September 2, 2010

Changes to health plan designed to protect employees

Changes to health plan designed to protect employees

Vanderbilt is seeing some success in its drive to protect employees from the runaway costs of health care coverage.

New policies to be implemented after open enrollment Oct. 1-15 will protect the most vulnerable Vanderbilt employees — those making less than $50,000 per year — from any immediate premium increases. Those who make more will see their premiums rise on a graduated scale, with those with the highest salaries paying the most for coverage.

Vanderbilt, which is self-insured, spends close to $190 million each year providing health care to employees and their families. National health reform legislation allowing employees to add some of their children as old as 26 to their insurance plans will also be costly.

“We pay our own costs,” said Jerry Fife, vice chancellor for administration. “BlueCross and Aetna merely process the claims. We pay those costs for our employees' health care. Employees pay about 19 percent of the cost of their health care through premiums, co-pays, and deductibles. Vanderbilt covers the rest.”

Vanderbilt University Medical Center has made great strides in holding down costs through initiatives such as promoting generic pharmaceuticals and an aggressive drive to improve quality of patient care, said Jeff Balser, M.D., Ph.D., vice chancellor for Health Affairs and dean of the School of Medicine.

“Doing the right thing in health care saves money,” Balser said, “For example, we have saved more than $5 million per year in intensive care unit costs by systematically addressing all aspects of care for patients on ventilators. We know that through the use of information systems that help us get all the details right, every time, we reduce the rate of pneumonia by more than 50 percent in our ICUs. This is good for patients and dramatically reduces cost.”

All benefits-eligible faculty and staff will be required to go online ( Oct. 1-15 to select or waive health care, dental, vision and accidental death and dismemberment plans.

If they do not, they will receive default benefits, even if they currently waive the coverage.

The most notable change to Vanderbilt's 2011 employee health care plan is that health care payroll deductions will be calculated on each employee's Annual Base Benefits Rate — which can be located by logging in to C2HR and clicking on the Job Profile tab.

“Recognizing that pay increases were held last year and were modest this year, we just don't feel that folks who make less than $50,000 can tolerate an increase in premiums,” Balser said.

“As in prior years, employees with higher salaries will absorb an increase. But we've also managed to cut the overall annual increase in our health plan cost to half of the prior year's increase. We're very serious about containing cost and controlling premium increases,” Balser said.

Another key change, which will save Vanderbilt and its employees considerable cost, is a switch from the BlueCross BlueShield of Tennessee P Network to the S Network. What this means is that fewer doctors and facilities will be included in Vanderbilt's plan. Any hospitals and doctors who are not in the S network will cost more and Vanderbilt employees will be faced with a decision about visiting these non-network providers.

Employees are encouraged to check with their current doctors to see if they participate in the S Network, and consider the extra cost involved when seeking care at non-Vanderbilt facilities.

Again, the goal is to improve the medical care employees receive while reducing costs.

“What we hope people will recognize is the importance of seeking care at Vanderbilt,” Fife said. “The first advantage is that Vanderbilt physicians and facilities are second to none. Second, when employees use Vanderbilt physicians and facilities, it allows us to assure that for our own employees, their actual healthcare costs are well managed.”

The long-term goal at Vanderbilt is to “not only bend the curve, but flatten the cost of the health care plan at Vanderbilt completely,” Balser said.

“That's an ambitious multi-year project,” Balser said. “But our goal is not just to help the people making less than $50,000 a year, but to really dramatically reel in the increases in costs for all of our employees.

“We have a laser-sharp focus on this — it is a top priority for VUMC to be a national leader in healthcare, and that includes taking a serious bite out of healthcare cost for our own people.”