff, and retirees to “relate any positive or negative experiences you have had with HealthChoice,” particularly if that experience related to medical care while traveling out-of-state, or out-of-the-country. We also asked whether members who lived outside the HealthChoice network, either as current employees or retirees, had attempted to convince their primary care physician to join the network and whether they had been successful.

We should express several caveats at the outset of our report. First, those who responded to our questionnaire constitute a small fraction of the total number of faculty, staff, and retirees at the University of Oklahoma: 143 current faculty and staff and 181 retirees. This is not a representative sample of the roughly 4,700 faculty and staff currently working on the Norman campus. Second, while we received both positive and negative comments about HealthChoice from faculty and staff, complaints probably drown out praise in most surveys of health-care providers today, particularly where multiple changes occur in carriers, as has been the case at OU during the last few years. Any significant change creates anxiety. Even plans with comparable benefits require participants to adapt to new policies and procedures. In some cases, it seems likely, faculty and staff did not understand benefits or deductibles, so their complaints may result from confusion and misunderstanding more than any fault in HealthChoice as a provider. The perspective OU employees have on HealthChoice may be very different two or three years from now. Third, it is unlikely that the faculty and staff can separate their evaluation of HealthChoice from their justifiable concern about rising premiums and deductibles at a time when salaries have been frozen for several years. The most common complaints related to the overall cost of insuring dependents and the declining benefits or quality of coverage. As mentioned above, we considered all complaints, but we paid particular attention to coverage while out-of-state or out of the country, and to out-of-network costs. Our recommendations are at the end of this report.

Summary

The Committee’s major findings include the following:

• Among the faculty and staff there is deep dismay about the rising cost of insuring dependents at a time of declining benefits. Many fear that soaring health care costs will more than offset any raises they receive in the foreseeable future.
• There is a notable difference between retirees and current OU employees in the way the two groups perceive HealthChoice. Most retirees use HealthChoice to pick up costs not covered by Medicare. HealthChoice apparently does this very well, and an overwhelming number of retirees want to stay with the state plan. Current employees are generally much more critical of HealthChoice.
• There is anxiety among the faculty and staff about health care coverage out-of-state and out-of-the-country. Many consider it unfair that when they travel on university business they face reduced out-of-network benefits or even health care providers who may refuse to accept HealthChoice because it is unfamiliar to them. These employees argue that such restrictions impinge directly on the mission of a national research university, which demands travel to conferences, for research, for performances and exhibits, and for many other purposes.
• There is also anxiety that while Norman Regional Hospital is an “in-network” hospital, that many emergency room physicians are not. Those who visit the emergency room cannot be expected to select the physicians who treat them.

The following categories correspond to those used for a 2002 survey of the Schaller-Anderson and Blue Cross-Blue Shield health plans then used by the university. The accompanying bar graphs compare responses from the two surveys in each category.

Positive Comments:

University employees submitted many positive comments about HealthChoice. Some respondents applaud the fact that Health Choice has no lifetime benefits cap, and they appreciate the fact that a PPO, as opposed to an HMO, allows them to see specialists without having to secure a referral from their primary care physician. Others mentioned that HealthChoice pays for some treatments and preventive screening that BC/BS does not. For example, a psychologist on the faculty praised HealthChoice for not being “too limiting in terms of which psychiatric diagnoses they’ll reimburse for,” including Attention Deficit Disorder. Blue Cross/ Blue Shield is, to use her word, “exclusionary.” Another employee found HealthChoice’s “service to be exceptional” and yet another observed that “[t]heir case workers are wonderful to work with.”

Support for HealthChoice is even more notable among retirees. Retirees fall into two groups: those 65 and older who use HealthChoice as a supplement to Medicare, and those under 65 who use HealthChoice as their primary, if not exclusive, insurance. In the former case, Medicare pays about 80% of medical costs and HealthChoice the remainder. These retirees generally have a very positive view of HealthChoice, and few want the university to change plans. Their complaints are relatively minor, and most relate to prescription drug coverage. A considerable number of the faculty and staff have a suspicious if not hostile view of HealthChoice, but the retirees indicated that claims were paid promptly, few claims were rejected, and HealthChoice provided good service. Indeed, some think that HealthChoice has been easier to work with than either Blue Cross/Blue Shield or Schaller-Anderson. Even those who sought out-of-state or out-of-network physicians and hospitals had few complaints. For example, one woman had breast cancer surgery at M. D. Anderson in Houston and follow-up care for several months. HealthChoice picked up all expenses not covered by Medicare. And in another case, HealthChoice called M.D. Anderson in advance of a respondent’s visit and got it designated as “in network.”

Too Expensive:

Current faculty and staff dislike being asked to pay more for a plan that has higher deductibles. One described the deductibles as “so high that I barely have any benefit of coverage.” Some can’t afford to insure dependents under the plan, and others fear that faculty recruitment and retention will suffer from the sharp increase in premiums for dependent coverage. Since most retirees use Medicare as their main provider and the university pays the cost of each retiree, there are few complaints about the plan being too expensive. Retirees under 65 are in the same situation as active employees. Indeed, several retirees who expressed concern about the cost of prescription drugs wanted the option to purchase a more expensive plan with lower deductibles and co-pays.

Prescription Benefits

The most common complaints concerning prescription benefits relate to the cost of medicines and the restriction of coverage to a list of approved drugs. Of the 54 cost or coverage complaints, about half relate to cost and the other half to coverage. Few respondents mentioned the “prior approval” merry-go-round, but there were complaints that even after a physician recommended a particular drug, HealthChoice refused to approve it. One respondent said that he had switched to Pacificare because of the better prescription coverage. (On the other hand, at least one respondent said that he was able to obtain a waiver.) Limitations on time between refills were also mentioned by a few respondents. One recounted that his pharmacist had to break six pills from a blister pack of nine pills because of such requirements. Nevertheless, problems with prescription coverage are fairly limited. Of more than 300 responses, only 27 complaints related to this coverage. Nevertheless, to those whose doctor writes a prescription for a medicine not on the approved list, the “hassle factor” appears to be significant. Among retirees, the cost of prescriptions is the principal concern.

Late Payments

Responses in this category are easily summarized by the initials STP—Slow to Pay. Of 19 total responses, all but four fit into this category. With so few out of the 300+ replies indicating this difficulty, the problem does not appear to be pervasive. Nevertheless, since respondents were implicitly comparing their recent experience with that of earlier providers, this is an issue that bears attention. Perhaps HealthChoice has statistics to indicate what the turnaround time is and how their performance compares with national averages.

Two respondents mentioned delays that resulted from their failure to fill out a form HealthChoice evidently requires stipulating that a child dependent is not covered by other health insurance. This form must be filed by the insured parent before the provider will honor coverage for his or her children. In these cases, there appeared to be a lack of communication between provider and participant about the need to fill out the form. Significant delays resulted. This problem could easily be solved.

To the extent that retirees responded in this complaint category, the response was nearly a unanimous complaint about the timeliness of payments.

Billing Errors

There was only one complaint about billing. To quote the respondent: “Twice I have received bills for additional fees that were not charged to me at the time of service. So it’s very unclear how much services are going to cost.”

Emergency Care

Most emergency care responses focus on the emergency room at Norman Regional Hospital. Several respondents went to Norman Regional’s emergency room only to discover after treatment that the physician who helped them was not an in-network physician. One woman went to Norman Regional with chest pains. The attending ER physician was not in the HealthChoice network, and therefore HealthChoice paid only the out-of-network reimbursement. Another respondent had a baby at Norman Regional. She did not anticipate that the anesthesiologist, whom she had never met, was not an in-network provider. She appealed, but “the burden falls on me to fight with them to pay charges.” This situation frustrates people who attempt to follow the protocol of going to an approved emergency room only to find out later that they needed to find an approved physician also.

Not Competitive with Outside Options

There was only one response in this category. It argued for the need to look for providers that might provide more competitive rates.

Coverage is Too Costly

Few faculty or staff were prepared for the changes that resulted from the movement to a new provider. HealthChoice appears to many former members of Blue Cross and Schaller-Anderson as less generous and more restrictive. Most complaints related to cost of coverage. Many individuals felt that the cost of deductibles and co-pays limited the value and usefulness of HealthChoice. Others complained that increasing premiums and deductibles put an undue strain on families with multiple dependents. Prescription costs were also seen as burdensome. Some individuals claimed that they were forced to pay for routine tests covered by previous providers that they assumed HealthChoice would also cover. In general, the responses in this category were pleas for relief.

Administrative Problems

Many problems related to the administration of Health Choice grow out of the paperwork required to process claims. Some respondents complained of submitting multiple claims because the original was “lost” or went to the wrong office. In other cases, claimants were told forms had been mailed to them when no such forms had been sent. There are also a few complaints about the way participants were treated on the phone when making inquiries about claims. And several respondents claimed they had not received an insurance card after over six months of membership in the plan. These may be isolated cases, but they create considerable ill-will among “neglected” plan members.

Delayed Explanation of Benefits:

This is not a major issue with retirees. HealthChoice pays what Medicare will not, and few retirees have any complaints. However, some current employees and staff claim that they expected a particular test or service to be covered and later found that it was not. HealthChoice picks up some “preventive” costs routinely, such as flu shots, but applies the annual deductible to others, suggesting that many “misunderstandings” arise from a lack of knowledge of how the plan operates. Nevertheless, some respondents think that HealthChoice gives them the “runaround,” either by requiring them to submit paperwork repeatedly, or by refusing to accept a physician’s judgment or recommendation.

Restricted Network/Out of Network:

Even making allowances for the anxiety incidental to the change-over from Schaller-Anderson and BC/BS to HealthChoice, the concerns of faculty and staff with restricted network and out-of-network care deserve careful consideration, particularly the plan’s coverage outside Oklahoma and the United States. This concerns recent retirees no less than active faculty and staff. If those retirees choose to live in the same community as one of their children in another state, for example, they run the risk of losing heath care benefits. And the problem is worse for active employees who travel. One faculty member, who is required to travel each summer as part of her professional development, had a miscarriage while out-of-state. Her medical treatment required a surgical procedure. An OB-GYN in the community in which the emergency occurred refused to accept HealthChoice, telling her she would have to pay the bill herself. Ultimately, the woman was forced to use a local GP who was willing to accept HealthChoice. “What concerned me the most,” the woman wrote, “was the fact that Health Choice was not a recognized health insurance plan by out-of-network medical institutions and the lack of help from Health Choice to answer my questions [about coverage]. The latter point is of particular concern because I was not in the best emotional state.” The Faculty Welfare committee received eight cases of people who had had similar experiences out-of-state or out-of-country, ranging from routine visits to the doctor to emergency visits to hospitals. As one described his appointment with a physician in Oregon: “The doctor’s receptionist practically laughed when I told her I was insured by a state-sponsored program that wasn’t Oregon’s.” The Faculty Welfare Committee has concluded that this is a significant problem that needs to be addressed as soon as possible.

Recommendations

• Ombudsperson: We recommend that the university appoint an ombudsperson as an intermediary whose principal job would be to provide information about the university health care programs to the faculty and staff, and to issue regular e-mail updates on such matters as deductibles, reimbursements, and out-of-network costs. He or she would also serve as an intermediary to resolve disputes. At a time of rising health care costs and rapidly changing plans, the faculty need all the spokespeople and advocates they can get. We realize that the Benefits Office has provided informal counseling about health care options, and has occasionally represented individual faculty in the claims process, but we believe that someone who specializes in health care–someone who can respond quickly to e-mail and phone inquiries--would do much to make the faculty and staff think that the university has their best interests in mind.
• Travel and out of network costs: One purpose of insurance is to provide the purchasers with “peace of mind.” If the faculty and staff worry that HealthChoice will be rejected as payment, or that payment will be far less than the cost incurred, then an injustice has been done. Indeed, if our insurance plan discourages faculty from traveling, the reputation of the university may suffer along with the career of the individual. We recommend that HealthChoice contract with a reliable, national provider network to insure that those who must travel will have coverage. We also urge that this coverage be at the prevailing rate for the region or country in question, not just at the rate set for Oklahoma providers. This should be a basic part of our health plan, but, if necessary, faculty and staff should be permitted to pay for supplemental coverage that will meet these needs.
• Preventive care and wellness: The health of Oklahomans compares poorly to the residents of many other states. We eat and smoke too much, weigh too much, and get too little exercise. In its 7^th annual report, the Oklahoma State Board of Health reported that Costa Ricans and Cubans have longer life spans than Oklahomans because the latter suffer from high rates of heart disease, high blood pressure, strokes and cancer. (See www.health.state.ok/board/state). While OU employees may not be typical of the state as a whole, we think the university should do everything possible to encourage “wellness,” including providing educational programs and a free on-campus exercise facility for faculty and staff. (Huston Huffman is expensive, and it is widely perceived as a facility for students, not faculty and staff.) Whether regarded as a quality of life or wellness issue, the university should encourage the faculty and staff to take responsibility for their own health.

The Faculty Welfare Committee:

Donald J. Pisani, Chair (History Department)

Robert Dauffenbach (Center for Economic & Management Resources)

Pat L. Weaver-Meyers (Bizzell Library)

G. Lee Willinger (School of Accounting)