Harvard faculty roiled by health fixes

The university is adopting standard features of most employer-sponsored health plans: Employees will now pay deductibles and a share of the costs, known as coinsurance, for hospitalization, surgery and certain advanced diagnostic tests. The plan has an annual deductible of $250 per individual and $750 for a family. For a doctor's office visit, the charge is $20. For most other services, patients will pay 10 percent of the cost until they reach the out-of-pocket limit of $1,500 for an individual and $4,500 for a family.

Previously, Harvard employees paid a portion of insurance premiums and had low out-of-pocket costs when they received care.

Michael E. Chernew, a health economist and the chairman of the university benefits committee, which recommended the new approach, acknowledged that "with these changes, employees will often pay more for care at the point of service." In part, he said, "that is intended because patient cost-sharing is proven to reduce overall spending."

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The president of Harvard, Drew Gilpin Faust, acknowledged in a letter to the faculty that the changes in health benefits though based on recommendations from some of the university's own health policy experts were "causing distress" and had "generated anxiety" on campus. But she said the changes were necessary because Harvard's health benefit costs were growing faster than operating revenues or staff salaries and were threatening the budget for other priorities like teaching, research and student aid.

In response, Harvard professors, including mathematicians and microeconomists, have dissected the university's data and question whether its health costs have been growing as fast as the university says. Some created spreadsheets and contended that the university's arguments about the growth of employee health costs were misleading. In recent years, national health spending has been growing at an exceptionally slow rate.

In addition, some ideas that looked good to academia in theory are now causing consternation. In 2009, while Congress was considering the health care legislation, Dr. Alan M. Garber then a Stanford professor and now the provost of Harvard led a group of economists who sent an open letter to Mr. Obama endorsing cost-control features of the bill. They praised the Cadillac tax as a way to rein in health costs and premiums.

Dr. Garber, a physician and health economist, has been at the center of the current Harvard debate. He approved the changes in benefits, which were recommended by a committee that included university administrators and experts on health policy.

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In an interview, Dr. Garber acknowledged that Harvard employees would face greater cost-sharing, but he defended the changes. "Cost-sharing, if done appropriately, can slow the growth of health spending," he said. "We need to be prepared for the very real possibility that health expenditure growth will take off again."

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Harvard faculty roiled by health fixes

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