Penn State health plan expected to lead to positive change and cost savings

Penn State is one of a growing number of higher education institutions to implement a wellness component to its health care plan in an effort to curb costs long term and improve the health of employees. In a recent survey, 23 percent of respondents said they had adopted or enhanced a wellness program and 17 percent indicated they had increased the employee share of dependent coverage costs, according to the College and University Professional Association for Human Resources' 2013 Employee Health Benefits in Higher Education Survey. Other changes being planned or considered include increasing in-network deductibles and adopting or expanding the use of financial incentives to encourage healthy behavior among employees.

"The reality is that comprehensive wellness programs do work. At least 70 percent of the chronic conditions in our population are preventable according to the Centers for Disease Control," said Donald Fischer, senior vice president and chief medical officer, Highmark Health Services, during a conference call with media held Thursday afternoon as part of Penn State's roll out of its new health care strategy.

Penn State began preparing its three-year health care strategy in earnest in the fall of 2011, focusing on three primary goals: affordability for both the University and its covered employees; employee choice in plan design; and health care consumerism, which involves encouraging employees to be more accountable and have greater responsibility for decisions affecting their own health.

"The primary motivation for this specific initiative is to ensure our employees and their families, know their health risk and have the best care and resources readily available in order to manage those risks. We believe that by managing those risks early, we ultimately can reduce cost and more importantly, save lives," said Susan Basso, Penn State vice president for Human Resources, on the same conference call.

The overall strategy includes four major components: the Take Care of your Health initiative; value-based designs offering low-cost plan options; a tobacco surcharge; and a spousal surcharge. The Take Care of Your Health initiative has three elements, which are necessary in order for individuals to avoid the $100 per month financial surcharge.

"We are asking that individuals complete a wellness profile, complete a biometric screening and fill out an attestation that they will have a physical examination," Basso said. "We see the wellness profile as a useful personal tool in learning an overall wellness score. And it will also provide individual strategies to improve or maintain their health status."

Since the late 1990s, Penn State has offered a voluntary biometric screening to employees that included a cholesterol screening, blood pressure check, body mass indexing, a computerized cardiac risk check and one-on-one interpretation of the test results. In the last decade alone, the University has invested millions of dollars in the program, but "there have never been more than 1,400 participants (in any given year), and unfortunately there has been no positive change in the cost curve," Basso said.

All results of the biometric screening are confidential, and nothing will be shared with Penn State. "Employees do not need to complete a screening at any specific locations. They can download a form from the OHR website and take it to their personal physician for completion and submission to Highmark," Basso said.

Basso explained the second component is an introduction to value-based, low-cost benefit options. One such option is for employees who are diagnosed by their doctor with high blood pressure, high cholesterol and/or diabetes. The program will be a voluntary, opt-in choice that will cover office visits, lab work and medical supplies at 100 percent, related to one or more of these conditions. Employees choosing to opt into this program will be required to enroll or remain in the PPOBlue health plan and will be expected to follow Highmark's medical protocol for their specific diagnosis.

In addition, the University will be providing an account-based, qualified high-deductible plan. "The University will actually seed a health savings account. Individuals who opt in will receive $400 and $800 for a family to help defray deductibles and copays. These health savings account dollars are pre-tax, will accumulate year-to-year, and they would be portable," Basso said.

Because smoking is the leading cause of preventable death in the United States, one in every five deaths each year, Penn State is implementing a smoker surcharge of $75 a month per employee, spouse or same-sex domestic partner who chooses to use tobacco. "However, we are offering free tobacco cessation programming to assist our employees and their dependents. By enrolling in a tobacco cessation program they can actually avoid the surcharge," Basso said.

Another element of the strategy is spousal insurance surcharge of $100 per month. "If a spouse or same sex domestic partner has an option for coverage through his or her employer, we want to encourage them to take that coverage. But if they choose to stay on Penn State's plan -- which they may -- the monthly surcharge will apply," Basso said.

The University of Virginia also has rolled out changes to its health coverage. The changes, announced on the institution's website earlier this week, are wellness-based and include a working spouse provision. According to the website, "Starting Jan. 1, spouses who have access to coverage through their own employer will no longer be eligible for coverage under U.Va.’s plan."

Fischer indicated that Highmark Health Services has nearly 400 clients with structured wellness programs, representing more than 500,000 members. These clients all have wellness profiles as part of their program, and approximately 50 percent include biometric screenings.

There are up-front costs associated with the implementation of wellness programs, as employees complete their biometric screenings and physicals. "But the savings come from stopping the risk from continuing to escalate. And I think I read on a blog, somebody said, 'Well, you know, it's only going to be a 100 people with chronic disease or they're only going find and prevent 100 people from having a problem.' But I can tell you, some of those 100 people have extraordinary expenses," Fisher said. "And, you know, those hundred lives, and I don't know if 100 is the right number or if its 50. But if its 50, it's incredible savings and benefit to those individuals and to the employer."

To view a transcript of the conference call, visit http://www.psu.edu/ur/2013/transcript.pdf and to listen to an audio recording, visit http://www.psu.edu/ur/2013/Call_Audio.wav online.

For more information on the program, visit http://ohr.psu.edu/assets/benefits/documents/TakeCareOfHealthFAQs.pdf and http://news.psu.edu/tag/health-care-initiative online.

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Last Updated August 27, 2013