Reining in Health-Care Costs: A Little Creativity Can Go a Long Way in Managing the Health-Care Crisis

Article excerpt

Universities have been more creative recently in controlling rising health-care costs for faculty and staff members. It's a defensive move: Premiums for employer-sponsored health insurance have been rising dramatically--premiums went up 59 percent, or five times the rate of inflation, between 2000 and 2004, according to a Health Research and Educational Trust survey. Still, cost-saving options are available, from self-insurance plans to stronger wellness programs to giving employees the chance to have telephone consultations with health-care providers.

Central Michigan University (CMU) has taken the self-funding route in the past two years to help control its medical costs. The school's estimated savings in the first year of self-funding (compared to its previous, fully insured approach) neared $1 million.

CMU is now partnering with the other public universities in Michigan to pursue a collaborative purchasing arrangement. While this initiative is still in process, it promises significant long-term savings potential.

Other strategies include embracing stronger wellness programs and incentives to help change behaviors. A new wellness program model will phase in incentives over three years, explains Lori Hella, director of Benefits and Wellness, Human Resources, at the Mt. Pleasant, Mich.-based institution. The rollout plans look like this:

* In year one, most employees and spouses covered by CMU insurance can take an online health-risk appraisal (HRA). Questions cover family and personal health history, weight management, nutrition, physical activity, stress, skin protection, injury prevention, and other areas--helping to raise self-awareness about behaviors. CMU staff members then aggregate data from the questionnaires and target wellness efforts based on the major health problems and risk factors identified. "The data can also be used to generate return-on-investment and other outcome measures when compared to healthcare cost data," Hella notes.

* In year two, the wellness program will contain four major components (including the HRA). Employees will receive a cash incentive for each component completed. They can pick and choose how many components they wish to participate in, based on their readiness to change behaviors, such as by getting an annual physical and preventive screenings or by exercising more regularly.

* In year three, for those employees who are covered by CMU's self-funded insurance and who also participate in all four of the wellness program components, there will be a gain-sharing model implemented. Any surplus funding from the insurance plans will be shared with employees as a reward for keeping claims costs down as a result of their wellness behaviors.

"While this new program model is just in its infancy for us, we are excited by the prospect of strengthening the correlation between wellness behaviors and health-care costs," Hella says.

But CMU efforts don't end there. A health-care committee provides input to help control benefit costs by educating colleagues, while at the same time helping to recommend plan designs and programs--ones that consider employee needs while helping the university to achieve cost control/savings. The committee consists of representatives from each of CMU's employee groups. Its role is to stay abreast of health-care and benefit issues that impact both CMU and the individual employees, as well as to recommend possible solutions.

The committee has been instrumental in the development of new medical plan designs, which led to movement from traditional plans to PPO models, and from a fully insured to a self-insured funding method.

Other actions have included collaborating on the development of new wellness programs and implementing weekly listserv messages pertaining to wellness topics that correlate with high claims areas, in order to help raise awareness of wellness issues and change behaviors, explains Hella. …