University Health Services may avoid some of the planned cuts to its services if a proposal currently being debated by a committee of administrators, student government representatives and UHS physicians is adopted by Chancellor Robert Holub.
Last semester, University administrators announced a series of cuts to UHS designed to save money in preparation for the building of a new health facility. The new proposal – prepared by the committee tasked with reviewing the cuts after student and employee protest – would preserve the on-campus pharmacy and laboratory services.
However, there is still a $400,000 gap between the proposal’s savings and the $4.9 million targeted by the committee, according to Associate Chancellor and Committee Chairperson Susan Pearson and Vice Chancellor Jean Kim.
According to Pearson, this gap is based on significant budget miscalculations. She is currently working with the Associate Director of UHS Maria Coach to review each department’s finances and correct the miscalculations.
SGA Secretary of Diversity and Committee Member Akshay Kapoor said that the committee has reached a consensus to keep the pharmacy operational and continue to provide on-campus lab services – both of which were to be cut in the original list of changes. Pearson said the committee has not yet reached an agreement, primarily due to the discrepancy between the desired savings and those accounted for in the new proposal.
Kim expressed doubts that the proposal would meet its savings goals if the pharmacy is kept open.
“If you keep the pharmacy and the lab, it will add to the cost of the new building,” said Kim. “The original building proposal included reduced services.”
Kapoor said that closing the pharmacy would create a burden by making students, many of whom do not have cars, to travel to an external pharmacy to pick up medications.
The proposal projects hundreds of thousands of dollars in new revenues from the pharmacy and changes to the Student Health Insurance Plan [SHIP] billing. Price hikes for over the counter medications and increased pharmacy business are projected to raise approximately $150,000, while more diligent billing of insurance companies for UHS procedures is projected to raise close to $500,000.
Kapoor also said closing the pharmacy would increase the cost of treatments at UHS because it would force UMass Amherst to drop out of the drug purchasing consortium it is currently a part of with UMass Worcester. Pearson confirmed that UMass gets cheaper prices on medications due to the consortium, but disputed that a pharmacy closure would lead the University to drop out.
UHS officials and University spokesman Ed Blaguszewski declined to comment on the committee’s deliberations or provide details on UHS’ insurance billing and drug purchasing procedures.
In addition to projecting new revenues, the proposal would save money by cutting jobs at the pharmacy and the lab. Kapoor said the details of those cuts had yet to be decided and would be subject to union negotiation.
“The student enrollment at UMass is increasing every year … We expect a larger student health fee with more students paying the fee,” he said. He clarified that such increases would come from the larger student body, not from planned increases to the fee itself.
The administration feels that reducing the number of employees at the pharmacy while increasing the workload would demand a “production rate that is unrealistic for pharmacy employees,” said Kim.
Kapoor said that the committee as a whole, including UHS and administration representatives, did a study of the proposal’s impacts that estimated the projected savings.
The nearly $500,000 in revenue increases from the SHIP would come from improved administration and billing of insurance claims, said Kapoor.
Kim and Pearson confirmed that up until last year the SHIP program was not billed for many basic medical procedures, which forced that the Student Health Fee to absorb this cost. This changed last year when UHS began billing the SHIP program. According to Kim, 15 percent of students currently use the SHIP plan.
“When you came there and got a physical, for example, or got a lab test done or got medicine, we didn’t bill the insurance company for that. We took the hit ourselves,” said Kapoor.
He said that because of low returns in the past from insurance claims, UHS policy was to often not seek such claims at all, in the face of high administrative costs for relatively small returns. He continued to state that the committee projected hundreds of thousands of dollars in new revenue if UHS were to continue to bill insurance companies for all services.
Kapoor said students and administrators began their work on the committee with very different perspectives and interests, to the extent that they literally grouped themselves on opposite sides of the table.
“When we sat down at the table there was a very clear divide … we were even physically very polarized,” Kapoor said. “In the end, everyone fought for the things they cared for. For example, a lot of people wanted to cut the Center for Counseling and Psychological Health. We made a very strong case … they wanted to cut the four free visits [that students have to counseling services,] and we talked a great deal about how detrimental that would be.”
Students on the committee recognized that certain cuts were necessary given the committee’s task of finding nearly five million dollars in savings, according to Kapoor. He described how, despite reservations, he and other student representatives agreed that cutting operating hours at UHS would make the facility more cost-effective.
“For example, we realized that we’d save a lot of money if we changed some of the operation hours- reluctantly, of course, we didn’t want to see hours get changed,” he said.
“We knew the goal of the committee was we need to save 4.9 million dollars,” he said. “That was the charge of the committee – if you don’t like [the initial proposal], find this money somehow else. Make it work.”
According to Kim, the fate of the services in question depends on the committee’s ability to find the same savings elsewhere.
“If they can meet the same bottom line, of course we will keep [the pharmacy],” said Kim.
The proposal includes cuts to night, weekend and holiday hours. Kapoor said that given the reduced hours, he proposed that UMass HealthRide program – which offers on-campus students vouchers for cab fares to off campus medical facilities in exchange for a small fee each semester – be made available for free. The cost of that change has not been integrated into the proposal yet, as the committee has not finished its cost estimate of making the service free.
According to Kim, there is no timeline set for the completion of the decision making process. Holub will make the final decision, but he cannot do this until a concrete proposal for the new UHS facility is issued.
“Honestly, I had hoped that the review process would be completed by now,” said Pearson. “But it is more important to get it right than to complete it quickly.”