About this series
Today the University Record presents the second installment in a three-part series exploring the rising cost of health care.
Part 1: Setting the scene >
Part 2: The University perspective
Part 3: Doing our part one person at a time >
The University Perspective
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Human Resources
Four years ago, under the direction of President Mary Sue Coleman, the University launched an initiative intended to “promote health and healthy living in the face of tremendous social and cultural pressures that foster unhealthy living and poor health,” and “contain health care costs that have risen to crisis levels.” This was the charge presented to an initial task force that was asked to address how the University, with its faculty and staff expertise, outstanding health system and access to other health resources could design a program that would promote a culture of well-being at the University while addressing the problem of rising costs.
Michigan Healthy Community, now a permanent initiative, has several programs that include encouraging employees to exercise more, choose better foods, take care of their bodies and minds, and manage their diseases.
In part two of our series on making sense of rising health care costs, Dr. Robert Winfield, chief health officer, and Laurita Thomas, associate vice president for human resources, explain what institutions — this one and others — are doing to contain costs while creating a culture of health.
Record: What are employers, including higher education employers, doing to solve this problem?
Winfield: Some of the largest and most innovative employers who recognized that escalating health care costs were very important to their organization’s viability have created health and well-being programs that try to keep the work force healthy, or healthier, and to contain health care costs by helping employees stay well, and also helping employees make wise health care decisions. Examples of these companies include Johnson & Johnson and Pitney Bowes. They have been leading the effort, and we, along with a few other universities, began to embark on this through President Coleman’s Michigan Healthy Community initiative. We have been working for the last three years on increasing physical activity, improving ergonomics in the workplace and improving recognition of ways that managers can help their employees stay healthy. We now plan to enhance our efforts so that we have targeted programs that faculty and staff can engage in for reducing the specific health risks they have as individuals.
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For example, if somebody is not physically active, we want to be able to encourage more activity. If someone has high blood pressure, and it is not well controlled, we want to be able to help them address why they haven’t been able to get it under control and help them work more effectively with their provider of choice. To do this, it is necessary to find out what barriers they find to using the lifestyle changes or the medications they need and help them to do a better job of reducing their risk. Those of us committed to reducing the health risks of faculty and staff are working on new programs that will be introduced over the next 12 months to help employees who want to inventory their risk factors and develop plans to address them on an individual basis.
In addition, we’ve been looking at innovative ways to help people make the best choices for their health and health care through their insurance benefits. A new concept called value-based insurance design is demonstrated by the Focus on Diabetes pilot program that was started over a year ago by Michigan Healthy Community, where individuals with diabetes have their co-pay reduced or waived. This pilot program was designed to encourage the use the medications that we know will improve health and reduce the complications of diabetes. We anticipate that the short-term cost of covering co-pays could provide long-term value by preventing complications and related diseases that occur when medications are not regularly taken because they are not affordable. We hope to expand this concept over the next few years.
Record: Where else are we headed with the initiative?
Winfield: One other important aspect of the Michigan Healthy Community programs is an effort to improve disease management. For example, if somebody identifies himself or herself as having chronic illness such as diabetes, depression or heart failure, there are programs offered through our health plans that will provide a nurse or a team that can work with them to help reduce their difficulties with their illness.
Another aspect we are working on is to enhance the way that we support employees with illnesses or injuries. For example, we’re bringing in more nurse case managers to Work~Connections and adjusting the approach to make more assistance available for employees with complicated situations to get help in navigating the health care system and get back to work safely.
Record: Let’s discuss the dollars at stake: What is happening right now and what you are projecting in terms of cost to the University?
Thomas: Currently, health care costs continue to rise. The big picture of these costs includes medical, pharmaceuticals, dental and other costs. For the University, our rate of increase has been between 8 and 10 percent a year, and that’s been below the national average. Yet, our state appropriation has been declining, and the challenge to the University to fund our overall health care bill without sacrificing our core missions is very significant.
We intend to meet the challenge, and to stay a leading employer that will continue to compete for extraordinary faculty and staff. Benefits are an important part of the equation in remaining competitive. We simply have to be very thoughtful about the options we have to contain costs and use the dollars available to us in ways that add significant value.
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Most employers share the cost of monthly premiums with employees. As you know we implemented near-universal premium sharing with our faculty and staff in 2005 when those with single-person coverage began making a contribution toward their medical premium. It’s been several years so one step we must take is to evaluate whether our current ratio of premium contribution is still what it should be. We’re also looking at ways that other employers have invented wise choices, and we’re investing in wellness because we believe raising the baseline of good health and prevention activities will help contain costs in the long run.
Record: Are you thinking of incentives for participation?
Winfield: Absolutely. The work that other employers have done clearly shows that participation is critical. The best programs have participation rates of 80-90 percent, which is our long-term goal. In order to get to that level of participation most employers have used incentives to encourage people, so that if you participate you are either given a reduction in your health care premium or you are given some kind of an incentive reward in terms of cash, products or services. We will be considering using some types of incentives in the future to help us reach participation rates that can have real impact on our overall costs and health.
To comment on this series, send an e-mail to [email protected].
