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The newspaper of The Johns Hopkins University October 4, 2004 | Vol. 34 No. 6
JHU Plans to Revamp Benefits

Review, first in 15 years, prompts changes in philosophy

By Greg Rienzi
The Gazette

Following a comprehensive months-long review, a benefits advisory committee has presented to university administration a series of recommendations intended to save Johns Hopkins millions of dollars annually while still maintaining its competitive breadth of offerings.

The review, which involved considerable employee participation, was prompted by the steadily rising cost of health care, compounded by the economic downturn in recent years and the incremental increases in cost of other benefits areas. The last comprehensive review of JHU benefits occurred in 1991.

To guide the conception of any new benefits policies and programs — the majority of which will go into effect in January 2005 — the 14-member advisory committee first recommended adopting an official benefits philosophy that emphasizes flexibility, preventive wellness and health maintenance, knowledge-based decision making and affordability, for both Johns Hopkins and its employees.

A primary recommendation is that JHU should enhance its programs for educating faculty and staff about benefits. To that end, the university will develop for each employee an annual compensation statement with specific details on all the benefits, with corresponding dollar values, utilized in the past year.

Charlene Hayes, vice president for human resources, said that Johns Hopkins wants its employees to focus on "total compensation."

"The annual report would show a person his or her salary, and they would also see that Johns Hopkins paid this much for health insurance, tuition remission, etc.," Hayes said. "It will be personalized for each employee, so he or she can look at the bottom line: Not only did I earn such-and-such an amount, but I received benefits that came to this value."

In terms of existing benefits policies and programs, the committee recommended looking into changes to the benefits dollars allocation — for implementation in 2006 — with a goal of making it more equitable. Benefits dollars represent the university's contributions to the cost of benefits elected by individual faculty and staff members.

Another proposed change to benefits is to make more preventive services, such as breast exams and annual checkups, exempt from required co-payments and deductibles. Some preventive services are currently exempt, but the university wants to expand the offerings.

"The plan is to go over all the services available to employees and determine, with health insurance carriers, the full laundry list of preventive services and how much they cost and then earmark some as nondeductibles, meaning they won't count toward the employee's deductible," Hayes said. "We want to encourage people to take advantage of preventive services because, in the end, we spend less money as we end up with fewer hospitalizations and less chronic disease."

To offset the rising cost of health care, employees enrolled in self-insured plans, such as EHP, will see an increase in their maximum out-of-pocket expenses, co-payments and deductibles in a manner consistent with rising costs, while maintaining cost-sharing levels at about 80 percent to 20 percent for the university and employees. HMO plans, such as Kaiser Permanente, will see increases in co-payments.

Johns Hopkins has not made any adjustments to co-payments and deductibles in more than 10 years.

"During that period, the cost of health care has just skyrocketed," Hayes said. "Each year there has been a significant increase, but we have not passed that on at any level to employees. It is difficult to wait 10 years and lower a boom on increases, so we have made the commitment to review our plans now on an annual basis and make any needed adjustment. Our hope is that through our preventive services and other measures we will not see costs for Hopkins rising as much as they have been."

The committee, which comprised representatives of numerous university divisions and was chaired by Donald Steinwachs, chair of Health Policy and Management at the School of Public Health, and Fred Puddester, executive director of the Budget Office, also recommended:

Structure prescription drug co-payments to encourage the use of lower-cost options and mail-order purchases.

Continue to offer multiple health plan options to meet employee needs.

Offer disease management programs to assist the chronically ill with self-care and needed services.

Seek greater efficiency with the administration of benefits programs to control costs without impacting customer services.

The Office of Human Resources is currently searching for a new senior director for benefits. Hayes said that the priority of the new director will be to look comprehensively at the administration of benefits and determine if things can be done differently in order to save money.

One change already made is to the open enrollment process, which from now on will rely more heavily on the Web. Hayes said that in order to save printing and mailing costs, Human Resources will no longer send out mass mailings of large benefits booklets.

"Some populations of employees — those who do not have ready access to the Internet — will continue to get the booklets sent to them, but we will be asking everyone else to go to a Web site to enroll from now on," Hayes said. "When it's all added up, all these changes could save the university millions of dollars, and that is something we need to do. And from here on in, we will try to stay ahead of the curve."


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