University can’t duck health cost reform

The new task force looking at ways to restructure the University of Wisconsin System will be looking at many issues, but it will be unable to avoid the funding crisis caused by the state’s unimaginative management of its soaring costs of health care.

Many essential government programs are being crowded out by bloated health care costs. Look no further than major decisions made by the governor and legislature in the state’s current biennial budget.

The university system was cut by $250,000 million, taking it down to 6% of the total budget, about half of where it used to be in the 1980s and 1990s. In the same document, where almost all state programs took a haircut, Medicaid spending by the state was increased by $1.2 billion. That is the epitome of  “crowding out.”

K-12 education and environmental programs also took hits.

Another iceberg sinking the university ship is the health care costs of its own employees. Total employment of the system is about 32,000, about half of the state employee total.

Last I checked, the Employee Trust Fund, which buys insurance for state employees, was spending $21,000 per employee. That compares to $7,000 for private companies using best practice management innovations for health care delivery. That would be companies like QuadGraphics, KI in Green Bay and Burger Boat in Manitowoc. They all offer very comprehensive coverage at the $7,000 mark.

At $21,000, three times best practice, the university is spending more than $600 million per year. If the university converted to a consumer-driven plan, based on Health Savings Accounts, it could save at least 20% of its health care bill.

That would be enough to offset the cuts in the 2011-13 budget. Further, there are other innovations, such as on-site primary care, that can cut the costs even more, while delivering better care.

How can the task force not look at best practices for the delivery of health care?

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