A Publication of Florida Community College at Jacksonville Rising health care costs force changes It is no secret that health care costs are rising tremendously in the United States. In the past 20 years the overall cost of health care has gone from about $50 billion to more than $500 billion. Statistics show that in mid-size cities the cost of a chest x—ray has risen from $27 in 1979 to $59 in 1989; a caesarean section that was $5,000 in 1979, is now $10,000. What is causing this increase in health care costs? Most of the problems are results of the changing times in society. Some of the factors are: Cost shifting — Redistributing costs of non—paying and partial-paying pa- tients (Medicare and Medicaid) to those who can pay in full. New Medical Technologies and Diseases — Technological advancements in medical treatment are costly, and the treatment for AIDS and other catastrophic illnesses is also expensive. Malpractice Suits/Rates -— Doctors’ malpractice premiums are soaring as more patients sue. This increase is pass— ed on to patients. Aging American Workforce — We are living longer and therefore requir— ing more medical services. 600 500 or“ .sJ-‘eakha‘e 400 NATIONAL TREND 300 IN HEALTH CARE COSTS o '84 '85 '86 '87 '88 '89 A BILLIONS OF DOLLARS This rise in the cost of health care results in costlier health care insurance. Most companies are now looking for means to contain costs. Some com— panies are raising employee premiums, hiring health management consultants and sending their employees to physi— cian networks. Others have stopped payr ing for employees with certain health problems or dropped health benefits completely, causing some to go uninsured. Florida Community College has also been affected by the skyrocketing costs of health care. Over the past three years the College has experienced an average 21.5 percent increase in health inr surance costs. In the past, the Board of Trustees has been placing additional funds into the College health plan, but this year this is not an option. “For the first three months of the 1989 fiscal year (July, Aug. and Sept.), the number of employee insurance claims has reach— ed the six month level. That’s twice as many as estimated based on our past experience,” says Pat Pickett, employee services manager. A task force on health cost contain— ment headed by Lynn Parker, vice presi— dent, planning, marketing and human resources, and Jack Spears, vice presir dent of administrative and business ser— vices, was developed to review various cost containment possibilities and then submit a formal recommendation to the Board of Trustees. Pickett said the new plan had to ad— dress immediate problems and allow for a long term cost reduction of at least $500,000. There were three primary charges for the task force: 1. Contain costs. 2. Protect the lower paid employee from an unbearable burden. 3. Preserve employee morale to the greatest extent possible. At the meeting held Nov. 29, the Board of Trustees voted to accept the following changes in the employee health plan, effective Jan. 1, 1990: D Increase the non—PPO (preferred provider organization) deductible by $200 U Increase the PPO deductible by $100 Decrease the non—PPO co—insurance amount by 10 percent Increase the amount of claims necessary for waiver of co—insurance by $2,000 Cl Increase the maximum amount of employee out’of—pocket money by $1,200 for non-PPO and $300 for PPO. These changes create a larger gap be- tween the PPO and the non—PPO reim- bursements. This is meant to encourage employees to use the PPO doctors, who offer medical services to the College at reduced rates. The College will con— tinue to pay the full $150 a month for employee premiums, unlike many com— panies who now require employees to share in that cost. Another change is a stiff penalty for employees who do not pre—notify American General of a non—emergency hospital admission. The new plan calls for notification five days before a non— emergency admission or payment of 50 percent of the hospital bill. “This pre—certification feature is not asking for permission to be admitted, it’s only notification,” says Pickett. “This notification helps the insurance company monitor the care the patient is receiving, which helps contain costs. Statistics show that 90 percent of hospital bills have some kind of error.” Employees were informed about possi— ble changes during November and December. Communication included the distribution of information packets, PM‘mr ORDER HE wad: Cate WW 2 C) 1.5 ' TOTAL CLAIMS PAID BY FCC] 0 '85/'86 '86/‘87 '87/'88 '88/‘89 AMILLIONS OF DOLLARS employee information meetings held on each campus and telephone access to Human Resources staff for questions. Experts agree that health care costs will continue to escalate. Statistics show an increase of two percent a month or 24 percent per year in health care costs. More changes in the College health plan are likely in the future. “I’d like to see some of the furor turn into making changes, to make employees start look- ing at ways in which we can be more health conscious,” Pickett says “but, it’s a challenge.” Changes on dependent health/dental coverage: Effective January 1, premiums for dependent health and dental coverages increased. These changes were previous— ly accepted and were not part of the changes approved by the Board of Trustees in November. El Family health coverage rate — $142 per month; $71 semi—monthly El Family dental coverage rate $30 per month; $15 semi—monthly This represents a $12 increase in the dependent health rate and a $2 increase in the dependent dental rate. Any questions concerning the employee health plan, should be directed to Human Resources at 632—3316 or 632—3169. . m Mafia/mam First endowed chair INSIDE Apioneer retires ........2 New Nassau Center. . . . . . . .3 A true champion . . . . .4 FCC} is pleased to announce the dedication of its first endowed chair of excellence. The Nathan H. Wilson Chair for Community Leadership in Minority Affairs was created through a $45,000 gift from Southern Bell and a matching grant of $30,000 from the State of Florida. The Chair will be used to reward FCC] faculty and/or their departments who demonstrate innovation and persistence in improving minority affairs in our community. Nate Wilson, who recently retired after serving two terms as chairman of FCCJ’s District Board of Trustees, has an unparalleled history in Jacksonville for instigating and enabling progress in community relations among all citizens. At left, President Spence receives check from Earl Crittenden, vice—president, Network—Bell South. , OCR Text: A Publication of Florida Community College at Jacksonville Rising health care costs force changes It is no secret that health care costs are rising tremendously in the United States. In the past 20 years the overall cost of health care has gone from about $50 billion to more than $500 billion. Statistics show that in mid-size cities the cost of a chest x—ray has risen from $27 in 1979 to $59 in 1989; a caesarean section that was $5,000 in 1979, is now $10,000. What is causing this increase in health care costs? Most of the problems are results of the changing times in society. Some of the factors are: Cost shifting — Redistributing costs of non—paying and partial-paying pa- tients (Medicare and Medicaid) to those who can pay in full. New Medical Technologies and Diseases — Technological advancements in medical treatment are costly, and the treatment for AIDS and other catastrophic illnesses is also expensive. Malpractice Suits/Rates -— Doctors’ malpractice premiums are soaring as more patients sue. This increase is pass— ed on to patients. Aging American Workforce — We are living longer and therefore requir— ing more medical services. 600 500 or“ .sJ-‘eakha‘e 400 NATIONAL TREND 300 IN HEALTH CARE COSTS o '84 '85 '86 '87 '88 '89 A BILLIONS OF DOLLARS This rise in the cost of health care results in costlier health care insurance. Most companies are now looking for means to contain costs. Some com— panies are raising employee premiums, hiring health management consultants and sending their employees to physi— cian networks. Others have stopped payr ing for employees with certain health problems or dropped health benefits completely, causing some to go uninsured. Florida Community College has also been affected by the skyrocketing costs of health care. Over the past three years the College has experienced an average 21.5 percent increase in health inr surance costs. In the past, the Board of Trustees has been placing additional funds into the College health plan, but this year this is not an option. “For the first three months of the 1989 fiscal year (July, Aug. and Sept.), the number of employee insurance claims has reach— ed the six month level. That’s twice as many as estimated based on our past experience,” says Pat Pickett, employee services manager. A task force on health cost contain— ment headed by Lynn Parker, vice presi— dent, planning, marketing and human resources, and Jack Spears, vice presir dent of administrative and business ser— vices, was developed to review various cost containment possibilities and then submit a formal recommendation to the Board of Trustees. Pickett said the new plan had to ad— dress immediate problems and allow for a long term cost reduction of at least $500,000. There were three primary charges for the task force: 1. Contain costs. 2. Protect the lower paid employee from an unbearable burden. 3. Preserve employee morale to the greatest extent possible. At the meeting held Nov. 29, the Board of Trustees voted to accept the following changes in the employee health plan, effective Jan. 1, 1990: D Increase the non—PPO (preferred provider organization) deductible by $200 U Increase the PPO deductible by $100 Decrease the non—PPO co—insurance amount by 10 percent Increase the amount of claims necessary for waiver of co—insurance by $2,000 Cl Increase the maximum amount of employee out’of—pocket money by $1,200 for non-PPO and $300 for PPO. These changes create a larger gap be- tween the PPO and the non—PPO reim- bursements. This is meant to encourage employees to use the PPO doctors, who offer medical services to the College at reduced rates. The College will con— tinue to pay the full $150 a month for employee premiums, unlike many com— panies who now require employees to share in that cost. Another change is a stiff penalty for employees who do not pre—notify American General of a non—emergency hospital admission. The new plan calls for notification five days before a non— emergency admission or payment of 50 percent of the hospital bill. “This pre—certification feature is not asking for permission to be admitted, it’s only notification,” says Pickett. “This notification helps the insurance company monitor the care the patient is receiving, which helps contain costs. Statistics show that 90 percent of hospital bills have some kind of error.” Employees were informed about possi— ble changes during November and December. Communication included the distribution of information packets, PM‘mr ORDER HE wad: Cate WW 2 C) 1.5 ' TOTAL CLAIMS PAID BY FCC] 0 '85/'86 '86/‘87 '87/'88 '88/‘89 AMILLIONS OF DOLLARS employee information meetings held on each campus and telephone access to Human Resources staff for questions. Experts agree that health care costs will continue to escalate. Statistics show an increase of two percent a month or 24 percent per year in health care costs. More changes in the College health plan are likely in the future. “I’d like to see some of the furor turn into making changes, to make employees start look- ing at ways in which we can be more health conscious,” Pickett says “but, it’s a challenge.” Changes on dependent health/dental coverage: Effective January 1, premiums for dependent health and dental coverages increased. These changes were previous— ly accepted and were not part of the changes approved by the Board of Trustees in November. El Family health coverage rate — $142 per month; $71 semi—monthly El Family dental coverage rate $30 per month; $15 semi—monthly This represents a $12 increase in the dependent health rate and a $2 increase in the dependent dental rate. Any questions concerning the employee health plan, should be directed to Human Resources at 632—3316 or 632—3169. . m Mafia/mam First endowed chair INSIDE Apioneer retires ........2 New Nassau Center. . . . . . . .3 A true champion . . . . .4 FCC} is pleased to announce the dedication of its first endowed chair of excellence. The Nathan H. Wilson Chair for Community Leadership in Minority Affairs was created through a $45,000 gift from Southern Bell and a matching grant of $30,000 from the State of Florida. The Chair will be used to reward FCC] faculty and/or their departments who demonstrate innovation and persistence in improving minority affairs in our community. Nate Wilson, who recently retired after serving two terms as chairman of FCCJ’s District Board of Trustees, has an unparalleled history in Jacksonville for instigating and enabling progress in community relations among all citizens. At left, President Spence receives check from Earl Crittenden, vice—president, Network—Bell South. , Z ArchiveInABox,JAX,Outlook Newsletter Resorted,1990,January 1990,January 1990 1, January 1990 1