As I mentioned in my post on the Budget, the Regents will be considering a proposal to alter the governing structure of the medical centers.  This proposal is a somewhat improved version of an earlier, and admittedly worse, plan that was presented at the Regents September Meeting.  The effects of these plans will be to give the Executive Vice-President--Health greater authority, to increase the ability of the medical centers to influence the Regents more directly, and to grant greater autonomy to the health care system more generally.  In both its substance and its creation it points to serious problems in UC's internal governance.

First as to substance.  The proposal will expand both the size and the authority of the Regent's Committee on Health Services.  It would be continue to have six Regental members but would now include the Executive Vice President--Health, two Chancellors from campuses with medical centers, four outside "experts" effectively chosen by the Executive Vice-President--Health, and one faculty member from a medical center to represent the Academic Senate.  These eight new individuals would be non-voting members.  The Committee would have increased autonomy regarding transactions up to certain limits (5) including those relating to compensation. (1)  The Committee's opinion would be required on capital projects that could affect the Health System. (4)

Now as I said, this proposal is an improved version of a proposal first floated at the September Regents Meeting.  In that earlier proposal, the Executive Vice-President--Health and the two Chancellors would have been voting members.  In addition, they would have been granted "primary responsibility" for UC Health capital projects.  (5).  This set up raised the possibility, given the size of the committee and quorum rules, that the Executive Vice President--Health and the two Chancellors might establish a committee policy because only two Regents were in attendance.  Nor was there any proposal for faculty input.  In the end, Regents at the September meeting did voice skepticism about these proposals and the Academic Senate strongly opposed the plan.  The result is the modified version we have now.

Still, there is no reason to throw laurels.  For one thing, one point stressed by the Academic Senate and not addressed in the revisions is the all but complete disregard for either the teaching or the research components of the UC Medical Centers which are, after all, university medical centers.  This plan pushes those concerns aside for an emphasis on the business of health care.  But unless one can include in strategic planning the teaching and research elements of the UC Medical Centers it is unclear what the medical centers are doing as part of the University.  Medical faculty I have spoken with are deeply uncomfortable with this aspect of the new plan.

There is one perhaps even deeper issue here.  The proposed changes are based in a Rand Study begun in the middle of March 2015, completed in June 2015 and based on review of some of the analytical literature, interviews with UC and UC Health Care Administrators as well as some administrators from other academic medical centers and publicly accessible UC documents.  (2-3) The study's authors acknowledge that due to "the short timeline of the effort, a detailed analysis of the AMCs’ finances and operations was beyond the scope of this project." (3) The heart of the report is really about the problems of communication and lines of authority within UC Health Care.  Yet on the basis of a rushed report that was unable to do a detailed analysis of how the system actually worked and raised all sorts of internal issues, UCOP is proposing to increase the authority and autonomy of the medical centers.  I can understand why the medical center administrators would want greater authority and autonomy but is this any way to make policy? What about the impact on the campuses and the University as a whole?

The end result, then, is that thanks to push back from some Regents and the Senate a poorly constructed and rushed policy has been replaced by a modestly improved proposal.  But the proposal is still based on the shaky foundations of the Rand research and the claims of the Medical Center administrators.  Once again, the Senate has been put into a position of trying to improve a policy proposal that should not have been made in the first place.   Instead, the serious issues that face the Medical Centers in the new world of the ACA should have been carefully studied--studied by the many faculty experts on health care that are at UC.  Unfortunately, like too many other issues in the recent past, UCOP did not identify a problem and engage with the faculty in a shared search for possible solutions.  Instead it presented a proposal and left the Faculty to smooth out the edges.  The Senate remains on the defensive and well thought-out solutions remain over the horizon.

The Council of University of California Faculty Associations has drafted a letter/petition to President Napolitano in response to proposals to reduce the health care options available to UC Employees.  I am posting CUCFA's letter and petition in the hope of widening its circulation among faculty members.  Staff unions and UC-AFT may be proceeding with their own responses.  If any faculty members wish to sign the petition you can find it at:

http://cucfa.org/healthcare-options-petition/

michael m

As you may have heard, UC Care is suffering even more problems (or I should say people enrolled in UC Care are suffering more problems) as it heads into its second year.  On the one hand there are considerably higher premiums on many policies (you can see the new figures here and compare with your old payments).  But on the other, and even more significantly, UC Care continues to struggle to maintain Tier 1 service for all of the campuses.

On this issue, the most striking problem is the ongoing battle between Blue Shield and the Sutter Health system of hospitals.  The contract between Blue Shield and Sutter Health expired at the end of 2014 and conflicts between the two huge systems have prevented a new contract from being signed. UC is reporting that both sides have agreed, however, to a de facto extension of six months so that subscribers are not in any immediate danger of finding themselves without a health plan.  Both systems are seeking to portray themselves as defenders of patients (Sutter claims Blue Shield is trying to reduce payments while Blue Shield claims they are seeking to protect patients from imposed arbitration agreements and the potential of hiked premiums).  But of course each side is seeking to protect their own quite large revenues.

Although outside the control of UC, this crisis is reminiscent of the ongoing problems facing employees at UCSB.  As the UCSB Faculty Association has pointed out, UCSB still does not have Tier 1 access at the only full service hospital in their area.  If Blue Shield and Sutter Health cannot work the problem out, it is possible that the majority of the non-medical campuses will be left without access to their traditional range of health care options.

UC has provided some numbers to call at Blue Shield if you are having problems.  They can be found here.  It is also possible that other costs may go up during this dispute.


UPDATE:  Blue Cross and Sutter Health have agreed to a new 2 year contract.  You can find the press release HERE.

What's coming are price hikes--big ones in UC Care.  (In contrast, the negative number at left is the subpar status of UC's benefits relative to market). That's the unloved UC self-insurance plan that was implemented last year over a hue-and-cry about its incomplete and inferior coverage.  On Tuesday, after voting in the midterm election, I went to the Santa Barbara Senate's forum on changes this year (prices here), which revealed the obstacles to improvements going forward--both at the system level and at UCSB.  Here I'll discuss UC and UCSB together.

The issue comes with a history that began last fall, with the gradual unveiling of new UC health care plans and of their various deficiencies.  The specific UCSB issue was the absence of the Tier 1 version of UC Care in the Santa Barbara area, which made medical costs higher for UCSB employees than for their peers on other campuses. After UCOP officials endured a large, angry meeting on the Santa Barbara campus, a patch was arranged.  Sansum Clinic would offer Tier 1 services for a year, with a possible continuation. But Cottage Hospital, the best and only full-service hospital in the Santa Barbara area, would be available exclusively under Tier-2 payment conditions for UC Care (and under normal HMO conditions for HealthNet clients).  Tier-2 has much higher payments for patients, but underlying cost inequities and access problems were not resolved.

(All our posts and links on the topic are listed here; you can find, for example, my initial review of UC Care changes and its tier system; coverage of UCOP's response; Michael's perspective from a medical campus; a Berkeley breakdown of UC Care's reduced services and increased costs; my cost estimate for a UCSB tier-1 fix (at the bottom); and a Spring 2014 summary of people's problems as they tried to use the new system.   We are still providing a forum for experiences at Share Your UC Care Story.)

On the eve of last Tuesday's Senate forum, the UCSB Faculty Association posted a statement on UC Care that itemized these ongoing inequities and problems. It called for Chancellor Henry Yang to appoint a committee empowered to meet with UCOP officials, including President Napolitano, in order to fix the health care plans. The goal would be for "Central Coast employees of UCSB [to] have access to quality health care on a basis that is not inferior to that at other UC campuses."  UCSB FA president Nelson Lichtenstein and other FA members came to the Senate meeting with copies of the letter, and repeated the call.

What are the chances of a real fix?  As far as UCOP is concerned, there is nothing to fix.  I say this because they declined Senate divisional chair Kum-Kum Bhavnani's invitation to send officials to speak with UCSB Senate members at the meeting, and because of a UC-wide survey their Human Resources department published in mid-October under the headline, "UC Faculty, Staff, and Retirees Satisfied with Current Medical Plan Offerings." Chair  Bhavnani presented the major findings.  Respondents saying they were satisfied or very satisfied with their plan, their new plan, their ability to see a primary care physician, or their ability to see a specialist, were all in the mid-70s out of a hundred.  For example, "77 percent of those enrolling in a new plan said they were satisfied with the new network."  Although there were early reports of prescription drug problems, satisfaction rates there hit 90 percent (slide 20).

Broken down by campus, Berkeley and Los Angeles have 76 percent and 75 percent satisfaction rates. The formerly unhappy Riverside comes it at 76 percent satisfied, above the medical campuses Davis at 74 percent and Irvine at 71 percent.  The only real holdout is Santa Cruz at 54 percent.  Santa Barbara, the least well-served, is in between, at 67% agreeing or strongly agreeing that they are satisfied with their plan.  The absence of a large dissatisfied minority may have enabled the price hikes I'll get to in a minute. In any case, the rollout appears in the survey as a major triumph.

The major exception to this pattern across the system was UC Care.  There, the percentage who agree/strongly agree that they are satisfied with their plan falls to 46 percent (slide 10).   UC Care is off the charts in dissatisfaction with access to correct information about the plan (slide 22).  In other areas UC Care is comparable, but it's obvious even in this survey that major work still needs to be done.

An implied question at the forum was whether UCOP is going to set systemwide health care policy on the basis of surveys like this.  My guess is yes, though that's a bad idea, partly because of the survey and partly because of the management theory behind it.  First, the survey has a fairly low response rate (26 percent), in part reflecting the fact that it was administered during a two-week window that began right at the end of the academic year for eight of the ten UC campuses.  Secondly, the health care system's biggest problems occurred at sites that are too small a percentage of the whole to budge the totals (the medical centers and national laboratories were included).  

Perhaps most seriously, the survey doesn't distinguish among levels of use, which artificially increases satisfaction rates.  I pay for UC Care but didn't use it once during my first year, so would have no reason to express dissatisfaction with UC Care.   The meaningful satisfaction figure is the share of active users of the plan, ideally broken down by level of use. Those numbers, if they exist, were not published.

The poor management theory behind surveys is that you can manage by majority opinion and set the minority aside.  That marginalizes individual experience, and in health care it is a way of favoring the healthier share of the population over the sick.  This strategy produced such serious cost and public health problems with the existing private health care system in the US that the Affordable Care Act, for all its public subsidizes for private providers, now regulates it.  The UC system doesn't reject sick employees, and yet this survey, normally construed, encourages UCOP to treat the dissatisfied as outliers who can be safely ignored.  Those outliers include the entirety of the UCSB workforce, who constitute about 3 percent of the system's healthcare enrollment.

Management by survey may have encouraged UCOP to end last year's policy of holding down employee contributions.  You'll remember that UC Care's premium, defined as lower than that of Anthem/Blue Cross, was a leading selling point.  I did some quick calculations before the meeting and discovered that my UC Care premiums will be rising by over 17 percent.  This is of course a systemwide price. Lower income employees will see a rise of about 20 percent.  In all brackets, UC Care prices rose from 2 to over 3 times the rate of HealthNet and other preexisting commercial plans.   Chair Bhavnani presented a spread sheet that displayed cost increases for all plans at all income brackets, and they are disturbing.  Will they be repeated for 2016 and again for 2017 and for the years after that? No one from UCOP was there to answer this or any other health care question.

I asked Chair Bhavnani about UCOP's justification for UC Care price hikes that are more than double projected cost increases for the medical sector as a whole. Several people chimed in, and the leading explanations were that the UC medical centers who provide UC Care's service (a) had new costs that they had to roll forward into this year;  (b) are actually not very efficient at providing primary care; and (c) have growing deficits that need covering in part from UC Care revenue streams.  

Of course last year UC proclaimed the readiness and superior efficiency of UC's medical centers, which were there to keep costs down. In addition, UCOP presented UC Care as a health benefit to UC's employees rather than as a way of creating a captive customer base for UC hospitals.   Was the point really to pull in tens of thousands of new customers and their ever-higher premiums for a medical enterprise of dubious solvency?  Nobody in the room wanted to contemplate the extent to which UC employees, faculty included, are regarded as little more than revenue sources by a UCOP that has not been candid about the fiscal problems facing one set of UC "businesses." Mid-career and younger faculty focused on the economic straightjacket facing them, and the difficulty they will have paying more (for less).

On the UCSB Tier-1 issue, Samsum will participate for 2015, but the agreement ends that year and there is nothing in place to extend it.  Cottage Hospital will remain outside of UC Care Tier 1.  An advisor to the chancellor said he doesn't think UCOP is actively negotiating with anyone in Santa Barbara, and that he couldn't get a straight answer out of either side about where the talks are.

Chair Bhavnani asked for a sense of the meeting--what did we want to see happen now? I asked that she post the price hike spread sheets on the Senate web site.  (As of this writing, this has not happened.) I expressed confusion about whether the Senate wanted to mobilize faculty on this issue, or not.  I also asked why we don't ask for premium reductions for UCSB's subprime version of UC Care.  Someone else replied she didn't want to pay less for Tier 2 UC Care--she wanted Tier 1.  A third person suggested a lawsuit, and I agreed. It's hard to think of what else would get UCOP to care enough to spend the money it would take to have the unified system we're supposed to have under standard insurance risk pooling principles.

The FA's Prof. Lichtenstein suggested that if there's enough pressure to get UCOP to cover UCSB with Tier 1 UC Care at Cottage, they'll realize UC Care was a bad financial idea and scrap it.  We could go back to providers that only raise rates 6.8 percent a year rather than 17 to 20. 

But again, where will the pressure come from? As physics professor Harry Nelson pointed out, UCOP didn't care enough to send someone back to UCSB to see how their plan is working for us. And they can shield themselves from criticism with their survey.  Furthermore, the turnout for this meeting was small (I think because no one has yet really checked the year-on-year price increases).   The UCSB Senate leadership in the room did not seem not interested in the lawsuits or in an official letter of protest of the ongoing inequity. 

Would the Senate start by endorsing the Faculty Association call for an official task force and delegation?  To express your opinion, you can write Chair Bhavnani via the UCSB Senate splash page. You can also write the systemwide Senate chair, UCI professor Mary Gilly at mary.gilly@ucop.edu. The chair of the systemwide Senate's Faculty Welfare committee is UCSD professor Joel Dimsdale at jdimsdale@ucsd.edu.

As you may know, there have been rumors of a significant rise in the co-payments that UC's health insurance plans require as part of coverage of "specialty drugs" that are often needed by the most endangered members of the workforce (people suffering from cancers, MS, HIV, liver ailments etc). In the aftermath of Union pressure and employee mobilization, Vice President Dwaine Duckett has announced that there will not be changes to the ways that "specialty drugs" will be treated by the different health care plans.

It is difficult to tell whether this was, in fact, a serious possibility that was pushed back by union activism or simply something floated in the course of discussions.  But it is a reminder that next year's UC health insurance options are in the process of being finalized and it is important for faculty and staff to keep their eyes open or contact their local HR offices about possible changes.

It is now a year since the debacle that was the roll-out and implementation of UC Care.  Although UCOP liked to emphasize the moderation of employee premium costs, it soon became clear that the shift to UC Care also shifted some costs onto employees for certain procedures, and that there was concern about new fees and reduced availability of physicians.  In fact, it was the example of UC Care that helped trigger the worry about the co-pays on specialty drugs. You may recall from analysis we posted last fall that one of the effects of UC Care was to raise the costs of specialty drugs dramatically.  In some cases individuals had to pay co-payments of up to 30% of the cost of drugs (although there were monthly and annual limits).  It is also the case that many employees doctors were no longer included in Tier 1 (thereby raising costs that way as well).

On top of this cost shifting there was the larger question of the reduced coverage offered to employees at non-medical center campuses.  The ultimate example of this, of course, was UCSB.  The only major hospital in the area Cottage Hospital refused Tier 1 coverage because of what UC was offering in payment. The only major clinic was pressured into a Tier 1 contract, but only for  one year.  It is unclear what, if any, Tier 1 coverage will be offered to UCSB this year.

Finally, people need to be aware that retiree health care for out of state retirees has been modified dramatically.  Since health care for employees looks like overhead to UCOP, further cuts are in the offing.

We have a number of old posts that you can check to refresh your memories of last year's UC Care roll-out and other changes.  Open enrollment is in two months so now is the time to raise issues or concerns with your local HR offices.

Employee Benefits Posts and Links

Remaking Posts:
Health Care Troubles and a Simple Solution (October 9, 2013)
The Plot Thickens on UC Care in Santa Barbara (October 10, 2013)
Some Further Questions About UC Care (October 12, 2013)
More on UC Care (October 15, 2013)
UCR Faculty Association Letter on UC Care in Riverside (November 17, 2013)
UCSB Health Care Update: The REst of Tier 1 is Yet to Come (November 23, 2013)
Obamacare and UC Care (December 9, 2013)
Union Logic of the Insurance Changes: the Case of Retiree Health Care (December 15, 2013)
UC Care Stories (March 14, 2014)
Further Troubles with UC Care (April 10, 2014)

by Judith Paltin, UC Santa Barbara

On this blog last October, Berkeley Anonymous pointed out that the UC’s employee compensation/benefits website, At Your Service, was promising:,"If you do nothing, you will be enrolled in the new UC Care plan, with the same dependent coverage you have now. UC Care has the same in-network and out-of-network coverage you have now, with much more.”

However, the stories brought to the UCSB Faculty Association meeting on April 9 demonstrate that faculty coverage and, consequently, their medical decision-making, are in fact very different under UC Care. One faculty member, unable to find any labs contracted to provide Tier 1 benefits, was advised to travel 80 miles to Santa Monica to receive covered lab services, a trip she would have had to make repeatedly. Upon her objections, she was told (incorrectly, according to the insurance company) to “use whatever lab [local Tier 1 medical clinic] Sansum uses” – she is now attempting to appeal the insurance company’s subsequent denial of her lab charges. A UCSB Health Care Facilitator told her that the UCOP “forgot to negotiate” with any nearby labs. 

One pregnant faculty member said she signed up for UC Care under the understanding that she would be covered for a Sansum obstetrician and a Santa Barbara delivery. Now her UC Care choices are to bear the Cottage Hospital Tier 2 charges for herself and the baby (up to $6,000), or to risk having her baby on the open road on the way to UCLA. Another reported: “My wife needs surgery…  so the Sansum doc will do it outpatient rather than have us go to UCLA, or face the Cottage costs.”

Finding UC select providers (i.e., those who count as “in-network”) has proven to be a challenging exercise in Deep Web research. Members reported yesterday that after due diligence, they have not been able to compile a complete list of UC providers, and that insurance specialist personnel at UC medical centers have been unable to tell them which doctors, labs, anesthesiologists and other specializations with privileges at their facilities count as UC providers. (According to a licensed health benefits specialist at BalanceCare, a national health advocacy service provider, most private insurance companies do not provide lists of anesthesiologists, since patients have no control over that selection, but the companies nevertheless routinely rule these to be out-of-network charges, leaving a majority of patients in multi-payer systems with the additional post-surgery task of appealing anesthesiology charges.)

An assistant professor reported: 

I live in Ventura and there is no physician coverage here. The only coverage here are clinics structured to cater to farm workers and the uninsured. Kaiser is not an option for my family, since it too is in another city [Woodland Hills, about 40 miles away]. Seaview Medical Group, a physician group that used to participate with UC, dropped participation with Healthnet Blue & Gold where it formerly participated. To get my family to primary care providers and specialists we have to drive 30 or more miles to Santa Barbara. The doctors in the medical groups in Santa Barbara are oversubscribed and it takes months to get appointments. Given the increased cost, the university effectively dictates which medical practices get UC workers as patients. Mostly this seems to be Sansum Clinic.

This faculty member  has tracked a massive flight of Ventura-area doctors from UC health networks since she first signed on. She reported being told, improbably, that the Ventura conditions are “only a problem for five people.”

Many attendees agreed that doctors in Santa Barbara are heavily over-subscribed and one may wait months for an appointment. Sansum Clinic offered one attendee who requested an ophthalmological consult an appointment in February 2015.

Another faculty member said, 

I signed up for UC Care originally and recently switched to HealthNet. The reason I switched is that I didn't realize that lab work wouldn't be covered as Tier 1 in UC Care, even though the work was done right inside Sansum Clinic.  This can end up costing a lot, as the deductible is quite high. It is frustrating that UC Care costs a lot per month for a family and yet out-of-pocket is also high.

Another was surprised to discover that a leg cast counts as an (out-of-network) lab charge. A third person observed: “In my 14 years as a UC faculty member, I have witnessed higher costs and lower benefits… Did you know our co-pay for mental health has increased about 40% since January?”

Another faculty member’s doctor recommended immediate surgery for a suspicious mass. In order to have that work done at UCLA, the nearest UC Care provider, the faculty member would have had to locate a new doctor, schedule a consultation, a pre-operative appointment and surgery. Fearing the length of time that would take, the UC Care subscriber decided to accept Cottage hospital’s offer to schedule the surgery within five days. This faculty member is still waiting to see what all the bills will add up to.

In a dramatic set of meetings held in front of overflowing crowds last fall, outgoing UCOP CFO Peter Taylor, whose resignation was announced abruptly at the end of March, alleged that Cottage Hospital wants “too much money” from UC. At Wednesday’s meeting, Faculty Association President and labor historian Nelson Lichtenstein called that “egregious,” even if true: “Just leaving us out of the pool defeats the whole point of insurance.” Since it is the nature of insurance that some places and providers are more expensive and some less, the insurance pool is created precisely to even out those differences.

The promise of UC Care was that it would effectively provide the best of both worlds by combining the negotiating power of a single, large-scale payer with the range of choice offered by a menu of multiple plans. In fact it seems to have picked up the worst qualities of each type of system:  It has refused the advantages of single-payer or large-scale systems by denying parity to its campuses and faculty, treating each campus as a separate negotiating entity, and has also refused to allow individual campuses to negotiate for themselves with the local folks they know. So far, this UCOP strategy has not been conspicuously successful. Although Santa Barbara does not have the same quantity of medical facilities some other campuses have nearby, it is not a medical desert; the city does have lab services and a well-regarded hospital and emergency room, which just happen to be unavailable because UCOP failed to reach an agreement with Cottage, and only achieved a one-year agreement with Sansum. Moreover, the changes in faculty benefits also affect the collectives which have a “me too” clause, such as UCSB’s pool of lecturers.

Concerned faculty are calling for an open forum online where they can share information, broken promises, provider experiences and interactions with university administration, and want the Faculty Association to seek legal advice. (The blog has started a page called "Share Your Healthcare Story.")  

The Faculty Association has scheduled a general meeting open to all on May 7, featuring representatives from United Academics, the new collective bargaining group representing tenured, tenure-track and non-tenure track and adjunct faculty, in addition to librarians, research assistants, post-docs, and other academic employees at the University of Oregon. They will talk about similar experiences at the University of Oregon, and how collective bargaining is working out for them. 

Now that the UC Care debacle has moved beyond the poor planning stage (leaving some campuses with significantly less access to care while paying the same amount) it is clear that although UC Care has held the line on premiums, for some people, at least, those cost savings are being lost to increases in co-pay requirements and other financial and logistical burdens that have been shifted onto faculty and staff. We continue to receive emails and blog testimony about issues with UC Care at non-medical and medical campuses alike (e.g. this example from UC San Diego).

It is our hope that shared information will enable employees to better organize through the Senate, Faculty Associations, Staff Unions and representatives, and just better prepare for pushing back at the new costs.  As a result, we have created a new page for people to share their UC Care stories. 

If you look above the posts you will see a button entitled "Share Your UC Care Story."  If you click on this it will take you to a page that will enable you to report your experience and any problems you have faced as well as read others' stories.  Please participate.  We hope the information will prove helpful to everyone trying to navigate and improve this situation.

We've gotten off-line comments on the ongoing coverage of benefits changes, and I thought it would make sense to address some of the issues publicly. Most focus on the issue of how faculty and staff are supposed to deal with university management, and so at the end I get to a conclusion about senates and unions via this week's issue of out-of-state retiree health care.

Q. Is keeping current levels of benefits as hopeless as your post makes it sound? 

A.  No. The post putting UC Care in the Obamacare context is a bit bleak, but my point was to say that the problems with the new UC Care program have not been resolved, and that we should continue to work to fix it.  Some non-UCOP administrators are working on a fix behind the scenes, but I don't think they will achieve uniform health benefits without major support and/or pressure from faculty and staff to move beyond the current, one-year, half-way measure. 

Q. Since most of the public pays more for worse coverage than we do, why do you think should anyone care?

A. We all hear this all the time.  First, neither salaries nor benefits at UC are now above industry averages (see e.g. this post on pay and benefits problems), and UC folks should point this out when confronted with false assumptions.  Second, we should oppose misery-loves-company spite that now fuels a salary-and-pensions race to the bottom in our increasingly post-middle-class society.  Third, many UC workers are already lower-middle or working-class, particularly in cities like Santa Barbara.  If our friends and neighbors are going to express class resentment, we should encourage them to direct it at hedge fund managers or hospital CEOs rather than at people for whom $3000 or $9000 in additional medical costs is a 10%-20% cut in take-home pay. 

Q. Must we be so cynical about UCOP motivations?

A. It's not cynicism, it's realism about how UCOP appears to see its job.  The Sansum deal, for example, suggests that UCOP was more interested in keeping their new health-care cost savings while demobilizing angry faculty and staff than  in rectifying inequitable coverage.  I say this on functionalist grounds: we have a Solomonic decision with one year of Tier 1 clinic and no Tier 1 local hospital, and in practice this has demobilized faculty and staff but retained inequitable coverage.  I also say it because Peter Taylor rejected the equity principle of cost sharing in telling the Chronicle of Higher Education that UCSB was demanding a subsidy from our colleagues elsewhere. Like other UCOP officials, Mr. Taylor does not work for UCSB employees.  Their job is to address a structural funding deficit that hasn't improved much since 2011.  Their job is not to insure maximum faculty and staff productivity through excellent working conditions and high morale. There may have been a time when UCOP's main goal was to heighten UC well-being, but that has not been true at least since then-chair of the Board of Regents Richard Blum called UCOP to heel with his 2007 memo on being "strategically dynamic."

Q. Isn't it better to save on health care and increase funding for teaching and research?

This is a false choice that has worked well as a political wedge but not as a true description of the budget.  It also avoids confronting that long-term structural issue, which is that UC is not currently funded to provide either top educational quality or above-average employee compensation.  It's getting minor annual increments in state funding that will take years to get back to ground level, and Gov. Jerry Brown and his legislative allies have made even these small increases contingent on a tuition freeze.

UCOP and the regents have used various stop-gaps to push the problem down the road. For example, the 19-year pension contribution holiday allowed UC to underestimate its state funding need by $333 million a year.  Another example has been years of reductions in the growth of the overall salary mass (thought not that of targeted executives, coaches, and high-end faculty).  The Dynes administration allowed salary scales to fall behind comparators', and justified this by pointing out our above-par benefits, saying that therefore total compensation was still ahead of our peers'.  If the Dynes administration had come for our above-par salaries, the Yudof administration came for the above-par benefits. Given ongoing structural problems, there's no natural stopping point for UCOP officials in dealing with ongoing shortfalls through the continuous pruning of total compensation.

A more recent example is retiree health care.  UCOP decided last year to carve out the subset of retirees that live outside of California, and withdraw UC health care in exchange for a cash subsidy.  Prof. Caroline Kane, writing for the UC Berkeley Emeriti Association, explains the change:

In the recent Open Enrollment period, out-of-state retirees had to select insurance through plans managed by ExtendHealth. The University does not subsidize any of these plans, but it does provide $3000 per year per Medicare-enrolled retiree and per Medicare-enrolled family members of that retiree. . . . Such plans help in covering the 30% cost of outpatient doctors, procedures, and tests that are not covered by Medicare.  From now on, there is no Open Enrollment for out-of-staters.  If they wish to change health plans in the future, they very possibly would be subject to underwriting: that is, subject to decisions on pre-existing conditions, on exclusions, and on age of the retiree.  None of these apply to in-state retirees with UC sponsored health plans. If currently out-of-state retirees move back to California, they will be ineligible for the same plans that current retirees can access. Also, the policies brokered by ExtendHealth are state-specific, so any retiree who moves would be again subject to likely changes in costs and coverage.

A class of retirees are being booted off UC health care based on their residency outside of California.  If it were a question of UC's poor coverage out of state, then retirees would logically be allowed to reenroll in UC health care, but that is not the case. This struck me as another example of discriminatory treatment based on an arbitrary class characteristic. But unlike the case with UCSB Tier 1, this discrimination was initiated by UCOP.

The letter prompted me to listen to the Regents' meeting discussion of retiree health care that Dan Mitchell had posted in November.  The UCOP leads are VP Dwaine Duckett and EVP Nathan Brostrom, with a Deloitte benefits consultant in attendence.  After the presentation, Regent Hadi Makerachian asked a series of questions, starting with why they are doing this change with this group of people.

The first answer was that it saves UC $2000 per out-of-state retiree per year. The average cost to UC under the existing system was $5000 per year, and UC will now give that group of retirees $3000. The second answer was that there is a risk transfer from UC to the retiree: in Mr. Brostrom's words, there's "more of an obligation on them as consumers of health care."  In addition to saving annual costs, UC's long-term liability is reduced by $700 million--or "a 50% reduction in total liability just for this population."

Third, Mr. Brostrom claimed that this will improve out-of-state retiree health care rather than cheapen or downgrade it. Fourth, Mr. Druckett said that "it is a way to take a small population to see how the exchanges will work, rather than trying to convert the entire retiree health population inside of California and outside all at one time. . . . I would not call this a pilot by any means but it is a way for us to see if gradually this would work where coverage is not as good for our retirees."  In other words, this is a pilot.  It's a pilot for the conversion of UC retiree health care.  One of the things also being piloted is whether there is much pushback from employees.

Mr. Brostrom wrapped up with this:

We have been looking at this, Regent Makarechian, and we thought this was a good cohort to start with because frankly their coverage was going to be getting better.  . . .To the governor's point about how people don't like disruption and change, we've gotten a lot of blowback from this plan, but we think it is the right direction to move in, and we've given Dwaine a long-term target of flattening our health care costs, and these are some of the steps we're taking to try to do that.

Mr. Brostrom had just estimated Obamacare as adding 2-3% (I assume per year) to UC health care costs. Thus Mr. Duckett's job is to cut health care costs by 2-3% year--and probably twice that, given normal cost inflation in the sector.  Given the flat revenue picture, this suggests that cuts to total compensation are to remain UCOP's annual project.

The governance of the constant cutting becomes a paramount issue.  Academic Senates work well in a collegium, to use Jim Sleeper's phrase for the desired structure of liberal education.  In that context, information is shared across roles and specializations, and decisions are meaningfully participatory.  Financial managers share information with administrative personnel and chemistry department faculty, for example, and then decisions are deliberated and to some extent jointly decided. It assumes a rough equality of status--which is why it can work well among professional colleagues but in universities has generally excluded non-academic staff.

The Senate model still functions in some precincts of academia. When I gave a lecture a couple of years ago at my alma mater, Reed College, some Senate faculty told me that they were then deciding whether the Economics department would be allowed to offer an above-College salary to candidates for a hard-to-fill position.  Majority opinion was leaning toward "no."  Some Reed faculty opposed the Senate's involvement at this level; others felt it was essential to faculty governance.  A Senate could of course decide either way while retaining deliberate authority over all major policies, as the foundation of a college that is constituted first and foremost by its faculty.

UC is the original corporate university and it has never worked this way. The entire sector has become quite a bit more corporate over the past thirty years, and this has increasingly marginalized the Academic Senate.  What we have now is a fairly straightforward managerial situation.  UCOP has ownership of financial information, which does not circulate, except in limited form to Senate committees, which do not circulate that information to their membership. Second, UCOP has ownership of decision rights.

A major symptom of this arrangement is that retiree health benefits do not belong to the retiree as deferred compensation, but to the University, to be managed according to its needs.

Most UC faculty are anti-union: the faculty is not going to unionize anytime soon.  But the more frankly managerial nature of UC governance puts faculty more obviously in the structural position of labor.  UC Care is a prime example.  Faculty are subject to the same changes as all other staff, to which none were asked to consent. And yet unionized staff do have some authority via the practice of collective bargaining.

In an era of compression of total compensation, UC faculty are less likely to put their energy into upgrading governance than into beneficial private arrangements. But that's not going to change the downward trend.

I thus recommend continued pushback on the health care plan.  The Faculty Associations are doing this, and I hope the Senate joins them.

The exchange that stays with me from the retiree health care discussion is this.

Regent Makarechian: They have all agreed to this?

Mr. Brostrom: We have implemented it, yes.

We're continuing to get mail from all the campuses about the impacts of UC's cancellation of Blue Cross-Anthem and its replacement by UC Care. Most drill down into the kind of detail offered by our Berkeley contributor in October. (If you have already forgotten the blessings of your departing plan, that post chronicled many of them.)  After open enrollment closed at the end of November, a colleague wrote from Irvine:

A group of us just realized that the 20% for use of Tier 2 would affect many people who have dependents living out of state--grown-children students taking a gap year, students in boarding schools, students just graduated.  An accident and hospital stay for these families would be devastating, as they can no longer enroll in the Anthem Blue Cross guest HMO.  And perhaps even worse, retirees on the UC pension living out of state would be in the same situation. I can tell you that my colleagues have no idea of any of this.

Shortly thereafter, one of those out-of-state retirees forwarded an email she'd sent to her campus benefits representative:

I am shocked to learn today that my prescription expenses will increase 500-600% switching from Anthem PPO to UC Care.  While their benefits look pretty much the same on the material sent to us, it is not quite the case when you dig in. It comes down to this in my case: Anthem calculates a $45.00 copay for drugs that are not on their "preferred drug list" while UC Care, via Blue Cross, calculates a 20% co-insurance for a drug that is not on their list, with a $3000.00 maximum.  I have to have shots that are not on either insurer's lists and that cost $1800.00 to $1900.00 a month.  Under Anthem I was paying $45 x 12 = $530 a year. Under UC Care I would have to pay $1850 x  20% x 12=$4440, meaning each year I will pay the $3000.00 maximum.

I found this out just today from one of the "Concierge" at Blue Shield and I find it simply outrageous.  It is outrageous that we are told that coverage will remain pretty much the same, outrageous that UC Care manages to hide so well the real costs to us, outrageous that Oakland did not notice or chose not to notice the real costs to its faculty and retirees. My question to you: is there something you can do about this? and if not, what do you suggest that I can do? 

The answer appears to be no. This is a sizable pay cut, particularly for a retired person.

The UCSB Faculty Association wrote a letter pointing out that UCSB employees are still without local Tier 1 hospitalization under UC Care. It included this summary:

All is, of course, not lost.  If you are insured as an individual, your Tier 2 co-insurance contributions are capped at $3,000.00 per year.  After that, UC Care pays for everything.  Were you also to sign up for an HRA spending account, you could accumulate $2,500.00 in tax-free dollars each year to help with co-insurance costs, and save a little money that way.  Still, many of us would find being out-of-pocket for @$2,200.00 an unwelcome challenge in these diminished times.  Note, too, that the Tier 2 cap for families is much higher than the cap for individuals.  And should we need, while in hospital, to consult a doctor who is not a designated UC Care provider, we would still be responsible for 50% of those costs.  

UCOP officials insisted that UC Care was not about shifting health costs from employer to employees, and the initial publicity spotlighted the drop in monthly payments in moving from Anthem to UC Care.  But sizable cost shifting is indeed occurring, with the burden shouldered first by the chronically (if non-catastrophically) ill, and those with serious but manageable permanent conditions.

What is happening with the project of Tier 1 hospitalization that I noted a couple of weeks ago was still incomplete? The short answer is nothing for this year.

There is now better information than there was last month.  One can find lists of participating hospitals, like this one for UC Riverside. The list seems OK when one reads it from somewhere else, but as the $4400 prescription writer pointed out, the picture changes when one gets past the material to the nuts and bolts.  Riverside's Tier 1 UC Medical Center is in Irvine, not Los Angeles.  In addition, a staff member at UC Riverside reported,

Riverside Community Hospital, the best hospital in the area and a partner with UCR's new medical school, is not included in Tier 1 (UC Select).  If enrolled in UC Care, the faculty in the Medical School will not be able to use the hospital where they're training their students, unless they're willing to pay Tier 2 copayments.  The nearest UC Select hospital, Parkview Community Hospital, does not have a trauma center.

The only hospital in Davis is not in Tier 1, Santa Cruz staff will be driving to Palo Alto for Tier 1 clinical care, and so on. Various complaints we've received suggest that staff at the non-metropolitan campuses will pay more to use UC Care locally. 

In Santa Barbara, the inclusion of Sansum Clinic in Tier 1 was the result of an executive buy-out for 2014.  The deal is off for the years following, pending more successful negotiations.  Cottage Hospital is accessible through Health Net and through Tier 2, but it appears to have had no interest in negotiating Tier 1 with UC.  I was told that UCOP was looking for a per-patient employer payment keyed to their stated costs at the nearest UC Med Center, and the Sansum wanted 50% more.  UCOP apparently was willing to do a one-year top-up for UCSB employees with Sansum, but not with Sansum and Cottage.

I suggested a version of this employer buyout of employee deductibles on the principle of insurance cost pooling, in which individual and group differences come out in the wash. I conclude from my conversations that UCOP rejects this principle and continues to see the UC system as a set of separate cost pools for the purposes of health insurance.  As UC Care continues into out-years, Individual campuses will be expected in effect to self-insure and cover their own costs--except that UCOP controls the overall structure and will not support campuses in cutting their own deals with local providers. In a sense, this is worst of both worlds: UCOP not delivering on the savings of "strategic sourcing," which is supposed to give everybody volume discounts, but individual campuses can't go it alone with local medical groups whom they generally know face-to-face.

UC Care isn't the only insurance system whose opacities take time to penetrate. The New York Times ran a piece today on unexpectedly high costs with Obamacare plans--which are not designed by the government, but by private insurance companies. Here is part of the article:

Insurers devised the new policies on the assumption that consumers would pick a plan based mainly on price, as reflected in the premium. But insurance plans with lower premiums generally have higher deductibles.

In El Paso, Tex., for example, for a husband and wife both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium less than $300 a month, but the annual deductible is more than $12,000. For a 45-year-old couple seeking insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month has a deductible of $10,000.

In Santa Cruz, Calif., where the exchange is run by the state, Robert Aaron, a self-employed 56-year-old engineer, said he was looking for a low-cost plan. The best one he could find had a premium of $488 a month. But the annual deductible was $5,000, and that, he said, “sounds really high.”

By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135.

UC Care deductibles are lower than these, but the lower-premium higher-deductible is the same.  The scheme is souring potential beneficiaries on Obamacare, and it's not helping relationship within UC either. 

On Friday morning I along with the rest of UCSB's campus received an email from UCSB's Senate Divisional Chair Kum-Kum Bhavnani with the promising subject line, "Success with Tier 1 Provision in UC Care!"

"President  Napolitano just announced that there will now be a Tier 1 option in the Santa Barbara area with Sansum Clinic as a provider.  We are very pleased about this outcome.

"We are very appreciative of all the efforts of the Chancellor, the Health Care Task Force, the Universitywide Committee on Faculty Welfare, and the senior executives at the Office of the President.  Please read the attached memo of today from Vice-President Dwaine Duckett about Open Enrollment.

"Thank you for all of your support in our collective efforts to communicate our concerns.

"With best wishes,
"Kum-Kum Bhavnani, Chair, Academic Senate

"Simonetta Falasca-Zamponi, Chair, Council on Faculty Issues and Awards "

Well this is good news, I thought.  

And I pondered two further things.

First was my appreciation for the work of the Senate and local administration--and also for the work of the UCSB Faculty Association and CUCFA.  The FA led a public charge on the issue. Thanks to UCSB FA president Nelson Lichtenstein wrote the press release that got the Chronicle of Higher Education to cover the story, which then triggered a public defense by UCOP and helped to get what had been a back-channel discussion out into the open.  Thanks also to board member Bob Williams, who wrote an Independent op-ed that brought the issue to the attention of the town and of various officials.  Thanks to Aranye Fradenburg, who co-write various statements and kept people focused.  Because of these and other people, the FA forcefully articulated the inequity argument, and continued to write Janet Napolitano, as did the Riverside FA about their similar issue: no Tier 1 participation for their quality local hospital, which meant 20% payments (with Tier 2) rather than co-payments.  Other individual faculty galvanized local politicians. CUCFA president Pat Morton  wrote to President Napolitano just the day before this announcement, calling Tier 1 "grossly inadequate" as well as discriminatory. 

Then came an email from Aranye Fradenburg, who noted that although this is good news, "Sansum is not a hospital." 

This is the second issue.  Neither Chair Bhavnani nor Mr. Duckett mentioned the participation of Cottage Hospital.  But that, after all, was the real issue in contention.  Perhaps Cottage would be part of a longer document or will be the next step in fixing the problem?  So I pestered a few  people about the matter of whether Santa Barbara would have Tier 1 hospitalization, as well as Tier 1 at Sansum clinic..

One of them wrote to HR as follows:

Do you know what the situation with Cottage will be?  That is to say, if we are hospitalized by order of a Sansum Clinic doctor who uses Cottage, will we have to shift to Tier 2 or 3 for Cottage services?

And HR replied:

Services at Cottage hospital will be at the Blue Shield Preferred (Tier 2) benefit level.  You will have an annual deductible and 20% coinsurance.  The annual maximum for Tier 2 is $3000, that is the most you will pay in a year for services with Blue Shield Preferred providers.

Please let me know if you have questions.

I do have a question.  What happened to the idea of getting Santa Barbara's only hospital, Cottage, in UC Tier 1?  

I found the Chancellor's memo on the subject at the HR site. It confirmed that,

President Napolitano has just announced to our Academic Senate leadership that under her directive, negotiations between UCOP and Sansum Clinic have been successfully completed. As a result, Sansum will become a Tier One (Select Tier) provider in the UC Care plan.

There is further information about how "the Systemwide Human Resources and Benefits group is offering UC Santa Barbara community members the opportunity to make enrollment choices and changes through February 2014," although open enrollment still closes November 26th. 

I have written to senior administrators to ask whether the matter is now closed, with Cottage hospital locked into Tier 2.   I certainly hope not.  This would mean, to repeat, that UCSB does not have an in-area Tier 1 hospital, and that its employees will pay 20% of all charges up to their annual ceiling to use Cottage.

Since they did not acknowledge the ongoing Cottage hospital issue in their announcements, UCSB's Senate and administration may not be planning to continue the campaign.

Dear Colleagues,

The recent changes to the health care insurance plans available to UC faculty and staff have resulted in a radical reduction in both choices and quality of our insurance options.  In particular, UC Care, a new “self-funded” PPO medical insurance plan that replaces Blue Cross Plus and Blue Cross PPO, does not provide equivalent coverage for campuses that do not have a medical center, such as UCR. The UC Select (Tier 1) network of providers and facilities is grossly inadequate, excluding many of the best doctors and hospitals that were covered under the Blue Cross plans.

For example, Riverside Community Hospital, a partner with UCR's new medical school, and Loma Linda University Medical Center are NOT included in the UC Select network.  The nearest UC Select hospital, Parkview Community Hospital, does not have a trauma center and has twice almost gone bankrupt.  This leaves UCR faculty and staff with the poor choice of paying 20% co-payments for care at the best  facilities, using the facilities in the UC Select network or choosing another health insurance plan.

The Riverside Faculty Association endorses the Riverside Division Senate resolution protesting the paucity of choices available to Riverside faculty and staff in the UC-Care option:

The Riverside Division writes to register its outrage at both the health benefit options available to its faculty for the 2014-calendar year and the process by which these options were determined.  In particular, UC Care, which replaces multiple Anthem plans, leads to serious inequities between faculty and staff on those campuses with medical centers and faculty on those campuses without them.  As a whole, moreover, the new benefits raise concerns about recruiting and retaining faculty and staff. Therefore, we insist on an expanded set of tier 1 options under UC Care so that campuses without medical centers can provide the same level of care as those with medical centers.  We also insist on a more consultative process with regard to all future changes. Both the process and the result of changing our health care options are unworthy of the University of California.

In addition we demand that the Riverside Community Hospital and the Loma Linda University Medical Center be added to the Tier 1 option in the UC Care plan immediately. Otherwise many faculty and staff will migrate to Kaiser or other plans.  Adding these hospitals to UC Select must be done and announced before the closing of the open enrollment period on November 26, 2013.

Sincerely,
The Board of the UC Riverside Faculty Association
http://ucrfa.org/

This statement from the systemwide Academic Council outlines the inequities and problems with UC Care http://senate.universityofcalifornia.edu/reports/BJ_JN_UCCare_FINAL.pdf

November 14, 2013

Dear President Napolitano,

Last week our campus was visited by a delegation from UCOP – including Peter Taylor, John Strobo, and Dwaine Duckett – the purpose of which was to explain the new health care plans and to reassure us about the diminished options now available to us. As you may have heard, things did not go well.

Before the audience of faculty and staff intervened, the delegates had begun to deliver a self-congratulatory pitch emphasizing the fact that they had saved everybody in the UC system from higher premiums by dropping the Anthem plans across the board. When urged to get directly to the issue of most concern to us at UCSB – the termination of PPO benefits at the tier 1 level – they had little to say, except to encourage us to make the best of a bad situation, and to blame our local health care providers (especially Cottage Hospital) for refusing to accept UCOP’s terms. They also danced away from their failure to communicate effectively with Sansum Clinic.

Mr. Taylor had already made plain in comments published in the October 10 issue of the Chronicle of Higher Education, as well as in a response to a petition from our Divisional Academic Senate, that his guiding principle in negotiations with the various health care providers for campuses without medical centers was to obtain discounts, insisting that physicians under contract with the UC system not be paid any more than the system pays its own. He was so committed to his principle – arbitrary though it was – that adhering to it was more important to him than the welfare of our campus community. When things did not go his way with the Santa Barbara providers, he and his subordinates made the coldly calculated decision to cut us loose from the rest of the system. In the Chronicle interview he said that he did not see the need to deviate from his principle in the interests of the “600” UCSB employees – actually more than 700 and their families – who would be affected. When questioned during his visit here he was unapologetic; indeed, he seemed to think we should admire him for his refusal to compromise.

The attitude and methods of Mr. Taylor and his subordinates are typical of the cynicism and arrogance that have prevailed at UCOP in recent years. The new health care plans were conceived by an inner circle of top administrators, developed, and negotiated without anything even approaching appropriate consultation with faculty or employees. With no regard whatever for the principle of shared governance, the Academic Council’s Faculty Welfare Committee and Health Care Task Force were kept in the dark much of the time and, as the formal announcement of the new plans drew near, the Faculty Welfare Committees on the individual campuses were pressured to maintain confidentiality. Our own Chancellor did not learn the terms of the new plans until the second half of August!

One is hard pressed to decide which is more deplorable, the reckless managerial swagger of Taylor and his team, or their sheer ineptitude. If the UC system plans to self-insure – to go into the insurance business – it had better find more competent administrators. We call upon you to remove Taylor, Strobo, and Duckett from further involvement in the process and to take the matter into your own hands until a new set of administrators can be appointed.

We hope that you understand the depth of our anger over this betrayal of our trust, and that we do not intend to let the matter rest. The employees of UCSB are facing discriminatory treatment that seriously degrades the quality of our individual lives and those of our families, as well as undermining the collective welfare of our campus community, and we are prepared to fight it with every means at our disposal, including legal action. We call upon you to exercise the leadership necessary to resolve this crisis in a manner that satisfies the needs of UCSB’s faculty and staff.

Yours truly,
Nelson Lichtenstein President,
UC Santa Barbara
Faculty Association (UCSB FA) nelson@history.ucsb.edu

Robert Williams
Board Member, UCSB FA

Aranye Fradenburg
Board Member, UCSB FA

Julie Carlson
Board Member, UCSB FA

Jorge Luis Castillo
Board Member, UCSB FA

Elisabeth Weber
Board Member, UCSB FA

Allan Stewart-Oaten Board Member, UCSB FA

Cc:

Kum-Kum Bhavnani,
President, UC Santa Barbara
Academic Senate

William Jacob
Chair, Academic Council of the UC Academic Senate

In an effort to have the same health care benefits next year as the rest of the University of California system, UC Santa Barbara faculty groups have maintained pressure on the Office of the President personnel who developed the new plan.  It now appears that UCOP is sending three senior officials to an otherwise routine open enrollment information meeting at the UCSB campus.

The Open Enrollment Fair runs from 9:30 am to 3:00 pm on Thursday, November 7, in Corwin Pavillion.  In the same space, there will be two 90 minute Town Halls at 10:00 am and again at 1:00 pm.

The HR flyer describes these as "your opportunity to hear from UCOP leaders about why changes are being made."  UCSB Faculty Association President Nelson Lichtenstein describes it as your opportunity to hear senior leaders "defending UCOP's decision to offer the UCSB community but an inferior and more costly insurance plan." Scheduled to appear in these roles are Peter J. Taylor, Vice President and Chief Financial Officer; John Stobo, Senior Vice President, Health Sciences and Services; and Nathan Brostrom, Executive vice President, Business Operations.

Both the UCSB FA and the UCSB Senate sponsored petitions objecting to the campus's unequal treatment, and these  collected enough signatures to prompt this highly unusual simultaneous visit of three top officials to the Santa Barbara campus.  Senate Divisional Chair Kum-Kum Bhavnani reportered 853 signatures on her petition prior to submission to UCOP, where her cover letter to Mr. Bostrom et al. concluded, "I know you are aware of the gravity of this issue and it is now evident that the campus faculty and staff are deeply disturbed that the new health plan is not living up to the fundamental principles of access for all and broad coverage."

For those coming in late, the basic issue is that for 2014 UCOP has dropped two Anthem health insurance plans and replaced them with an in-house system called UC Care, in partnership with Blue Shield. But Santa Barbara's only hospital, Cottage, and only large medical clinic, Sansum, are unwilling to offer Tier 1 coverage at the price UCOP has been willing to pay.  Tier 1 means paying a copay rather than 20% for covered medical treatment: the latter is Tier 2, and is available at those facilities, as are the continuing HMO plans.  For additional detail, see our posts "Health Care Troubles and a Simple Solution" (October 9), "The Plot Thickens on UC Care in Santa Barbara" (October 10), "Some Further Questions about UC Care" (October 12), "More on UC Care" (October 15), and links to additional coverage on our Employee Benefits page.  The latter two posts are by faculty from UCLA and UC Berkeley, and UC Care's quality as an employee benefit is a systemwide as well as a UCSB issue.

I objected in "The Plot Thickens" to the UCOP position that by asking for Tier 1 at high-cost Cottage Hospital, UCSB employees were demanding a subsidy from the rest of the system. This is wrong both because UCSB is a net donor to the UC system's budget and because cost mutualization is the purpose of insurance pools and extra costs in this or that group are constitutive.  In their response to Senate Chair Bhavnani and the Senate petition, VPs Bostrom, Stobo, and Taylor stick with their framework.  They maintain that UC Care is a good deal for UCSB employees even without Tier 1. They also say that they will "continue to do all we can to include" Santa Barbara's Tier 1 providers in UC Care, "short of causing a premium increase for all other UC employees." Given the apparent difference between Cottage hospital and UCOP/ Blue Shield, this suggests UCOP remains unwilling to change their cost position to get a deal.

I still think UCOP / Blue Shield can and should come to an agreement with both Cottage and Samsum. There's help from the principle of equal coverage within an insurance pool. There's all the work and good will of campus people who've been trying to fix this for a couple of months.  There's help from a common desire to avoid existential questions about the UC system (does UCOP believe in UC as a whole or doesn't it? is UCSB like some other smaller campuses going to be structurally disadvantaged now and forever? If so, what is the payoff of keeping the system as it is?, etc.) 

Instead of going there, perhaps we could do the math and find a cost point somewhere in the middle. I hope Messieurs Bostrom, Stobo, and Taylor are asked and answer concrete questions about the size of the gap between the parties, the real costs of filling the gap, and whether an immediate patch can be found, before open enrollment closes, while final or out-year negotiations continue.

It seems from Peter Taylor's previous statement that the difference between the UCOP/Blue Shield position and Cottage's is about $825 a month per employee for the employer contribution.  Could UCOP pay $715 more, or $413 more per month more to get UC Care Tier 1 going in its inaugural year and make the equity issue go away? Contributions could be revisited next year and in later years after the system has settled down and everyone has a chance to identify the real costs.

Given the larger questions involved, I don't think that would be so expensive after all.