UNIVERSITY PARK – For nearly six months, a dedicated team of faculty and staff led by Keith Crocker, William Elliott chaired professor of insurance and risk management in the Smeal College of Business, has researched, benchmarked and evaluated a trove of information about health care insurance.
Charged officially as a task force on Nov. 18, 2013, the group benchmarked health-care benefits programs at eight other Big Ten universities, along with Temple University and the University of Pittsburgh; assessed alternative approaches to reduce the rate of increase of the University’s health care costs and to improve the health status of employees and their dependents; and investigated improvements to communicating about changes and benefits.
While the task force report, which will be presented formally to the Faculty Senate on April 29, identified several themes and recommendations for further investigation, the members decided against including a list of “action items” because of the uncertain, unstable health care landscape in the state and nation, brought on by several factors including an increase in chronic conditions, the under-supply of primary care physicians, a shift from in-patient to out-patient care, and phased-in implementation of the Patient Protection and Affordable Care Act.
As stated in the report, “Given the limited time provided to craft this report, and considering the complex and often subtle tradeoffs that will be faced in any formal evaluation of options, the task force can do no more than set the stage by providing a framework for the detailed analyses and discussion which must inevitably follow.”
In its report, the task force articulated its goal from the outset as being “to examine the health care alternatives facing the Penn State community, and in the process, to consider the costs to employees of various policies, as well as the associated benefits to the University.” The group did not set out to make specific policy recommendations, but instead to “provide a rigorous evaluation of the alternatives that will be of use to decision-makers.”
The academic research subcommittee found growing evidence that High Deductible Health Plans (HDHP) such as the one offered at Penn State, reduce overall expenditures in the short-term. The task force also explained that studies on the longer-term effects of HDHPs are hindered by relatively short follow-up periods. In addition, evidence on clinical outcomes has been non-existent due to the inability to track insurers over a long enough period of time. “It does seem, however, that exempting preventive services from cost-sharing, as is now required by the Affordable Care Act, will lessen concerns that HDHPs might impede efforts to prevent chronic disease or detect it at its earliest stages,” the task force report indicated.
The task force reports its review of existing research concerning the impact of Workplace Wellness Programs (WWP) and found that workplace wellness programs appear to have a small, but statistically significant, impact on a few employee health behaviors or health risks such as smoking cessation and weight loss. They write that the long-term effects remain unclear. The real cost-savings, the report says, “seem to arise from intensive disease management rather than lifestyle management programs.” The University’s current health-care plans include value-based design options that provide high-value services such as office visits, laboratory services and tests at no cost to individuals who are diagnosed with high blood pressure, high cholesterol or diabetes.
The task force also found that while some of the other institutions use a form of salary-based indexing for premium contributions by employees, Penn State’s method of using a flat percentage across all salary levels is unique. The other institutions who use salary-based contributions use a methodology that either decreases the percentage of contribution as salaries increase or decreases the employer’s contribution as salaries increase. In addition, the task force found that Penn State is the only university to assess surcharges for spouses/partners who have access to coverage through their own employer, and for those using tobacco.
“The task force report delivered by the joint Faculty Senate-administration committee pushes forward the important need for continued study of this issue. It was a very knowledgeable group that examined our health care challenges and their input is valuable,” said Susan Basso, Penn State’s vice president for Human Resources. “Some of the recommendations presented are avenues that we have already been exploring, while other recommendations will require more study to determine their feasibility and cost-effectiveness.”
In its report, the task force provided many alternatives for the University to examine in greater detail, including the following:
— Evaluate the use of a comprehensive data warehousing infrastructure to adequately manage annual healthcare spending. Most, if not all, alternatives that the task force has reviewed will require comprehensive data analysis to better inform decision makers about the options that could make an impact and be pursued. The task force report says that any such database, “would adhere to the federal government’s privacy and confidentiality requirements for handling personal health information under the Health Insurance Portability and Accountability Act (HIPAA), and would permit analyses in a timely and systematic way to support and guide decisions regarding contracted vendors, prices paid to providers, the quality of care received by beneficiaries, etc.”
— Assess the value of current provisions of retiree benefit options compared to the Medicare marketplace, which could provide optimal benefit design and out-of-pocket expenditures for beneficiaries.
— Attempt to identify health care providers that serve significant portions of the Penn State population and engage in discussions about preferred arrangements. The task force indicates this could result in more favorable pricing, jointly developed care management and quality programs, or centers of excellence for more complex treatments and procedures.
— Assess the value the University is receiving from its current pharmacy benefits manager by putting the pharmacy benefit out for bid separately (“carving out”) from the current contract with the third-party administrator.
— Assess the market competitiveness of the current administrative services fee paid to the current third-party administrator by developing a request for proposal to competitively bid for third-party administrator services.
— Consider the use, where appropriate, of reference-based pricing that is a strategy designed to generate convergence in the market to a fair price for clinical services such as diagnostic tests, durable medical equipment or laboratory tests.
— Work with payers to implement bundled pricing in some settings, which is a package price for a bundle of services or an episode of care. The task force said such pricing “eliminates the incentives inherent in a fee-for-service environment to bill for unnecessary treatment.”
— Establish on-site health clinics and expanded primary care at campus locations to increase access to urgent and primary care services.
— Evaluate the current disease management program against alternatives such as complex case management or gaps in care programs, second opinion services or traditional disease-management programs.
— Provide better information and tools for beneficiaries to help navigate increasingly complex health systems. These could include Choosing Wisely, an initiative of the American Board of Internal Medicine Foundation. Another would be the provision of a comprehensive consumer transparency tool to provide more and better information to beneficiaries on provider quality and price.
In addition to Crocker, the members of the committee are:
— Martha Aynardi, director of Academic Support and Projects and senior lecturer at Penn State Berks. Aynardi is responsible for oversight of Career Services, the Learning Center, and Academic Advising. She is a biologist and current chair of the Joint Committee on Insurance and Benefits and former Chair of the Senate Committee on Faculty Benefits.
— Jo Anne Carrick, coordinator of the Nursing Program and assistant professor of nursing at Penn State Erie. Carrick is responsible for coordination and management of the associate degree in nursing. She is a registered nurse and current vice chair of the Senate Committee on Faculty Benefits.
— Joe Doncsecz, associate vice president for Finance and corporate controller. He is responsible for oversight of the University’s system of internal controls, facilitation of all external financial and accounting control audits, and leadership of the University’s cash, debt and risk management functions.
— John Harwood, associate vice provost for Information Technology, and associate professor of information sciences and technology and English. His administrative focus is on strategic planning and the assessment of information technology at Penn State.
— Susan Johnson, manager of planning and operations in the College of the Liberal Arts. She has responsibility for strategic planning and a broad range of college operations, and a background in financial services and health-care sectors.
— Robin Oswald Haas, director of the Employee Benefits Division in the Office of Human Resources. Her responsibilities include development, recommendation and implementation of University-wide strategic benefit initiatives for faculty and staff including employer-funded and voluntary benefits, retirement, workers’ compensation, absence management, health initiatives, educational benefits, and occupational medicine.
— Dennis Scanlon, professor of health policy and administration in the College of Health and Human Development. His research interests include consumer information and health care markets, health insurance and HMO plan performance, measurement of quality.
— Rachel E. Smith, University budget officer. Her responsibilities include assisting the president and the Budget Task Force in developing, implementing, monitoring and controlling the University’s annual operating budget; support for strategic planning efforts; and presentation of institutional data for various analyses and reports.
— S. Shyam Sundar, distinguished professor of communications and communications arts and sciences. He is co-director of the Media Effects Research Laboratory and specializes in advertising, public relations, and media studies. One of his many interests is health communication.
— Jeremy Warner, security and facility manager at the Palmer Museum of Art. He is chair of the University’s Staff Advisory Council, which acts in an advisory capacity to the administration; explores issues, policies, and practices that impact staff; suggests revisions to policies and new initiatives, and advocates for staff welfare and development.
— Carol Weisman, distinguished professor of public health sciences and obstetrics and gynecology at the College of Medicine, with a joint appointment in the Department of Health Policy and Administration in the College of Health and Human Development. She also is associate dean for faculty affairs in the College of Medicine. She is a sociologist and health services researcher.
— Robin Wittenstein, director and chief operating officer of the Penn State Hershey Health System. She oversees Penn State Hershey’s network of clinical and academic affiliate hospitals across central Pennsylvania as well as the Health System’s interests in the Pennsylvania Psychiatric Institute, Penn State Hershey Rehabilitation Hospital, Hershey Outpatient Surgical Center, Hershey Endoscopy Center, and other collaborative, health-related ventures.