As you may be aware, the University of California is considering restructuring the provision of medical plans for its employees across the ten campuses of the system. These changes would have a dramatic impact upon the health care options currently available to faculty and other UC employees. In brief, the plan is to create a new UC Care HMO program that will replace Health Net and possibly Kaiser. The aim is to generate savings for the university by forcing UC employees into a monopoly healthcare system that will be both less convenient and more expensive to use, as well as cause severe inequities of provision between campuses.
More details can be found in a letter, below, that the CUCFA Board is sending to President Napolitano, asking her to undertake serious study of the manifold consequences of this plan and to make transparent the financial projections driving it. We used this web page to ask faculty to add their names to this letter so that President Napolitano could see how important these health care options are to us. We stopped gathering signatures at the end of the day on April 6th.
Dear President Napolitano,
Faculty are deeply alarmed by administrative plans to restructure the health benefits for all University of California employees. Vice President for UC Health John Stobo outlined these plans at a meeting of the UC Faculty Welfare Committee in February 2015. The idea is to push UC employees currently enrolled in HMO plans into a new UC Care HMO involving the UC Medical Centers and (where these are lacking) by contracting with a network of private medical providers. This would be achieved by eliminating the existing healthcare plans that the vast majority (70%) of UC faculty and employees currently use—first, Health Net, and then at some future date, possibly Kaiser. We applaud our senate faculty welfare committees for questioning this plan. We believe this is a fundamentally bad plan for many reasons.
- Employees should not be forced into a monopoly system that denies a competitive choice of healthcare plans. That UC Care and the UC Medical Centers are managed within the same UCOP administrative portfolio gives rise, at the very least, to the appearance of a conflict of interest in UC’s safeguarding of employee health and welfare.
- The proposed plan will compound the unequal access to healthcare of faculty and employees across the UC system already introduced by the replacement of Anthem Blue Cross PPO with UC Care PPO last year. Short of traveling great distances to a UC hospital, those at UC campuses without medical centers – Berkeley, Merced, Riverside, Santa Barbara and Santa Cruz – let alone those who work at remote field stations, would be almost entirely dependent on UC Care’s ability to create an adequate, local network of private providers. But experience with UC’s venture into the creation of its own PPO so far, which among other things, failed to provide for Tier 1 coverage at the only full service hospital in Santa Barbara, does not inspire confidence in the contracting competencies of UC Care’s administration.
- Even for employees at UC campuses with medical centers, it is not clear that a UC Care HMO would be as extensive, reliable, or cost effective as what is currently offered by Health Net, let alone Kaiser. According to UCOP’s own survey, only 12% of UC Care users are “very satisfied” with the plan, compared to 25% for both Health Net and Kaiser. All those with Kaiser, and probably some with Health Net, would lose long established and, in many cases, essential relationships with their doctors. Moreover, should the use of Kaiser medical facilities cease to be an option, it is also unclear whether the remaining nearby medical providers would even be able to absorb the 40,000 UC employees and their families enrolled in that plan. Yet if Kaiser remains an option, it is unclear that a UC Care HMO that only replaces Health Net will attract enough younger, healthier UC employees to subsidize UC Care. This is presumably why VP Stobo has suggested that the removal of Health Net as an option may only be the prelude to the eventual elimination of Kaiser.
- The removal of Health Net, not to mention the possible elimination of Kaiser, will disproportionately affect lower paid, younger faculty and UC employees who enroll in them in larger numbers. With UC Care as the only option, they will almost certainly be forced to pay higher premiums, co-pays and deductibles. This will only further exacerbate what UCOP’s own total remuneration study recognizes as the uncompetitive nature of UC faculty compensation. Without UC’s traditionally strong benefits to offset our below-market salaries, faculty recruitment and retention may become enough of a problem to erode UC’s international standing as a whole.
- While we appreciate the University’s attempts to reduce its expenditures on employee healthcare, no data has been presented to demonstrate that a new UC Care HMO will deliver long-term savings and greater efficiency. The prospective UC Care HMO entails switching from UC offering fully insured health plans, where the financial risk is borne by others, to a ‘self-funded’ model in which UC accepts the risk and is liable for any losses. The wisdom of UC’s expansion into an insurance business at a time of great pressure on UC budgets requires much more transparency and greater justification.
- For several years, changes to our health plans have been announced with minimal consultation and little warning. The management of these changes has been chaotic and many have experienced significant distress in losing long-term providers and trying to find new ones. The consequences for faculty morale and sense of shared governance have been considerable.
We ask that you weigh carefully the consequences of this plan. Any restructuring of healthcare should only be undertaken after extensive study of its impact on faculty and employees, detailed financial projections that are made publicly available and wide consultation with all UC employees. Faculty stand with other UC employees in demanding that we continue to enjoy a choice as well as equal access to quality and affordable healthcare.
cc: Dwaine Duckett, Vice President for Human Resources
John Stobo, Senior Vice President, UC Health