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Meeting the challenge

UPMC takes steps to control increasing costs
of medical benefits for staff

It’s no surprise to most Americans that health care costs continue to increase. UPMC, as an employer, faces the same increases as any other employer that provides medical benefits to its staff. From 2006 to 2007, UPMC’s medical costs are anticipated to increase by nearly 11 percent. Medical costs for employers are projected to increase 9.5 percent in the greater Pittsburgh area (Cowden Associates) and 9.9 percent nationally (Hewitt Associates).

UPMC is committed to providing a comprehensive, high-quality, affordable benefit program to staff members. Key steps have been taken to continue to enhance our medical coverage and to maintain affordability for our staff. While the cost to provide HMO coverage to a family is almost $1,000 each month — nearly $12,000 annually — UPMC staff members (full-time) continue to contribute just 15 percent toward the cost of coverage. Employee contributions for family coverage average 24 percent in the greater Pittsburgh area and 33 percent nationally (Mercer HR Consulting).

Strategies to reduce costs

UPMC believes that simply shifting the higher costs of health care to staff members is not the answer, and we must continue to explore a wide range of strategies aimed at keeping our benefit plans affordable. Most importantly, the plans and cost must encourage all our staff members to take an active role in maintaining their own health. Benefit programs are reviewed continually to ensure they are both cost-effective and competitive. Steps are taken each year to encourage staff members to seek the right care at the right time and in the right setting. For example, data indicated that emergency room visits by UPMC staff members were well above normal trends. Increased copayments were incorporated into all medical coverage options to stem the use of emergency rooms for nonemergency needs.

Addressing rising costs of prescriptions

Prescription medications are important in the treatment and prevention of illness, and they help avoid more costly medical services. But with the average cost of a prescription going from $28.67 in 1994 to $64.86 in 2005, it is essential to review the prescription program and look for cost savings opportunities. UPMC Health Plan reviews the prescription formulary quarterly to assess new medications that have become available and identify how they should be covered. The Your Choice program was introduced to allow staff members to have a choice in the medication they use. By choosing generic medications, Health Plan participants have helped to limit the increase in the cost of prescription medications.

My Health partnership

UPMC believes that focusing on the controllable causes of higher utilization of health care services, such as those influenced by lifestyle and behavior, is the most effective way to slow rising health care costs. By introducing the My Health initiative, we are providing more information to staff members and their families to increase their awareness of health-related issues. The My Health questionnaire and health screenings have been instrumental in promoting the early detection of potential health problems. In short, healthier staff leads to more efficient use of medical benefits, and thus lower costs.

Watch Extra! for more information about My Health and Open Enrollment.