Subject: Re: PEBB 2010 Medical Plan
To: "Peter B Gilkey" <gilkey@uoregon.edu> 
Cc: jcbean@uoregon.edu, llking@uoregon.edu, baltmann@uoregon.edu, 
"Nathan Tublitz" <... 
From: "Nathan Tublitz" <tublitz@uoneuro.uoregon.edu>
Date: Wed, 17 Jun 2009 08:16:46 -0700
Dear Peter et al:

Thanks Peter for your excellent email. Like you, I have received numerous
emails in the past week from faculty and staff concerned about this
proposed change. It is clearly of serious concern to the employees here at
the University.

Here are a few potential options for you as Senate President to consider:

1) The Senate President is able to set up an ad hoc commmittee anytime
during his/her tenure. One does not need to wait until the fall term to do
so.

2) The Senate President has the authority to call a public town hall
meeting this summer and invite the PEBB administrator and Providence
representatives to present at this meeting;

3) The Senate President can urge the members of all the stakeholder groups
in the Senate to each write an individual letter to PEBB and their state
legislators stating their views on the proposed change;

4) The Senate President can work together with his counterpart at OSU to
develop a joint plan of action which might include sharing of information,
writing joint letters to our legislators and OUS board members, etc; and,

5) The Senate President could encourage the University administration to
take a strong public stand against this change and ask them to write
letters stating this view to legislators, PEBB and OUS.

I admire your ability to follow a "strict constructionist" route when it
comes to being the University Senate President. However, each of the above
actions can be legally taken by the Senate President now during the
summer. I urge you to consider taking all these steps. As Senate VP, I
will support you fully and in whatever way I can.

The Senate should be proactive in ensuring that our faculty and staff have
the best possible health care coverage. Advocating for our colleagues is
what the Senate is all about.

Finally, I formally ask you to post this letter on the Senate website
letters page along with the portion of my 16 June 09 email to you which
you appended below (the list of issues).

Thanks so much for taking a leadership role on this issue Peter.

Nathan
-- 
Professor of Biology
Member, Institute of Neuroscience
University of Oregon
Eugene, OR 97403
phone: 541-346-4510; fax: 541-346-4548
>
> =================================================
>>From tublitz@uoneuro.uoregon.edu
> Date Tue, Jun 16, 2009 at 1:26
> To gilkey@uoregon.edu
>
> [Material deleted at the request of Senate Vice President Tublitz]
>
> Here are some issues that could be raised in any letter about the
impeding
> change in health care provider from Regence Blue Cross to a self
insurance
> scheme funded by PEBB and administered by Providence:
>
> 1) THE PROMISE OF SAME BENEFITS IS NOT CORRECT, at least not now and
possibly not for a long time to come. Here are some reasons why:
>
> A. The Providence provider list is not the same as the Regence list.
Providence claims 80-90% overlap which may be true, however those who go
to their doctors next January and then find out they are not covered
will
> not be happy when they have to pay full price out of pocket for a
previously covered service.
>
> (by the way, Providence says we employees are responsible for making
sure
> our physicians are on the providence provider list - why should we be
responsible for this? It is PEBB's responsibility or Providence, not
ours).
>
> B. Provider refusal to contract with Providence. Some Regence providers
will not contract with Providence because of past unsatisfactory
interactions. It is not clear the reason(s) for this dissatisfaction but
that means people will have to change doctors to remain covered.
>
> C. Rural Coverage issues. People who live in rural areas have a very
few
> doctors from which to choose. If a specific rural doctor chooses not
contract with Providence for whatever reason and the other rural doctors
in that area are not taking new patients, then those employees will not
have any health care coverage.
>
> D. Mental health coverage. Providence has not yet contracted with many
of
> the mental health providers in Lane County (i.e., psychologists,
licensed
> therapists, social workers etc). What will happen when the self
insurance
> scheme begins and all these mental health care professionals are not
providers?
>
> E. Reproductive coverage. Being a faith based company, it is not clear
that Providence will automatically approve current benefits for
abortion,
> contraception and LGBT issues. Their religious views are certainly at
odds
> philosophically and morally with providing these services to us
employees.
>
> F. Out of state and out of country coverage. The Providence
representative
> at the OSU meeting last week said that out of state and out of country
expenses "should" be covered by Providence. However he also said that we
would have to pay all charges out of pocket first and then get
reimbursed.
> Who has $15,000 or more to pay for an unexpected hospitalization when
away on vacation or on a job-related trip? Regence always guaranteed
payment for these expenses without question at the time of treatment so
all we ever paid was the co-pay and often not until after the bill was
submitted and paid for by Regence.
>
> 2) SECURITY OF PEBB RESERVE FUND. The entire self-insurance scheme is
based on the premise that PEBB will have funds to payout claims. The
current idea is that PEBB will use its reserve fund, currently valued at
~$74 million. Is this enough? The answer to this is not clear. And what
happens if the state decides to sweep the PEBB reserve into the general
fund? The PEBB administrator says "this is unlikely" but it is certainly
possible. And if that happens, then the entire self-insurance scheme is
unworkable.
> Should we take this risk by moving ahead with self-insurance now or wait
to see what the legislature will do?
>
> 3) CAN PEBB DO A BETTER JOB THAN REGENCE AT A CHEAPER PRICE? PEBB has
never run a self insurance scheme of this magnitude. There are huge
start
> up and
> continuing overhead costs associated with starting a new self insurance
plan. What assurance do we have that PEBB is capable of managing such a
plan without a fiscal disaster? The State of Oregon set up PERS to avoid
working with existing companies (because they thought they could it
better
> themselves) and look what a fiasco that was.
>
> 4) CONFLICT OF INTEREST. PEBB was originally set up to provide the best
possible insurance for state employees. Now it is getting into the
insurance business to save money. There is an inherent conflict of
interest when the same business is trying to act on behalf of the
employees and also cut costs which will negatively affect the same
employees.
>
> A further important issue is that there may be little change this year
to
> the benefit package but there will be increasing pressure on PEBB to
continue to cut costs (by cutting benefits) in future years. Thus the
conflict of interest issue will only grow in subsequent years.
>
> 5) A VERY BAD PROCESS. PEBB never discussed this change with any faculty
or other group outside of the PEBB reps. It also was planning to
consider
> this for 2011 but moved this entire decision up by a year and did
summarily so without any public input.
>
> 6) CHOICE OF PROVIDENCE. Providence was chosen because its bid was 0.4%
less than Regence. In exchange for saving a tiny percentage, all the
above
> problems have been raised. How does PEBB justify saving such a tiny
fraction at the expense of the health and general welfare of its
employees?
> This brings us back to issue #4, the conflict of interest issue.
>
> 7) WHO MAKES THE FINAL BENEFIT DECISION, PEBB OR PROVIDENCE? When
Regence
> was our health care provider, they did everything - they took our
premiums, made decisions about what was or was not covered, and paid out
benefits. Who will make the decisions about benefit coverage in the self
insurance scheme, PEBB or Providence? And what recourse will we have if
we
> disagree with the decision to deny benefits?
>
> Nathan's conclusion: Maybe self-insurance is a good thing in the long
run.
> But there are too many important questions not yet answered. PEBB has
not
> clearly thought out all the implications of this decision. Thus, the
decision to self-insure should be rolled back until Jan 2011
> at the very earliest. The best way to achieve this is through public
pressure on our representatives. Perhaps we (the Senate) should ask all
University employees to write a letter to their state senator and state
representative asking for a delay in the implementation of this
decision.
>
> Hope this helps,
>
> Nathan