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 her remarks at the UC Regents' meeting on Wednesday, UC President Janet Napolitano accepted Gov. Jerry Brown's proposal for a tuition freeze in 2014-15, and in effect promised to continue current UC Office of the President budget strategy.  The outcome of that strategy can be seen in the update of our traditional (simplified) chart of state general funds.

The chart compares the growth in state personal income to the growth or lack thereof in UC's general fund share. The idea is that were UC to have "grown with the state" -- and no faster --the University would be up about $2.2 billion above the $2.9 billion the Regents would like to receive in 2014-15.

What has this gap meant in practice? A tripling of undergraduate tuition, most obviously, and large fee hikes in professional schools.  According to the Finance Committee item on the 2014-15 budget proposal, UC will collect about $3 billion in tuition in 2013-14 (p 3), and about the same next year, given the tuition freeze. The missing $2.2 billion could have covered about 75% of that tuition bill.

Last February, Stan Glantz and I endorsed the principles we found in Gov. Brown's budget proposal--that the state must reinvest in public higher ed, that public universities should not charge high tuition, and that state personal income is a good metric for measuring this reinvestment.  But we noted the "huge gap between 'normal' general fund growth and UC's actual public funding level." The question UC has been facing again and again for years is what revenues could fill the gap and allow UC to "reinvest in academic quality"?

These new revenues will not soon consist of tuition. The Governor, along with the legislature's Democrat leadership have taken away the gap-filling option of tuition hikes.  But at the same time, Sacramento has now locked UC into a state fund trading range of 4-5% increases per year.   UCOP recently estimated that after the massive Schwarzenegger and Brown cuts visualized above, it needs 12% state funding increments year in year out (or 16% in a state-tuition mix) to avoid a massive structural deficit of $2.9 billion by around 2016. So once again, UC is facing permanent austerity and permanently lower academic quality as the result of this annual increment gap. Does the new budget proposal address this problem?

Yes, in that it takes the 5% base increase ($142.2 million) and adds in enough other targeted increases to get an increase of $263.4 million.  (The rest of the $383.1 million in additional funds comes from non-resident student tuition or from various university sources.   UCOP is counting savings from contracts and asset management as income, which strikes me as political outreach rather than accounting.)   So in fact UCOP is requesting a 10% increase in state general funds for 2014-15.

Obviously I hope they get it. This 10% is the minimum that would make a tuition freeze sustainable.

A major glitch is that much of Sacramento thinks that UC is the opposite of a hardship case--that it has used the crisis to raise more tuition money than it lost in the cuts. Assembly Speaker John Pérez said this loud and clear last January, and last month the Legislative Analyst's Office generated data showing UC's total state-related revenues going up steadily (figure 7).  If you look at the Budget for Current Operations 2014-15, you see the same relentless growth in UC total revenue (now closing in on $26 billion) that makes much of state government think UC should fend for itself--without further tuition gouging of students.

This framework douses the state's interest in reinvesting on the same huge scale on which it cut.  The result is that the state is now in effect deducting payments to specific university items from its general fund share.

For example, UCOP wants $64.1 million in additional funding for the state share of the pension fund, but the budget item reports that bond debt service savings of $100 million year "be used to address the University of California Retirement Plan (UCRP)'s unfunded liability" (page 4).

A bigger problem is that state leaders seem now to deduct Cal Grant increases and other financial aid against UC general funds. Gov. Brown spelled this out at the Regents' meeting in September:

Through the Cal grant program the state is adding $750 million. So the state is paying 39% of core teaching expenses. Every time you increase teaching you increase Cal grant. . . .  And now the legislature, under the leadership, or pressure, depending on how you want to look at it, of the speakers, is now going to add a middle class scholarship. That’s going to be several hundred million dollars.  That, on a yearly basis, is more than our increase to the university.  Maybe had you been lobbying a little more powerfully you would have turned that into a direct investment in the university.  But it’s not going to turn out that way. It’s going to turn out to be something called the middle class scholarship.

The California Democrat super-majority has terminated the traditional funding model of tuition hikes + state increases. This reflects a nationwide trend, in which politicians are saying no state funding restoration and no tuition hikes. Michigan-Ann Arbor is looking at 1.1% and Penn State at 2.76% for next year, and even the larger number barely breaks even with the Higher Education Price Index increase for the current year.

So rather than 6% + 6%, the state is offering UC 5% + 0%.  And when UC says 10% + 0%, the state will say OK, (10% - 5%) + 0% = 5% and you're lucky to get that, with the minus 5% being what we the state pay in financial aid to support the current frozen level of tuition.   In this Democrat model, future state increases will be held down by past tuition hikes.

Staying in this place will permanently change the University of California.  The same is true for the other segments.  But there will now be no state reinvestment unless the university can make some long-term commitment to real affordability, which will need to include tuition deflation or rollbacks.

By Colleen Lye and James Vernon (Co-Chairs, Berkeley Faculty Association)


At the end of September, the current 3 year-contract of UAW 2865 representing UC Academic Student Employees (GSIs, readers and tutors) expired and ASEs are now working without a contract. UCOP Labor Relations and UAW 2865 have not yet reached an official “impasse.” But the Berkeley Faculty Association is concerned that UCOP’s last offer of a 2% rise doesn’t come close to eliminating the gap with our comparator institutions, based on a 2010 UCOP survey.  Currently the 10-month (49.5%) GSI stipend is $17,655 for an incoming student, though our campus financial aid office estimates that $21,608 is required to cover the cost of living for 9 months while the campus desired target for doctoral students is $26,000. The Report of the Taskforce on Competitiveness in Academic Graduate Student Support, adopted by UC Academic Council in June 2012, declared “rising tuition and uncompetitive stipends threaten to seriously undermine program quality” and asks that additional resources be allocated for net stipends for academic doctoral support.  On the discussion agenda of the Regents meeting this week, a report from the Committee on Educational Policy restates the situation: “It has become more difficult for UC departments and faculty to offer competitive financial support for their doctoral students.”

In letters sent up to UCOP on September 16 and October 3, 33Department Chairs at Berkeley and 21 Chairs at San Diego asked the University to raise the GSI base wage so as to enable our PhD programs to stay competitive, citing the unsustainable practice of having to top up students' support from scarce and unpredictable resources.

.

Please lend your voice as a UC faculty member by signing this petition, which will be sent to Director of UCOP Labor Relations Peter Chester.

http://petitions.moveon.org/sign/uc-faculty-in-support?source=c.url&r_by=9477459

Undergraduate student debt has become a well-publicized national problem, but graduate student debt has ramped up with much less attention. UC began to increase its professional school fees in the last downturn that began over ten years ago, and debt loads for those degrees have increased rapidly.  The thinking was that medical, business, and law degrees endow their possessors with the high incomes that can cover high debt. Whatever one thinks of this logic in those cases, it doesn't apply at all to doctoral students, who experience long degree times, protracted periods of reduced income, and moderately good rather than high incomes afterwards, assuming they avoid many years of postdocs and adjunct teaching.

The materials for the UC Regents' meeting on doctoral education have some good graphics for the University of California version of the problem. The first of these is above.

The percentage of indebted students in each category hasn't increased that much in 10 years. The amount of debt for those who borrowed has increased by 23% in the Physical Sciences, Math, and Engineering (inflation adjusted), and by exactly twice as much in the Arts and Humanities -- by 46%.   Average total debt is 50% higher in the humanities than in the life sciences.

Studies suggest that a college generation graduating into a recession takes decades to catch up economically, if it ever does. The same might be said of humanities PhDs.  Their funding structure graduates them to the rear, and most will never catch up.

The next figure shows the median number of years it takes to finish a doctoral degree at UC and some comparator groups.

The median is nearly six years, or twice that of a law degree.  UC isn't worse than these other research universities, but the Arts and Humanities are worse than other fields.

The higher debt of humanities PhDs probably reflects the extra years required for degree completion.  So why do humanities doctorates take longer and therefore cost degree-holders more?

There are many pieces to this puzzle, but some big ones are easy to name. One is that humanities doctoral students spend several years in postbaccalaureate coursework: coverage happens all over again at the doctoral level before specialization begins.  Books have been written to critique this practice, but given the integrative nature of humanities research--which is not well understood in other fields--not all streamlining will be good.

A second piece is that humanities PhDs teach too much, and are too consistently responsible for the quality of the large lecture experience for undergraduates at research universities.  Most I know work beyond their formal limits, out of conscientiousness, and it's easy to see how one could work 70 hours a week for 5.7 years and still not be finished with a humanities dissertation.

A third piece is that humanities faculty have next-to-no extramural sponsors to provide large grants with which to hire graduate students who can spend those 70 weekly hours doing research related to their PhD, as opposed to spending half of them prepping, teaching, advising, and grading undergraduates. The structure of humanities funding spreads rather than concentrates humanities graduate students' attention.  They become good at understanding and teaching all sorts of things, but this in itself doesn't help them finish their dissertation.

There's much more to say about this, but my main reaction to this report is not only that UC needs to do quite a bit more to improve funding for grads overall (see Display 8), which the Academic Senate has documented in a series of reports over the last 10 years, but that the system can improve humanities PhD graduation time only by increasing research funding for these disciplines.  Hanging onto the status quo won't rectify the inequitable time-and-money hardship of humanities graduate study, which, in spite of our obvious fiscal problems, needs to be fixed.

By Catherine Liu, Director, UC Irvine Humanities Collective

In 2008, under the reign of Mark Yudof and in the aftermath of the financial meltdown, the University of California Office of the President overturned the 20 year old “Gardner Initiative” that had supported research and scholarship in the Humanities.  In 1988, David Gardner (15^th President of the University of California ,1983-1992) had recognized the centrality of Humanities scholarship to the University and helped establish the Gardner Initiative – a funding scheme that led to the establishment of the University of California Humanities Research Institute and the campus Humanities Centers. UC Irvine won the bid to house the UCHRI. Campus centers received annual disbursements from the Central Administration, amounting to approximately 50K – 100K including graduate student fellowships.  But then, President Yudof decided, the funds for the Gardner initiative would no longer be “automatically” available. We were all to become more “accountable” – there were no longer to be any “entitlements. “ We all had to work together, to find synergies, to emerge bleary eyed from our silos and – collaborate.

The Humanities Deans rallied and worked with UCHRI to apply for funding renewal in 2009.   With these funds, they organized a Consortium and UC Humanities Network. David Marshall, Dean of the Humanities and Fine Arts at UCSB, spearheaded the effort with David Theo Goldberg, Director of UCHRI.  As a result of their efforts, the UC Humanities Network was created in 2009 as a multicampus research group, funded through UCOP's Office of Research--for five years. 

All in all, the Network, which includes UCHRI and the Consortium (the UC Humanities Centers and Institutes spanning the 10 campuses) received $11 million in total funding for this five year period. The Gardner Initiative was, in effect, “replaced” by the Network.   And it is noteworthy that the Consortium and the Network are mysterious entities: there is a web “portal” that alleges their activities, but little real sense of collaboration.

2014 marks the expiration of the funds that have sustained the Centers and the Consortium. In addition, the President’s Faculty Fellowships and graduate student fellowships will also be suspended for 2014-2015.  The recipients were named  a “Society of Fellows,” but as far as I know, other Societies (at Cornell or Princeton) do not struggle for funding from year to year. 

As of today, there is no call for 2014 because of budget cuts to UCOP: in the best case scenario, some Centers might receive local campus “bridge funding” for one year, and a new competition might be announced. Although there has been an “official” announcement of the funding hiatus, each campus has received the news in various ways. 

Is the collapse of funding for the Humanities at the UC the result of thoughtless administration? Is it a conspiracy against the Humanities?  The news as it has emerged has been fragmented at best.  Many faculty are not even aware of the consequences of the postponement of the call. The idea of protest or letter writing was squelched in favor of closed-door negotiations. The results are still negative.

Is Janet Napolitano, new President of the UC, aware of the artificially produced crisis in Humanities funding?

It seems that it has made absolutely no difference whether or not we kept our criticisms of the ways the funds were administered to ourselves, whether we collaborated or not, whether we acted as a “Network” or a new arm of bureaucracy. If we cannot describe our own reality in accurate language, how can we teach our students about textual analysis? Accountability, assessment, evaluation, competition, collaboration, these were the anodyne watchwords that we were supposed to respect without question. 

Even were the Humanities at the UC fully re-funded, a threat will hang over the organization Network/Consortium as it is reconfigured. Some administrators have hinted that we should be “inventing something new.” Indeed the present structures of governance over the Network/Consortium/ UCHRI do not seem to have enhanced ten-campus communication or collaboration. Our EVC of Research John Hemminger at UC Irvine has assured me that the Humanities MRG has the greatest reach into the ten campuses. He is aware of the damage that such a hiatus in the MRPI will have on Faculty, Graduate Students and Research. 

It is almost certain that decisions were made about cuts to research funding that did not specifically target the Humanities. But with limited outside funding, Humanities infrastructure depends for its very existence upon UCOP funds in a way that others do not. 

As the uninformed and ideologically slanted “demise of the Humanities” meme continues to be trumpeted in the news media, and as the ardent defenders of the Humanities read the tea leaves of student enrollments, what is absolutely clear is that at upper levels of higher education administration, the Humanities are not really worth the trouble either to finance or manage well. 

The Gardner Initiative supported the idea that high quality Humanities research must be supported by a large, ambitious public University. In contrast, before he left office, Yudof gave $100,000 to be distributed as part of a Public Humanities Initiative to the ten campuses. The $11 million gap is hardly filled by this one-time Public Humanities grant, but it is always mentioned as a sign of our success in getting the harried and ailing former President’s fleeting attention.

No one seems to care enough about the long-term existence of Humanities research support.  We need to build trust and confidence, but our leaders have no idea to what degree that trust has been undermined. Perhaps they hope that the ethos of professionalism will keep us quiet. 

In this short story, there is the problem of budget cuts and then there is the problem of mismanagement and poor communication.   It is time for both UCHRI and the Humanities Research Consortium to step forward and improve both.

 

by Joe Kiskis, Department of Physics, UC Davis

The Regents meet this week. There are several items of interest on the agenda.

1) President Napolitano has stated several times that she will announce some big plans. The only likely slot I see for that is between 8:30 and 9:30 am on Wednesday. You probably noticed that she already committed $15 million in non-state funds to the president's postdoc program, grad student recruitment, and undocumented UC students ($5 M for each).

2) A number of capital projects and their financing are on the agenda for the Committee on Grounds and Buildings at 3pm on Tuesday.

State capital projects for the next two years are covered here:

The Capital Financial Plan 2013-2023 has detailed info on plans for each campus. You may find projects that you had no idea your campus was contemplating.

3) Educational policy at 9:30 on Wednesday: there will be a discussion of doctoral education and especially grad student support. The agenda item lays out the problem, but I do not see any definite suggestions other than to meet and discuss the problems some more.

4) Educational policy also has a discussion of annual report on private support. The report itself has a lot of very detailed and sometimes interesting data. E.g. "alumni individuals" gave less than "other individuals." In many categories, the numbers vary sharply by campus. For example faculty giving varies from $17,910 to $4,137,986. At only one campus is it a noticeable slice of the pie, and that is not the campus where it is the largest in absolute terms.

5) The Committee on Finance meeting at 8:50 on Thursday is dense with significant items.  Much of this is seriously wonky stuff and is far more than anyone can digest in one lifetime. However, if you ever need numbers, these are good
places to look.

The budget plan for 2014-15 is here (with attachments here).  This calls for increases in revenue and expenditures of $383.1 million. It's easy to spend it. It's less clear where it will come from, with the only reasonably certain source being $142.2 million more from the state. The University will request an additional $125 million from the state. There is also a "budgeted" increase of $26 million  in Non-Resident Tuition (NRT). The proposal for filling the remaining $90 million gap
comes from projected improvements in investment strategies, procurement contracts, and philanthropic giving. Almost all of the new money will go to increases in salary and benefit costs including a proposed 3% salary increase for all. $50 M is for improvements in academic quality.

6) The annual financial report is here.  The hugely detailed report is here. UC debt has increased to about $15.8 billion, up by about 50% since 2009.

7) UC Retirement System's annual report

8) UCRP report (for the pension system) is here, with attachments here.  The UCRP funded ratio is still falling and is now 76%.

8) Actuarial valuation of the retiree health program is here (with attachments here)

Whew. I'm exhausted just listing all this.

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.  

The problems besetting Cal athletics keep multiplying.  In addition to the evidence that central campus resources have been used to subsidize Intercollegiate Athletics it has now become clear that the Athletics department has not been fulfilling its responsibilities to its student Athletes in major sports.  A recent NCAA report shows that the graduation rate for Cal Football and Basketball are among the lowest of any University participating in the major sports.  In football, Cal has the lowest graduation rate among the 72 schools listed, while in Basketball Cal has the 4th lowest amongst teams in the major conferences.  These results are occurring at a moment when graduation rates across the country's athletic programs appear to be rising.

Although the Cal Athletics department argued that the figures did not represent present coaching staffs it is hard not to see this as a deep-rooted institutional problem.  Nor can Berkeley insist that its numbers are lower because of the difficulty of its academics.  Stanford on the other hand ranked 5th in graduation rates.

Berkeley has been diverting resources away from the general campus population in favor of their elite athletes. Now it seems, they are failing to meet their obligations to those athletes as well.

The best recent book about British higher education, Andrew McGettigan's The Great University Gamble,  was the subject of two long reviews last week. I wrote one of them, which appeared in the LA Review of Books under the title “The Counterreformation in Higher Education.”  The other, called “Sold Out,” was written by the eminent essayist and Cambridge literature professor Stefan Collini, and appeared in the London Review of Books.  The essays have US and UK audiences in mind, respectively.  I try to provide enough background on both UK universities and the Conservative government’s changes for non-British readers to see just how huge and irreversible the British changes have been—and how relevant that are to the U.S. If you don’t have time to read the reviews and this post, then stop reading here and cut to the reviews (LARB & LRB). 
 

There are two broad schools of thought in the Anglophone world about the permafrost austerity and the deep cuts that have been applied to public universities. One is that they reflect reform, and that the suffering is temporary, the pain transitional, and the outcome cost-effective improvement.  The other school of thought is that they produce decline, and that both quality and efficiency are being reduced by systemic cuts and related changes.  Drs. Collini, McGettigan and I are declinists, though also optimists in the narrow sense of thinking there is nothing inevitable or necessary about the changes that are harming public universities. 

Thus the work of the book and the reviews is to persuade the first school that changes like the Cameron government’s sudden 80% cuts in the UK university teaching budget are in fact both unnecessary and destructive—that the replacement income of tripled fees and other market-oriented measures create losses rather than gains.  Persuasion will be in the eye of the careful reader, and I hope the McGettigan book attracts quite a few. He shows that Tory talk was one thing and Tory deeds something else altogether. The Great University Gamble will be especially valued by anyone interested in what the broad concept of privatization really means in technical practice.  How you really do that is fully explained in the long-play version, with the nuance required to see the operating system behind Tory beliefs.

The declinists are in turn comprised of various groups.  One might be called the fatalists, who are deeply unhappy about what is happening to their universities but who don’t see intentionality or design, at least ones that could be blocked or redressed. Another are depressives, and this is a psychologically interesting position that I can’t go into here.  A third are anti-commercialists—not anti-commerce in a general sense but anti-commercialism, where commercialism is an ideology that deals with economic adversity, turbulence, injustice, and confusion by saying commercialize everything. 

Prof. Collini and I could be classed as opposing this master narrative, often called neoliberal, and as you read the two reviews you will see a shared sense that behind the assurances of efficient budgets and increased quality lies the goal of commercializing universities all the way down, norming their goals and practices to those of for-profit firms. 

Anyone writing from this position needs to master technical detail for the purpose of constructing arguments that will appeal both to allies and to opponents.  My own method in the LARB review is to use Dr. McGettigan’s formidable research to deduce government motive from government policy implementation, crossing off one declared goal after the other until we get to what is really going on. I also say a few things about why commercialization is bad, since the dominant school sees it as a liberating breeze that brings a vital glow to the excessively cloistered academic cheek. Even commercialization is not, as I see it, the final Conservative goal. But to see how this works you’d have to read through to Sections V and VI of the piece.  

My title alludes to my sense that those who say they favor reform are not rightly called reformers but counterreformers, and that they are not adapting ad hoc to a changing situation but aim at a full counterreformation, which I outline there. The main way today’s conventional wisdom deals with such arguments is to cast them as resistance to inevitable change, but even sympathetic skeptics about the declinist analysis reasonably ask, what do declinists favor? What are declinists for?

Fortunately, Stefan Collini has written an entire book called What Are Universities For? A complex answer lies therein.  One way to think about it in a policy context is as the a strong public good understanding of education. This is an economic discourse that is woefully underdeveloped if not falsified in standard economics. This abstract discourse of the public good—or common, or commonwealth—is embodied in Prof. Collini’s book as the limitless pursuit of human knowledge. 

This discussion emerges in his uncomfortable relationship to the humanism of Cardinal Newman, and I quote him (Prof. Collini) in part.

A better way to characterize the intellectual life of universities may be to say that the drive towards understanding can never accept an arbitrary stopping-point, and critique may always in principle reveal that any currently accepted stopping-point is ultimately arbitrary. Human understanding, when not chained to a particular instrumental task, is restless, always pushing onwards, though not in a single or fixed or entirely knowable direction, and there is no one moment along that journey where we can say in general or in the abstract that the degree of understanding being sought has passed from the useful to the useless. In other words, it is not the subject-matter itself that determines whether something is, at a particular moment, classed as ‘useful’ or ‘useless’. Almost any subject can fall under either description. Rather, it is a question of whether enquiry into that subject is being undertaken under the sign of limitlessness – that is to say, not just, as with the development of all knowledge, subject to the testing of hypotheses or the revision of errors, but where the open-ended quest for understanding has primacy over any application or intermediate outcome.

This is the tip of the iceberg of the impact of the university on public or common knowledge, where the university is one place devoted, in theory, but utterly, to maximizing the power of human thought to save us from ourselves.  Limitless knowledge is a central public stake in the contemporary battles for the university, and the book and these reviews are written in the knowledge that commercialism doesn’t have what it takes to support this work.

By Berkeley Anonymous

Previous posts have identified problems with UC Care for employees at non-medical campus and a particular problem with the coverage around UCSB.

But there are broader problems with replacing Anthem’s Blue Cross Plus Program with UC Care. 

Anthem Blue Cross Plus had three tiers including an HMO which I guess most people used most of the time.  But it also allowed flexibility to get out-of-HMO care if needed. 

UC Care purports to be similar with three ostensibly corresponding tiers 1 - UC Select, 2 - PPO network, and 3 - out-of-network.  But as we heard before, the UC Care Select network excludes many doctors in the Anthem Blue Cross Plus HMO network.  Even the broader UC Care PPO omits some that were part of the PLUS HMO (including one of mine).  Going to Tier3 out-of-network means you’ll probably pay a majority of the cost out of pocket.  UC Care also seems to cover fewer prescriptions; specialty drugs cost some fourfold more.

Perhaps the biggest difference is that one could meet all medical needs using the Anthem Blue Cross Plus HMO -- never needing to pay deductible or co-insurance, even for some out-of-network consultations with specialists and while traveling.  Alternative medicine (acupuncture and chiropractic) were also covered at fixed co-pays without deductible.  Vast swaths of HMO medical expenses were free.  These included: laboratory tests & X-rays not at a hospital, outpatient ambulatory surgery, home health care, medical equipment & devices, hospice care, skilled nursing facilities, home infusion and nurses, emergency physician services, and ambulance.  Free!

UC Care is different.  The UC Care Select tier doesn’t cover most of those free services at all.  Instead, most are bumped to the PPO tier (along with alternative medicine), requiring deductable and co-insurance.   If the type of specialist you need isn’t in UC Care Select, you must go to the PPO tier.  Even some physician services at UC Care Select facilities seem to be billed as co-insurance.  It seems some illnesses will require some PPO tier treatment, with its substantially greater costs.

In short, Anthem Blue Cross Plus mixed low HMO co-pays with out-of-network flexibility when needed.  UC Care is just a PPO with deductibles and co-insurance, except for some Select types of coverage with Select doctors.

* * *

In light of this it is worth looking at the other UC PPO option.  At the bottom of the totem pole in the UC insurance world is the Core plan, the only choice for employees who do not work enough hours to qualify for full or mid-level benefits. However, the costs and benefits of the new UC Care plan make the Core plan look comparatively attractive.

The Core plan has a $0 employee premium.  Though it has a $3000 deductable and co-insurance on drugs, its _maximum_ out-of-pocket cost of $6,350 is not vastly higher than -- or even lower than -- the employee family premium alone for the UC Care program ($4,392 in IncomeBandII, $6,917 in IncomeBandIV -- though bear in mind that premiums are pre-tax).  Its out-of-network benefits look better than UC Care.

So, the Core plan could be the most cost-effective plan for many families, considering premium plus out-of-pocket costs.

CORRECTION:  http://atyourservice.ucop.edu/oe/medical/core.html says “Annual out-of-pocket maximums ($6,350 per member) limit what you pay.”   In my original post I assumed “member” meant employee or family.  However, it turns out that “member” means “family member;” i.e., the out of pocket is $6,350 per person, and for a family the maximum is $12,700.  This is listed in the new detailed plan description, at https://www.blueshieldca.com/sites/uc/documents/2014-OE-Brochure-Non-Medicare.pdf (page 12).   Given this, it turns our that Core will not be as appealing as I previously suggested.

UPDATE: Also, there is a confusing statement at http://atyourservice.ucop.edu/oe/tools-resources/discontinued-plans/anthem-plus-plan.html which says:

"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."

This statement on the UCOP website is only true if "with much more" is interpreted to mean "with more out-of-pocket expense, for deductible and co-insurance charges."

In his two posts (here and here) Chris has raised a series of issues concerning the failure of UCOP to ensure that all campuses have access to Tier 1 coverage in UC Care.  Although his focus has been on the Santa Barbara case, there are indications from other non-medical school campuses that there are tremendous concerns over access and costs.  But the issues do not stop there.  I want to raise here a few issues concerning the impact of the health insurance changes even at the Medical Center campuses and then raise some questions which it seems to me is incumbent on UCOP to answer--and to answer with real data and reasons.

I should say that my first thought on the changes was that it would make little difference to those on Medical Center campuses.  But as I looked into the issues a little more I began to doubt that.  Given that we have not yet had a full accounting of the details of the new plan these concerns are somewhat tentative.  But I think faculty and staff need to look into this issue with some care--and not just with UCcare.

Just so we are all on the same page I am basing this discussion on three documents available at UCOP.  They are descriptions of the benefits for Anthem Blue Cross Plus, Anthem Blue Cross PPO, and the new UC Care.  If I am reading these documents correctly (and I am happy to have others correct any errors) then the following is the case.

If you have the Anthem Blue Cross Plus AND you are already in a UC Medical group your changes will be relatively small.  In fact, if you are able to select a Tier 1 physician your co-pays will drop slightly, and your yearly co-pay max is the same.  That is true with specialists as well so long as they are at a UC medical center (I am assuming that the sort of intervention that occurred at UCSC to obtain a non-UC Tier 1 provider is off the table since that would defeat the whole purpose of the shift).  Your fees for physician services in emergency rooms apparently will go up although not the hospital fees. (compare pg,5 with pg.2)  It is less clear to me about the costs and availability of medications since I have not located those lists.  Nor is it clear whether or not the shift to an HMO type plan for Tier 1 will affect the pressures on doctors in terms of referrals or procedures.

But if you were in Anthem Blue Cross Plus and you ARE NOT already in a UC Medical group then things look quite different.  For one thing, it isn't clear that there are enough spaces at the Medical Centers to accommodate people shifting in.  And second if you wish to keep your non UC doctor they will now be in Tier 2 (even if they had been considered "in network" for the purposes of Anthem Blue Cross Plus).  Vice-President Duckett indicated that there would be a high overlap in doctors between the old system and the new.  But the only way that I can figure out for that to be true is if he means that doctors who were formerly "in-network" (the de facto equivalent of UC Care's Tier 1) will now be available in TIER 2.  In THAT case employees co-pay and costs will go up considerably.

If on the other hand, you were in the Anthem Blue Cross PPO, your Tier 1 or Tier 2 costs and access should not be strongly affected.  On the other hand, your costs outside of the network will go up for any specific event although your yearly maximum contributions will go down somewhat.

To sum up, despite the focus that UCOP has placed on premiums if you are at one of the medical center campuses it is looks pretty clear that access AND cost will not be maintained for those in the discontinued plans unless you are able to move into a UC medical center for your health care.

If this is the situation I think that it raises a series of questions:

1) Vice-President Duckett reportedly indicated that this transformation was instigated by the Medical Centers themselves.  It would be good to have a fuller accounting of this process.  I understand that UC might be interested in being able to retain its revenues within itself rather than having to release them to the outside.  But in this case, it seems as if the interests of the majority of faculty and staff are being subordinated (in some cases sacrificed) to the interests of the medical centers.  Vice Presidents Taylor and Brostrom have claimed that the University will secure important savings from these changes.  If that is the case how are those savings going to spent?  If UC faculty and staff are going to be pushed into the medical centers where is that revenue going to?  For what? Taylor and Brostrom speak as if these changes benefit everyone.  But how exactly?

2) Given this first set of questions I think it is fair to ask about the general relationship between the medical centers and the campuses.  I should make clear that I think that medical education is an important part of the UC system.  And I know that there are important synergies between the medical faculty and the campus faculty at least at UCLA.  But we know from its own statements that UCSF is facing a difficult future, no one seems to know about the financial future of the medical centers after ACA, and as Dan Mitchell has tirelessly pointed out in his analyses of the sometime-in-the-future-who-knows-when hotel convention center at UCLA the medical centers can have enormous effects on UC's spending priorities. 

3) There is also a question of the timing of all of this.  I recognize that this actually took a while to develop.  But in the event we have learned that the new system could not complete a successful negotiation for the faculty at UCSB and only did so through outside intervention at UCSC.  Berkeley people are complaining about the effects.  And I am not sure what is going on with either Riverside or Merced.   Why exactly UCOP was willing to do this when there was so much uncertainty for so many campuses is a fundamental question.

I remain proverbially naive about the Academic Senate.  But from my vantage point it seems to me that the least the Academic Council can do is insist on answers to these questions and plans for the rectification of the obvious problems.  This issue is a large one for Faculty Welfare after all. 

Of course UCOP makes the decisions here.  Vice-President Taylor is constantly insisting that UCOP is incredibly transparent.  This would be a fine issue to provide some evidence of that claim. 

UPDATE: In conversation with different faculty it appears that there may be some non-UC doctors who will fall into Tier 1 status.  As a result I would urge people to check carefully the status of their various doctors.  We are hoping to be able to provide more information and analysis as time goes on.  And feel free to use the comment sections if there are clarifications that you can provide.

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.

UPDATED BELOW
In the spring of 2011, my partner Avery, a semi-pro cook, was working in the kitchen of our house in Santa Barbara when she cut straight through an artichoke and into her hand, severing tendons and sending blood everywhere. I was still working in France, so she called 911 and the fire department came. They took a look and called an ambulance, which drove her from the house on the Eastside to Cottage Hospital, an 11-minute drive of 3.3 miles in length, for which she was later billed $1900.

At the hospital, the first question was, “Do you have insurance? The second question was, “what kind of insurance do you have?” Avery had Anthem PPO and presented the card with the hand that wasn't oozing blood. She was waved through to immediate treatment, and one night, one surgery, and many doctor and hand therapy visits later she was on the mend. The care was good and the out of pocket cost ended up being about $2000, for some reason under the $3000 annual (in-network) cap including $410 as her share of 11 minutes in the ambulance.

That is a very happy ending under American health care. Will this be possible under the new health insurance regime, as UC’s Office of the President replaces Anthem with UC Care?

The switch is causing an uproar at UC Santa Barbara, and major concern at several other UC campuses. The UCSB problem is that it won’t have the Tier 1 benefits that other campuses get, and some subset of employees will pay more out of pocket than their colleagues at other campuses.

At a well-attended town hall on campus last week (partial audio here), there was plenty of concern about interrupted health care, reduced care, costs getting shifted onto employees—and also an undertone of worry that as a perennial “younger campus” UCSB was being relegated to second-tier status. “The breaking up of the UC system continues,” one person suggested to me in an email. There’s also the steady erosion of “total compensation” for UC employees. Salaries have been below the comparison average for years. Recently, pension and benefits are going to the same place. One effect of UCOP’s recent financial strategy has been the end of UC’s comparative advantage for employees.

But first, the answer to the care question is yes it will be the same—if you’re willing to pay more. Under Anthem, when you cut your hand open, and regardless of your doctor’s status in Anthem’s network you paid 20% of ER costs, 20% of emergency transportation, and 40% of surgical and other fees—if performed by a non-network doctor. But once one’s insurance was identified, an in-network surgeon seems to have been procured, and hence the semi-manageable out-of-pocket costs described above.

UC Care will be different: an outline is here. There is more detail here (now Scribd here), where it’s easier to compare its 3 tiers. (October 9th replacement of that link is here.) If you are my blog partner, UCLA professor Michael Meranze, and you cut your hand open in your kitchen in Santa Monica, an ambulance takes you to UCLA Medical Center, you pay $100 for ER costs, 20% of physician costs, and $100 for the outpatient surgery. That is Tier 1 UC Care, and it is available at all UC Medical Centers and other designated hospitals. Cottage in Santa Barbara is not one of these.

So if next year I cut my hand open in my kitchen in Santa Barbara, I will pay 20% of the full cost of all of the above. That is under Tier 2 of UC Care, which is Blue Shield’s Preferred network. UC Vice President for Human Resources Dwaine Duckett assured employees at the UCSB town hall that Cottage and Samsum Clinic would both be available for UC Care Tier 2 patients. And they are still available to HealthNet patients as well under HMO referral conditions.

But why would Cottage look at my UC Care card and treat me as Tier 2? I don’t know for sure, but I assume that they would want to know if my regular doctor is actually part of the Blue Shield network. And the answer to this question would be no. In that case, I will be treated as a non-network person attached to “non-preferred providers,” in other words, as a patient from Tier 3. Then I will be paying 50% of all costs (except ambulance and ER at 20%) up to an annual cap of $5000 (for individuals, or $15,000 for families).

There’s also reason to think my case is typical rather than anomalous. First of all, people want to keep their doctors, and the right to do this has become a national political issue in the Age of Obamacare. The UCSB town hall heard harrowing testimony—one faculty member reported that two of his wife’s three surgeries for brain cancer would happen at Cottage, and then the third, which fell after January 1, was supposed to be with another surgeon at a different hospital 50 miles from where they lived? It’s not clear whether there are continuity provisions.

And second, Tier 2 consists of the Blue Shield Preferred network, which has to have doctors in it for you to see if you want to belong to Tier 2. I assume that being Tier 2 at Cottage would require that your doctor be Blue Shield and have admitting privileges. There are parts of California that have great Blue Shield networks. For example, a search for Blue Shield network providers in any specialty within 15 miles of 94301, Palo Alto’s zip code, yields 983 doctors. The same search for Blue Shield’s Santa Barbara network (any specialty within 15 miles of zip codes 93101 or 93110) yields 20 doctors. And 8 of them are pathologists.

The UCSB UC Care situation seems to be this. UC Care has a lower monthly premium than Anthem did, but higher copays and caps for the non-network people who are the ones mostly likely to seek a PPO in the first place. Then, at UCSB there is no Tier 1, so the low-cost high quality option is not available at all in the area. UCSB does have Tier 2 access to the local hospital, but Tier 2 Santa Barbara—the Blue Shield preferred network-- barely exists. Tier 2 may wind up being Tier 3 for most SB UC Care people for most conditions, unless they can gear up for a 40-100 mile ambulance ride. The cross-campus inequities are obvious: what most campuses can get for $20 copays (or $100 per outpatient surgery) will push UCSB employees up towards their $5000 / $15000 annual caps.

How did Santa Barbara fall through the PPO cracks (along with, at least initially, Berkeley, Merced, and Santa Cruz)? UC Care was based on a UC med center tie in--Mr. Duckett said the medical centers came to UCOP wanting to bid for the UC employee health business—which put the non-medical campus at a disadvantage.

He also said that in the Santa Barbara case there wasn’t a failed negotiation between UC and Cottage, but between Cottage and Blue Shield. Blue Shield made bids, and Cottage “made the decision that we don’t feel as though we should be offering these types of discounts.” Cottage does have a health care monopoly in town, and seems to be holding out for more money—even if it risks losing much of Santa Barbara County’s biggest payroll to providers outside the area.

Mr. Duckett said his office would continue to lean on Cottage and Blue Shield, and that in the meantime UCSB folks should write letters to “anyone who will listen.” This strikes me as shifting responsibility onto people who didn’t create the problem and who have no power to fix it. UCOP is putting together an insurance network, and it needs to function normally across all the cities where its employees live. UCOP obviously needs to finish putting its network together.

In the meantime, there’s a simple way to restore cross-campus equity. UCOP could reimburse all UCSB UC Care patients for the difference between (a) what they are paying for the tier they are forced to use (Tier 2 at best, mostly likely Tier 3), and (b) what they would be paying if they had a local version of Tier 1.

For example, if the hand wound needs $55,000 of reconstructive surgery, the would-be Tier 1 patient would pay $1500 to UC Care, and UC would pay $3500 to UC Care to make up the $5000 of the UC Care charge to the patient, who at UCSB has to be in Tier 3. UC would make a similar payment to match the difference between a $100 outpatient surgery and the 50% of $55,000 which a UC Care Tier 3 patient would be obliged to pay.

This may seem at first like a subsidy to UCSB employees that other campuses don’t get. But in reality medical campus employees are already getting an equivalent to this subsidy from the university. And this arrangement would be temporary, while UCOP restores cross-campus equity.

On the other hand, if UCOP does no more than encourage Cottage and Blue Shield to settle, it puts UCSB at a recruitment and retention disadvantage in relation to other UC campuses, which weakens a UC system that is already struggling to keep up with its peers in other places.

UPDATE: Michael has found a 7 page list of UC Care TIer 2 providers (Blue Shield's Preferred network) in Santa Barbara, which I've posted here.  So please take my gloom about Tier 2 with a grain of salt. The UCOP patch would apply to a solid Tier 2 as well as to Tier 3.