Vol. 38, No. 18

2-18-2004
By: Susan Wittstock

Committee to tackle investment, design of health plans

Using the guideline that medical services must continue to be accessible, affordable and of high quality for university employees, a Health Care Investment and Design Committee (HCID) is now tackling the difficult question of how.

“We’re trying to generate creative new ideas to maintain the quality and improve the services offered by our medical plans, as well as bring the cost trend down. If we can achieve that, Ohio State will be on the leading edge of health plans nationally,” said Larry Lewellen, associate vice president for human resources.

HCID has completed Phase I of its charge, which consisted of benchmarking and research to determine the competitiveness of Ohio State’s current benefits plans. Now entering Phase II, the committee will spend the next five months formulating strategies for design and delivery of the medical plans. Feedback on plan prototypes will be solicited from the university community this spring.

Whatever the committee finds, faculty and staff will begin to discuss results from its work this summer, with a roll-out that may occur in stages, beginning in 2005, depending on what shape the new plans take on.

Ohio State, along with employers nationally, has struggled for the last several years to keep pace with the skyrocketing costs of health care, which are now increasing at a rate of 15 percent a year. A previous Health Care Evaluation Committee, which met in 2001 and 2002, made recommendations for short-term strategies that have helped the university save $9 million annually. “But a long-term plan is needed to moderate the increase in health care costs, take advantage of the leading-edge health care strategies of our OSU Medical Center and improve information, education and quality of service to members,” Lewellen said.

The 16-members of HCID are faculty and staff drawn from universitywide committees or offices, leaders of academic units, and health care and insurance experts. The committee conducted extensive research and benchmarking this fall to determine how the university’s medical plans, excluding dental and vision plans, stack up against those offered at competitive universities and other large central Ohio employers.

“We found that our plans are very competitive. We’re in the middle of our university benchmarks and in the middle for large employers in central Ohio,” said W. Randy Smith, vice provost for academic affairs and chair of the committee. “Our charge was to determine whether the university should decrease, maintain or increase its financial support of medical plans and where we came out is we want to maintain that competitive level. The committee recommended the university continue to contribute 85 percent of the cost of the University PrimeCare plan.”

This year, that translated to approximately $120 million of the university’s budget. “It’s a balancing process, because the university also is moving forward with its competitive compensation initiative,” Lewellen said. “We had a lot of discussions about the fact that total compensation is one pool of funds and we want to be sure that the benefits portion and the compensation portion are appropriately balanced.”

Shaping plans
HCID is putting everything on the table for the design process.
“I envision this process as beginning with a blank sheet of paper that we can design what is best for faculty and staff. It may mean tweaking the current plans or it may mean starting over,” said Susan Marsico, director of benefits. “We need to ask the question: What creative and innovative plan designs are out there that we could incorporate into our new plan designs?”

The university’s association with a medical center gives Ohio State an advantage with offering health benefits. “Some of our university benchmarks have medical centers, but none of the local employers do. This does put us in a unique position,” Marsico said.

HCID will be meeting with Fred Sanfillipo, senior vice president for health science and dean of the College of Medicine and Public Health, to determine how a redesign can benefit from and contribute to the Medical Center as it grows and changes under Sanfillipo’s vision.

Focusing on wellness is one way to tie into the Medical Center’s resources. “Improved health status for all employees should be a major goal,” said Judy Kadja, associate executive director of Managed Health Care Systems. “A major way to save costs is to help individuals take more responsibility for their personal health. We’re hoping to find ways to build that responsibility into the health plans.”

“Costs for the new plans, regardless of the new shape they take, will unfortunately continue to increase each year. That’s a burden Ohio State as the employer and faculty and staff as plan participants will have to shoulder together,” Lewellen said. “However, we’re hoping we can find a sustainable way to control that trend. If there’s a way to lower that double-digit increase to say, 8 or 9 percent, we’d be far ahead of what our competitors are able to offer.”

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