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Thursday, October 10, 2013

Thursday, October 10, 2013

The Plot Thickens on UC Care in Santa Barbara

The Chronicle of Higher Education has now run Don Troop's story on the UC health care changes, "Changes in U. of California's Medical Plans Worry Some Employees."  The piece reports information from UCOP finance head Peter Taylor that may be new to most people--it was to me at least. 

Mr. Taylor is quoted as saying that offering UCSB employees the same plan (UC Care Tier 1) "'would raise individual premiums systemwide by $323 a year. That's asking 18,400 non-UC-Santa Barbara employees to pay out of pocket tremendously so that about 600 Santa Barbara employees would have access to this,' he said. 'We're trying to find a balance. We don't have an inexhaustible supply of money, and yet we want to provide a solid benefit to our faculty and staff.'"

Does this mean that Cottage Health Systems wanted $5.94 million more than UC and Blue Shield were willing to pay? This comes to about $10,000 extra per affected employee.  Does it mean that actuaries expect that each of the 600 UCSB employees will need an extra $10,000 a year apiece to cover the difference between the Tier 1 care available apparently everywhere except at the Santa Barbara campus and the Tier 2 that they will have?  I will ask.

We do seem now to have a quantification of the gap between Cottage and the University.  We also have a somewhat different tone regarding the Santa Barbara campus.

Mr. Taylor's comments seem to recast UCSB employees, who defined themselves as seekers of a cross-campus equity of which they have been deprived, as demanders of subsidies from their UC colleagues elsewhere.  I pointed out in the post that cross-campus equity is not a subsidy, since UC Care is being underwritten by UC medical facilities and personnel in ways that are complex in accounting terms, and because UC has "subsidized" other non-medical campuses in providing them with local Tier 1 facilities.  Any framing of UCSB as seeking special privileges is inaccurate. 

This framing also misstates the nature of insurance pools, which are all about the mutualization of common costs.  This was a driving principle behind the Affordable Care Act, which outlaws the exclusion of people on the basis of a "preexisting condition."  Insurance providers are now not allowed to throw less healthy people out of health care pools because they've identified them as having higher individual costs.  Similarly, UC shouldn't throw a campus out of UC Care Tier 1 because their local health facility has higher costs.  

The framing in which UCSB is seeking a subsidy is also at odds with UC budgetary history: UCOP distributes to UCSB  lower funding per student than it gives to any other UC campus (see the Rebenching report, Appendix A for a table and Appendix B for a bar graph).  We've commented on campus inequities in this space before.  To state the matter somewhat pointedly, UCSB is a long-term net subsidizer of the UC system as a whole.  Let's posit that this UCSB contribution to the UC system is a good thing in the "all for one and one for all" spirit of UC as One University.  This spirit leads directly to UCOP negotiating correct UC Tier 1 coverage at UCSB.

I hope that Mr. Taylor and Mr. Duckett redouble their efforts to fix this inequity.


Ellen McCracken said...

Excellent points, Chris. This is a classic divide and conquer ploy, the spectre that everyone else would have to pay $27 more a month so everyone in the system could be adequately covered. If anything, this should be added to UCs portion because they have a responsibility to EVERYONE in the system, not just the ones they can cover cheaply, as you point out. Looked at conversely, UCSB employees are in fact subsidizing all other UC employees on health care so they can pay $27 LESS per month..

Susan said...

As someone at Merced, I haven't heard anything about how it will affect us. I realize silence may mean everything is ok, but maybe not.

Anonymous said...

Odd, UCSB joined the UC system in 1944, not 1958(as shown on the figure) according to the `about UCSB webpage':


1958 was the year UCSB changed from University of California, Santa Barbara College (UCSBC) to the University of California at Santa Barbara (UCSB).


However, general education took place and degrees were granted at UCSB starting in 1944. Not sure where your figure came from, Chris. I hope its intent was not to diminish UCSB's history.

Anonymous said...

The real solution is to build a medical school at every UC campus.

There is an incredible shortage of physicians that is projected for California and the USA in the long run. All the graduates would find jobs. This isn't like law schools.

Chris Newfield said...

the problem with more medical schools is the state won't/can't pay for them anymore. Riverside is trying to start one with UCOP loans and minor annual earmarks. They aren't talking about supporting expanded nursing schools either, which has a huge demand. Sacramento doesn't want more tuition increases for nursing students but it doesn't want to reinvest either.
Yes on the UCSB history. My mother graduated from it when it was still a state college in the university of california. that wasn't my graphic--UC uses the 1958 date.
I would love information about the Merced situation!

Chris Newfield said...

and that's a nice reversal Ellen. It does seem to me that the nature of insurance is to pool inherently unequal costs, so the carve out of one campus isn't justified simply by pointing out that its costs are higher.

Anonymous said...

Where did you get the graphic from, Chris? If UC uses 1958 it is a minor poke at UCSB, and perhaps helps explain the attitude with respect to letting health insurance decay at UCSB. Not worth getting the history of UCSB right to UC.

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