Email concerning PEBB 16 June 2009

Dear All.

This is in response to an email received from a faculty member at the UO. Since I am copying my present email to a large number of people, I am transmiting my response as a blind copy to said faculty member deleting identifying information in the interests of preserving his/her personal privacy. This is a lengthy letter and I hope you all will bear with me.

Action has been requested of the UO Senate concerning the changes proposed by PEBB. The UO Senate is not an executive body -- it is a legislative body. Consequently, the UO Senate President has very limited executive authority. The next meeting of the UO Senate is 14 October 2009. In September, an invitation to PEBB and Providence could be issued and a Senate Committee could be constituted. But waiting until then is simply too long. Such a delay is not acceptable. So I am taking what action lies with my pervue. Now. Today.

Linda King: The appropriate executive authority in this regard at the University of Oregon is vested with you as the Associate Vice President for Human Resources. You attended the OSU Senate meeting and are busy writing a report on what you learned. I am respectfully requesting that you copy everyone on this list with your report when it is available. I agree that matters are critical and need to be looked into now and feel that you need to be our first point of contact. You are a professional in this regard and well versed to deal with the questions raised. And I respectfully request input from you in this regard.

Barbara Altman. You chair the FAC. To quote from the charge to the Faculty Advisory Council: "The Faculty Advisory Council shall be responsible for providing the President and other Administration officials with faculty opinion and counsel on the wide range of university affairs. In its relations with the President, the Administration, and with the faculty, the Faculty Advisory Council shall act either on request or on its own initiative." The FAC will be meeting during the summer months on a regular basis -- the next scheduled meeting is 1 July 2009. I am making a formal request for action in this matter.

Dave Hubin. You are the official laison between the UO Senate and the President's office. I am asking you to ensure that appropriate action is taken by the President's office.

I am President of the InterInstitutional Faculty Senate. As such I have different constraints than those attendant upon me in my role as UO Senate President.

Denise Yunker -- we met last Friday in the Chancellors office concerning this very subject and at that time I raised the very question of mental health providers that is raised below. I am copying this email to you to reinforce my concern in this matter.

Susan Weeks (Vice Chancelor for Academic Affairs)-- I also met with you last Friday and we discussed the matters that Nathan raises below. I pass along these concerns so that you can ensure that Chancellor Pernsteiner kept fully informed. I believe this requires action from OUS and not just the UO.

Nathan has most kindly given me permission to post part of an email he sent me earlier on the web. I copy it below and urge all to give careful attention to it.

I am a strict constructionist. The Senate simply is not the appropriate venue for action in the Summer. But our administration through the Associate Vice President for Human Resources IS an appropriate venue. And the Faculty Advisory Council (on which Nathan sits as Vice President) is ANOTHER appropriate venue. And the Chancellors office is also an appropriate venue through which our faculty can express their legitimate and respectful concerns.

Peter B Gilkey
President of the InterInstitutional Faculty Senate (2009)
President of the UO Senate (2009/10)

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?

Hope this helps, Nathan