New on today's
Bulletin Board

Northern New Mexico Chapter of ARMA holding Spring Seminar on April 25

Monday, April 22, 2002

UC health-care programs under review

Costs expected to rise

The University of California is reviewing its health-care programs in light of the relentless increase in health-care costs happening nationwide. UC officials expect there will be significant changes in plans for UC employees in the near future. Los Alamos employees can expect increases in their share of costs for health care if projections of the potential increase in costs of health-care plans come to pass.

Newspapers recently have noted a telling indicator of the state of the nation's health-care system. An article in the San Francisco Chronicle said that the California Public Employees' Retirement System received health-care bids for 2003 that proposed increases ranging from 15 percent to 41 percent. CalPERS – representing about 1.2 million state employees, dependents and retirees – often can negotiate the best deals with health-care providers because of its size and leverage, so other purchasers view CalPERS' plan costs as a marker.

Syndicated columnist David Broder said, "When the single most important player in the showcase of managed care sees its bills going up at that rate, it says unmistakably that time has run out on this dysfunctional, disjointed thing we call health care."

UC Office of the President officials are involved in a process to examine how best to respond to the pressures of rising costs while maintaining a health-care program that preserves access to quality health care and supports the needs of participants. This examination and its outcome will affect the entire UC community. For Los Alamos, UC officials also are very cognizant of the potential for health-plan changes to impact the local New Mexico communities and providers.

"It's too early to know specific details about possible plan options and costs," said Michele French, who manages health-care benefit programs for the UC system. "What we do know is this: Change is inevitable, there is no single, magic solution to the problem, all parties need to work together to address the need for change, and all will have to contribute to the eventual outcome."

UCOP has established an Executive Steering Committee, which includes the Lab's Rich Marquez, associate director for administration, to provide sponsorship and oversight of the effort at Los Alamos. A core team, including Helga Christopherson, Human Resources (HR) director, and Judith Kaye of the Quality Improvement Office (QIO), will help to establish strategic direction strategies and will manage the overall project.

"One of the first things we and UC intend to do is to gather input through interviews, focus groups and surveys," Christopherson said. "Those efforts will start next month, and will include employees, retirees and other plan participants, providers and community leaders, and our NNSA and Lab management.

"We also intend to work with the Community Health Care Roundtable for advice on how to manage the changes we will likely undergo," Christopherson said.

At recent presentations to Lab employees, retirees and the health-care roundtable, French described some of the trends that are impacting health-care plans locally and nationally. For viewgraphs of French's presentation, click here.

Experts are forecasting double-digit percentage increases in health care costs nationally. Pharmaceutical costs and usage drive a significant part of the increase, as does the overall aging of the population.

For Los Alamos, key drivers of continuing increases to the cost of the Lab's health-care plan are rising service costs and increased use of emergency room services, outpatient diagnostic services and prescription drugs. Changes to the Lab's health-care plan to hold down costs have not been sufficient to offset those key trends.

Data show that although the Lab's HMO health-care plan is expensive compared to others in New Mexico, the employee's share of HMO plan costs is the smallest of any public-sector entity in the state.

"We cannot continue the status quo," Christopherson said. "We are committed to providing cost-effective health-care options, but the cost situation is driving us toward major changes. Working with UCOP, we hope to manage those changes to achieve the greatest benefit to all the parties concerned."

Christopherson and UC officials said the Lab and UC will communicate regularly in the coming months with plan participants and the community at large on the health-care issue and the need to work together to address the change process.

--John R. Gustafson

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