SPECTRUM - Aetna Student Health by dandanhuanghuang


                               A P U B L I CAT I O N   OF   T H E C H I C K E R I N G G RO U P

                                                                                   MAY 2003


             Relevance, Measurement and Value
                          JAMES E. MORLEY, JR.
                          PRESIDENT, NACUBO

       Special Interview: Working Smarter With Less
                        MARGARET BRIDWELL, MD

 Special Interview: Plan, Assess, Communicate and Celebrate
                         SAUNDRA L. TAYLOR, PHD
                          U NIVERSITY OF A RIZONA

            Budget Cuts: A California Perspective
                                STEVE LUSTIG

Campus Health Services: Surviving the Academy’s Budget Crisis
                          J. ROBERT WIRAG, HSD

     Columbia University’s Volunteer Ambulance Corps

               Prescription Costs: Does Your
        Student Health Insurance Plan Measure Up?
                          PAUL A. CRONIN, FSA
                         THE CHICKERING GROUP

                                  O      ur special edition
                                         of Spectrum on
                                   the uninsured student,
                                                               Maggi Bridwell, one of the “deans” of college
                                                               health, describes how she has worked with her
                                                               financial and program officers to be fiscally
    published in March 2003, introduced a new look,            responsible and yet preserve the resources necessary
    the addition of outside editors, and greater reliance      for an adequate student health service. Steve Lustig
    on contributed articles. Since we heard from many          at Berkeley describes how he has maintained Student
    of you that you were pleased with these changes, we        Health Services in the face of a 20% reduction in
    plan to continue to publish in this new format.            University funds. Finally, Saundra Taylor, Vice
           When Spectrum was launched six years ago,           President for Campus Life at the University of
    our mission was to provide a newsletter of opinion,        Arizona, discusses the Solomon-like choices in
    ideas, and information on current issues in student        managing budget reductions across an array of
    health. That mission remains unchanged, but six            important programs.
    years have helped us to be clearer about how                     Rounding out each issue will be an article on
    Spectrum can be more useful.                               a topic related to student health insurance. In this
           For example, we have published a number of          issue, Chickering’s Chief Actuary, Paul Cronin,
    contributed articles on how things are done at             focuses on the patterns of utilization and cost
    various campuses, called “In the Spotlight.” We            observed in prescription drug coverage.
    have received favorable comments on these real-life,             We will also include abstracts of articles from
    real-time descriptions of current practices. Therefore,    other journals and the popular press on items of
    each issue will now include that kind of article           interest to student health. This section will continue
    in a section called “How We Do It.” In this issue,         to be called “Briefly Noted.”
    Margo Amgott and Hannah Krimins at Columbia                      With this issue we also are introducing an
    describe Columbia’s student-run ambulance service,         independent editorial board. Although Spectrum is
    a story of involvement, quality, service, efficiency,      not a refereed journal, we felt that an editorial board
    and cost savings.                                          would provide valuable suggestions for both
           We have also heard that Spectrum has been           content and authors and would help ensure the
    a useful instrument for informing and educating            ongoing relevance of the publication. This editorial
    colleagues. The lead piece this winter on the core         board will grow over the next few issues to become
    competencies for Student Health Services Directors         a group that will represent both the leadership and
    has gone to several search committees and to many          diverse constituencies of college health.
    Student Affairs Offices with route slips saying,                 As always, your suggestions and comments
    “This is what I actually do!”                              are valued. We hope that Spectrum will continue to
           To meet that need, we will have an integrating      be an important forum for the field.
    theme for each issue, focusing on topics of high and
    current interest. This issue focuses on how student        Best regards,
    health programs are coping with the budget
    constraints facing all of higher education, but most
    acutely, public institutions, which rely on tax dollars.
    Bob Wirag’s article, “Surviving the Academy’s              Fredrick H. Chicos   Stephen C. Caulfield
    Budget Crisis,” lays out several strategies for            President and CEO    Chairman
    achieving independence from university funds.              The Chickering Group The Chickering Group

       SPECTRUM                                                                                              May 2003
  Relevance, Measurement,Value
                      I am pleased to be asked to introduce this issue of Spectrum, which, in a very
                      timely way, discusses the difficult financial challenges all of us in higher education
                      are now facing.
                    A few words of introduction may be in order.The National Association of Colleges
                    and University Business Officers (NACUBO) has over 2,100 institutional members.
                    Our primary constituents are chief administrative and financial officers. I came
                    to this position in 1995, after a succession of business officer positions, including
  Senior Vice President of Cornell University.
  I am not sure whether this is the most difficult period I have experienced, but it is certainly among
  the most challenging. My colleagues who are directly responsible for the financial health (and
  sometimes survival) of institutions are facing a sharp erosion in endowments, constraints on tuition
  and fees to keep higher education affordable, precipitous declines in annual giving (including
  unfulfilled pledges) and increasing enrollments that tend to run counter to a faltering economy. Our
  public institutions that rely on tax-levy support at the state level are particularly hard hit. As someone
  suggested, this year the signs on my colleagues’ desks now read, “The Buck Shrinks Here.”
  What are the three or four key messages from the business officers at times like these?
  First and foremost, each program competing for university funds has to be both clear and credible
  about how that program relates to the central missions of the institution. Those most closely aligned
  with both the core missions and core values will receive more favorable treatment. As Dr. Bridwell
  points out, it is too late to make this case at a time of crisis. It must be an ongoing process, and each
  program’s story must be heard, understood and believed at the highest level. It is important for
  student health leaders to make your case in this context, and, for the CFO to have the institutional
  perspective to listen.
  Second, although we are sometimes viewed as “Doctor No,” our proper function is as a business
  consultant and facilitator of information and best practices to all internal units.
  Third, we in NACUBO are, by nature, quantitative people. If a program does not collect and use
  data to make prudent business decisions, we will work with them to help identify appropriate analysis
  and metrics to assist in the resource allocation process. Dr. Taylor’s strong emphasis on assessment
  comes close to qualifying her as an honorary NACUBO member.
  Finally, our role in some ways is to be the value police. Our job is less difficult when programs have
  been tough-minded about their value proposition. This requires both benchmarking against best
  practices in other higher education institutions and comparable programs in other settings.
  The authors writing in this issue of Spectrum capture the issues and support these four themes.Those
  of us who have to guide the budget to a balanced bottom line appreciate this kind of informed dialogue.

  James E. Morley, Jr.
  President, NACUBO

May 2003                                                                                    SPECTRUM
                  I n t e r v i ew

                  Working Smarter With Less:
                  An Interview with Margaret Bridwell,

Editor’s note: At Chickering’s Leadership Forum last October,                        While there is talk of furloughs on other campuses of
Dr. Bridwell asked her colleagues for advice on how to manage                the University, we haven’t been asked to do this. There is no
her program in the face of significant reductions in the state of            plan that I know of for early retirement packages, but there
Maryland’s funding for higher education. Five months later,                  is now talk of layoffs, and we have been told to expect
we checked back with Dr. Bridwell to see how the process                     another round of cuts next year. Nothing specific has
had unfolded.                                                                been suggested, although another 5% is anticipated. Since
                                                                             the governor’s plan for slot machines has been voted
Stephen Caulfield: Dr. Bridwell, last fall the University                    down, we can definitely expect more cuts next year.
directed all programs to respond to the state’s budget                               What else have we done? We are looking very
crisis by across-the-board budget reductions. Can you                        carefully at salary savings and our operating expenses. At
give us the broad outline of what you were asked to do                       this point, we are still delivering the same services. We have
and what mechanisms, such as hiring freezes, were                            about 65,000 visits each year, but we are looking at services
imposed on you?                                                              and positions that we can outsource, for better service
                                                                             and, hopefully, at less cost. The services we’re looking at
Dr. Maggi Bridwell: Let me start by setting the context                      include housekeeping and IT. I think we can make the
for our program. We are the main campus of the State                         requested cuts this year, but we need to look at the long
University. We have about 34,000 students whose tuition                      term and decide what we want to be then — continue as
and fees at the start of this year were $5,600 for Maryland                  is, downsize or add services which could be self-sustaining
residents. The Student Health Services (SHS) began this                      on a fee-for-service basis. For example, physical therapy
academic year with a budget of $5.4 million, of which                        (PT) is a service we are moving back to the Health Center,
$3.126 million came from the state (University funds). We                    and it should be busier now that it is not on the other side
do not have an identified Student Health fee. The approx-                    of campus. PT is fee-based and should be self-supporting.
imately $2.3 million that is added to the state funds to                             Another example is our dental service, but here our
make up our total budget comes from fees we charge for                       budget crisis requires that we be very careful. Our new
pharmacy, dentistry, physical therapy and other services.                    facility (which was under construction prior to the budget
      Our whole budget of $5.4 million was considered                        crisis) is planned to have six dental operatories, an addition
our “base budget.”* From this we have had to cut 5%, or                      of two over the four currently in the clinic. This is a gamble,
about $270,000. To achieve this, we have given up five                       but I think we might reduce our risk by contracting with
positions out of a full-time equivalent staff of 80.                         local dentists to provide the care. We are now evaluating
In addition to these five positions, there was a University-                 the current dental clinic operation to document whether it
wide hiring freeze, which has recently been lifted. Under                    can become self-sufficient. Another complication is that
the freeze, vacant positions could not be filled without                     the latest review of our budget puts in question whether
high-level University approval. Some months ago, that                        we can equip and furnish the dental clinic as planned.
was tightened further, with appeals going directly to the
State Capitol. Under the freeze, we had been given                           Caulfield: Do you think those responsible for the budget
permission to fill two of several vacancies — a nurse and                    now understand the unique missions of the SHS, and has
a medical records technician — but we still have other                       that understanding allowed some flexibility with regard
openings, including three in Medical Records.                                to the across-the-board program?

*Budget is for direct compensation, supplies, travel, and minor equipment. Fringe benefits, space, utilities and major capital expenses are excluded.

         SP E C T R U M                                                                                                             May 2003
                              “When the budget crisis hits, it’s too late to make friends
                            and sell your pro g ram up the organization because eve ryo n e
MD                                 else is doing the same thing for their own pro g ra m s .”

     Dr. Bridwell: The University and, specifically, the Student     still function. My preferred way to do this is to get
     Affairs Division, do understand our mission. We are             together in small functional groups, when we have
     hurting no more than the rest of the University, and I          something to talk about. I do send the occasional all-staff
     might even say we have been treated well, or at least very      email, and we have a monthly newsletter. I am sometimes
     fairly. With our current state budget deficit, the University   asked to hold meetings every two weeks on the budget. I
     has limited options. This semester, tuition was raised $200     have two problems with this: First, I don’t have something
     for in-state and $300 for out-of-state residents. Because of    to talk about every two weeks, and, more importantly,
     the uproar these increases caused among students and            our primary job is to provide health care. The best way to
     parents, another increase in tuition will be tough, so there    keep morale up is to stay busy and focus on our primary
     has to be a rigorous effort to cut costs. These decisions (to   job — taking care of students. The staff is working hard
     require both a 5% cut and a hiring freeze) were made at         and remain dedicated to their jobs. However, it is difficult
     a higher level, by the Provost and the President, but I don’t   for them — rumors spread when we do not have any
     know what else could have been done.                            specific information to pass on to them. When they hear
                                                                     there are layoffs in other departments, they are concerned
     Caulfield: Can you talk about the moral and ethical             for themselves. With the budget crunch, we can’t afford
     dilemma of wanting to help the state resolve its budget         meetings, and we don’t have ways to reward staff.
     crisis and, as a physician, wanting to provide necessary
     and appropriate care?                                           Caulfield: If the University budget process gave you the
                                                                     degree of freedom you think is necessary to run the
     Dr. Bridwell: We still feel responsible for delivering          Student Health Service, what are the two or three
     necessary and appropriate care and will do so. I am not         alternatives you’d like to pursue to stabilize your
     sure I feel responsible for resolving budget problems at the    program financially, without increasing your reliance on
     state level. Ethically, we must help the staff understand       University funds?
     what the situation is and enlist their ideas and support as
     we make the necessary cuts.                                     Dr. Bridwell: Obviously we have to work on both the
            What makes this particularly challenging is there is     expense side and the income side of our ledger. On
     no fat. Ten years ago, during the last big budget crisis, we    the expense side, I am looking at outsourcing what services
     eliminated a number of positions. Now we either have to         we can, but not losing control of our core clinical
     be more productive with what we have, or we have to cut         services, health education, wellness health promotion,
     services. I hope this year we can do more with productivity     and healthy lifestyle programs, which are integral to the
     — working smarter and using the improvements in work            delivery of health care in a higher education setting and
     flows that our new facility will allow. But another 5%          which should be maintained. Outsourcing some non-
     next year? I don’t know.                                        central services may have two advantages, it may save us
                                                                     money, and it will free up personnel lines. In our system,
     Caulfield: How have you kept your staff informed, while         you need both. Even if you have a revenue stream, you can’t
     maintaining morale and focus on the primary job of taking       hire without an approved personnel line. Looking down
     care of students?                                               the road, I want to be sure to have personnel lines available.
                                                                           Also on the expense side, we are looking at ways of
     Dr. Bridwell: As information becomes available, the staff       working smarter. Our clinicians (MDs, NPs, and PAs) now
     is informed. All units are looking at ways we can cut and       do tasks that nurses could do. Our nurses do work that

     May 2003                                                                                               SPECTRUM
                                                                                “ These are uniquely challenging times.
                                                                                able to make one-time cuts to solve the
                                                                                c u r rent services with any further budget

                                                                                 Caulfield: From what you’ve described, you will get
                                                                                 through the next academic year with constrained
                                                                                 resources. What is the realistic outlook for the next few
                                                                                 years and what are your strategies for the next round
University of Maryland, College Park Campus Health Center (pre-construction).
                                                                                 of budgets?

      nursing assistants can do, and nursing assistants do what                  Dr. Bridwell: Strategies for the next few years will include
      clerks could be doing. Changing will take time, but we must                continuing to consider outsourcing, as we have talked
      do it. This also illustrates the need for personnel lines. We              about before; the restructuring of our staffing model; and
      will need more support positions to fix this problem.                      looking at income generation. Regarding income, two
             On the income side of what we do, the most pressing                 points are worth noting. I had mentioned our fees earlier.
      need is to bring our fees up to something close to the                     Virtually all of our fees and charges are way below those
      current market rates in our community. I would also like                   charged in the surrounding community. We need to
      to go back to a specific student health fee, rather than to                bring those up, but I still want them to be somewhat
      be part of the undifferentiated tuition and state supplement               below “market” rates to ensure students use our program.
      pool, but I don’t think that will happen.                                  A second point is that, because of our state employee
                                                                                 status, our physicians and other clinicians are covered
      Caulfield: During this process, you have been in the                       under Maryland’s tort claim limits. This is not considered
      midst of a very significant construction and renovation                    adequate malpractice coverage by the insurance or managed
      project which will more than double the size of your                       care programs, so we cannot bill for clinicians’ care
      SHS. I assume the construction budget is untouchable,                      because we are not considered participating providers.
      but what about the program budget to adequately staff
      your new facility?                                                         Caulfield: You have not mentioned moving your Student
                                                                                 Health Insurance Program from a voluntary to a hard
      Dr. Bridwell: The construction goes on and is funded up                    waiver or mandatory program. With everyone insured,
      to a point. For example, there has been a commitment by                    you might improve your fee recovery and perhaps get
      us of $1 million from our budget to finish the project,                    some capitation payments to address your credentialing
      but we have not been able to put the full amount in the                    and malpractice problem.
      construction account. We also have already had to use
      some of the budgeted furniture and equipment money to                      Dr. Bridwell: I have not mentioned it because I think it
      cover construction contingencies.                                          wouldn’t be acceptable at a time when tuition is rising.
            At this point, it means that we will have less new                   I’m torn on this, because it’s the right thing to do and it
      furniture and will have to put old furniture into a nice-                  should, with increased numbers, make the insurance less
      looking new facility. We will put the new furniture in the                 costly for everyone. On the other hand, as Rick Kronick
      common areas to start.                                                     pointed out in your special issue of Spectrum, at some
            But, as you suggest, the real concern is staffing.                   point you make higher education unaffordable. It’s also
      Moving existing staff into the new facilities will                         not a good time to take on that issue, with the budget
      improve productivity by creating two exam rooms for                        crisis hitting every part of the University.
      each clinician and better work flow. But we had
      planned on some new hires. I worry that, due to loss of                    Caulfield: You have directed this program for many years,
      position lines, we will have a beautiful new Health Center                 you are a national leader in accreditation of SHS programs,
      with not enough staff to deliver services.                                 and you have been active in ACHA for years. Combining

               SP E C T R U M                                                                                                  May 2003
We have had cuts before, but we always had a cushion and we re
budget dilemma. This time, there is no way to maintain all our
c u t s .”

      your Maryland experience and your national experience,            next five years. Nothing is sacred. Look at everything
      are these uniquely challenging times for Student Health?          you do. Can you do it differently? Can you do without?
                                                                        If you have always done things a certain way, re-evaluate.
      Dr. Bridwell: Yes, these are uniquely challenging times.          Try to involve everyone. That is not easy. None of it
      We have had cuts before, but we always had a cushion              is easy!!! For example, I commented earlier that we don’t
      and were able to make one-time cuts to solve the budget           have the right mix of junior people. In a more comfortable
      dilemma. This time, there is no way to maintain all our           time, we could live with these inefficiencies. Today
      current services with any further budget cuts. And this           we can’t.
      will raise the very difficult question of what gets sacrificed.          Fourth, I always ask the people who do the various
      College health has had the extraordinary opportunity to           jobs how they could do them better. They know because
      provide primary care, to manage specialty and subspecialty        they are the ones in the trenches; they just need permission
      care, to practice public health and prevention with a captive     to tell you that it isn’t perfect and could be improved.
      population and to address questions of lifestyle and risk                Fifth, it’s true that you have to spend money to save
      behaviors. My fear is that with further cuts, public health       money, but that’s virtually impossible with tight budgets.
      and prevention will be compromised.                               Thank goodness we had our new facility going up when
                                                                        this hit. Could we save money going to an electronic
      Caulfield: From your budget travails of the last six              medical record? Probably. But can we afford to do that
      months, have you developed at least the broad outline             now? Probably not. So, if you get a little bit of breathing
      of a “survival guide” that might be useful to your                room, build your efficiencies then, improve your systems
      colleagues elsewhere?                                             and invest in what is required to make those changes.
                                                                               Finally, you asked about the morale. Let me add
      Dr. Bridwell: First, you have to know your budget inside          that to the lessons. If you’ve done your staffing right, a
      and out. As a physician and director, I had focused on            budget crisis will strain morale, but it won’t break it. Our
      care delivery issues and program planning, particularly           staff likes what they do. Sure they complain, but they
      with our new facility. It took me a while to get up to speed      pitch in and manage. The crisis will expose the weak links
      with all of the detail and nuances of what makes up our           in your staffing. As director, you’ve got to fix those quickly,
      budget. For example, I had always assumed our pharmacy            but if taking care of ill, injured, or worried students was
      “made” money, but found that the salary lines and other           rewarding before the budget crisis, it should be just as
      expenses associated with the pharmacy were not included           rewarding during and after budget cuts.
      in the expense side. I still think the pharmacy is a net
      income producer, but we’re looking at it in a different and       Margaret W. Bridwell, MD, has been Director of the University
                                                                        Health Center at the University of Maryland, College Park since
      much more detailed way.                                           1975. She received her BS fromTulane University and her MD from
            Second, when the budget crisis hits, it’s too late to                                                  .
                                                                        Louisiana State University Medical Center Dr. Bridwell is past
      make friends and “sell” your program up the organization          president of the American College Health Association, past president
      because everyone else is doing the same thing for their           and a current board member of the Accreditation Association for
                                                                        Ambulatory Health Care, and a surveyor for AccreditationAssociation
      own programs. I mentioned that our Vice President for                                                                       r
                                                                        for Ambulatory Health Car e, Inc. and Faculty for T aining.
      Student Affairs and others in the University hierarchy                                                   ’s
                                                                        Dr. Bridwell was the recipient of ACHA Edward Hitchcock Awar      d
      have treated us fairly and appropriately, that is because         in 2000. She can be reached at Bridwell@health.umd.edu.
      they knew and understood our value long before the
                                                                        Stephen C. Caulfield, MSW, is Chairman of The Chickering roup.
      budget crisis hit.
                                                                        Prior to joining Chickering he was a worldwide partner at Mercer
            Third, always look for ways to work “smarter.”              Human Resource Consulting. He can be reached at scaulfield@
      Look ahead and plan, not on a yearly basis, but for the           chickering.com.

      May 2003                                                                                                    SPECTRUM
                 I n t e r v i ew

                 Plan, Assess, Communicate and Cele
                 An Interview with Saundra L. Taylor,

Editor’s note: The budget crises on college and university          this program, an outreach effort for K-12 students. Human
campuses are felt and responded to at many levels, from the         Resources has all of the traditional units, including a work/
Trustees right down to the student. Dr. Saundra L. Taylor, the      life unit. It is a full-service resource for the entire campus.
University of Arizona’s Vice President for Campus Life, is close           All of this is on a fairly large scale. We have a small
to the top of that process. She reports directly to the President   city here — 37,000 students and 20,000 faculty and staff.
and has some 1,200 people working in programs she oversees.         Twelve hundred people work in Campus Life, including
Dr. Taylor talked with Spectrum for over an hour about the          300 student workers. Campus Life’s operating budget is
difficult decisions she and her colleagues are making.              just under $100 million, with $14 million in state funds
                                                                    and $85 million in auxiliaries. Over the past three years,
Stephen Caulfield: In your role as Vice President for               there has been a slight growth in enrollment, perhaps 2%
Campus Life, you are responsible for everything from                each year. But the state budget has been in decline during
residence life, to judicial affairs, to student health. Can you     that three year period.
give us an overview of the scope of your responsibilities —
how many departments, how many people, total budget,                Caulfield: Since you mentioned the decline in the state
serving how many students?                                          budget, it is no secret that virtually every state is facing
                                                                    particularly significant budget cuts this year, and in
Dr. Saundra Taylor: Let me start with a word about the              virtually every state, those cuts have been felt in public
title, Campus Life. The President and I take that quite             higher education. In most jurisdictions, there is some
literally to mean we have the responsibility to make all            political process whereby some programs do somewhat
campus experiences as fulfilling and productive as possible         better and some fare less well, but even during that
— for students, faculty, staff and visitors — from the              process the “writing on the wall” is pretty clear. What is the
community, parents, or others. One specific department              Arizona story, and what has your University had to absorb?
that I have that you would not find in Student Affairs is
Human Resources, which serves both faculty and staff,               Dr. Taylor: The state allocation for the University is to be
including faculty recruitment.                                      reduced by 13%, or about $45 million. In Campus Life,
       How does this get done? I have one Associate Vice            we will absorb about 10%, and in academics, only about
President and three executive directors, as well as staff,          7%. The auxiliaries don’t take the same hit, but I can find
who report directly to me. We are organized into four               ways that the auxiliary programs can help me. For example,
broad areas: Student Life, Health and Wellness, Human               the bookstore will pay for part of commencement, and
Resources and Cultural Affairs. In each of these you will           Residence Life pays for a program called the Faculty
find the usual suspects — for example, in Student Affairs           Fellows. Residence Life also pays for a person who does
we have Residence Life, Multicultural Services, the                 assessment for the whole division. This is always very
Student Government, the Student Union/Bookstore,                    delicate, since I have to keep fund balances in the auxiliaries
Greek life, etc. A few programs are somewhat unique.                so they can weather future storms. With the exception of
Under Health and Wellness, for example, we have our                 the bookstore, those balances are pretty thin.
programs for students with learning disabilities. Under
Cultural Affairs, we have a program called UApresents,              Caulfield: How has the University decided to deal with
which brings performing artists to the campus, and through          these budget cuts? Have you imposed hiring freezes, early

        SP E C T R U M                                                                                              May 2003

    retirement packages, across-the-board cuts, and how much         develop a strategic plan three years ago, before these really
    is at your discretion programmatically?                          tough budget decisions came down. That was extremely
                                                                     helpful because we identified our core values — things
    Dr. Taylor: We have what I would call a “soft” hiring            like diversity as an issue for Campus Life and collaboration
    freeze. Every new hire has to be prior approved by a Vice        outside of our division to promote retention, things like
    President. We discussed furloughs and ruled them out             that. The plan expresses what it is we value about the
    because we felt they would send the wrong message —              work we do, how those values get represented in the goals
    that people were not necessary for some periods of time.         we have set, and what our tactics are to get to those
    Regarding early retirement, the University of Arizona is         goals. The plan has become our “moral compass.” What
    highly tenured. When our HR people looked at this, they          is also very important is that we have added how we are
    told us it would cost us more than we would save, so no.         going to assess how effective we are in doing what the
           So what do we do? We first looked for marginal            plan says we will do. We have been working on the
    programs. If we found one, we eliminated it. If it had           assessment program full throttle for two years now, and I
    some good people in it, we tried to get them well placed         think, after this year, we are really going to have the kind
    elsewhere, hopefully within the UA campus. Second, we            of feedback we need to adjust the compass, but also to
    looked for marginal parts of programs. This is tougher,          demonstrate to the President and the budget process that
    both to identify and cut, because most program parts are         most of what we are doing is working.
    somehow linked to the whole. Third, we looked for people                The Campus Health Center has been following a
    who were not contributing, sometimes through no fault            planning and evaluation process for a long time. They
    of their own. These people have to be moved into fully           belong to ACHA, and the Health Center is committed to
    productive roles. Sometimes we are able to do that within        an accreditation process. It was their model that we said
    the University.                                                  we should use across the whole division.
          At the University level everything is being examined.             Of course to do this, you need to commit to it, and
    We have been able to refinance some of the buildings at          we have, with a director of assessment, who has helped us
    more favorable rates, and we recognized $4 million there,        a great deal. We have had workshops and retreats and
    which has enabled us to protect some academic functions.         everybody now has their assessment plan. These assessment
                                                                     plans must measure contributions to the division’s goals,
    Caulfield: In the normal conduct of your responsibilities,       such as diversity and retention, as well as each individual
    you indicated you rely on a management group, which              program’s goals.
    consists of your Associate Vice President/Dean of Student               One example of how the assessment program helps
    Life and your three executive directors. How has this            with the difficult budget decisions is the orientation
    worked to help you with these difficult budget decisions?        program (Wildcat Welcome) for all of the students at the
                                                                     beginning of the year. Our assessment showed us what
    Dr. Taylor: These four have certainly been my “go to”            students valued and what they did not. We had a lot of
    group, and we have had many sessions looking at what             fluff in that program. We now know we can reduce that
    were going to be our priorities. I also have a budget director   program and focus on what is working. [Editor’s note:
    for the division who works very closely with this group.         Dr. Taylor’s emphasis on assessment ties nicely into Jay Morley’s
    Perhaps the most important thing we have done was to             letter on page 3 of this issue.]

    May 2003                                                                                                  SPECTRUM
                                                                      “ When you are new to a position...it
                                                                      l ack of knowl edge...but also because

                                                                      participate in NASPA and ACPA. Now, informally, the
                                                                      VPs for Student Affairs on the three state campuses
Student Union Memorial Center/Bookstore, University of Arizona.       communicate all the time. There is also a Regent’s Board
                                                                      staff that keeps us connected on financial aid issues,
            Having a plan and solid assessment program is             international students, and other areas of common interest.
     critical, but I must tell you, reporting directly to the                In addition, I belong to a group of vice presidents
     President is also very helpful. The President is very clear      from across the country, which has been meeting for
     that a number of areas should be treated like the academic       about 30 years. They are known simply as the National
     side of the University. An example is all of the multi-          Vice Presidents’ Group, and I’ve been a member of that
     cultural programs and services that are really invested in the   group for about eight years. It truly is my reference group.
     recruitment and retention of underrepresented students.          I use them all the time for opinions and for what they can
                                                                      tell me about what is going on on other campuses. We
     Caulfield: You have discussed your own reporting channel         meet as a group twice a year, and we work hard to make
     to the President and how valuable that has been. Let me          these meetings places where you share in great detail
     ask you about colleagues. Have they been helpful and             how things are done. That has been a great support group
     supportive during these difficult budget decisions?              for me.

     Dr. Taylor: Yes. Our Athletic Director has been particularly     Caulfield: At the end of the day, I suspect you have faced
     supportive, agreeing to transfer $500,000 from his budget        some very difficult, Solomon-like decisions. Tell us about
     to help fund our new Student Union. This very generous           how you make those decisions.
     reallocation was made possible when the debt on the
     stadium was retired early, freeing up these funds. The           Dr. Taylor: You know, the irony for me is that the toughest
     Athletic Director, the President and I all discussed the value   decisions I have had to make at the University of Arizona
     that a really terrific Student Union would have in recruiting    were made the first year I was here. As I look back on that
     for athletics and for all of campus life, and we talked him      time, I’ve never had to handle anything as difficult since.
     into contributing these funds for the debt service on our        When I came, I had to make a million dollar cut. I did
     new $60 million Student Union.                                   not know the programs, I did not know the people, and
                                                                      I did not know the culture, and, because so much had
     Caulfield: Tell me about your consultation with                  already been cut, I was left trying to figure out how to
     colleagues on other campuses. What have you found to             streamline my administration. My principle was going to
     be particularly helpful?                                         be that I would cut the administrative level, but protect
                                                                      the service level. Once I made that decision, I had to
     Dr. Taylor: Sadly, our state association has failed. When        implement it. Just to give you some detail, one decision I
     I arrived here eleven years ago, it was very strong, but like    made was to eliminate two direct reports to me. One was
     so many voluntary organizations, it was overly dependent         an Assistant Vice President for Minority Affairs and the
     on the energy and hard work of a few individuals. When           other a director for a student service center (focused on
     they burned out or left, we just couldn’t keep it going.         retention). I won’t go into all of the details, but the one
            For myself personally, I am very committed and            thing I found out immediately was that every minority
     involved in NASPA, and my colleagues at NAU and ASU              group on campus and every minority group in the

              SP E C T R U M                                                                                        May 2003
is ve ry tough to make these decisions, both because of the
you lack t he ‘re lationship c ollatera l’ .”

      community was heavily vested in keeping the minority            process, gives us both the objectivity and the data to
      affairs position. It seemed like the world came after me.       make the required tough decisions. The toughest decisions
      A minority woman with a PhD was in the position and was         for me are always what to do with good people in positions
      very talented, but much of her program had previously           where they are not fully contributing. You have to work
      been stripped away. Because of her great strengths, I           especially hard to get them into a position where their
      worked with the Provost to find her a faculty position,         contribution is greater than their compensation. That’s
      which we did. It has worked out very well — she’s now           tough for me and tough for them too.
      tenured, but it took three years for some people to calm
      down. Politically, it was a bold decision, and the President    Caulfield: Under the “clouds have silver linings” heading,
      backed me on it, but it was a big firestorm for quite some      are there two or three positive things that the process
      time. I guess if there are lessons here, one is that you have   has facilitated?
      to make some tough political decisions, but it’s awfully
      good to have the President on your side and you have to         Dr. Taylor: I was talking yesterday with an international
      have the fortitude to ride out the storm that may take a        student for whom I am the dissertation advisor. She made
      year or three!                                                  a very interesting observation that students from overseas
             One other interesting irony. When you are new to         admire American universities precisely because they go
      a position, particularly in an institution, it is very tough    through this kind of budgetary discipline. They feel it
      to make these decisions, both because of the lack of            results in better teaching, better programs, and better
      knowledge I already mentioned, but also because you lack        campus life. I must admit, it’s hard to see that when you
      the “relationship collateral” that these decisions seem         are in the middle of it. When I step outside of the process,
      to require.                                                     I do think the hard decisions we’ve made truly add value
             On the other hand, now that I have a fair amount         to the core of what we are doing. In large institutions, this
      of relationship capital, I don’t know whether I could           can be particularly hard to do because it is easy not to
      make those decisions today, because I am so vested in           address modest inefficiencies. If you have the resources,
      these programs.                                                 those inefficiencies will proliferate. When you don’t have
             I still stand by my original decision. We have put       the resources, you have to zero in on those services that
      back in place an excellent multicultural program that           students really need.
      has much more than the cultural centers in it. It is a very
      legitimate enterprise.                                          Caulfield: If Arizona is like most other states, budgets
                                                                      don’t look like they are going to improve next year. How
      Caulfield: You make a very interesting point. A leader          do you help your people and programs plan for a difficult,
      who is committed and passionate about their programs            near-term, future?
      may not have the ability to really evaluate them objectively.
      This ties back to your earlier comments on the importance       Dr. Taylor: We forecast that we will have to make another
      of assessment.                                                  4-5% cut next year. This will be a moment of truth for me.
                                                                      We have realigned, reorganized and gotten rid of every-
      Dr. Taylor: There is no question in my mind that the            thing that we could possibly say was peripheral. When we
      assessment work we are doing is absolutely critical. That,      get to this next cut, it’s going to be core, because there is
      combined with a fairly rigorous planning and goal-setting       just not anything left. It is going to mean cutting some

      May 2003                                                                                               SPECTRUM
“Un i versities w ill be loo king t o pr iva t i ze or outsource their heal th
Can someone ou tside the center do it bet ter or cheap er, or both?”

really basic services. I know those programs are needed,          “How nearly free as possible is it?” because the Arizona
and they are excellent and we have the data to support            constitution has a clause in it that says that.
that they are really being effective, but I am still probably
going to have to cut some of those things.                        Caulfield: A related question: How do you manage peer
                                                                  competition, rivalry, or perhaps open warfare, as each
Caulfield: Physicians have an advantage over other                department head fights for their particular program?
department heads, in that they can draw lines in the
budgetary sand and say, “Without these resources, student         Dr. Taylor: Happily, the planning and goal setting process
health and safety will be jeopardized.” I doubt Harry             we began three years ago, disciplined by a fairly rigorous
[McDermott] has done that, but does student health have           assessment process, has resulted in all programs knowing
a somewhat unique position in the budgeting process?              and respecting where their colleagues fit in. So it really has
                                                                  not been a problem. Also, the fact that 85% of our budget
Dr. Taylor: I think they do, although one of the                  is from auxiliary functions means that programs “own”
challenges is that Universities will be looking to privatize or   their own revenue streams.
outsource their health centers. That is always the challenge
of downsizing. Can someone outside the center do it better        Caulfield: Have you evolved two or three rules or
or cheaper, or both? It is my job to demonstrate to my            guidelines for making these tough budget decisions?
administration that we are running this Health Center in
a very cost-effective way. It’s very lean administratively and    Dr. Taylor: My first rule is always try to reduce “over-
we put the resources in the service delivery. They need to        head” or administration, before attacking the program.
know that we are poised to deal with mass immunizations,          Having worked on that strategy for a number of years,
containment of infectious disease, that we know how we            you’ll see my organizational structure is now pretty flat. I
will deal with meningitis on campus — all things that will        only have four direct reports. We may have gone too far,
get a President’s attention. I think I’ve got our President’s     and I am now talking about breaking out some programs
attention, and he’s very supportive of our maintaining the        and adding a fifth direct report.
base for our Student Health Center out of our retained                   This illustrates a kind of corollary to the first rule,
fee pool. We switched the Health Center from the state            which is, “Don’t overdo it.” When we have administration
allocation to a retained fee basis about eight years ago. The     as lean as it can be, when we have no fat in programs and
state budget is the most vulnerable, so this shift to a           measurable results, the next step is to do less — reduce the
designated student health fee reduced that exposure.              scope of what you are doing.
       This, of course, raises the question of the overall               Going back to a point I made at the beginning, if
affordability of higher education in Arizona, which adds          you can possibly take out an entire program rather than
up all costs to the student, including retained fees. Thus        starving everyone, you should do it. We have just gotten
far, this is not an issue because the University of Arizona       out of our occupational health activities, where we
is in the bottom third of all state universities for tuition      contracted with the city and did some internal contracts
and fees. Actually, we were second from the bottom, and           with risk management. It just wasn’t cost-effective for us,
we’ve just raised tuition by 40% ($1,000) for the fall, so        so we got out of that business.
we will see where that brings us. We are going from about                So I guess I’m saying as a second rule that if
$2,500 to $3,400, but we still will be in the bottom third.       something is not serving our core missions, going back to
We are so far off the chart compared to our peer institutions     our planning and goal setting process, let’s get rid of that
that the affordability question really does not get framed        program rather than handicap those activities which do
in the same way in Arizona. In Arizona the question is,           support the core mission.

       SP E C T R U M                                                                                            May 2003
centers. T hat is always t he challenge of dow n s i z i n g .

             This, of course, highlights what really may be my                   almost always remarks on the opening of these facilities
       strongest message. Take the time always, before, during                   and how proud he is. So, in spite of the negative things
       and after difficult times, to know what your core missions                that are happening to us, we all feel very fortunate that we
       are, how you are going to achieve them and how                            were lucky enough to find the window of opportunity to
       you are going to measure success. If there is one                         do these projects. I guess the lesson is, don’t let these kinds
       thing more than anything else that has helped us in this                  of opportunities pass you by.
       time of limited resources it has been our planning and                            If my first rule on maintaining morale is celebrate,
       assessment work.                                                          my second is communicate. As you probably know, capital
                                                                                 projects are continuing, interest rates are low and the
       Caulfield: Someone recently commented that budget cuts                    state’s bonding authority is sound, but people don’t
       can wound programs, but bad morale can kill them. How                     understand how we can keep building while cutting
       have you maintained morale, collegiality and focus on the                 programs and raising tuition. Our President has a whole
       tasks at hand?                                                            communication campaign called “The Color of Money”
                                                                                 where he explains the different sources of funding. You
       Dr. Taylor: One of the morale boosters for Campus Life                    have to keep your communications going continuously,
       is that we were able to get a number of building projects                 because there is always the next group of applicants, the
       through when the University was not in crisis — a                         next class of students who need to understand.
       student union and bookstore, a building for our learning                          Finally, I think morale is closely tied to management’s
       disabilities program, several residence halls and the                     ability to identify and reward people who are ready to
       campus health building (which will open next spring).                     take on new responsibilities. Even in this difficult time, we
              All those projects are heralded on campus as                       can promote people and give them promotion increases.
       improving campus and student life. What we have done                      Of course, we have to find that money elsewhere, but it
       is concentrated on celebrating that we’ve upgraded our                    is critical to morale for the entire organization to see good
       campus. We had a whole week celebration in opening                        people being moved up.
       the Student Union/Bookstore, with different people
       sponsoring each day. The whole campus was invited. Yes,                   Saundra Lawson Taylor, PhD, isVice President for Campus Life at the
                                                                                 University of Arizona. She is a tenured faculty member in the
       the Student Union and Bookstore have had to take cuts,                    Department of Higher Education. P                .
                                                                                                                     reviously, Dr Taylor served at
       but their mindset is, “How fortunate we are to have this                  Western Washington University as Vice President for Student Affairs,
       terrific facility.”                                                       Interim Vice President for University Advancement, and tenured
              Another thing we are planning is to open a very                                                y
                                                                                 faculty member in Psycholog. She received her BA in Psycholog    y
                                                                                 from DePauw University (1963), an MA in Clinical Psychology from
       upscale dining room in the Student Union — which is                       Bowling Green State University (1965), and a PhD in Clinical
       only now used for lunch — in the afternoon and evening                                                                  .
                                                                                 Psychology from Ohio University (1969). DrTaylor is active in
       for a social hour for faculty and staff. Faculty morale is                                                                     A
                                                                                 the National Association of Student Personnel dministrators
                                                                                 (NASPA). Locally, she chaired the U United Way Campaign
       also suffering, but when they announced this in the
                                                                                 for 2001-02, and she is a past board member of the Sahuaro Girl
       Faculty Senate, they all applauded.                                       Scout Council of Southern Arizona. She can be reached at sltaylor@
              Celebrating what we have, which is truly impressive,               u.arizona.edu.
       is a way to distract people from the other realities, like the
                                                                                 Stephen C. Caulfield, MSW, is Chairman of The Chickering roup.
       fact that there will be no pay increases next year.* It is also
                                                                                 Prior to joining Chickering he was a worldwide partner at Mercer
       a way for me to say “thank you” to everyone who worked                    Human Resource Consulting. He can be reached at scaulfield@
       so hard to make the facilities possible. The President                    chickering.com.

       * This applies to all faculty and staff without regard to the source of their compensation. It does not apply to promotions.

       May 2003                                                                                                               SPECTRUM
                   Budget Cuts:
                   A California Perspective
                   St e ve Lustig, Assistant Vice Chancellor, UC Be rk e l e y

Editor’s note: No state in the union faces a more daunting           health care. Prior to this decision, health services on UC
fiscal challenge than California. And few states have been           campuses varied — some campuses, including Berkeley,
as focused as California on the importance of student health         had mandatory health insurance for graduate and under-
to higher education. Across the nine-campus system of the            graduate students and strong on-campus services, others
University of California (UC), registration and other non-           did not.
waivable fees provide an average of about 54% of the                        Now, across the UC campuses, about 120,000
funding for on-campus services, including student health. By         undergraduate and graduate students are enrolled in
mandating student health insurance three years ago, the UC           campus-sponsored major medical plans. On the Berkeley
system now has most graduate students and a majority of              campus, all students depend on campus health services
undergraduates enrolled in campus-sponsored plans. Although          for counseling and primary health care, and 25,000 of
this model approaches Dr. Wirag’s “Gold Standard,” (see page         these students (91% of the graduate and 73% of the
18 in this issue) it is not “budget proof.” This article describes   undergraduate students) purchase the Student Health
the extreme challenges Steve Lustig is facing at UC Berkeley.        Insurance Plan (SHIP) and rely on the health services as
                                                                     gatekeeper to their major medical plan. Cuts to on-

I  n California, we have a great irony on our hands. A
   task force organized by the University of California
Office of the President has just completed a multiyear
                                                                     campus services are inextricably linked to the strength of
                                                                     the student major medical plan.
                                                                            On the Berkeley campus, 20% translates to a
process during which mandatory health insurance was                  $1.6 million reduction in campus funding for health
implemented for all students on UC campuses. The same                and counseling services. We currently project a loss
task force also articulated guidelines to meet “…the                 of 26 positions in our medical, counseling, and health
responsibility of each campus to continue to fund on-                promotion programs. For the 34,000 students who use
campus health and counseling services…to provide a                   these services, there will be additional fees, reduced
continuum of services…” and to help keep the health                  services, longer waits and increased referrals to the
insurance premiums low.                                              community — which already are costing students 20%
       Within one year of implementation came the state              more next year because of local market forces. At a
budget crisis and proposed cutbacks for 2003. For most               time in California when educational fees are being raised
campuses in the UC system, proposed cuts to the                      to support academic programs, students will experience a
University translate into 20% cuts to student services.              reduction in those services which are designed to support
Will the budget crisis of the next few years pull the                their engagement in those programs.
rug out from under the University’s vision? If we cut back                  And yet, the Berkeley health services staff is
on campus-based services, will it increase costs to                  drawing upon creative ideas to keep services effective.
students? Place a burden on the insurance benefits?                  Other departments, both academic and service, are
Reduce responsive care?                                              receptive to new partnerships. These include the teaching
       The impetus for the September 2000 Board of                   of our academic classes in the School of Public Health,
Regents’ decision to require health insurance as a condition         and teaming up to improve outreach, prevention and
of enrollment was pure and simple: the University did                education efforts. Our after-hours advice service most
not want to become part of the national picture, causing             likely will merge with other after-hours departments on
students to fail or withdraw due to a lack of access to              campus, e.g. campus police, or with community after-

        SP E C T R U M                                                                                           May 2003
                                “ The Un i versity did not want to become part of
                                 the national picture, causing students to fail or
                                w i t h d raw due to a lack of access to health care .”

 ON-CAMPUS STUDENT HEALTH AND COUNSELING SERVICES                                                                               MAJOR MEDICAL PLANS

  Prevention/Education                     Intervention and Treatment                                                           Off-Campus Treatment
  Peer education, academic classes,        Medical, counseling, mental health                                                   Medical and mental health
  workshops, community campaigns           for individuals and campus                                                           for individuals
  for individuals and groups
  • Education                              • Crisis response and mitigation        • Pharmacy                                    • Major medical care
      Clinical education                   • Urgent consultations                  • Clinical lab/x-ray                          • Emergency care and
      Consumer education                   • Psychological assessment              • Selected specialties (e.g. psychiatry,        transportation
      Health education                     • Emergency and disaster response         orthopedics, musculoskeletal,               • Long-term treatment of
  • Campus community outreach              • Communicable disease clinical           gynecology, dermatology, physical             chronic or complex
      Public health information              response                                therapy)                                      medical and mental
      Media and Web information            • Urgent educational response           • Social services                               health conditions
      Resources referrals                    (e.g. food-borne pathogens,           • Case management for chronic                 • Specialty care
  • Consultation and advice                  bio-terrorism, TB, hep B)               needs                                       • Long-term therapy
      Aberrant behavior                    • Primary care, urgent care and         • Nutrition                                     (e.g. physical therapy,
      Risk management                        women’s health                        • Medication management                         vocational rehab,
  • Disaster and emergency planning        • Counseling and assessments            • Academic program screening                    counseling, etc.)
  • Immunizations                          • Triage                                  (e.g. physicals, travel screening)          • Out-of-area coverage
  • Training                               • Referrals and insurance advising
 ü General and insurance administration               ü Quality assurance, accreditation, program management
 ü Needs assessments and service evaluations          ü Health policy and regulatory compliance

                                   Registration and other non-waivable fees*                                                     Insurance premiums
                                                                              *Most campus medical services charge some fee s for service.
                                                        PRIMARY FUNDING SOURCE
 Source: Recommendation and Guidelines, Campus Health and Counseling Services Workgroup, University of California Office of the President, June 2002

hours emergency lines. Some of our counseling personnel                          be happening, the process for decisions, and what criteria
will move to contracts with specific departments, and we                         are being used.
will fund other staff through grants.                                                   Planning is in various stages at other UC campuses;
       Since much of our student population lives in the                         some student health services have been asked to develop
surrounding community, we are meeting with City of                               scenarios for cuts greater than 20%. At UCLA, Deputy
Berkeley Health and Human Services staff to explore                              Assistant Vice Chancellor Al Setton has been asked to
collaborative options. In-house, we are moving certain                           plan for up to a 25% permanent cut, but to avoid reducing
functions on-line, e.g., student health insurance waivers,                       student services. “This means we reduce the administrative
immunization requirements and health histories. And,                             staff,” he says, “but that won’t be enough. So we will be
we are reorganizing our practice plan to manage clinical                         introducing new fees ... And keeping our fingers crossed.”
patients with a reduced staff.
                                                                                 Steve Lustig is Assistant Vice Chancellor, University Health and
       For our staff, the emphasis during this period has                        Counseling Services, and E     xecutive Director of University Health
been on communication and on viewing cuts within a                                                n             a
                                                                                 Services at the U iversity of C lifornia, Berkeley. He recently chaired the
long-range planning perspective. The goal is to be as                            UC Office of the P  resident Advisory Committee on Student Health, as
                                                                                 well as the statewide task force that established the guidelines for
forthcoming as possible and to share information with all                        mandatory student health insurance and on-campus health services for
staff — including the larger state picture and what may                          all nine UC campuses. He can be reached at slustig@uhs.berkele      y.edu.

May 2003                                                                                                                             SPECTRUM
                Campus Health Services:
                Surviving the Academy’s Budget Crisis
                J. Ro b e rt Wi rag, HSD

T     ough times…war, terrorism, layoffs, shrinking
      economy, state governments in financial crisis, less
support for higher education, salary compression, travel
                                                              receives the same dollar amount from one year to the next,
                                                              it is effectively a budget reduction because of increasing
                                                              operating and personnel costs. The risk is a year-by-year
restrictions…tough times, indeed….especially for campus       erosion of services, including staff reductions. Clearly, this
health service programs dependent on institutional funds      method of financing the campus health service program is
for financial support. Many in student health anticipate      not appropriate for many, especially for those mid-sized to
another year on their knees, begging for an infusion of       large campuses that have student populations large enough
cash to keep their programs afloat.                           to warrant an alternative financing arrangement, which
       If you are one of those, don’t feel like the Lone      can provide for a student health service that fully meets
Ranger. Each year many student health care administrators     the needs of students and is stable over time.
face the challenge of financing their programs with enough           Another shortcoming of the allocation method is the
money to, at the least, maintain essential services.          illusion it creates…leading students to believe the health
                                                              services are “free.” It may also lead them to believe the SHS
The University Giveth, The University Taketh Away             is of lower quality. “What you don’t pay for can’t be worth
       The most vulnerable are programs financed              very much.” It is a deceptive practice and should be avoided.
exclusively by an allocation from university funds — one
of the two extreme financing systems that can threaten        Piecework: What Pieces At What Price?
student health programs’ ability to maintain access to care          The other extreme is the exclusive fee-for-service
and at least a basic range of services. (The other extreme    method of financing…no health fee and no allocation of
is pure fee-for-service, which is discussed below.) The       institutional funds. The risks to the program financed
vulnerability of the allocation method rests with the         solely with fee-for-service differ from those noted above.
ability and willingness of the institution to continue to     While historical data related to students’ demand for
support the scope of the health services provided. In this    chargeable services and good data on the services actually
model, all on-site services are expected to be covered by     provided in the previous year are a relative gauge of
the annual allocation. The argument in favor of this          potential patient revenue, there is no guarantee from one
financing model is the cost-savings to students (no out-of-   year to the next that patient demand will remain stable.
pocket costs), to the program (no personnel costs for         As the environment changes and the cohort of eligible,
cashiering or billing activity), and to the institution (no   potential patients/customers changes, a decrease in demand
staff necessary to handle collections since no charges are    could have a dramatic and adverse impact on the financial
transferred to the student’s institutional account).          viability of the program. Similarly, an increase in demand
       A significant problem with the allocation method is    could overwhelm existing resources, leading to long waiting
that it forces the Student Health Services (SHS) director     times, briefer visits, and highly stressed staff. Another
to “plan to the budget” rather than “plan to the need.”       downside is the financial barrier to access for some students,
That is, the allocation method determines the scope of        especially for those who are uninsured or underinsured
services of the program and may not adequately address        and have little or no means of reimbursement for out-of-
students’ primary care needs, much less the needs for         pocket medical care costs.
prevention and health education. Even if the program                 To be successful, the fee-for-service model is

       SP E C T R U M                                                                                        May 2003
                    “College health is at the nexus of two worlds, both
                       of which a re feeling great financial pre s s u re —
             higher education and the greater health care community.”

dependent on a combination of the number of students             financial barrier to access of campus-based health services
who walk through the door and the chargeable (and                is eliminated or lowered as well.
collectable) services they receive. The mix of undergraduate,           A further complication with the exclusive “fee-for-
graduate students, and dependents is also a key variable.        service” operation is staffing. In addition to clinical staff,
In addition, the services provided under this model tend         a well-organized “back office” business operation is essential
to be limited to those that generate revenue…mostly              to manage billing and collections. Finding the right
clinical in nature, to the exclusion of primary prevention       balance between clinical staff and demand is no small
(health promotion and disease prevention) that generate          challenge. If demand drops for any reason, the resultant
little, if any, revenue. Other variables include students’       over-staffing may be very appealing to the consumer,
personal finances, perception of the quality of the              because patient care needs can be expedited, and also to
program, willingness to have a health service charge             the staff, because work loads become lighter. However, an
appear on a bursar bill or insurance claim, and the type         excess of personnel will very quickly increase expenses
of insurance coverage (if any). If “the pain in the              relative to revenue. Under-staffing may also prove to be a
wallet exceeds the pain in the belly,” they will bypass the      program detriment. Too few staff to adequately meet
program and either ignore the problem, resort to self-           demand may result in customer dissatisfaction, loss of
remedy or wait until they go home to see the family              confidence in the program, and deterioration of image to
doctor. If they belong to an HMO and are “out-of-                the point that future decreases in patient volume threaten
network” and “functionally uninsured” when on campus,            the delicate balance of expenses and revenue required to
they are also more likely to bypass the campus health            maintain a fiscally sound program. (A dynamic eloquently
service program. 1                                               described by Yogi Berra, who observed “That place is so
        The prospect for success using the fee-for-service       crowded nobody goes there anymore.”) Furthermore, if
only model (no allocation, no health fee), as well as for        automated systems are not in place to support and expedite
the “Gold Standard” model discussed below, can be                business functions, the “back office” personnel costs may
enhanced if the institution adopts a mandatory with              further erode the financial strength of the program.
right-of-waiver (hard waiver) health insurance policy.                  In between these two extremes there exist a variety
Students who are required to purchase the campus-                of financing combinations that have to be considered:
endorsed medical insurance plan — because they either            allocation and fee-for-service; health fee, allocation and
do not participate in another plan or their plan does not        fee-for-service; health fee and fee-for-service. In an ideal
meet established minimum coverage benefit thresholds             world, any combination can work. Unfortunately, we are
— help ensure financial stability of the student health          a far cry from an ideal world. College health is, in fact, at
program. Furthermore, if the plan provides hassle-free           the nexus of two worlds, both of which are feeling great
reimbursement for chargeable (insurance-reimbursable)            financial pressure — higher education and the greater
services, or, if the health service is able to assist students   health care community. Like the postdocs who are neither
with filing claims and accepts assignment of claims, the         “faculty” nor “student,” college health workers tend to
health service and students alike are the beneficiaries.         have a similarly diffused identity (neither “faculty” in the
The health service captures the revenue, the student’s out-      context of the Academy, nor real doctors/nurses when
of-pocket costs are either eliminated or reduced, and the        compared to their counterparts elsewhere). If the allocation

SP E C T R U M                                                                                          May 2003
“ The Gold St a n d a rd is the student health service which functions as
the university and is financed by a combination of an adequate and

method treats the campus health service as a stepchild of          community, accessible to all students for the express
the Academy and the exclusive fee-for-service method               purpose of helping them maintain a level of wellness
concentrates only on those services that maximize revenue,         and functioning to achieve academic success. It is separate
what model has the greatest prospect for success?                  from all other tuition-related benefits of the institution
       Consider a model that insulates, but does not               and is recognized as such. And, the health fee is a relatively
isolate the student health service program from other parts        easy sell, especially to parents who know how expensive
of the Academy, one that projects independence and self-           health care is, or can be, if minor problems are exacerbated
determination, promotes accountability, is more proactive          by delays in receiving care. Having ready access right on
than reactive, and applies sound business principles.              campus is also a clear and well-understood benefit.
                                                                          The health fee makes it possible to dedicate resources
The Gold Standard                                                  to campus-wide, primary-prevention initiatives, including
       The Gold Standard is the student health service             promotion of healthy behaviors. Since these services
which functions as an auxiliary operation of the university        do not generate fee-for-service revenue, the use of a
and is financed by a combination of an adequate and                portion of the health fee as a principal funding source
clearly identified health fee and fee-for-service. Auxiliary       is justifiable. Even for that student who does not have a
programs in universities are designed to pay their own way.        need for clinical care, the health promotion and disease
They function as a business. They employ staff sufficient          prevention programs and services are available and have
to meet consumers’ demands, have well-defined policies             been demonstrated to reach most students at some time
and procedures, adhere to rigorous standards and best              during their academic career. The health fee is akin to the
practices, and adapt to the fluctuating demands and                premium paid for a basic insurance policy that provides
sensitivities of customers.                                        certain benefits. By spreading the risk over the entire
       Migrating to the Gold Standard for those not already        student population, the health fee may obviate, or at least
there does not have to be an onerous undertaking. It will,         reduce, the need to institute a visit charge to help cover
however, require a shift in the institution’s philosophy.          the program’s expenses — a cogent argument over the
Anticipate resistance. Nonetheless, in today’s difficult           previously discussed fee-for-service model, which tends
economic times, the timing could not be better. The notion         to financially penalize the user for getting sick or for
of redirecting university funds currently allocated in support     seeking care.
of the campus health service program to other areas of
critical institutional needs can be extraordinarily persuasive.    Setting the Health Fee. Setting the health fee is no small
       Some may suggest a designated health fee or a hard-         challenge. If one subscribes to the concept of “budget to
waiver student health insurance policy will add to the total       the plan,” the first task is to clarify the student health
costs of the education, raising the question of “affordability.”   service’s plan to ensure the program is the driving force in
There is a strong counter-argument when one considers              determining what the health fee should be. The challenge
the higher charges students pay for services when they             is greater than the financing by allocation method (which
bypass the student health service. These hidden, but very real,    forces one to “plan to the budget,” limiting the scope of
costs should be considered when measuring affordability.           services to the funds available). Many factors come into play.
                                                                   • What does the historical experience regarding patient
The Health Fee. The separate, identifiable health fee                demand suggest?
makes an important statement — that the health service             • Are there unmet primary prevention and clinical needs
program is a value-added resource to the academic                    identified from survey research?

        SP E C T R U M                                                                                            May 2003
an auxiliary operation of
clearly identified health fee and fee-for-ser v i c e .”

       • What is the extent of other health-related resources             number by two to arrive at the semester health fee. (Some
         on- and off-campus?                                              campuses weight the semesters differently, and most
       • What is the age, gender, nationality of the population to        have a separate fee for the summer session.) The clearly
         be served?                                                       identifiable health fee spreads the risk among all students
       • What is the residential/commuter mix?                            and is set at a level which provides assurance that specified
       • What are your options regarding staffing ratios, the             services will be available when needed and that
         number and type of staff necessary to provide your               any associated charges will be kept to a minimum
         required scope of services (include or exclude mental            compared to prevailing rates in the local community —
         health and health education services)?                           a real competitive advantage for any campus health service
       • What are the operating costs (historical and projected)?         program. [Editor’s note: Many institutions have systemwide
       • What is the appropriate funding for depreciation of the          limits on fee increases, including designated health service fees.]
         physical plant and equipment and/or funding of capital
         project reserves?                                                Setting Charges for Services. Times, they are a-changing.
              Regarding this last question of funding capital             The practice of “giving away medicine” is history for many,
       projects, do not underestimate the value of the facility           if not most, campus health service programs today. This is
       where health services are provided. Is it accessible (can          not new. For example, in the mid-60s, by an act of the
       students get to it), not just location, but transportation         North Carolina legislature, student health service programs
       and parking as well? Is it available (at times when students       were required to function as self-supporting auxiliaries,
       need it)…hours of operation? What does it look/feel                ineligible for tax dollar or tuition support. Colleges and
       like (welcoming, aesthetic)? Is it configured to promote           universities in North Carolina were permitted to assess a
       confidentiality/privacy, patient flow (intake and egress)?         mandatory health fee to make such services available. In the
       Since students (like most health care consumers) make              70s and 80s, as tax dollars in support of higher education
       decisions about quality of care with their eyes, if the facility   began to dwindle, many schools, such as the University of
       doesn’t look like it provides quality care, opinions               Arkansas, shifted from an allocation to a health fee plus
       are quickly formed and these initial impressions are               fee-for-service to continue providing health services to
       hard to reverse — even if all other invisible measures of          their students.
       quality are considered (accredited, staff credentials, latest             If the decision is made to assess fees for those
       technology, etc.).                                                 services/procedures typically reimbursed by health insurance
              One approach to setting the semester health fee             plans, setting charges for those services can be difficult.
       is to determine the funds that will be required to cover           Most universities want to price their services close to, but
       all or most of the fixed costs of the program, namely              below, the prevailing rates in the surrounding community.
       salaries, fringe benefits, liability insurance and institutional   Trying to gain access to “charge masters” from area clinics
       overhead charges (if any). The balance of the budget               and hospitals, however, can be a frustrating experience.
       — operating costs — can be made up by charges for                  Another option is available from the Healthcare Financial
       services paid for by cash or through health insurance              Management Association, which publishes a Customized
       reimbursement. To simplify, take the total annual fixed            Fee Analyzer called MEDICODE, which enables an
       costs (using historical budget data plus any substantive           organization to compare its fees against national bench-
       reductions or enhancements to the scope of services) and           marks. (The address is Ingenix, Inc., 2525 Lake Park Blvd.,
       divide it by the projected annual student enrollment to            Salt Lake City, UT 84120.)
       determine the student health fee per year. Divide that                    Perhaps finding the median charge for various

       May 2003                                                                                                      SP E C T R U M
“ If ‘the pain in the wallet exceeds the pain in the belly,’
students will bypass the pro g ram and either ignore the
p roblem, re s o rt to s elf-remedy or wait until they go
home to see the family doctor.”

services (50% charge more, 50% charge less) in your area         • Subjects itself to the rigors of accreditation to demonstrate
will serve as a gauge to set your own charges. You may             that standards of quality are being addressed.
find it advisable to set the fees at or below the median                The Gold Standard method of financing sees its
charge as an additional benefit of the health fee — having       finest hour in times of economic distress. It helps insulate
access to services at charges lower than prevailing rates in     the campus health service from the financial stressors
the surrounding community.                                       of state and tuition support. Health service programs
                                                                 independent of tax dollars and functioning as a self-
Sowing the Seeds for Success.It’s all about leadership. It’s     supporting, auxiliary operation are surviving, and even
about knowing what to do and how to do it. An excellent          thriving, if the following conditions are met: the program
source of guidance is the chapter on “Administration and         is well managed; is fiscally sound; is meeting the needs of
Financing College Health” written by Ericson, Mills and          those served; receives high marks for customer satisfaction;
Ledlow in the newly-published text The History and               has the confidence of constituent groups, especially those
Practice of College Health, edited by Turner and Hurley.2        who manage the annual fee-review process; and has
In the same text, Stephen C. Caulfield’s chapter on              the endorsement of any faculty member, administrator
Student Health Insurance discusses the insurer’s role in         or staff member who would say “If I was sick or hurt
helping finance student health centers (pp. 345-346). A          and needed medical attention, I would use the student
well-crafted student medical insurance plan that reimburses      health service for my primary care needs…as my first
the student health program for chargeable services               choice, if I were eligible to do so.” Now, that’s a
makes a significant contribution to the financial health         “Gold Standard” outcome!
of the program and provides a return on the premium
students pay.3                                                   J. Robert Wirag, HSD, has served as the Director of the Student
                                                                                                 n            o
                                                                 Health Service program at The U iversity of N rth Carolina at Chapel
       In summary, the Gold Standard of financing:
                                                                 Hill since January 1999. This is his third directorship, following
• Provides dependable revenue from the health fee;               The University of Texas at Austin, 1987-95, and The University
• Makes a statement of value…spreads the risk…helps              of Arkansas, 1983-87. His professional career spans a period of
  the institution protect its investment in its students by      over 30 years and includes faculty appointments at The University of
                                                                 Notre Dame, DePaul University and The P nnsylvania S tate
  promoting retention;                                                                  v
                                                                 University, where he ser ed as the Director of Health Education for
• Promotes the college health model: health promotion,           University Health Services. Dr. Wirag is past president of the
  disease prevention, clinical services;                         American College Health Association, a board member of
• Includes direct reimbursement to the student health            the American College Health Foundation, and an active participant
                                                                 in ACHA’s Consultative Services Program. He can be r ached    e
  service program from the institution-sponsored medical         at wirag@email.unc.edu.
  insurance plan for chargeable services covered by
  the plan;                                                      Notes:
• Facilitates access;                                            1. See the special issue of Spectrum, March 2003, “The Uninsured
• Reduces costs associated with the higher education             Student: a Failing Grade.”
  experience;                                                    2. Ericson, Mills and Ledlow, “Administration and Financing College
                                                                 Health,” The History and Practice of College Health, ed. Turner, Hurley
• Makes “budget to the plan” more viable;
                                                                 2002: 42-78.
• Provides a well-established referral network to specialists,   3. Caulfield, “Student Health Insurance,” The History and Practice of
  hospitals and rehabilitation services; and,                    College Health, ed. Turner, Hurley 2002: 345-6.

       SP E C T R U M                                                                                                  May 2003
                           H ow We Do It

                           Columbia University:
                           Columbia Area Volunteer Ambulance
                           Margo Amgott and Hannah Krimins

N       ow in its 41st year, Columbia University’s Emergency
        Medical Services — CAVA (the Columbia Area
Volunteer Ambulance), as it is known on campus — is
                                                                  critical since other New York City emergency medical
                                                                  services can take as long as 30 minutes to reach an
                                                                  emergency site.
one of the oldest collegiate EMS programs in the country.                CAVA is known not only for its longevity, but also
Staffed by student volunteers, known as the Corps, who            for innovative programming. Strong member initiative
are New York State emergency medical technicians, CAVA            is encouraged to continuously improve the program,
operates in accordance with the rules and regulations of the      making it more professional and responsive. Training
Regional Emergency Medical Services Council. CAVA is              and leadership development are key in defining
available to respond to emergency calls on campus and             membership, and the Corps has worked diligently over
from the surrounding community.                                   the past few years to ensure that an effective system is
        Begun in 1962, after students and staff transported a     in place.
faculty member to the local hospital, the idea grew for an               New student volunteers begin as probationary
on-campus EMS service. In 1974, the University bought             members, taking an EMT class run by CAVA that is
its first vehicle, a van outfitted as an ambulance. In 1980,      offered both to students and other members of the
the program was named CAVA and became state-certified,            community. Each probationary member then goes
with service available 24 hours a day, seven days a week          through an individualized training program before
throughout the academic year.                                     becoming part of the Corps. The program is designed so
        As a division of Health Services at Columbia (HSC)        that new members with no previous experience become
and Columbia’s Security Department, CAVA is a key part            Drivers, then Crew Chiefs, within five semesters. Crew
of campus emergency response services. It works as a              Chiefs are responsible for all aspects of a call, including
bridge between the campus community and health care               logistics, patient care, and safety.
options: HSC, the local emergency department (or other                   Volunteers are then introduced to practical examples
facilities as required), or self care. Health Services provides   and experiences. After every shift, a trainee goes through
medical direction and manages the finances, while Security        an evaluation and self-appraisal process. Trainees who
manages the vehicle and dispatch. It is the student               pass the probationary period and are confirmed as
volunteers who run the day-to-day operations and lead             members then take a defensive driving course.
initiatives to enhance CAVA.                                      CAVA made the driving course mandatory in 2000,
        The Corps consists of 50 members, from all areas          while New York State added it as a requirement the
of the campus, who manage 600-700 calls per academic              following year.
year. This number grows annually, primarily due to more                  The leadership of CAVA is carefully structured,
widespread awareness of CAVA’s services and an increased          with both an Executive Board and a Medical Board.
comfort with the confidential nature of CAVA’s work.              The Executive Board consists of the Director,
Response time is 4-5 minutes, well below the standard             Captain, Operations Officer, and Personnel Officer.
industry response time of 8-10 minutes. This is particularly      The Medical Board is comprised of Crew Chiefs.

May 2003                                                                                               SP E C T R U M
“ C AVA has become better integrated into the Un i versity infra s t ru c t u re.
a role in determining Security and Un i versity policy on calls related to

CAVA has elections on the calendar year, which allows         secure a new ambulance. The process began with
the new board members to overlap at least one semester        CAVA facilitating discussion between HSC and Security,
with the previous board members. This overlap allows          detailing how each service defined its role and how they
for a seamless transition between outgoing and                were interconnected. They demonstrated that the
incoming leadership and fosters collaboration within          current ambulance needed immediate replacing. After
the CAVA hierarchy.                                           investigating what type of vehicle and specifications
       Health Services provides medical oversight. As part    were needed and then selecting a vendor, CAVA senior
of the program’s quality assurance, a physician reviews       leadership worked with University administrators to
every chart and follows up with patients as needed.           identify resources to fund the new ambulance. HSC
Particular attention is paid to “repeat customers,” linking   and Security shared the cost of the vehicle, along with a
them to other health or counseling services as appropriate.   contribution from Chickering. Delivery is anticipated in
The CAVA leadership updates protocols and offers              May 2003.
expanded services as State regulations permit. In November            Transport or medical support by Columbia’s EMS
2001, when it became legal for EMS to administer two          is provided without a fee to the patient; no bill is received
emergency medications — epinephrine and albuterol,            by the recipient of care. Support of CAVA’s operations
used to treat severe cases of allergic reactions and          comes from Health Services, Columbia’s Security
asthma attacks, respectively — the Corps updated their        Department, fees earned from services provided for
protocols and developed training sessions to ensure           athletic events on and off campus and student transport
proper use.                                                   fees paid by the student medical insurance program
       CAVA has become better integrated into the             administered by Chickering. The program occasionally
University infrastructure. Members have worked                receives donations from grateful patients, and is high on
assiduously to have a role in determining Security and        the list of fundraising priorities for Health Services.
University policy on calls related to alcohol and psycho-             This program is a model for the establishment of
logical emergencies. They have also become more               new collegiate EMS programs and for the improvement
involved in contingency planning for campus events            of existing programs. At the National Collegiate EMS
and are called on more frequently to be available for         Foundation (NCEMSF) Conference in February 2003,
high-profile campus functions and activities. CAVA is         CAVA was awarded the Striving for Excellence Award,
present at University athletic events on- and off-campus,     which recognizes the program as a leader in collegiate
providing first response medical care to athletes and         EMS. At the same conference, CAVA members lectured on
bystanders. And on September 11, 2001, as well as             its training program and on the purchase of an emergency
September 11, 2002, the Corps was out in uniform in an        vehicle. Joshua Marks, director of CAVA through
effort to provide the community with a sense of comfort       December 2002, was honored with the 2002-2003
and safety.                                                   NCEMSF Collegiate EMS Provider of the Year Award.
       CAVA has also been actively engaged in finding         Joshua also was awarded the Lewis Barbato Award by the
resources to fund its program. One of a handful of            American College Health Association (ACHA), which
collegiate programs that drive a University-owned vehicle,    will be presented to him in May 2003 at the ACHA
CAVA worked with the University over three years to           Annual Meeting.

       SP E C T R U M                                                                                       May 2003
Members have worked assiduously to have
alcohol and psychological emergencies.”

      Staffed by student volunteers, known as the Corps, who are New York State emergency medical technicians, CAVA operates in accordance with the rules
      and regulations of the Regional Emergency Medical Services Council. CAVA is available to respond to emergency calls on campus and from the
      surrounding community.

                                                                                  executive director of administrative planning. Before joining Clumbia
            In the coming years, CAVA plans to work towards                       in 1991, she spent seven years in senior administrative positions in
      becoming an even more integral part of the public health                    New York City and NewYork State go     vernment, serving as budget and
      community. With a grant from Columbia Community                             support services director for New   York City’s Department of Juvenile
                                                                                  Justice and director of special projects at the CityHealth Department.
      Service, CAVA has been able to begin the initial stages of                  Prior to that she managed health services for women in North
      a CPR program for the greater community in the                                                v                        o
                                                                                  Brooklyn and ser ed on the staff of the pr vost of the SUNYD  ownstate
      Morningside area. Under direction of Jordan Brafman,                        Medical Center in Brooklyn. She has a BA from Barnard College and
      Director for 2003, CAVA has proposed extending services                     an MPA in health policy and management from New                      .
                                                                                                                                         York University
                                                                                  She can be reached at ma53@columbia.edu.
      throughout summers and breaks in the academic calendar,
      further positioning CAVA within the reliable infrastructure                                                                    e
                                                                                  Hannah Krimins is program coordinator at Health Srvices at Columbia.
                                                                                  She manages a range of special projects, including immunization
      of University services.                                                     compliance and researching and writing new policy initiatives for the
                                                                                                             v                                         y
                                                                                  service. Previously, she ser ed as marketing associate for The Advisor
      Margo Amgott is currently xecutive director of Health Services for          Board Company, a health care strategic research consortium. Hannah
      Columbia University, directing student health, counseling and w lness       holds a BA from Barnard College and is a post-baccalaureate student
      programs on Columbias Morningside campus. P       reviously, she was        at Columbia University.

      May 2003                                                                                                                  SPECTRUM
                    Prescription Costs: Does Your Student
                    Health Insurance Plan Measure Up?
                    Paul A. Cronin, FSA

T     he consensus, as reported by major benefit consulting
      firms’ survey research, is that prescription drug costs
are increasing at an annual rate of between 16-22% for
                                                                             an increase in the number
                                                                             of people in treatment
                                                                             for a particular disease.
group employer plans in the current year. Student health                     New drugs may have
programs have not only felt the same pricing pressures,                      major benefits, such as
but are often more sensitive to them because outpatient                      reduced side effects or
prescription drugs usually represent a higher proportion                     greater clinical effective-
of the health premium dollar under student health                            ness, but may also lead to
plans (this is because employer plans typically have                         greater utilization [e.g.,
higher medical, surgical and hospitalization costs than                      “diagnosis rates for
student plans).                                                              depression doubled after
       The components, or drivers, of these predicted high                   the SSRIs (Prozac-like
drug trends are:                                                             drugs) became available”].1
• Price inflation — prescription drugs are a major                           In addition, the influence Figure 2: The top individual drugs
  contributor to the Medical Consumer Price Index (CPI).                     of new drugs on drug used by the student population
• Product shift (also known as the “treatment substitution                   utilization is further (ranked by amount paid).
  effect”)1 — newly approved drugs replace older drugs in                    compounded by the more recent phenomena of direct-
  the therapy of established patients, but are often more                    to-consumer marketing of drugs.
  expensive than the drugs they replace.                                   • Leverage — the cost impact to a drug benefit
• Utilization (also known as the “treatment expansion                        plan will be greater because of the leveraging effect a
  effect”)1 — the introduction of a new drug often leads to                  co-pay has on the benefit paid. An increase of, say, 10%
                                                                             in the retail price of a drug will have an 11-20% increase
                                                                             in the benefit paid, depending on the applicable co-pay
                                                                             (the greater the co-pay, the greater the leveraging effect).
                                                                                  For example: Your prescription benefit plan has a
                                                                             $20 brand co-pay and is then paid at 100%. A drug
                                                                             which costs $50 costs your benefit plan $30 ($50 Rx -
                                                                             $20 co-pay = $30 claim). A 10% increase in the retail
                                                                              price of this $50 drug now costs $55. If you choose to
                                                                             maintain the same prescription benefit design for the
                                                                             next year, then this drug will cost your plan $35 ($55 Rx -
                                                                             $20 co-pay = $35), or an increase of 17%.
                                                                                  Since high prescription drug cost trend is a reality
                                                                           that is projected to continue, it may be helpful to
                                                                           share some general observations about student health
Figure 1: Drugs utilized by the student population (grouped by class and
                                                                           prescription drug programs, as well as a breakdown of the
ranked by amount paid).                                                    various benefit plan design features currently in place.

         SP E C T R U M                                                                                                    May 2003
  “ The use and price of prescription drugs will continue to grow for
  college students. St rategies to make these drugs affordable thro u g h
i n s u rance must include appropriate utilization, prudent purc h a s i n g ,
             generic substitution, and reasonable consumer cost-sharing.”

                                                                                was 5.7, when the claimant wasn’t restricted by benefit
                                                                                plan maximums and oral contraceptives were excluded.*
                                                                                      In terms of what drugs are utilized by the student
                                                                              population, the drugs were grouped by therapeutic class
                                                                              and then ranked by amount paid (Figure 1).*
                                                                                      The top individual drugs, ranked by amount paid,
                                                                              are listed in Figure 2.*
                                                                                      Psychotropic drugs have a very high utilization
                                                                              among the student population and account for 20-22% of
                                                                              the total cost of a student health outpatient prescription
                                                                              drug program.

                                                                              Benefit Design Features
                                                                                    The next year, 2002-
                                                                              2003, we underwrote 76
                                                                              outpatient prescription
                                                                              drug programs. Figure 3
    Figure 3: A review of 76 outpatient prescription drug programs provides   provides the distribution
    the distribution by benefit maximum (2002-2003) and projects the          by benefit maximum.
    number of claimants that will reach each maximum in 2003-2004.            Using the number of
                                                                              claimants who reached
    General Observations                                                      their respective benefit
           For the academic year 2001-2002, The Chickering                    maximums in the 2001-
    Group underwrote 71 student health outpatient prescrip-                   2002 academic year, we
    tion drug programs. An analysis of these programs                         projected the percentage
    provided the following observations:                                      of claimants that would
    • Prescription drugs, as a percentage of the total cost of a              reach each maximum in
      student health insurance program, ranged from 6-15%,                    2003-2004 for a drug
      depending on the prescription drug benefit maximum.                     program with $10/20
    • Brand drugs accounted for 60% of the prescriptions                      co-pays.
      filled, but 88% of the cost of drug programs.                                 Figure 4 provides
    • The average retail cost of a brand drug was $72, for                    the distribution based on
      generics, it was $20.                                                   generic/brand co-pays that Figure 4: Distribution by generic/
    • The average number of prescriptions filled per claimant                 are currently in place.    brand co-pays already in place.

    * A majority of drug programs do not cover oral contraceptives except where there is prior authorization. This is now changing as state mandates
    and other pressures for inclusion of oral contraceptives are felt.

    May 2003                                                                                                              SPECTRUM
Points to Consider                                                             Prescription Benefit Managers Accused of Steering
       Based on these observations and data, we suggest                        Physicians and Patients to Higher Cost Drugs
you consider these plan design features:
• The co-pay for brand prescriptions should be at least                       Recently, the American Foundation of State, County
  $20. We base this recommendation on the assumption                          and Municipal Employees and the Prescription Access
  that the average retail cost of a brand drug will be $85-                   Litigation Project (PAL) have sued four Prescription
  100 for 2003-2004 and that 20% cost-sharing on the part                     Benefits Managers (the PBMs), which together control
  of the student is reasonable.                                               80% of the market, alleging that these PBMs have
• The benefit maximum should be at least $1,000, an                           entered agreements with drug companies to encourage
  amount that should provide sufficient coverage for 90%                      customers to use the most expensive drugs. One of the
  of the claimants.                                                           named PBMs, Express Scripts, Inc., announced on
• Mail-order drug programs should not be considered                           March 17, 2003 that it will phase out its practice of
  because of the high potential for theft on campus.                          accepting payment from drug makers in exchange
• Finally, strong incentives should be given to the use                       for promoting certain products through letters and
  of generics. In addition, student health centers should                     telephone calls to doctors and patients.
  educate student consumers about brand name prescrip-
  tions that are coming off patent, and, if possible, work                    other practice pattern review programs. Both the research
  with students to migrate to the newly available generic                     literature and anecdotal evidence from student health
  alternatives (Figure 5).                                                    service directors suggest that both strategies have merit, but
       We have limited our observations and recommenda-                       to some degree these interventions go to issues of physician
tions to plan design features. We have not mentioned the                      decision making, which we believe are outside of the
use of formularies, or the use of drug utilization review or                  purview of the insurance program.
                                                                                     Finally, we have not discussed the utility of campus-
                                                                              based pharmacies in managing costs, again because we
                                                                              believe it is separate from the insurance program. But,
                                                                              unlike formularies and drug utilization review, campus-
                                                                              based pharmacies do not impinge on physicians’ decisions.
                                                                                     The reported experiences with campus pharmacies is
                                                                              almost universally favorable among student health service
                                                                              directors, who cite the lower drug costs, higher point-
                                                                              of-prescribing drug interaction checks, superior patient
                                                                              education and improved compliance. Given recent concerns
                                                                              about prescription benefits managers (see sidebar), campus-
                                                                              based pharmacy programs should be considered.
                                                                                     The bottom line is this: the use and price of pre-
                                                                              scription drugs will continue to grow for college students.
                                                                              Strategies to make these drugs affordable through insurance
                                                                              must include appropriate utilization, prudent purchasing,
                                                                              generic substitution, and reasonable consumer cost-sharing.
                                                                              Paul A. Cronin is Senior Vice President of Actuarial Services at
                                                                              The Chickering G  roup. He is a Fellow of the Society of Actuaries and
                                                                              a member of the American Academy of Actuaries. He hasver thirty
                                                                              years of corporate and consulting actuarial experience in the group
                                                                              life, health and disability arenas. Paul can be reached at pcronin@

                                                                              1. Carter, David M. and Mark McClellan. “Is Technological Change in
Figure 5: Prescription drugs that will come off of patent protection in the   Medicine Worth It?” Health Affairs (Sept/Oct 2001): 11-29. Volume 20,
near future.                                                                  Number 5.

         SP E C T R U M                                                                                                           May 2003
                BRIEFLY NOTED...
Editor’s note: On March 25, 2003, The Wall Street Journal                 I am a board-certified family physician with seven
ran an article on the front page of their second section           years’ experience. I suppose I could be on the fast track
entitled, “Why You Shouldn’t Get Sick at College—Strapped          and driving a Porsche, but I drive an old Honda with more
Colleges Cut Medical Staff, Close Infirmaries: The Best (and       than 150,000 miles, live in a rented house and pack my
Worst) Health Services.” One of the introductory lines was,        lunch for work. I make $30,000 a year less than my least-
“Faced with shrinking budgets and the same runaway costs           paid colleague and I won’t get a raise ever. I take calls 24
that are squeezing the overall US health care system, schools      hours a day, 365 days a year so that a student with stomach
are being forced to lay off doctors and pare back everything       pain won’t have to go without care, a rape victim won’t
from weekend hours to around-the-clock advice lines staffed        have to go to the ER alone and a distraught undergrad won’t
by nurses.” Several days later, The WSJ published these two        commit suicide because his girlfriend broke up with him.
letters. With permission from the authors, we reprint them                Thank you again for choosing to write about this
here in their entirety.                                            little-understood, but essential, area of medicine. I hope
                                                                   your words will help all of us to understand each other
       In regard to Anne Marie Chaker’s March 25 story in          better. It might just make the case for me with the admin-
The Wall Street Journal, “Why You Shouldn’t Get Sick at            istration for a raise in health fees.
College—Strapped Schools Cut Medical Staff, Close                                                  Thomasina H. Sharpe, MD
Infirmaries: the Best (and Worst) Health Services”:                                                 University of South Alabama
       Thanks for bringing to light many of the problems in                                                     Mobile, Alabama
college health care. A USC senior summed it up very well
in the last paragraph, “You’re not prepared, when you go                 As the medical director of a university health service,
to college, to be in charge of your own health. It’s actually      I’m all too familiar with the financial constraints facing
a big deal.” That’s why I love practicing college health:          many colleges and universities as they try to provide quality
educating the students, parents and administration about           health care. At MIT, we work hard to provide high-quality
what a big deal it is.                                             care at a reasonable cost and to help our students and their
       College health is more than a walk-in clinic — you can      families make the difficult transition from home- to
get that at any “doc-in-a-box.” We cannot be compared to           school-based health care as smooth as possible.
your regular family doctor either, since we provide specialty            As your article pointed out, it can be difficult to
care to a distinct population of patients. We are a full-service   make health care available when it’s needed. While most
center that offers medical, psychiatric and educational            of us in Cambridge run on Eastern Time, I often say our
counseling, testing, laboratory results, X-ray, and pharmacy       students tend to keep schedules more suited to a location
services, all for $15 a semester. I challenge you to find          several time zones to our west — waking later in the
clinicians anywhere who will evaluate you, test you, perform       morning and hitting their stride in the late afternoon and
a pelvic exam, and treat your sexually-transmitted disease         evening. To address this issue, MIT Medical offers a walk-
for less than $15 and then spend an hour counseling you on         in service until 7 pm on weeknights, an on-site physician
what to do now, how to talk to your partner, how not to get        overnight and on weekends for urgent care, and specialists
it again, how to protect yourself, give you condoms and/or         who are on-call outside of regular office hours.
birth control, provide emergency contraception if needed                 I applaud you for encouraging parents and students
and hold you while you cry. Usually all the same day you call.     to think about the breadth and depth of health care services
       That’s what I do every day, in between diagnosing           available when they shop for colleges.
new onset diabetes, ankylosing spendylitis, counseling                                                 William M. Kettyle, MD
on weight loss, treating malaria, doing administrative                                Medical Director, MIT Medical Department
duties and caring for students with the flu. And I love it.                                             Cambridge, Massachusetts

May 2003                                                                                                  SPECTRUM
                            PUB LI SHED BY THE CHICKERING GRO U P

The Chickering Group, established in 1955, is an insurance product and services company which has provided student
health insurance to colleges and universities as its exclusive business since 1980. In partnership with Aetna, one of the
country’s largest health insurance companies, Chickering offers students access to more than 500,000 physicians,
hospitals and other health care providers throughout the United States. The Chickering Group now serves 250,000
students at approximately one hundred colleges and u n i ve r s i t i e s in twenty-two states and the District of Columbia.

Editorial Board                                                                     Managing Editor
William A. Christmas, MD, FACP          Frederick H. Chicos                         Gillian C. Buckley
Duke University                         President, The Chickering Group
Shonda Craft, MS                        Stephen C. Caulfield                        Art Director
The Ohio State University               Chairman, The Chickering Group              Feroza Unvala
Margo Post Marshak, JD                  Linda M. Ragosta, EdD
California Institute of Technology      Vice President for Institutional Affairs,   Marketing Communications
William A. Payton                       The Chickering Group                        Manager
University of Missouri                                                              Christine Murray
Evelyn Wiener, MD
University of Pennsylvania

Student Health Spectrum is published by The Chickering Group. Back issues of Student Health Spectrum are available at
www.chickering.com. If you would like to see a topic covered or would like to be a contributing writer, please contact
Marketing Communications Manager, Christine Murray, at cmurray@chickering.com.

  Chickering congratulates Ralph Manchester of the University of Rochester on the completion of his highly-
  successful term as the President of ACHA, and offers Reginal Fennell of Miami University of Ohio every good
  wish as he assumes the presidency. We also congratulate Spence Turner from the University of Kentucky on his
  well-deserved Lifetime Achievement Award, and all of the other ACHA awardees and newly-elected Fellows.

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