With health care insurance inflation in the double digits for the third year across all sectors of the American population, colleges and universities across the United States continue to think about how to best provide insurance for their students.
It doesn't make matters any simpler that the uninsured population in this country remains at a stable and unacceptably high level to many. Some are clamoring that unpaid medical bills are one of the main reasons why students leave their college education incomplete.
And though scholastic hard-waiver and mandatory health insurance programs are becoming more and more of the norm, they may not be enough for some, especially as small communities surrounding college towns are sometimes left to cope with the burden of providing care to students. Meanwhile, a few institutions lucky enough to operate medical schools or own hospitals may have discovered a successful formula for providing these benefits in the era of managed care's decline.
While insurance companies have usually been thought of as favoring younger, healthier populations with lower insurance premiums, that principle may be of little consolation to those college students who happen to be underinsured or who lack health insurance altogether.
"According to the U.S. Census 2002 report, young adults ages 18 to 24 were less likely than any other age groups to have health insurance," says Sharon Fisher, communications coordinator for the American College Health Association (ACHA), a national organization made up primarily of individual members in college health services departments. Only 70.4 percent of young adults in that age range were insured in 2002, Fisher says.
The problem is indeed serious, agrees Ralph Manchester, director of University health services at the University of Rochester in New York. According to Manchester, some 25 percent of America's 18 million college students are some combination of underinsured or uninsured.
As part of an attempt to mitigate the problem, the ACHA has participated in Cover the Uninsured Week for the last several years, according to Manchester, who is a former president of the organization.
A big part of the problem is the double-digit health care inflation that has been affecting the entire country consistently for the past several years. Alan I. Glass, director of student health and counseling at Washington University in St. Louis, explained how the phenomenon was affecting his institution. "We've been seeing 24 percent inflation, which has made it a challenge negotiating premiums with the insurance company," Glass says, noting that premiums were increasing by 30 percent for next year.
students need only
aspirin and a shoulder
to cry on are mistaken.
To deal with the public health aspects of the issue, Washington has joined a growing number of institutions in formulating a "hard-waiver" policy. "Nationally, 17 percent of college students are uninsured, accounting for about 10 percent of the country's uninsured population," Glass says. "With the hard-waiver policy, the students have to prove that they have adequate coverage in order to enroll.
"The difficulty is that from an administrative perspective, it can be incredibly costly and difficult to manage. You have to have somebody keep records of the documentation, and things can happen at mid-year. For instance, at the beginning of the year they may be covered by their parents, but then their parents may lose coverage," Glass says.
Cornell University has a hard-waiver plan, but the school did a study in 1999 and found that 8 percent of their enrolled students did not have coverage at mid-year. And 35 percent had coverage which was less than adequate, Glass says.
Providing coverage for their students might be more than simply being a good citizen for American colleges and universities; it might add to re-enrollment and graduation rates.
Consider a 2000 study by the California Board of Regents which found that the No. 1 reason students disenroll was unpaid medical bills, said Dan Fishbein, president of the Chickering Group and general manager of Aetna's student health line of health insurance.
One of the reasons health insurance companies have deemed the younger populations of our country as so desirable for insurance purposes is that their health care needs have long been regarded as minimal. Other than a little bit of counseling and a runny nose now and again, there was little colleges (or health insurers, for that matter) really needed to provide for these students. Hence, the general pattern of student health centers on campus has been to provide access to one or two M.D.s and a few beds, as well as a few basic health care solutions when students get sick away from home.
"Parents should feel very comfortable about the fact that they are sending their sons and daughters to institutions where such good medical care is available," says Reginald Fennell, current president of the ACHA and professor of health education at Miami University (Fla.). "One of the important parts of college health is keeping students happy so they can learn and make contributions to society. You and I might call a doctor, but not see them until next week. If a student were to walk into a college health service today while they were sick, they would not be turned away."
In the years since managed care became a driving phenomenon and a reality in the American health care market, college health services have been placed in the role of "gatekeeper," the role traditionally played by primary care doctors who decide whether or not a patient should be referred to a specialist or for screening or other services. This places the college itself in a unique position of being able to influence what services the students actually consume. But those who believe the only health care services a student needs are a couple of aspirin and a shoulder to cry on would be mistaken.
"Motor vehicle accidents are one of the leading causes of death in this age range," says Manchester. "We've had students die as a result of those in the time that I've been here. OB/GYN care is another significant issue for female students," he adds.
Even well-known pathologies can be destructive for college students if not paid attention to. "When it reaches its most severe form, depression is one of the leading killers in this age group," says Glass. In addition to diabetes and inflammatory bowel disease at Washington, even a small school like Montana State University has its share of unexpected illnesses. "The No. 1 health care problem we see is upper respiratory illnesses, and the second is injuries," says Jim Mitchell, director of student health services. "We also had a case of Rocky Mountain spotted fever, a tick-born disease," he says.
These needs may be why some 25 to 30 percent of American institutions have some variety of mandatory or hard-waiver insurance requirements. "There are discussions going on in the field about the best way to decrease the number of uninsured college students," says Manchester. "If you leave it up to the individual, you run into the problem of adverse risk selection. Young, healthy people don't think they need health insurance, but once they're sick they go get it, and then run into high health care costs."
"You can't start making exceptions or the thing doesn't work. That's why the thing works, because everybody is required to purchase exactly the same thing, so you can spread the burden out over a large number of people," agrees Glass. "Insurance companies are always out there trying to encourage people to institute mandatory insurance programs, because they insure a lot of people and save money, but it can be a hard sell when premiums are rising."
While principles like adverse selection and the spreading of risk are essential to the concept of insurance as we know it, they apply not only to populations within colleges and universities. "Going uninsured isn't something that just affects the students; it affects the whole community," says Montana State's Mitchell. "Last year, our health plan paid the local hospital $850,000 in claims. If our students were uninsured, it would've been bad debt, because students don't have any assets to go after. They'd have to raise rates for everybody else," Mitchell says.
Mitchell says the school decided to institute its own insurance policies as a way of dealing with a community relations issue. "One day the president of the hospital showed up at the office of the president of the university and said that half of the bills from students were not being paid. This issue had to be resolved. One of our goals was to avoid dumping uninsured people on the community the college is part of," he says.
"The colleges that comprise the majority of Montana students have their own student health clinics, and the purpose is to not bring thousands of people to a university town without coverage, and then burden the local community," agrees Richard Miltenberger, vice president of marketing for Blue Cross/Blue Shield of Montana, which services the Montana State account. "But there is no silver bullet for the national health insurance problem. We're looking at 12 percent medical inflation nationally. For this population its only going up by 7 or 8 percent, but that's a collision course nonetheless," he says.
Into the mix arrives a recurrent phenomenon in American college town life, as much a part of the contemporary health care setting as managed care itself: local hospital institutions changing hands.
The strategy, which has proved popular with large insurance companies and seems to benefit those colleges lucky enough to own hospitals, is simple: The college contracts with a health insurance company, and the doctors and the teaching hospital attached to the medical school join the insurance companies network of preferred providers.
The university medical service, acting in the role of a gatekeeper as previously described, refers students to specialists within the teaching hospital whenever necessary. The result: The university saves on both ends, earning both a discount from the health plan when its students use its own network, and a market rate fee from the insurance company when the bill comes in.
Washington University is one example. "We have a unique situation, because we're one of only three medical schools in the country with a mandatory insurance program," says Glass. "Oftentimes our specialists, who are part of Aetna's network, have to refer to a subspecialist, such as a cardiologist, endocrinologist, or neurologist, who are also at the university. Of course, Aetna's physicians are also on our insurance, giving us access to a broad network of physicians nationwide, which is a real advantage to students when they're home on break," he says.
While Washington may be unique because of the high rankings of its medical school (especially for internal medicine and pediatrics), Washington's experience may be similar to that of other medical schools. Washington's contract with the laboratory at Barnes Jewish Hospital, where Washington's teaching activities are headquartered, has saved the school 70 percent on lab costs.
Another experience typical of medical schools in this area relates to the question of patient confidentiality. "We have approached outside providers for those delicate areas, when students have a concern about seeing someone here who may be involved in their educational system," says Betty Feagans, office manager of Washington's Student Health facility.
Some institutions, which appear to have accomplished the impossible, are not staying quiet about it. Can it be that in this era of ever-surging health care costs, some institutions are actually turning a profit by insuring their students?
The University of Rochester may be a great example of one university that is experiencing that rare anachronism, a profitable health care institution. Throughout the 1990s, while nobody in health care seemed to be faring very well other than the managed-care companies, the college town of Rochester was being put through its paces by local employers.
"In the 1990s, Eastman Kodak and other large employers in town decided that in order to control costs, we should move from a cooperation model to a competition model," explains Manchester, of Rochester. "Local hospitals quickly lined up into two competing organizations, one led by the university, the other led by Rochester General Hospital. Everyone knew that Rochester had more hospital beds than it needed. Eventually, the university bought Highland Hospital and consolidated it with Strong Memorial, and Rochester General was forced to close the Genesee Hospital," he says.
The economic fallout of the 1990s proved a windfall to the university. "We're generating a few percent operating margin on both Strong and Highland," says Manchester. "It's one of the better-performing health care systems in New York state, which may not be saying too much, because there are a lot of hospitals that are losing money," he says.
As with participation in an insurance plan, prominence has its advantages. "We do something in excess of $100 million in annual National Institutes of Health (NIH) funding for research. The university medical center has built two new research buildings in last four years. Strong Memorial community hospital performs liver, heart, and bone-marrow transplants, as well as specializing in neurosurgery," he says.
for students might add
and graduation rates.
While some universities are actually shutting down beds in their small student health clinics, institutions like the University of Rochester and Washington University are expanding their student health care services or even earning a slight profit. That might not seem like much of an accomplishment in an era in which hospital costs are increasing second only to pharmaceutical costs (or even overtaking them, according to some current reports), but those institutions which succeed today are more likely to survive for the long term, and even turn out better research and students for tomorrow. In some small college towns with inadequate health care resources to start out with, it may be an even more important strategy.
Consider the top-ranked small college in the United States, Williams College in Massachusetts. With just over 2,000 students, the institution has recently instituted a hard-waiver student insurance program.
Nonetheless, Williams closed its five-bed health center in May of this year. "Next year, we'll be completely ambulatory. Only about a third of the students take the plan that's through Williams; other students use their parents," says Ruth Harrison, director of health services.
For those colleges that have successfully increased their health care infrastructure, benefits can increase incrementally. "Half of our health center visits are by nonstudents," says Rochester's Manchester. "Bringing employees onto the plan at least helps stabilize costs. For a medium-size student health service like ours, it allows us to have a somewhat larger staff and offer a more comprehensive range of services to our student populations. It also helps us smooth out the academic care schedule by arranging annual checkups during the office season," he says.