Harvard faculty rally against university's new health care policy

Tension on campus a 'microcosm' of the nation

Despite a Harvard University faculty vote in November that overwhelmingly opposed health care plan cost increases, rates will increase this month as part of the Affordable Care Act—which many of the schools' professors supported, reports the New York Times.

Although the dynamics at Harvard are unusual—some of the school's professors played a role in advising Democrats on the health reform law—the tension on campus reflects feelings nationwide. "Harvard is a microcosm of what's happening in health care in the country," says David Cutler, a health economist at the institution and adviser to President Barack Obama's 2008 campaign.

However, says Cutler, this is the first cost increase the professors have faced, adding faculty have largely been shielded from the costs that many employers have been passing on to their workforces in recent years. "Harvard was and remains a very generous employer," he says.

The institution is implementing features standard of most employer-sponsored coverage, in which employees pay:

  • Deductibles of $250 for an individual or $750 for a family;
  • A share of the costs for surgery, certain advanced tests, and hospitalization.

Harvard's plan covers 91% of service costs, while the most popular plans available through exchanges cover only 70%.

The university's 2015 health care enrollment guide says it must respond to the "national trend of rising health care costs," including those caused by the ACA. The added costs come from provisions extending coverage to children 26 and younger, making preventive screenings free, and beginning in 2018 a "Cadillac tax" on high-cost plans.

Health care providers' responses to the Affordable Care Act

Prior to the changes, employees covered part of the insurance premiums and low-level costs. Now, "employees will often pay more for care at the point of service," says Michael Chernew, chairman of the institution's benefits committee. "Patient cost-sharing is proven to reduce overall spending," he says.

Another common way to reduce spending, narrowing the network, was considered not an option because it would mean cutting out hospitals affiliated with Harvard Medical School.

Administrators have noted that though out-of-pocket costs will increase, premiums will decline slightly, and a program will help employees who earn $95,000 or less annually.

Faculty reaction

Harvard professors analyzed the school's data and now challenge the assertion that costs have increased by as much as the university says. National health spending has grown at a slow rate in recent years.

Jerry Green, an economics professor and former provost, says the increased out-of-pocket costs could push people to delay treatment, leading to more complications.

"Consumer cost-sharing is a blunt instrument," says Meredith Rosenthal, a health economics and policy professor. "It will save money, but we have strong evidence that when faced with high out-of-pocket costs, consumers make choices that do not appear to be in their best interests in terms of health" (Pear, New York Times, 1/5).

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