An Open Letter to the Harvard Community on Health Care

Throughout the United States in the 1990's, the condition of the American health care system is consistently referred to as in "crisis." The components of that crisis are by now familiar: health care costs and health insurance premiums climb at a dizzying rate; employers, on whom the system has depended for decades, take desperate measures under intense pressure; the numbers of people uninsured or underinsured rise steadily; government at all levels appears unable to take even the smallest steps to interrupt the spiral. There is no good news to provide balance.

Meanwhile, what is the status of the Harvard health care system? Within our walls reside many of the world's foremost scholars in medicine, public health, business and finance, and public policy. Is the prescription for a sounder health care future being written here? What are the health care prospects for nearly 10,000 staff, many thousands of faculty and students, and thousands of their dependents who receive care under Harvard's auspices? Will the Harvard community's careful consideration and reform of its own health care situation provide leadership for our society's larger problems?

Certainly the health care situation is less desperate for members of the Harvard family than in the larger picture. Full, good quality coverage is available at relatively affordable premiums for nearly all students, faculty, staff and retirees, and their dependents. At the same time, our chances for averting a health care meltdown are no better on the Harvard campus than elsewhere in American society. For HUCTW's 3,600 members, health insurance is already expensive--the average support staff member's 15% share of premiums is costing her more than $600 this year, on an annual salary of $23,000. We can not afford several more years of uncontrolled inflation in premiums. Meanwhile, efforts at consistent, coherent application of our University's resources, involving our top administrators and renowned scholars in the solution of Harvard's health care problems, are utterly nonexistent. Harvard as a major employer and administrative organization is not only doing less than it could to secure its citizens' health care futures and set an example for resolving America's health care crisis. It is doing virtually nothing.

Cost Containment

Perhaps the central challenge in health care policy today is how to control costs and discourage inflation without negative impact on the quality or availability of health care. HUCTW leaders and Harvard administrators have spoken together since their earliest meetings about the urgent need for everyone within the Harvard community to participate in serious work on this issue. The first Agreement between HUCTW and Harvard, reached in 1989, called for intense joint work in a committee involving faculty, administrators and staff, on "issues such as managed care, quality of care, and cost containment measures." Within the past few years, many in our midst have spoken hopefully about the possibilities for forward-looking programs that would discourage redundant "double coverage," manage systems that allow unmonitored and sometimes duplicative referrals, and encourage providers to consider newer, less expensive treatments. The University is also fortunate enough to have an independent and largely self-contained Health Maintenance Organization (HMO) within its structure. The Harvard University Group Health Program (HUGHP) is managed, staffed, and utilized entirely by members of the Harvard community, provides excellent health care, and can be a workshop for innovation in programs aimed at affordability.

Despite all these hopeful conditions, the University has stumbled badly in addressing the challenge of finding ways to contain costs without taking health care opportunities away from people. There are no individual administrators or standing groups, either in the University or in any of the separate schools, that work on this issue consistently. Occasionally in the past three years, consultants have visited the campus, usually peddling unattractive plans which pretend to "quality-conscious" cost containment, while actually reducing benefits or limiting access. The University's participation in the Joint Health Care Advisory Committee, created in the HUCTW Agreement, has been reluctant and unproductive.

As a result of this inaction, everyone who depends on Harvard for health insurance is vulnerable. The history of the last ten years in American health care is filled with examples of large and small employers, unable or unwilling to find constructive ways to control costs, simply cutting benefits. It should not happen here.

HealthFlex Blue

The one development in Harvard health care in recent years which could have been described and experienced as a positive new program was not so received. A year has passed since the University removed Blue Cross/Blue Shield, a traditional indemnity or "freedom of choice" plan, from the faculty and staff health care menu and replaced it with HealthFlex Blue, a Blue Cross-affiliated "point-of-service" plan, and the change is still widely misunderstood. (A point-of-service plan is a hybrid between an indemnity plan and an HMO--see "Definitions" below.)

Harvard administrators had occasionally considered such a change in the past, but rejected the idea when consultants recommended introducing it with a higher deductible, and therefore a greater cost to patients, than the old Blue Cross plan. In the end, because HUCTW leaders have insisted on complete consultation about any large or small changes in health care offerings, we had a detailed understanding of the new plan and accepted it. As instituted, HealthFlex Blue charged an out-of-network deductible identical to the regular, annual deductible under the old Blue Cross/ Blue Shield. In other words, theoretically, no costs to patients were increased and better-managed care was made available to patients, at a lower premium. (See "managed care" in "Definitions" below.) In addition, the University is expected to save millions of dollars in its share of premiums under HealthFlex Blue, as compared with Blue Cross/Blue Shield.

Yet the change was met with great suspicion and anxiety, especially by faculty and professional staff. Communication about the switch was late and incomplete. Most members of the community had to interpret the change and make corresponding health insurance decisions without context or understanding of the challenges that led to it. Why did the introduction of the new program seem abrupt and unconvincing to so many on the Harvard campus? Primarily because the University did not reach a reasoned conclusion over time that a "point-of-service" plan was an appropriate idea here and ought to be pursued. Although such plans have been around for several years, Harvard administrators found themselves forced to react quickly to an attractive offer from the newly-formed HealthFlex Blue, and had to communicate the new option hastily. A careful, broadly-consultative decision about a point-of-service plan could have been reached. It was not, because no one in Harvard's administration was thinking about it.

Domestic Partners

More than three years ago, HUCTW raised the subject of a gap in Harvard's health care system: the failure to allow family coverage for "domestic partners," partners or relatives who are not spouses or legally-defined dependents, but participate in a long-term commitment to living together as a family.

After intensive negotiation on the subject in 1989, the Union and the University agreed to study that question in the Joint Health Care Advisory Committee, gathering information from other employers which have enacted such plans, considering legal and administrative implications, and estimating costs. That Joint Committee work has been completed, and detailed in a written report. The results are reassuring. A sizable and growing number of institutions, many of them similar in size and activity to Harvard, have introduced "domestic partners" family coverage, with consistently positive results. Previously uninsured members of the community obtain coverage, the degree of participation is relatively small and predictable, and costs are not significantly affected.

The Joint Committee is made up of several HUCTW designees, as well as top administrators from the Benefits Office, Financial Systems, the University Health Services, and a Medical School faculty member.

Within the last month, in response to HUCTW's ongoing proposals to establish the benefit in negotiations with the University, Harvard has announced its intention to convene a new committee, chaired by the Provost and with broad faculty involvement, to consider the question of "domestic partners" coverage further.

HUCTW representatives will take part in the meetings of the Provost's committee enthusiastically, but a troubling question lingers. Why is it that a small but important question concerning the basic fairness of Harvard's health insurance offerings, which has already been studied extensively by a Joint Committee which included a number of Harvard's top administrative and faculty experts on health care issues, needs to be referred to committee for a second time? Again, it is hard not to reach the conclusion that the University's approach to the consideration of complex health care issues is not comprehensive or inclusive, but remains chaotic and confused.

Conclusion

In the end, the overall picture of Harvard's response to the health care challenges on its own campus is one of sporadic, incoherent activity. A significant lack of consultation and full communication on the HealthFlex Blue change is followed by a stunning excess of process in considering "domestic partners" coverage. Lasting, effective structures have not been created for committing the University's resources to finding good answers to difficult questions, even though they are called for in the HUCTW Agreement and by many concerned individuals in the Harvard community.

There is an urgent need for intensive, ongoing attention to health care issues by Harvard's top administrators. At a time when the American health care system is undergoing great evolution and new approaches to national policy could emerge, it is all the more important that the University have a serious mechanism for studying health care on this campus, considering new ideas, collecting and analyzing data, and educating all of Harvard's concerned citizens. The challenges are only going to get more complex.

It is possible to control costs to institutions such as Harvard without limiting coverages or handing down a greater share of costs to staff members. It is critical that we strive to do just that, for the sake of the University and its working people. No one can afford simply to continue as we are. It is also possible to change our definitions of who is included and who is covered, as our understandings change about what kind of families exist among us and need to be supported. Until we do that, an ideal of basic fairness and equal treatment for everyone in the Harvard community will not be achieved.

The time for a new and more serious, inclusive, ongoing approach to the administration of health care policies at Harvard is right now.

Definitions

Co-Payment or Co-Insurance

Many health insurance plans require a patient to pay a portion of the cost for each treatment received. For example, a plan might require a co-payment by the patient of $5 for every doctor's visit or separate treatment.

Cost Containment

At least two different kinds of efforts to control health care costs are referred to under the heading of "cost containment" in current health care policy. Plans designed to yield better coordination between providers and insurers (see "managed care" below) with resulting efficiencies, and changes which limit the amount or kind of care which a health plan covers can both be called cost containment.

Deductible

Many health insurance plans require a patient to pay 100 percent of the cost on a limited amount of health care costs incurred in a given year. For example, a $200 deductible would mean that the first $200 of bills for treatment in a year would have to be paid by the patient. Additional expenses beyond the first $200 would be covered by the plan.

HMO

A Health-Maintenance Organization or HMO is a relatively recent alternative to an indemnity plan. HMOs require that a patient receive treatment at a particular health center or within a specific group or "circle" of providers, except for emergency or specialized care which can not be provided in that way. Most of the options on the Harvard health care menu, including HUGHP and Harvard Community Health Plan, are HMOs.

Indemnity Plan

Traditional health insurance plans such as the old Blue Cross/Blue Shield are often called indemnity plans. They allow patients to make unconstrained choices about who will provide care, and cover all treatments and appointments recommended by a provider, sometimes with deductibles or copayments (see above).

Managed Care

Many insurance companies and health plans have begun introducing programs which require some kind of monitoring or approval of the health care choices made by patients or referrals by doctors. These can include mandatory second opinions for some procedures, "utilization reviews" monitoring the effectiveness of treatment plans, guidelines for the length of hospital stays for particular procedures, and other similar measures.

Point-of-Service

A point-of-service plan is a hybrid between an indemnity plan and an HMO. Patients can choose any provider, but are encouraged to stay within a particular circle. Typically, "out-of-network" choices are discouraged with deductibles or large co-payments, while "in-network" care is covered fully or with only small co-payments. Labor Donated