Committee to Review OU Health Insurance Options
Costs of health insurance to the university and its employees have risen dramatically in recent years while coverage has declined. There are a myriad of factors that have driven these increased costs. The factors include national healthcare cost trends, an aging population, consolidation in the health insurance industry, poor health habits, rise in the population of uninsured, advances in medical technology, availability of high-cost treatments, and lack of individual consumerism. The costs for University paid single employee coverage have doubled since 2001 with monthly premiums going from $179 in 2001 to $358 in 2007. The employee cost for family medical insurance coverage has increased by 177% since 2001, going from $280/month to $778/month in 2007. The high cost of insurance coverage is viewed as an obstacle to recruiting and retaining faculty and staff, especially lower paid employees and those who would like to insure dependents. The high cost of dependent coverage has led many employees to seek coverage through a spouse’s plan, private policy, or in some cases going without insurance coverage for their dependents.
The University is committed to providing a competitive level of health insurance benefits for its faculty and staff that supports attracting and retaining outstanding employees. It is imperative that the University focus attention on health care issues, explore alternatives, and look for ways to manage University and employee healthcare costs while still maintaining employee access to high quality medical services at affordable cost. In consequence, a comprehensive study is proposed with the intent of examining and recommending options to be pursued, guided by a Steering Committee.
The Steering Committee
Because a comprehensive and rational analysis of OU healthcare options and national healthcare trends is required to develop recommendations to guide University short and long-term actions, the President has appointed a Committee to manage the review. The Committee will have project oversight responsibility for the review, and will engage others from the University community to provide expertise and feedback necessary for an effective outcome. Attached as Exhibit I is a proposed organization chart that outlines the structure to support the Committee’s research and analysis. In addition, the Committee will be assisted by an independent benefits consulting firm with extensive experience working with colleges and universities in managing benefit issues. The independent consulting firm will provide analysis of competitive data, information about contemporary benefit practices and options, and will assist the Committee in managing the various facets of the project.
The Steering Committee will be responsible for ensuring that:
· project scope is defined and a timelines for completion are established;
· the review includes a study of the systemic issues that plague our state and national health care system with an interest in exploring innovative new approaches to addressing these challenges that might benefit the OU healthcare program;
· issues for review are prioritized, and needed resources are identified and managed;
· subcommittees that include knowledgeable faculty, staff, administrators and interested parties are established to conduct studies needed for completion of the comprehensive review;
· suggestions and feedback regarding the Committee’s activities are solicited from faculty and staff;
· timely, periodic reporting of project activities and results are shared broadly; and,
· the study of healthcare issues and options is conducted efficiently
Attached as Exhibit II are example questions to be addressed by the Committee during the course of their analysis. These questions are organized into categories of (1) OU-based information; (2) comparisons and alternatives; (3) systemic problems; and (4) action domains. Answers for many of these questions will take time and involve intensive research, and are, thus, longer-term considerations. Answers to some questions are more pressing short-term, such as “To what extent can we increase the number of competitive bids for OU’s health insurance program?” We must have coverage in 2008, and exploring alternatives for that immediate future is a first priority.
General Committee Charge
The Committee for Review of OU Health Insurance Options is charged with:
· developing a fundamental understanding of the factors that are driving these healthcare cost increases;
· conducting a comprehensive review of the University’s health care plans and alternative health care strategies; , and
· recommending changes that best meet the needs of faculty, staff, retirees, and the University.
The Committee should examine to what extent the University’s healthcare options and premium structure should be modified, and what long-term strategies should be employed. This examination should include a survey of what other universities, health sciences centers, and the private sector are doing to address similar problems. Because many of the challenges and problems encountered by the University in managing our healthcare benefits are a reflection of national healthcare problems, an understanding of national trends, policies, and legislation must also be developed.
The Committee will begin meeting immediately and will submit its initial report by the end of March 2007. The initial report will outline project scope, issues to be reviewed, subcommittee structures and assignments, and timelines for completion.
Steering Committee Membership
Dr. Dewayne Andrews – Committee Chair
Vice President for Health Affairs and
Executive Dean College of Medicine.
Dr. Robert C. Dauffenbach
Associate Dean, Ctr. For Economic & Mgt. Research
Faculty Welfare Committee
Vice President for Administrative & Executive Affairs
Director Human Resources
Dr. Gary Raskob
Vice President for Administrative Affairs
Questions to be Addressed
We seek answers to the following questions, as arranged in the categories below:
OU Based Information
To what extent do health care costs at OU divide into the categories of pre-paid standard medical care, maintenance of chronic conditions, single-incident major medical care, and catastrophic incidents and what have been the trends?
To what extent do health care utilization rates vary among OU populations?
To what extent do current arrangements in our OU coverage yield problems and vicious-cycle effects, such as may be the case with full employee-only coverage and no subsidization of family coverage?
To what extent can we increase the number of competitive bids for OU’s health insurance program?
To what extent is the OU public aware of and taking advantage of federal tax incentive programs to support health care costs?
To what extent do OU insurance needs vary among user populations?
To what extent does OU’s medical costs and coverage align with insurance plans offered by other major universities in the region?
To what extent is OU at a competitive disadvantage in recruitment of young faculty in comparison to Big XII and other institutions?
To what extent are universities in the several states “leading the way” to changed health care practice in their respective states?
To what extent do public health care systems differ among states in resource base, objectives, and outcomes in regard to the general health status of their respective populations?
To what extent are alternative strategies of health care being tried in other states, localities, businesses and institutions and what have been the results?
To what extent is it possible to compile a set of state health policy best-practices benchmarks for the several states?
To what extent
is the source of our health care costs impacted by the poor health status and
the growing size of the uninsured population in
To what extent is insurance the problem as opposed to the solution, in that it creates a wedge between the provider and the consumer, restricts information flow on costs, reduces individual focus on costs in relation to benefits, and thus impacts individual economic considerations?
To what extent is there a lack of competitiveness in insurance markets?
To what extent is there a lack of competitiveness in provision of hospital care?
To what extent is the availability of improved technology in health care delivery a part of increased costs?
To what extent can the efficiency of the health care delivery system be improved?
To what extent can we leverage our own professional resource base at OU-Norman and OU-HSC to improve health care outcomes?
To what extent can we, as an institution, provide incentives for individuals to seek information about their current health status?
To what extent can preventive care and early diagnosis be utilized to lower health care costs?
To what extent can we encourage healthy populations to elect OU coverage?
To what extent can personal accountability be encouraged in the structure of insurance premiums at OU so as to eventually lower health care risks?
To what extent can the education and information system at the behest of state government be utilized to change health behavior patterns at all societal levels?
To what extent can we reach into the public policy apparatus in the state to affect change?