Penn State views providing its employees with a high-quality benefits package that is both competitive in the marketplace and provides some control over their spending as an integral component of attracting and retaining talented faculty and staff.
However, health care costs continue to escalate faster than consumer inflation, and it becomes more challenging to find ways to balance the amount the University can continue to spend, with keeping medical benefits competitive and affordable for employees.
The anticipated rise in medical costs — which grew by 6.2 percent for Penn State in 2015 and could increase for employers by another 8 percent this year, according to industry experts — has the University examining how best to manage the growing expense of providing high-quality medical benefits for its employees.
“Doing nothing to our benefit plan designs and cost sharing for 2017 could potentially cost the University $14 million,” said David Gray, senior vice president for Finance and Business, and chair of the Health Care Advisory Committee. “But we’re not going to simply push the cost on to employees. If we reasonably share the cost burden between the University and the employees, exhibit prudence and seek efficiencies without compromising quality of care, continue to educate and create understanding, and provide the tools and resources we all need to create awareness and better manage our health, together we can reasonably manage the increase below the anticipated market trend.”
In April, the Health Care Advisory Committee (HCAC) considered options for Penn State’s 2017 medical benefits plan design and cost sharing. Recommendations were shared for consideration and feedback with the Joint Committee on Insurance and Benefits, the Senate Committee for Faculty Benefits, and the President’s Council for consideration, and will be shared with the University Staff Advisory Council later this month.
“The recommendations put forth by the HCAC included recognition and consideration of the 'Principles for the Design of Penn State Health Care Plans,' which was approved by the Faculty Senate in March, as well as the principle of fostering and promoting a culture of health, which is a priority in the University’s 2016-2020 strategic plan,” Gray said. “This principle calls for plan features and programs that encourage a healthy community, promote healthy choices and activities, and support the consistent and effective management of health risks."
The University believes it is well-positioned to play an integral role in achieving a healthy community by infusing health into everyday operations and business practices.
Penn State Health Care Partners
A strong example of effectively managing health risks is the University’s participation in a clinically integrated network with Penn State Health Care Partners’ (PSHCP). Penn State employees and their adult dependents living in Centre County may receive calls this summer from PSHCP’s care managers as part of a free and innovative pilot program to provide employees and their families access to broader resources to better monitor and manage health conditions, especially chronic conditions, with the goal of mitigating progression to more serious illness and, consequently, curtailing rising health care costs.
Data warehouse
The creation of a data warehouse will allow Penn State to develop more precise strategies through data-driven decision making. A data warehouse can be used to examine and compile information about diagnosed chronic conditions, such as diabetes, to explore patterns that could identify areas for better management of the condition in that population. For example, to what degree is the group seeing a physician and filling necessary prescriptions? Are they having regular assessments, as appropriate, to monitor their condition? Once this information is known, outreach to individuals with chronic conditions through Penn State Health Care Partners is one strategy to help employees better manage their conditions and receive free, private consultation and guidance. Because data is presented on an aggregate basis, with no specific member data provided to the employer, employee privacy is maintained, and Penn State will not know any information about an individual employee’s medical condition or their treatment history.
Cost transparency tool
Providing a cost transparency tool for health plan subscribers is another component that should help employees understand the costs for all services, whether they are preventive, diagnostic, in-patient, out-patient, or other professional services. As an example, knowing which services are covered as preventive at 100 percent versus those that may require out-of-pocket expenses for diagnostic tests can be found through the tool, allowing employees to make better informed economic and quality decisions on where they want to receive their care. The current preventive schedule is available here.
Explore tobacco-free campuses and provide incentives for employees who demonstrate tobacco-free lifestyles
From a health standpoint, a tobacco-free campus is to the benefit of all employees, and should be a laudable goal. Depending on the study, the additional medical claims a tobacco user incurs to a health plan each year is between $1,000 and $3,000 annually. To help defray the cost of additional claims that tobacco users incur, Penn State could consider plan design and cost-sharing differentials for tobacco users, promote the tobacco-cessation products that are available through both the PPO Blue and PPO Savings plans, and establish a tobacco-free University with expanded cessation support for employees.
Penn State Health and Wellness Center
On Jan. 1, 2017, the Penn State Health and Wellness Center will open on the University Park campus and provide convenient service for episodic illness. Expansion of the services to include health and wellness education is also planned for the center in late 2017. A future opportunity that will be explored is extending the wellness clinic services model to other Penn State campuses.
Laboratory services
Penn State is exploring opportunities to provide laboratory testing in convenient locations on or near all campuses at a reduced cost to both the University and the employee. When laboratory tests are performed at a physician’s office or hospital, the costs can be inflated by 50 to 700 percent as compared to fees at facilities that provide these specialized services. Having labs performed at stand-alone facilities are more cost-effective. Use of the stand-alone facility, however, would not be mandatory for employees, but would provide significant cost-savings to both employees and Penn State.
Look for more information about your 2017 benefit options in late summer. Updates throughout the next several months leading up to benefits open enrollment will continue to be provided through Penn State Today, the Office of Human Resources website and a dedicated microsite for the 2017 medical benefits plan design, as well as by traditional mail with benefits open enrollment information.