Changes in Duke Benefits Reflect National Trend
Some observers of health policy are saying the year 2000 will be seen as the moment employers turned away from managed care. In its new health benefit plan, Duke University isn't abandoning managed care, but the expansion of options means employees will get an opportunity to join other types of benefit plans.
Open Enrollment for the Duke benefit plan begins Sept. 25 for coverage beginning Jan. 1, 2001. The two managed care plans ‚ Duke Select and Partners HMO ‚ are still being offered, although both have changed somewhat from the current plans. Two non-managed care options, both through Blue Cross Blue Shield, also are being offered. Duke Options is a preferred provider organization, and Duke Classic is a fee-for-service plan, comparable to the Duke health plan offered prior to managed care.
The changes in the Duke plan came in response to a customer survey asking for more flexibility and changes in the specialist referral process. The changes are coming at a time when health premiums are rising across the country by 10 percent to 30 percent, causing employers both large and small to reassess their coverage. A recent survey of small businesses found that one in seven companies with fewer than 100 employees would drop health insurance if premiums increased again by more than 10 percent. Another 46 percent said they would change their coverage.
Larger employers are having their own problems. A survey by The New York Times indicates that many large employers are absorbing many of the premium increases, although many are raising or implementing co-pays or limiting prescription drug coverage. Andersen Consulting, home to 30,000 employees, is one of many larger employers that are dropping HMO coverage for a preferred provider organization (PPO). Sears is another. It recently dropped its premiums for PPO coverage in an effort to entice employees to the PPO coverage from the company's HMO.
PPOs are based on networks of physicians and health care providers who generally have negotiated with the company to provide service at reduced fees. Administrative costs for the PPOs, however, often are less than with the HMOs because permission is not required in advance for an employee to see a physician within the network. Employees also can see out-of-network physicians, but they have to pay more.
Throughout most of the 1990s, HMOs were credited with stopping runaway cost increases in health care, largely because they served as a gatekeeper to ensure unnecessary procedures weren't conducted. But policy makers say they no longer can provide much savings because there's no more place to cut and because their administrative structure brings significant costs.
Some of the rise in health care costs, however, is attributed to industry trends that have little to do with the type of benefit plan. Prescription drugs costs, for example, have increased around 20 percent nationally this year.
At Duke, these trends are being met with a plan that offers more flexibility. Premium information for the four health coverage options was mailed out this week to employees of Duke University and the Duke University Health System, which includes Durham Regional Hospital and Raleigh Community Hospital.
For the two HMO plans that are being continued, premiums for Duke employees are bucking the national trend. Premiums for Duke Select will not increase, and those for Partners will rise only in the 2 - 4 percent range.
In addition, both HMOs have changed some key structural issues. Most significantly, both Duke Select and Partners no longer will require employees to get approval from a primary care provider before seeing a specialist within the system.
Ken Spenner, professor of sociology and the outgoing chair of the Faculty Compensation Committee, said the new benefit plan offers more opportunities for Duke employees, but he adds it will require careful work on the employees' part.
"We're very hopeful about some of the changes," he said. "It speaks to some of the critical needs we felt very strongly about, particularly in providing more flexibility and taking care of the referral-to-specialists process.
"There were some compromises. There will be some people who are disappointed in terms of co-pays and prescription drug prices, but these are issues that are not specific to Duke."
Still Spenner cautions that increased flexibility brings more responsibility for Duke employees. He said employees will need to read all four plans closely before making a choice and reading the details in the plans, including co-payment costs and coverage and referral features. Employees will have opportunities to ask questions about the plans at Benefits Fairs and employee meetings scheduled over the next two weeks. (See Calendar, page 8, for listings.)
In addition, the mailing sent to employees' homes will include answers to frequently asked questions about health care coverage.
"This is complicated material, and it behooves employees to read the information and ask questions," Spenner said. "If they just go to the bottom line on the premiums and take the less expensive plan without considering co-pays or coverage, they may end up getting the wrong plan for their needs."