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NOVEMBER 30, 2004

Present:  Chair Daley, Secretary Weiner, Parliamentarian Corbin, Acting Provost Nielsen; Senators Batra, Baynes, Bernhard, Bitting, Blair, Blank, Brownie, Bruck, Clark, Fauntleroy,  Fikry, Hanley-Bowdoin, Hooper, Kasal, Kellner, Khosla, Krotee, Martin, Matthews, McRae, Moore, Robarge, B. Smith, R. Smith, Stein, Tetro, Warren, Wessels, Young       

Excused: Chair-Elect Allen; Senators Branson, Estes, Middleton

Absent:  Senators Fahmy, Johnson, Miller

Visitors:   Katie Perry, Senior Vice Provost; PJ Teal, Secretary of the University; Thomas Conway, Vice Provost, EMAS; Lee Fowler, Athletic Director

1.  Call to Order
Chair Dennis Daley called the eighth meeting of the fifty-first session of the North Carolina State University Faculty Senate to order at 3:00 p.m.

2. Welcome and Announcements
Chair Daley welcomed Senators and Guests.

Chair Daley made a second announcement about the regulation for requiring international students to have health insurance.  Hearing no objections he released the regulation to the administration.

3. Approval of the Minutes, Meeting  No. 7, November 16, 2004
The motion to approve the minutes passed unanimously.

4. Remarks from Acting Provost Neilsen
“I am just starting to learn a little about what this job is about.  I spent the last two days at the Office of the President attending their quarterly Chief Academic Officers Meetings.  I learned that there is a lot involved in this position.  One is the amazing scope of things that fall on the Provost’s desk.  I really did not know as a dean the range of things that the Provost deals with, things from the protection of the university logo and how people are using it, enrollment projections, and enrollment management to crisis communication.  I believe I was chosen for the wrong six months.  It turns out that my name goes on the announcement of whether we are opened, closed, or delayed for snow.  If you get the fall half of the year you don’t get that problem.  I apologize in advance for making half of you angry at any possible time relative to those decisions.

The other thing I have discovered is how different the view of the world can be from being a dean to being the Provost.  For example, at the Board of Trustees meeting there is always a presentation about some aspect of the university, and last week they had a presentation about Park Scholars and the Caldwell Scholars Programs.  It was very interesting because as Dean if I had been sitting there I would have been thinking, “How are we going to get more Park and Caldwell Scholars from the College of Natural Resources?  Sitting there thinking about it as Provost I was thinking about how are we going to get more money into these programs.  How can we establish them on a firmer basis?  I was thinking and wondering if there are ways that the Provost can be useful in recruiting or other things as we attempt to build the program.  So what you see is a very different viewpoint.  As a dean you are interested in the faculty, staff, students that you are charged with primarily, but as the Provost the view changes a lot to have a total university perspective.  It was instructive for me to have that happen, just at the first glimpse of doing this job.

The university’s view of the world is what Faculty Senate is all about.  You take off your academic home identification and you put on the identification of the university.  I want to tell you how much I appreciate as a faculty member and as a dean the work that the Faculty Senate does.  I spent four years on the Faculty Senate when I was at Virginia Tech so I have a strong sense of how much time and effort you put in and what valuable work you do on behalf of the university.

I know you might be interested in something called my agenda.  I don’t have an agenda.  I don’t think it is appropriate for the Interim Provost to have an agenda except to serve you and the rest of the institution in whatever way you think is valuable.  First of all, the first thing I promised Chancellor-Designate Oblinger was that I would do my best just to keep the wheels on the Provost’s Office.  It probably isn’t as difficult as it may seem to be right now because the Provost’s Office is filled with wonderful people who know their jobs and do them particularly well.  I am going to listen to them and do what they tell me to do after thinking about it a little bit and agreeing with them. I did talk with Chancellor-Designate Oblinger about the fact that it would probably be a waste if I didn’t try to work on a couple of things that might be important to the university during these six months.  He agreed.  There are two things that are highest on my agenda to work on and to keep moving forward.

Those are the two big issues I think I will be concentrating on.  There are a number of other things and I would be interested to hear from you what you think they might be.

Now let me mention how you can help us in the Provost’s Office as I try to do what we need done over the next six months.  I am a person who likes ideas and who likes to try things and think about what can be.  For every ten of my ideas there might be one that is good.  As I have ideas and we have ideas and as you have ideas I hope that we will all communicate together about what we might do and what we shouldn’t do. Just because I say something might be a good idea does not mean that it is true so I will rely on you to communicate with me about what you think and what you think about what I am doing and what we are doing in the Provost’s Office.  If you think I am doing something dumb or silly or beyond the bounds of what I should be doing please let me know because that is the way we will get things straightened out again.  I appreciate any kind of communication but I appreciate it when you tell me that I am not doing things right even more than if you had occasion to tell me I was doing things right.  So I appreciate in advance your feedback, positive and negative.

This is a great place.  The university is a great place.  Raleigh is a great place.  Approximately five years ago my wife and I set down in a fit of analytic fever and actually drew out a chart of great places to work and great places to live and we arrayed a number of universities on this chart.  There were three in the upper right hand corner of the greatest place to work and the greatest place to live and the one that was farthest up in the corner was NC State and I consider it an enormously fortunate event that I actually had the opportunity to come here.  You have heard from Chancellor-Designate Oblinger that we are a fine institution.  We are a university that is great and I agree with that.  I knew that from my college perspective, but even the couple of weeks that I have been in the midst of university level things, I have seen so many ways and so many places that exhibit our excellence and seeing the Park Scholars and the Caldwell Scholars at the Board of Trustees last week was a great example of that.  This can even be a greater place than it is already.  That was one of the other attractions to me of coming to NC State three and a half years ago was that I felt and I believe more strongly than I did then that this is an institution where an individual can still make a great deal of difference to the quality of the institution.  We have much opportunity here to try lots of things and to do lots of things to take full advantage of the capabilities of the institution.  This again is where your ideas count because the ideas that you have, the things that come forward out of the Faculty Senate can make a big difference in the life of the institution and the life of the institution for our students.   In the three plus years that I have been here I have grown to love this place and with your help I intend to put that love into action over the next seven months.  Thank you very much. “

Senator Fikry wanted to know if Acting Provost Nielsen plans to continue with the existing policies. 

Acting Provost Nielsen stated that he does not think it is going to be an easy job.  “The flow of things and the nature of things that come across your desk makes it a challenging job.  I think it is a middle ground.  What I want to do is not important.  I am here for six months to try to keep things going and if I can improve something and interact in some way that makes things a little better then that is what I would like to see done.  On the other hand Chancellor-Designate Oblinger has said, “You are the Provost.”  I don’t think he really wants me to hide or to run to him and say you are the Provost and the Chancellor.  I think he wants me to act as responsively and as fully as I think I should, but I will be cautious in that regard.”

Senator Fikry wanted to know why did Acting Provost Nielsen take the job.

Acting Provost Nielsen stated that his role is to serve the institution for the next six months.  “That is the way that I perceive it, is to do the things that you and others think is necessary to keep us moving in the right direction and that is the reason I took the job.  I won’t shrink from making suggestions if I think there is a change needed or we need to do something a little different.”

Senator McRae stated that the reason the Provost is involved in the decision on class closings for weather is because the Faculty Senate wanted the Provost’s Office involved.  “We did not receive enough input from the academic site of the university to those decisions and also not enough consideration of the safety and care of faculty and staff so you can blame us.”

Acting Provost Nielsen stated that he has a meeting with David Rainer about the crisis communication plan but as he understands it, it is a combination of the Chancellor, Vice Chancellor for Business and Finance and the Provost who get together and make that decision.   “I can remember from last winter that when the announcement came out it said Provost Oblinger announces.  I think the changes that have occurred in the way the Provost operates within the executive officers and the team of the university over the last year have been very good.”

5. Old Business
RPT -  Six Realms
Senator McRae, Chair of the Personnel Policy Committee reviewed the changes that were made to what they have frequently referred to as the six realms but is really now a proposed part of the academic tenure policy.  The committee received various comments from Senators.  They have tried to incorporate changes to reflect most of the comments into the six realms.  They have also tried to accommodate comments they received from the Office of Legal Affairs through Senior Vice Provost Katie Perry.  He presented a synopsis of the changes that the committee made. 

Senator Kellner stated that back when there were three realms we assumed that scholarship, teaching and service were separate things.  I am curious about the question of what scholarly contributions one might be expected to make to 6.2.1 teaching and mentoring, 6.2.3 creative artistry, 6.2.4 technological innovation, and 6.2.5 extension and engagement.  He thinks that contributions as defined by the demonstrated professional competence of 6.1 make sense.  “It seems to me that the phrase scholarly contributions is not quite right.  Perhaps if you dropped the scholarly and said contributions or if you got the demonstrated professional contributions in there from the previous one you would not have that conflict between demonstrated professional competence and scholarly contributions and you would not have the idea that there is no distinction between scholarship, teaching, extension and engagement and professional service.”

Senator Bruck stated that he disagrees with the comments and noted that the answer to almost everything that can be said about this document is that it is a guideline in which the contract is made between a faculty member, his department head and her dean. “I believe that this document is in good condition the way it is right now and as so I move that it is passed as written.”

Senator Hanley-Bowdoin stated, “One of the things we have tried to do is move away the idea that we can compartmentalize what we do, that when we teach in the classroom that is teaching and that when we do research that is research and when we do extension that is extension and one of the goals of doing that was to make it a point that they all are inter-related and they build on each other and we do each of them better because we do them all.  It puts us in a better position when we try to justify what we do with the faculty to people outside of the university.  So I think one of the things this document does is it tries along those lines and I think it is something that we want to do.  We want to make certain that people appreciate that we can’t departmentalize our activities.”

Senator Warren stated that the committee did have a long discussion about whether the word “scholarly” should remain and, “ the matter of fact of that conversation was that the term “scholarly” pointed out that we want to actually have that as a overwriting framework even for teaching with the extension and that “scholarly” as defined there is sort of like Catholic with a small “c” and that in a way it is a generic term for what we do as professors and that indeed we clearly define exactly what purely publications and original research are being asked for.”

Senator McRae commented that during a recent workshop on extension and engagement, scholarship, in that context was one thing that was frequently discussed.  That community embraced these six realms as an excellent statement.

Senator Bruck stated that he believes that this is a good document and it deserves consideration for passing at this time.

The motion to pass the Personnel Policy Committee’s report on the six realms passed.

Senator McRae noted that the six realms are only part of the academic tenure policy and that the Senate has passed everything else prior to this.  

6. Reports
Academic Policy Committee
Senator Bruck stated that based on a resolution that was passed by the Senate on tuition remission; he contacted Karen Helm and received a 30-page report from Karen and Louis Carson.  The official term for who gets this benefit is spouse and legal dependents.  “All over the country there are institutions that give full tuition benefits.  Some rules that they go by are that each university goes its own way.  There is no commonality between them.   From the first day of your employment you get the benefits.  It seems that the medium was six months of service before there was eligibility, one institution, the Florida system required as we had originally suggested, five years of service.  The bottom line is, this individual has taken actually thirty-five universities, collected the data and that question that we asked, “You mean we are going to have 5,000 more students to be able to take in?”  The answer is no.  On average ten percent of the existing faculty and staff at any given time would take advantage.  She used 6,000 employees.  Ten percent at any given year equals 600 students per year.  The direct cost to the university with this formula would be one million dollars per year.  The budget of this university is a billion dollars so with all due respect to administration please don’t say that the money is not there.  The important question of course was who is paying.  Karen Helm’s comments reads as follows. 

“Centrally funded benefit pool absorbs lost of revenue not a budget item.  Fringe benefit paid for at university level.  University of Maryland, College Park absorbs loss of revenue, and at Mississippi, employee’s department is charged a fee.  Finally the University of Tennessee funded and subsidized from tuition income which sounds like other people’s tuition might be paid for the tuition of that of faculty and staff.”

At this point we have a report.  Now certainly we can do this for the next three years if we want in terms of writing it over and over again, the point simply being that Karen and Louis had a marvelous time putting together a really comprehensive document.  Nowhere did I read in the report that this is impossible. “

A Senator wanted to know if that is 100% tuition remission for in-state tuition. 

Senator Bruck responded yes. 

Senator McRae stated that one thing that was left out is that current faculty who attend courses and those over 65 years of age numbers do not appear in our enrollment.  “We are already doing that for free.  I was told that Registration and Records essentially does not put those people in our enrollment data. 

If we as a faculty decide to do this it would be relatively easy to have Registration and Records create a special enrollment category into which these people would go.  They would not appear on our enrollment data.  Tuition would not be collected but they would appear in our courses in a special category where there is space so that we would not turn away any paying customers and it would be a relatively seamless thing to put in place.  The university would still benefit from receiving the fees from these people but it would be very paralleled to the way that the over 65 and the faculty attendance in courses are handled now.”

Senator Bruck stated what we are trying to do is create a very important recruiting tool. 

Senator Fikry stated that he thinks more details need to be worked out. 

Senator Robarge wanted to know if Senator Bruck plans to take this to the Dean’s Committee that is looking at this in terms of trying to attract and keep faculty. 

Senator Bruck stated that he assumes that Deans, Vice Chancellors and Directors would be the place to go but he wants advice from the Senate.

Senator Krotee stated that the tuition is probably $3,000 per year and in fees almost $7,000, therefore the university would actually be gaining. 

Senator Bitting wanted to know what the report would entail that Senator Bruck and the Academic Policy Committee plans to develop.

Senator Bruck stated that they would try to extract the information from the report he received and send it back to Karen Helm to make sure that she agrees with the information that they have written. 

7. New Business
Faculty Forum on Health Benefits
A motion was made and second to adjourn into committee as a whole for thirty minutes to discuss health benefits.  The motion passed unanimously.

Suzanne Weiner, Secretary of the Faculty stated that each person would be allowed to speak for one minute.  There will be three segments, ten minutes each. 

Chair Daley:  The first area deals with the coverage.  Most of the emails he received dealt with the fact that people did not have the less expensive option of covering the spouse only.  A number of them have pointed out that they are able to go into the private market and get an individual policy for their spouse less expensive than our coverage and some have pointed out that they can actually get individual policies for their entire family for less than what is being offered by NC State including coming from Blue Cross Blue Shield which administers the State Plan.

Senator Hanley-Bowdoin:  I will address the question of spouse versus family coverage because I am in that position and I have been in that position for fifteen years.  When I came here fifteen years ago I asked that exact question and the answer that I got is that when you look at the group, it cost as much to cover a spouse situation as it does to cover an entire family.  I asked some more questions because that just did not make sense.  What it came down to is since we are rolled in with all the retirees and the retirees tend to be spousal situations the cost for a spousal situation goes way up because the number of retirees in that group is way over represented comparing to everything else.  I think in order to deal with that issue we are going to have to make a case that there is something different about a full- time employee versus a retiree. 

Senator Bruck:  I am a product of the State University of New York System.  There are seventeen universities and thirty-seven Community Colleges in the State University of New York.  Our system, have sixteen universities and fifty-nine community colleges.  You have basically sixteen different choices of HMOs, Universal Health Cares.  The standard program is called Empire Blue Cross Blue Shield.  The deductible is zero, coinsurance is zero, lifetime maximum unlimited, health exam, office visit, well child, woman surgery, pre surgical, chemotherapy, maternity, cervical, allergy, chiropractor, hospitalization, in-patient surgery, out-patient mental health care, zero dollars per year for everyone.  It cost seventeen dollars per month for the employee.  For the family plan the cost is seventy-six dollars per month.  Our plan is a sham.  Thank you.

Wayne Buhler, Associate Professor of Horticulture Science:  My experience at Purdue University was quite different from here.  We have a tiered system there and I would just like to propose to the Senate that we investigate the potential for a tiered system in which maybe higher deductibles would be accounted for with premium cost.  Right now there is no choice.  I have struggled with this for three years with a family and three children.  My wife has had to go off line to private insurance just to find something affordable.  I think there are systems that we can look at that give us options.  I realize the health care system in its entirety certainly hit the tank in the last few years but it seems to me like other systems have been very successful with providing for choices that would enable the individual to choose from higher deductibles thereby leveraging what kind of cost of premiums they would impair.

Senator Kasal:  I agree with Bob.  Our insurance package is almost as non-existent as it can be.  Experience from Oregon State University - the premiums were much lower than what we pay here, likewise for coverage.  If I did not want their insurance I was paid the amount that was contributed to me by the state and I could go out and buy my own insurance plan.  This is not permitted here.  If I opt out I would get nothing. 

Secretary Weiner stated that one of the issues that was brought up in the Executive Committee meeting was the wellness plan and the issue was because of the large premiums you are penalized for being healthy.  There is a huge group of families with young children who don’t have large prescriptions and other expenses and the premiums are tremendous.  I don’t get coverage through the university.  I go through my husband’s company, which is a lot cheaper.

Senator Bruck:  I am in this situation with my wife.  We can complain about benefits.  We can complain about co-payments and everything.  Once a person is sick that is the end of the road.  They are uninsurable.  Therefore yes I would love to get on a different plan but I can’t.  My wife is a cancer survivor and that is the end of it.  She will never have another policy for the rest of her life. Forget about what I pay into that policy, what I get back from it covers less than fifty percent.

Senator McRae:  One of the current problems with the State Health Plan as it exists is that it pays an increasingly smaller percentage of the actual bill cost.  One example is with recent physical therapy the State Health Plan allotted about 25% of the bill cost for that service and if I did not have three coverages now I would have ended up paying a great deal.

Senator Hanley-Bowdoin:  Post Doctorates’ insurance is less than half the cost it is for ours and benefits are significantly better.  We already have people on this campus that are considered temporary employees that are fairing much better than the regular faculty and staff are.

Chair Daley stated that the second item deals with the cost factors.  The fact that co-payments go up, deductibles go up, plus as some people have pointed out there is no HMOs, no competition for our State Health Plan to keep cost down and of course in recruiting a faculty you come in here, you compare with what our peer institutions are offering and you are suddenly three or four thousand dollars down in terms of your total package and you lose candidates especially if they have families.  For employees here the big thing is uncertainty of your whole health field as co-payments go up and of course until you get the statement you are not sure how much the state is actually covering of that bill. 

Senator Blank:  I have not enrolled in any State Health Plan because my wife is employed at SAS Institute and there is no way anything that I was ever offered would compete with what I would get through her.  Family coverage in the State Plan would be more than family coverage through SAS so I solicited opinions of information from my colleagues in the college because I did not have a basis to make any claims about these programs.  Three people did respond with this very specific information.  One in particular that the wellness protection is too low to cover reasonable cost associated with a standard physical for a forty year old man much less for older men.  Another person responded concerning the dental plan cost, that they were much too high for his family, that benefits that were given makes it just absurd to even think about the dental plan.

Of the years that I have been dealing with SAS I have never paid a dental bill except for special services such as a crown that I just had put on a tooth and I believe I have to cover about half for the actual crown, not for the preliminary work or any examination or anything.  Otherwise I have never paid as far as going to the dentist. 

My experience is that every year when I review the enrollment packet nothing has changed and there is no reason for me to rethink my situation.  I agree with the fact that if things change where my wife no longer works at SAS and we need health care there may be some need for me to look again at the package, but I am not encouraged by what I have heard or seen.

Senator Bruck:  Two months ago I had a fifty-two year old man physical and my out of pocket expense was $492.00.  That is what came from the health insurance company. 

Senator Tetro:  What surprised me when I went for the heart test that I had this year was the amount that was paid.  I was given one bill that was approximately three thousand dollars, which I was going to have to pay twenty percent of and then it turned around that no it was $3,000 but in fact the reasonable charge was really twelve hundred dollars.  Those hidden factors are just astonishing.  The first piece of information that I got was that you owe twenty percent of three thousand dollars and I wanted to know if there were another alternative here besides a heart attack. 

Senator Kasal:  The insurance company’s reason for existence is to make profit.  I don’t see how we can solve an issue on trying to change the provider or some other insurance company.  The basic function is broken. I think we have a much broader problem here that I don’t know if we can ever try to solve. 

Senator Hanley-Bowdoin:  I agree that we have a bigger problem but the reality is all these other places we are talking about are operating in a similar environment and they are doing much better for their employees and their employee’s family.  The culture of the State of North Carolina has an attitude that families are totally a separate entity, totally the responsibility of the employee and for some reason not having the employee to have to pay any part of their cost as being some sacred thing they have to preserve, but beyond that families should forget it.  I don’t know of any other employers who do not make some effort to contribute to the family side of it and I think that is where the worse problem in terms of the premium is, is what is happening to the family situation.  If we the faculty are having problems with it, and you are an average state employee with a salary of approximately $35,000 per year how can you possibly afford $423.00 per month which is what the premium is to cover your family.   You just can’t do it.

Chair Daley received two email messages.  One person on disability pointed out that the law requires that you get Cobra while on disability.  You are responsible for paying for the insurance and while you are guaranteed coverage you are not guaranteed a reasonable rate therefore it can be very expensive.

One person talks of having an autistic child.  The state health plan considers autism an incurable disease and will not cover it.

Others have complained about what prescription drugs get included and what diseases are covered by the plan since some are covered and some are not.

Senator Tetro:  How is it that within the City of Raleigh when you get two different radiology offices charging higher premiums for a particular test by virtue of the part of the city that the office is housed in?  I could pay more just in Wake County to have a test done.  It has happened in my family already that the cost here is $200 and in Hickory it might be $100.  So how is it that the entire state employees are covered under the same benefit when in fact the cost per county is different even in Raleigh?

Senator Clark commented that if we could have something unique it would be wonderful for the college system but let’s keep in mind some of our concerns as researchers and people at institutions.  For example, I travel out of state and out of the country a great deal with research.  One of the biggest problems of my life was when I submitted a bill for having a kidney stone in England, not to be smart but it really threw a loop in the system.  There are a lot of us that actually do out of state international travel and when you start to look at the stuff that the university systems may want, please consider that.  

Senator Warren:  You don’t need to be out of state.  When I got diagnosed with breast cancer they decided that they were not going to cover my radiation.  I had to argue.  They were happy with giving me a mammogram in one breast but not in the other one.  It took having someone to intervene on my behalf.  There was no one at the university who would have actually negotiated through the thicket of refusal of basic cancer care.  We have to have some mechanism at the university.  I had people who could advocate for me but what happens when people become ill.  This was very basic cancer that I had to fight for tooth and nail and that was absolutely immoral. 

Senator Young:  In my business anatomy class we did an analysis of Blue Cross Blue Shield of North Carolina and for a while when they were filing to switch from non profit to profit they were concerned that they would have to compete with larger for profit insurance companies and Blue Cross Blue Shield of North Carolina does not have the financial resources to compete so they were doing every thing they could to jack up their revenues which is why when my wife needed medical attention it cost me $600 for lancing a boil and I have the family coverage.   My daughter had a fever, and two visits to the doctor cost me $500 out of my pocket.  The up shot of that is that Blue Cross Blue Shield of North Carolina reports the largest surpluses in the history and they are all patting themselves on the back and it became like a self fulfilling prophecy that more insurance companies want to come into North Carolina to keep in business because it is just about the most profitable market in the country which may be an opportunity for NC State to now negotiate a little bit tougher because we are not going to have a take it or leave it deal from desperate insurance companies. 

Senator Blank:  The timing for enrollment, the timing when timing occur in rates, the calendar year of when coverage is, none of that is synchronized so that the fiscal year runs from July 1 to June 30.  The calendar year for some plans or some coverage run from January 1 to December 31, you enroll in the fall so where are you with regard to what you are being covered and how you are being covered.  This person said specifically in one case she had a prescription that was one cost in the late fall and in January or February when she got it refilled it was like four or five times more.  There was no warning that was going to happen so the timing issue with the plan is just all over the place.

Senator Bruck:  The senior staff with Blue Cross Blue Shield gave themselves 30% pay raises.  Ten years ago I took a one-year sabbatical leave with three kids across the ocean.  Because the countries that I was in had a socialized medical system which I was not allowed to participate in it cost me a flat fee.  It is called the C-note.  Every time my kid got an ear infection, every time my kid got sore throat or got a bad scrape it was a C-note.  I have never seen a cent of that money.  It is ridiculous.  Frankly it is one of the major reasons why when I think of taking another international sabbatical I am not interested. 

Senator Hanley-Bowdoin:  I have had to change medications for chronic situations three times now because it would fall off of the preferred list.  They don’t keep the information on the web updated.  The number of drugs on the preferred list is shrinking and it is becoming really a difficult thing to maintain care especially as you get older and you start to need things on a regular basis for the rest of your life.  I have no issue with changing my drug if I can get a better price but there need to be a much better way of communicating this and giving people advance notice that these changes are occurring so they can accommodate the changes if possible.

Senator Tetro:  I would like to concur with Senator Blank on the calendar issue.  I don’t know who made that decision as to why we switch over in January versus July and we have to guess in October what our potential out of pocket cost plus deductibles are going to be so that we can use the flex spending dollars.  Every year it is just a massive guess.   I have a generic change to now a non-generic and I have just said to my husband there is another $350 that had I known this at the same time I would have taken that out of flex spending.  I don’t know why they both can’t be in July or they both can’t be in January. 

Senator McRae:  Just to show you where the priorities of the State Health Plan are I am a tri-care eligible person because I am a military retiree and I just found out that the State Health Plan will pay for a tri-care supplement for me directly so that I would not have to pay anything under tri-care if I would drop out of the State Health Plan.

Comments from Kitty McCollum
I wanted to come here today to talk with you about a new initiative that we have ongoing at the UNC Office of the President that has to do with employee health coverage.  I would like to begin by providing you some information about the cost of health care in the United States and North Carolina.  In North Carolina over the last five years the employer cost under the State Health Plan has increased 98% and employee cost to cover family members has also increased by 98%.  As you know this is not just a state of North Carolina problem.   Nationally over the past five years health insurance costs have increased 76% and the employees’ contributions have increased 126% so obviously we are at a crisis state when you start to look at the cost of health care.  The UNC system recently participated in a comparative study, which was actually a benchmarking exercise with eighteen other research universities across the country representing over 290,000 employees and over 1.7 billion dollars in health care cost that was conducted by Hewitt Associates.  Hewitt is one of the largest benefits consulting firms in the country.  UNC pays the full cost of employee’s premium compared to 91% by the other universities.  UNC pays nothing for its dependent coverage and on average other universities pays 64% of dependent cost.  As a result of that UNC lags behind other universities on the number of dependents that are enrolled in the plan.  We are way low in terms of the number of family members that are currently enrolled in our plan because it is just too expensive.   The overall percentage subsidy of 76% of the State Plan is lower than other universities at 81%.  UNC requires employees to cover a higher percentage of out of pocket cost, twenty percent of total cost compared to other universities at 14% and as I have also heard today UNC is the only university to offer only a straight indemnity plan design.  The other universities certainly have more options.  They have PPOs, HMOs, and other kinds of models out there.  We also recently conducted an employee satisfaction survey.  This electronic survey was made available to all employees at all the sixteen campuses and to the UNC healthcare system employees during the last two weeks in October.  We also had an interactive telephone response system available to employees that did not have access to computers.  The response to that survey was overwhelming with approximately a 34% response rate.  We had more than 12,380 responses to that survey.  Needless to say employees feel passionate about their health insurance, as they should.  We just received the results of that survey and as expected we found that generally university employees are not satisfied with their health plan especially the cost for dependent coverage and out of pocket cost compared to other employers. 

Compared to other employers 57.8% of employees are satisfied with their health plan overall compared to 81.4% of other employers; 92.2% are satisfied with the overall quality of medical care; 70.2% are satisfied with the services covered with the plan compared to 84.4%; 35.4% are satisfied with the employee contribution cost compared to 68.2% of other employees and only 26.1% are satisfied with out of pocket cost compared to 59.7%.  Based on this overwhelming response to the satisfaction survey we think that we need to be talking with you, with other groups like you and what we have done is the President has established a Steering Committee at the Office of the President to really address health coverage.  We are in the process of developing a model plan that would be a pilot plan that would be offered in lieu of the State Health Plan for university employees and their dependents.  The proposal will be presented to the Board of Governors probably in March and if the Board receives that positively then we will present it to the General Assembly during the 2005 Legislative Session.  To let you know as far as who is on that committee we have representation from the Faculty Assembly of the university.  We have representation from the Staff Employee Forum.  We have a member on there from the State Health Plan, from the Office of State Personnel.  We have also tapped some of our own experts at our campuses who are medical professional experts and we really have a very good Steering Committee.  I think a lot of you know and expertise is there and we are working very hard to put this model into place. 

The other thing that we have done is to retain the services of a consultant and actuary to help us design this mode.  As I mentioned because of the response to the survey and because of the work with the Steering Committee we are holding meetings like this at all of the sixteen campuses.  We plan to attend Faculty Senate meeting.  In some campuses we are just holding general meetings to talk about this and to get your input.  I want to take another few minutes to ask you some of the questions that we have listed here.  It is very important for us to get your input. 

What is currently not included under the State Health Plan that you would like included?

Senator Bruck:  I’m not sure that the question is properly frank, not attacking you.  I am just giving an example.  A person I know was raped and needed psychiatric care and after six sessions she was told sorry you are done.  Why is it that the State University of New York is 120 sessions per year?  Obviously if I need my gall bladder taken out they are going to take it out so it is not what is covered.  It is just what is not covered in terms of the amount that you are covered and the number of visits.

What about wellness?  Why can’t I go and get a free physical every year?  Isn’t that in the interest of the health care plan that I get a physical?

Secretary Suzanne Weiner:  Why can’t there be subsidies for Health Club Memberships, and in fact alternative care, i.e., massage therapy, physical therapy?  Why does it all have to be intensive medical care rather than alternative medicine?

Senator Matthews:  I have spent $10,000 this year on my mouth because dental costs are absolutely outrageous and when you have a maximum of $1000 that the insurance company is going to pay per year, if it qualifies that is nothing for some families.

Senator Hanley-Bowdoin:  The numbers when you were talking about percentages, increases, etc., I think those might be a little bit deluded because percentage is based on what the cost was five years ago and the State of North Carolina health costs have been high every since the day I walked in the door.  The 98% increase of a high cost in actual dollars may be a lot more money than a much lower cost.  I think that we are losing ground.  I don’t think the percentages really reflect how much we have lost ground here.  In terms of what is covered, the dental is ridiculous given the premium.  I opted out.  We decided we would pay it ourselves out of flex.  It is cheaper that way.  Eye care is ridiculous.  Who can buy a pair of glasses for $100 per year?  They put a dollar amount to these things but they are in no way related to reality of what the costs are in our community.  You don’t see these things improving; you see them actually getting less.  If the premiums stay the same like they did this year with the dental, the premium did not go up but the benefits went down because now you have a $50 co-pay for any cleaning and checkups if you opted for the lower level premium.  It is very misleading to people.  I think that if people don’t read the fine print very carefully they think it is staying the same but it is not it is declining.

Senator Young:  I am wondering why you are asking us what is missing in the insurance plan.  Why aren’t you benchmarking against the best plan in the country and then asking why we don’t have the best plan in the country?

Ms. McCollum:  We are doing some of that.  We certainly are talking to other universities.  I can tell you that at our last Steering Committee Meeting we talked with the University of Georgia system.  We talked with the University of Minnesota.  We plan to talk with the University of California.  We have talked with many universities across the country and we are finding out what works for them and how they have gone about designing a model so we are trying to get that information.  We also feel that we need your input as we design a model.  We certainly need to know what you like and what you don’t like about the current plan.  What changes would be beneficial to you. 

Why are only thirty five percent of the people you are asking are satisfied?

Ms. McCollum:  That means what they are really paying and in some cases you are not paying anything.  I would imagine that 35% of those that are favorable here are those that are not paying anything.  Everyone else who has to pay for dependent coverage is unsatisfied. 

Senator McRae:  I guest I am encouraged that you are calling a committee to study this. However, no committee is going to think of everything.  Are the faculty and staff going to get a chance to examine and comment on this plan before it goes to the trustees?

Ms. McCollum:  What we are also planning to do in January is to hold focused group sessions at probably six to eight campuses.  Our consultants will actually be facilitating those sessions where we sit down with a small group of employees and talk with them about the proposed model that we have and get input on that so yes clearly we plan to get input about that model before we move forward.

We are doing our best to keep our campus Human Resource people informed about this and they will be putting more and more information out on your website that you tap into to access information and I am sure there will be other kinds of community meetings held between now and the time that we finish developing that proposal so we are doing our best to get that word out.

Senator Krotee:  I worked 27 years at the university of Minnesota and did not have to pay anything.  When you talk to these other campuses and say this seems like a good plan then why do you have to keep talking to a bunch of others and have a pilot plan unless you are going for less.

Ms. McCollum:  I think we are just trying to find out what is out there.  I mean there have been a lot of changes in health care models over the past few years so we are just really trying to collect good information working with our consultants to design the best model that we can.  It is not going to be perfect, we know that.  We are limited with resources but we think the more information we have the better it will be.

Senator Warren:  Could you outline briefly what you mean by pilot plan.  Is this a small group of chosen employees?  Is this going to be offered to all employees on campus and whoever wants to try this will enroll and then we will look at the results and then take it to the General Assembly?

Ms. McCollum:  We felt like from a political standpoint we would better saying this really is going to be part of the State Health Plan as we move forward.  Our intention is that this would be a pilot plan for University of North Carolina Employees, which would include all employees at the sixteen campuses and if this is a mode that works for the university and the state wants to adopt it then they can certainly do that.

Senator Warren:  The idea is that the whole sixteen campus system and any employee in that system would have an opportunity to adopt the pilot plan on a voluntary basis.

Ms. McCollum:  This would be offered in lieu of the State Health Plan. 

Senator Bruck:  I’m looking at a plan right here that has ten times the benefits at 10% of the cost of what we get now.  The bottom line, somebody is paying this and it is the state taxpayer of New York who is paying for it.  I don’t think we should be sitting here talking about pilots and whatever else without understanding fully that it may cost for every single employee in this system another four or five thousand dollars per year of taxpayer money to make it work.  Am I wrong?

Ms. McCollum:  This would have to be a cost mutual plan at this point and we don’t know how that is going to work.  Obviously what we hope to do would be to have more options than we have where there might be HMOs and PPOs and some other types of models perhaps.  There may be tradeoffs that we might have to consider as you look at this health care plan that we have never had before.  You may have a plan that has a very high deductible that you might be able to choose or a low deductible and you pay a higher premium.  There are all kinds of tradeoffs and that is why I am here today to find out from you if you are willing to make some tradeoffs to have a better plan and to have more choices.

Senator Bruck:  First of all I applaud you for what you are doing.  The answer from a really heart felt of view is no.  Why do these people have and we don’t?  It is as simple as that. 

Ms. McCollum:  We think we can do better than what we have or we would not be doing this. 

Vice Chancellor Carol:  I think that what we are trying to do here with this initiative in the University System is to say to the state that the same dollar that this is costing you now, we think we can put together a better package and component and that is really what we are trying to do.  I don’t think that it is our intention to go to the state and ask for new resources so what we are trying to do is say for the same resources we can design something that would be an improvement. 

Senator Rex Smith:  What would the anticipated time frame be to get a pilot plan started?

Ms. McCollum:  I really cannot answer that at this point.  I think that if we can get it to the General Assembly during this next session it will depend on a lot of things.  First of all getting them to approve it and then deciding how long it will actually take for us to get this in place and then implemented.  I really can’t answer that at this point.

Senator Martin:  I recognize that there is a reality that we have to work in since there is a slight fix in the budget.  I would like to please request maybe on behalf of the Senators, that you ask for new resources as well because if all we are doing is working within the island we are going to get nothing.  Only if we look beyond will we have any hope of ever getting, so please ask for more.  Work within the guidelines that we don’t stop there.

Senator Hanley-Bowdoin:  Having looked at other university plans and retirement plans, I think a lot of our problems with health insurance are tied with the way the retirement in North Carolina is handled.  Correct me if I am wrong but I understand that if you are vested in the retirement plan which takes five years then your personal health insurance is covered 100% as a retiree so that makes it very easy for someone to come into the state system for a relatively short period of time and get a major benefit that we as regular employees are paying for.  I don’t think that is a common thing.  Usually you have to work some place at least twenty years to receive a benefit like that so until they really look at the whole picture I don’t think we are going to find additional resources.  One of the reasons why that is happening is because we have so many people who retire from the state with five years or more but relatively have not paid into the state retirement plan for very long and are basically getting incredible benefits for the time invested and money invested and that is what is driving in large part the cost for everyone and is even making it bad for people who work for the state twenty and thirty years who are retiring. 

Senator Blank:  If you go and look at the tuition rates to go to a school in New York even as an in state resident in New York compared to tuition rates for going to school in North Carolina you may be able to explain some of the differential in how they fund some of the things that they do.  There is an enormous differential. 

What types of incentive would cause you to engage in healthier behaviors?

Secretary Weiner:  Smoking Cessation, Weight Loss, and Fitness/Health

Senator Martin:  Frankly a decent healthcare plan would increase wellness. 

Senator Fikry:  I worked for twenty-five years but I am retired now.  I have a difficult time with medical expenses.  The doctor bills are high.  The dental insurance you can only use NC Flex for eighteen months, and so many other things. 

Senior Vice Provost Perry:  I know that the student insurance is very reasonable and I am sure it is because they have to go to the Health Services first and that is fee based.  Is that something that you might look at for employees?

Ms. McCollum:  As a matter of fact I was attending the Chief Academic Officers meeting today at the Office of the President and I was asking them about resources on campus.  I know we do have some campuses that allow employees to use Student Health Services or there may be screening clinics that you have available on your campuses so we are in the process now of trying to collect that information as well so we can tap those resources.

Senator Martin:  Relating to that why don’t you look at some of the laboratories as models.  They do a lot of work at the national laboratories.  Most of them have a physician or two on staff.  That is not going to do necessarily do our entire medical needs but if you have something like a sore throat it takes care of that.  When I go as a user to a national lab I have free access to that service.

Senator Stein:  I came here four and a half years ago and have been looking for a physician.  I have no leads.  In four and a half years everyone that I have called do not accept new patients.  If you give me health care I cannot even use it because you did not check out whom I can even call.

Ms. McCollum:  You can imagine that access is really a big issue as we are looking across the state at sixteen campuses in different regions so that clearly is an area that we are really focusing on.

Senator Stein:  I have been around the United States and you usually get a list of the doctors that you are associated with and that you have checked that I can call in four and a half years and find one.

A motion was made and seconded to extend the meeting to 5:05 p.m.

The motion passed unanimously.

If you knew your health care cost would be less but the quality of care would be equal if you used a particular group of providers would you switch to the low cost provider?

Senator Warren:  I was under the Kaiser System in California and in Oregon and I received wonderful medical care.  I would have absolutely no problem if there really were occurrences that the quality of care was there and for particular medical situations one would have the option of switching out independently.

Senator Batra:  It may not be helpful to someone who is currently here and has established a relationship with their doctor but it certainly would help the person who can not find a doctor.  New comers would certainly be able to use that.

Senator Tetro:  I was with Kaiser when they were here and I have followed the family nurse practitioner who was our provider there and having a family history that need to be kept in one place the answer is no.  I want to know that my doctor knows who I am and knows the history of my medical condition.

Senator Blank:  I would have no problem going with a low cost provider. 

Senator Bruck:  Back when we had HMOs I had neighbors who were absolutely thrilled with their HMO coverage, but for me the answer is no.  I want my doctor. 

Ms. McCollum:  One important fact is that a large percentage of the cost is contributed to a small number of state health plan participants. 

Would you be supportive of more proactive alternatives to help manage chronic conditions like disease management programs where we might be able to better manage such as diabetes, a chronic heart condition where we are more proactive in trying to manage that? 

Senator Bruck:  I think it is tremendously important.  You have people with chronic diseases who have to take medication three or four times a day and they are paying forty dollars each for the prescription.  They are not motivated because every time they get involved with having things checked it is going to be another $100 or $200 from there.  Individual motivation for chronic disease is going to be based frankly on how convenient it is going to be for the individual and if not many people don’t do it.  They don take their medications, they get sicker.

8.  Adjournment
Chair Daley adjourned the meeting at 5:05 p.m.

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