Report of the Faculty Senate Committee on Proposed Health Benefit Changes

The Committee reports the following:

First, we appreciate that:

• The Senate leadership and the President's office were instrumental in extending the deadline for the examination and evaluation of plan changes. Originally, the proposed alterations were to be considered within a two-week period.
• The administration showed a good faith effort to improve the plan and the process by which plan changes were determined. We engaged in a number of meetings with Administration officials to discuss our concerns about the new plan structure. Administrators met with the Senate and established several encounters with faculty and staff at the Norman and Health Science Campuses. These assemblies were well attended and considerable questions were addressed. This Ad Hoc Committee and its representatives had good input into proposed reconstruction of health plans. We believe that communication between the Administration and Plan Members at all levels have been strengthened by such processes and encourage such methods as standard in the future.
• Several adjustments were made in the design of Plans as a result of interaction between the parties. Some material changes were made to both proposed plans in response to concerns that were raised. In addition, a third option has been added (the "Bronze Plan") which provides additional health plan choices to faculty and staff.

Overall, we are encouraged by the good faith exhibited by Administration Representatives in dealing with us about the transformation of the health care options. Process matters. It establishes trust.

Second, we do have concerns:

• We exercised due diligence in discovering what information we could about Schaller-Anderson (SA), the contracted administrator of the University Plan a.k.a. the OU Plan. We met with the CEO of Schaller and took other actions to understand that organization's preparedness to broker the health care interests of a University-based staff. Based on the information we were able to obtain prior to this meeting we were unable to draw any definite conclusions about the quality of the SA administered plan. There are some clear cost savings associated with the SA plan, but we did not feel that we could obtain sufficient information about service quality to endorse the plan. We believe that experience alone with SA will answer legitimate questions we have about the suitability of SA as OU's plan representative. We recommend that during the first year, that there be an ongoing assessment of the SA plan with input from faculty and staff representatives through the Faculty Senate and Employment Benefits Committee and that in July of 2002 a formal evaluation be conducted summarizing the first year experience of SA's trusteeship of the OU plan. Until such review is complete, we reserve our endorsement of Schaller-Anderson as the best choice as administrator of the OU plan.
• The Formularies (issues related to medications) are not yet complete, but we are advised that there will be "no surprises." Still, we have only partial information about this important aspect of the OU plan and cannot in good faith make a recommendation until more data are available. Moreover, Catalyst Rx, a company that will play an important role concerning pharmacy-related issues, is new to the OU community and we need to become better acquainted with their capabilities. This may work positively, but we are not prepared to make an endorsement based on partial information and no experience with this company.
• We encourage the University Employment Benefits Committee to encourage the Administration to place additional Formulary information on the Web in the same way facts about physician networks are established.
• We encourage the Administration to produce a Benefits Handbook as soon as possible following action by the Regents so that faculty and staff will have complete information about their exclusions and limitations in their health benefits.
• We ask for more information on coverage "out of area." We understand this problem is settled, but have not received the detailed data.
• We must have further information on the Appeals Process associated with the Bronze Plan. We know a process is in development, but not completed.

Third, we have recommendations.

• The University will pay the employee share of the Blue Cross Plan and that plan should be the default plan. The reason is that a substantial group of OU employees have a history with BC/BS and are satisfied with the service provided. We suggest that the SA plan not be the default plan until a review of the first year experience under the plan has been completed. We understand that this entails some additional benefits cost to the University. However, comparing OU's health care cost to other institutions in the Big-12 this is still a modest additional commitment. We consider this suggestion most important and doable.
• An Oversight Committee will be established with faculty representation that would, among other things, (a) be involved in management of Fund Reserves, (b) evaluate the performance of Plan administrators, (c) appraise the effectiveness of various plan appeals processes, and work with the Administration on improving plan performance so that premiums are reasonable and benefits competitive.
• The Chair of the Faculty Senate will be advised of any need to reassess faculty benefits in advance of the development of proposals or RFPs to accomplish such ends. This Committee takes the position that proposed alterations in employee benefits are not solely administrative matters. They are appropriately subject to faculty and staff input

In conclusion, we think the Administration has done a good job overall in negotiating the best plans possible for its employees. We accept what has been realized so far, but we cannot endorse the plan changes until more information about the plans becomes available and we have experience with the new plan administrators.

We encourage the Senate to use its positions on the Employment Benefits Committee, its own Welfare Committee, and its present and past leadership to continue the dialogue that has started with the Administration on all of the issues identified herein. We make clear that we are not opposed to what has been done so far. We appreciate much. Still, until complete information and more experience with the changes are available, we urge continuation of the emerging partnership arrangement so the best health plans possible are provided to University employees.