Vanderbilt University Register: Faculty, staff to pay more for health care coverage beginning in 2003

Faculty and staff can expect to see an increase in insurance premiums, deductibles and other out-of-pocket expenses related to health care beginning in January 2003, according to University administrators.

Lauren Brisky, vice chancellor for administration and chief financial officer, said health care costs rising more than $10 million last year spurred the changes that will affect the employee benefits packages offered to faculty and staff in 2003. Employees will see changes to their current health care offerings when they sign up for their 2003 benefits during the annual open enrollment period, held this year Oct. 2-18. Generally speaking, open enrollment is the only time employees may make changes to their benefits package offered by the University.

"Vanderbilt pays the majority of health care costs for faculty and staff and has worked extremely hard over the years to minimize the impact of rising health care costs on our employees," said Brisky. "Increased utilization of health care has increased, driving the costs of health care up dramatically for the coming year. Regretfully, this means that costs for faculty, staff and Vanderbilt are again increasing significantly. Vanderbilt will continue to shoulder the majority of the costs to provide top-quality health care coverage for all of our eligible faculty and staff, and the only way to do this is to share the increase together."

And Vanderbilt isn't alone.

"Most employers can't continue to absorb all health care cost increases," said Kris Larsen, senior health and welfare consultant for Aon Consulting, the firm working with University officials to plan and implement the changes. "As costs continue to climb, employees are having to share responsibility for paying the higher costs."

Analysts say increased drug marketing, technological advances and an aging population have all contributed to rising costs. A decade ago, drug representatives relied primarily on relationships with hospitals and doctors, who would prescribe their products. Now, pharmaceutical companies are pitching their products directly to consumers through television, magazine and radio marketing campaigns. The result is that many patients are asking doctors to prescribe more expensive, name-brand drugs. Also, technologies that increase the life expectancy of many patients and the aging baby-boomer generation have created more older Americans than ever before. As the population ages, medical costs also rise because older patients generally require more health care services than the young do.

Finally, according to a PriceWaterhouseCooper study, government mandates and regulations, fraud and abuse, and consolidated hospital services contributed to the country's medical expenses that increased by nearly $40 billion last year.

"Vanderbilt has a quality health care program and, while it is never popular, most faculty and staff recognize that the only way to continue to provide this level of protection is to share the cost burden," Brisky said. "Certainly it is in everyone's advantage to have health care protection, and Vanderbilt is committed to having competitive rates for our health care options for faculty and staff."

Brisky said the details of the proposed changes will be announced in the near future.

"It is important that faculty and staff review the material carefully and choose the plan that fits their own family needs," she said.

For more information, read the open enrollment package scheduled to be sent Sept. 20 to the home of each faculty and staff member eligible for benefits. or visit the Benefits Fair Oct. 10-11.

Faculty, staff to pay more for health care coverage beginning in 2003

Administrators cite rising costs, older population as cause for benefit increase