Health Care Cost Savings Key Issue in the Ivory Tower

April 2, 2004 ( - Colleges and universities are no different than any other workplaces when it comes to finding ways to slash health-care coverage costs, a new survey found.

Seven in 10 of the institutions of higher learning told The Segal Company for its poll that administrators had instituted tiered prescription drug coverage while another 12% either planned the move for the coming year or were actively considering it. Meanwhile, 65% of the Segal respondents said they had already cost-shifted more of the health coverage expenses to both workers and retirees and another 29% either planned it or were actively pondering the move.

The list of health cost increase responses also included:

  • pored over medical and drug utilization data to find drivers of increased cost – 58% done, 24% planned or considered
  • banded together with similar employers to hammer out group rates with suppliers – 39% done, 35% planned or considered
  • negotiated with pharmacy benefit managers for better deals – 27% done, 23% planned or considered.

Separately, several respondents indicated that they also met with employees to discuss the impact of rising health-care coverage rates and established incentives to use mail-order prescription drug suppliers.

Also, it was abundantly clear that issue is as much of a hot button on campus as it is with other employers. Some 95% of respondents said the cost hikes were either extremely or moderately important – significantly ahead in those classifying it as extremely important compared to the effects of higher education funding cutbacks and defining HRs role as a campus strategic leader.

The survey covered 61 members of the College and University Professional Association (CUPA).