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Bad Process Makes for Bad Health Policy

By Bill Jaeger and Donene Williams

The University’s planned changes to employee health benefits for 2015 are a painful example of a flawed process leading to bad policy ideas. Although the new plans won’t affect members of the Harvard Union of Clerical and Technical Workers when they are implemented in January, HUCTW leaders have studied the changes carefully because we are concerned about the whole Harvard health care system and its impact on all of our co-workers—faculty and staff, union and non-union.

The factual basis and policy rationale for the changes are unnecessarily mysterious. University Provost Alan M. Garber ’76 has said the new plans were recommended by the University Benefits Committee. But thousands of deeply affected Harvard employees don’t know who is on the UBC, because a full list of Committee members has not been made public. Few in the community had any idea that this kind of change was being considered. If details of the UBC’s research and analysis have been documented, no one except Committee members and senior administrators has seen them.

More broadly, Harvard’s Human Resources administration seems strangely reluctant to share basic information. How much does the University pay for our health care, how has the cost changed in recent years, and what have been the effects of other plan changes meant to control costs? We have no idea, and many in the employee community are baffled as to why administrators won’t share the data.

The particulars of the plan changes are somewhat complicated, with new deductibles and co-insurance that are unfamiliar to most staff and faculty who are enrolled in Harvard’s popular HMO plans. But the consequences are straightforward. Any employee (or covered family member) who needs treatment more serious than a routine annual exam will pay significantly more out-of-pocket. Harvard will pay for a smaller share of our health care, and employees will pay more. The impact will be most severe on lower-paid employees, and the greatest burden will fall on our co-workers with families or chronic health problems. With each employee now at risk for as much as $4,500 per year in new health-related expenses, it’s no wonder faculty and non-union staff are voicing growing concerns about potentially destructive effects.

The strategy of shifting costs onto employees through higher deductibles and co-insurance is more of an HR fad than an academically tested solution. In fact, there is some suggestion in the health economics literature that increased cost-shifting onto patients may lead to higher total costs in the long-term, as employees decide not to seek beneficial care and get sicker.

There are better ways to control the cost of health benefits by helping employees to be healthier and by supporting informed decisions about where and how to receive care. In September, HUCTW issued a report that lays out “Seven Good Ideas for Bending the Health Care Cost Curve,” with the potential to reduce Harvard’s medical spending by up to $6 million per year. The ideas came from Union leaders’ discussions with Harvard faculty members about their research into strategies that improve health outcomes, rather than simply pushing a greater share of the cost onto patients.

The cost of health care is a big problem, a complicated issue, and an area of keenly shared interest between Harvard and all of its employees. Because it is so important, we need a very different approach to policy-making with more transparency and more engagement. University administrators should share information about health care spending fully and regularly, so that energetic, committed staff and faculty can engage in a search for innovative and progressive solutions. We do our best work when we take on challenges as a community, honestly and inclusively. Harvard’s health plan changes for 2015 are poorly aligned with employee needs and with the most hopeful strategies emerging in faculty research. The complex and urgent nature of the health care problem demands that we do better.

Bill Jaeger and Donene Williams are Organizers for the Harvard Union of Clerical and Technical Workers.

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