University Times

With the U.S. medical insurance industry changing at a near-frenzied pace, panelists at yesterday's University Senate discussion of Pitt employee health benefits would not predict how those benefits will shape up when the University's current, exclusive contract with Highmark Blue Cross-Blue Shield expires at the end of June 1998.

"I don't think any of us right now are prepared to sit here and tell you how we're going to design an RFP [request for new proposals from health insurers] based on what we think the health care region will look like in the next three months, six months or in the next year," said Ronald W. Frisch, interim associate vice chancellor for Human Resources and one of the three panelists. "I cannot tell you what mergers, acquisitions, financial pressures and government regulations are on the horizon." According to Frisch, the Pitt administration has not decided yet whether to seek bids from insurers other than Blue Cross when the University negotiates its next contract.

Nor, he said, has the administration even committed to requiring that any health insurer of Pitt employees use University of Pittsburgh Medical Center System (UPMCS) facilities and personnel — despite the fact that one of the main reasons the administration dropped HealthAmerica in 1995 was that company's reluctance to refer its subscribers to UPMCS.

"Will the senior administration be making those decisions [regarding UPMCS and seeking bids from other vendors] in the upcoming months? Of course. But to my knowledge, they haven't been made yet," Frisch said.

George Michalopoulos, interim dean of Pitt's School of Medicine, and Department of Medicine Chairperson Edward J. Wing urged members of the audience (which included Chancellor Mark Nordenberg and other top Pitt officials) to keep in mind that medical faculty will suffer if the University cuts a new health insurance deal that excludes UPMCS, which is a separate corporation from Pitt.

"Whatever may appear in the newspapers about who owns it [UPMCS] or who runs it, it is our medical center. It's a place where 1,200 of our faculty work, think, breathe and do research," Michalopoulos said.

Wing recommended that Pitt require potential health insurers here to describe in detail how they will relate to UPMCS.

n Besides Frisch, panelists at the Senate meeting — pointedly entitled "W(h)ither Employee Health Benefits at Pitt" — included health care experts Mark Peterson, an associate professor in the Graduate School of Public and International Affairs, and C. Michael Blackwood, president of The Pilot Group and former president and CEO of HealthAmerica, Pennsylvania, Inc. Moderating the discussion was Nathan Hershey, professor of health law in the Graduate School of Public Health and vice president of the University Senate.

Blackwood was head of HealthAmerica during the 1994-95 period when the Pitt administration engaged in a long and rancorous debate with faculty and staff groups over the wisdom of dropping HealthAmerica and making Blue Cross the sole provider of medical insurance for University employees.

Peterson noted that the United States is the only advanced, industrialized democracy with an employer-provided health care system. Other such countries have a universal health care system that is provided by, or at least directed by, the national government.

About half of Americans with employer-based health insurance have just one plan, Peterson said. At the other end of the spectrum, he said, is his former employer, Harvard, which offers its faculty and staff a choice of nine plans, largely independent of one another. Pitt is closer to the "no-choice" end of the spectrum, according to Peterson.

"We have four plans, to be sure, and they are in many ways quite different from one another. But they are all Blue Cross-Blue Shield plans. That is not what most of us in the health policy community view as a choice in a competitive marketplace," Peterson said.

Frisch disagreed. Based on his 27 years' experience working with employee health insurers in five states, he said, Pitt's current health insurance options represent "a decent plan" at a competitive price. "There are better coverage plans. I can tell you there are also far worse coverage plans," just as there are lower- and higher-priced plans, Frisch said.

Although Pitt contracts with just one health care vendor, the University offers four distinctly different plans, he said: Comprehensive Deductible, which offers some 1,300 Pitt employees full freedom of choice in selecting their physicians; SelectBlue, which provides network physician coverage as well as out-of-network coverage for about 1,500 employees here; Keystone Blue, a managed care option with about 2,500 Pitt subscribers; and the University Health Network (UHN), a preferred provider network with some 1,400 University members.

Pitt no longer allows its employees to join UHN as new subscribers because Blue Cross plans to eliminate the plan. Everywhere but at Pitt, UHN will disappear as of July 1997, but Blue Cross has agreed to continue offering UHN here until the Pitt contract expires at the end of June 1998.

Frisch cited that as one of the concessions Pitt has wrung from Blue Cross since the current contract went into effect. Because the University is such a large employer, "we carry a lot of clout, and we spend a lot of time manipulating that clout," he said. Since July 1995, "we have not stopped intervening, and on an almost daily basis — negotiating and challenging our medical providers as well as all of our benefits providers" for better terms, Frisch said.

Frisch said Blue Cross has agreed, at Pitt's insistence, to provide a much-improved tracking system that enables the University to make sure it pays appropriate fees for services. Also, Blue Cross assigned one of its senior customer service teams to Pitt.

Most significantly, the University administration insisted on guaranteed caps for the second and third years of its contract. As a result, Frisch said, Pitt will pay $22 million this year to Blue Cross for coverage that is costing Blue Cross $30 million, according to both the insurance company itself and to an outside auditor hired by the University.

Blackwood, in his presentation, outlined a sequential, technical process that he said Pitt should follow in negotiating its next health insurance plan. "This needs to be a terribly data-driven process," with the potential vendor or vendors providing detailed data on price, service and quality, Blackwood said.

Frisch replied that Pitt's administration has, since July 1995, been receiving exactly that kind of data from Blue Cross and will demand such information from any other potential vendors. Frisch also said he believes Pitt senior administrators are committed to "an open, free exchange" of health insurance information with the University Senate benefits and welfare committee and the Staff Association Council.

Health services administration professor Gordon MacLeod, a member of the Senate benefits and welfare committee, said Frisch has "done an excellent job, going as far as he can go. But it's been very, very difficult [for the committee] to work with Blue Cross." One of the committee's major complaints, MacLeod said, is what he called Blue Cross's lack of an effective grievance procedure that would enable subscribers to resolve grievances directly with the insurer, rather than going through Pitt's Human Resources office.

Frisch said his office has been pressing Blue Cross for such a grievance system, one that would surpass regulatory agency standards. "We have been unsuccessful in moving to the next level so far, but it [the grievance system] will be an issue in our forthcoming negotiations," Frisch said.

n This month, Pitt mailed benefits information to employees for the open enrollment period for the fiscal year that begins July 1. Faculty and staff with questions regarding their summary of benefits can call the Benefits office at 624-8160.

— Bruce Steele