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May 15, 2003


There is probably no activity at the University less connected to the University Senate than the hiring and firing of coaches of the University’s intercollegiate athletic teams. Many in the University community are interested in the intercollegiate athletic program, particularly the outcomes of the contests of the two revenue-producing teams, men’s basketball and football, and in their coaches. But selection of, and negotiation with, the coaches are strictly administrative activities. This is not surprising. Big-time athletics, meaning Division I men’s basketball and football, are business and entertainment, attract much media scrutiny, and have nothing to do with the academic mission of the University.

There were thousands of words in the newspapers in March and April devoted to the attempts to keep Coach Ben Howland from leaving Pitt, the search for a successor once it was clear he was moving to UCLA and the hiring of Jamie Dixon. The newspaper sports columnists sought to give the impression that they had inside information. They generally were critical of Pitt’s attempts to retain Howland, the search process for a successor and the selection of Dixon as coach. Some writers called Dixon unsuitable, saying the administration would regret its choice.

I doubt that the media had any more knowledge about Howland, the search and Dixon’s selection than did I and most readers. Much of what was written was critical but it made for entertaining, if not enlightening, reading.

Pitt’s administration is usually secretive about its plans. In seeking to retain a coach and in searching for a new coach there are obvious reasons why secrecy is essential. One newspaper article, reporting that Executive Vice Chancellor Jerry Cochran was not interested in becoming athletic director, undoubtedly was a source of amusement for all who understand Pitt. Such a position change would be equivalent to the Pittsburgh Post-Gazette’s editor becoming sports editor and writing a column.

Turning to more consequential matters, this is the season when University employees make their health plan benefit enrollment decisions for the coming year. For 2003-04, four health benefit plans are offered, as well as vision and dental services programs, to which the University makes no financial contribution.

Administration and staff, and faculty and staff representatives acting through the medical advisory committee, which includes members of the University Senate benefits and welfare committee, devoted much time and effort to assessing features that might go into health benefit plans. Everyone has been aware that health insurance plan costs would be increasing for the coming year and that new plans most likely were in the offing, given fiscal realities. A variety of plans are being offered, requiring choices by employees. Those involved with the construction of the new plans deserve credit for their efforts; I am certain a great deal of hard work was done by those folks.

I have been concerned about the likely cost of the new health benefit plans because of possible serious, adverse effects on low-income employees. Review of the various plans offered reveals that the least expensive plan in terms of monthly premium cost to the employee, depending on the volume of services the employee and his/her family members receive, and from which providers, could turn out to be more costly than the HMO-style plan in the long run. This is due to the deductibles and co-insurance requirements under the plan with the lowest monthly premium cost.

Consider the personal health cost data of a low-salaried individual employee who is in the current HMO plan. This employee has had no monthly premiums withheld and her out-of-pocket costs for a yearly physical examination, and several medications, including two taken daily, will total $253 for the year. The same employee, assuming she receives the same services and medications in 2003-04, with the new HMO-style plan will pay $420 per year in premiums, and with higher drug co-payments, will now incur a total personal expense of at least $1,095 per year. In short, this employee will be paying about $800 more of her own money with the new HMO-type plan than she is paying in the current year. Assuming a total tax rate of 20 percent (federal, state and local income taxes, plus FICA), this employee would need a salary increase of more than 5 percent in order to break even.

This is not meant to fault the administration for the health benefit plans being offered and for the amount of its contributions to employee premiums. It is to highlight the impact of rising health care costs upon the public, including Pitt employees.

I receive daily an Internet publication that briefly describes high-profile events in the health industry. Nearly every issue contains a piece about increased profits of insurance plans and hospital systems and the generous compensation paid to current executives of such entities, and to executives leaving these organizations as severance pay, often after being ousted because of poor performance or fiscal improprieties. This publication also contains reports of the enormous profits of the pharmaceutical industry. Anyone who watches television is well aware of the extensive advertising of brand-name drugs. Many of these drugs are for conditions that require daily doses, thus providing a continuing expense to the user and a continuing revenue stream to the industry. Sadly, the University and its employees and their dependents are largely at the mercy of the big players in the industry.

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