Rising Health Care Costs in Higher Education

            From 2002-2003 to 2003-2004, the average health care premiums paid by colleges rose 11.9% (Glenn, 2005).  And from January of 2009 to January of 2010, the cost of providing health care to employees at institutions of higher education increased by almost 7% (Kirch, 2011).  This is more than 2.5 times the rate of inflation in the United States over the same period (Kirch, 2011).  And this fact remains even though the institutions are paying an increasingly smaller share of employee premiums (Kirch, 2011).  In fact, many of these employees who are now burdened with paying higher premiums may have never even had to pay premiums in the past (Glenn, 2005).  Therefore, there are a couple of different problems inherent here.  First, institutions and employees (and students) are paying more for health care, while not actually receiving additional care.  Second, institutions run the risk of not being able to recruit and retain employees (and students) because of poor perceptions about their fringe benefits (Kirch, 2011). 

            Kirch (2011) offers a few ideas for reducing health care costs for higher education institutions, the first and foremost being educating and involving its employees (and students) about prevention and healthy behaviors for lifetime wellness.  The author mentions that some colleges have begun programs that offer employees incentives, like lower premiums or vacation time, for exercising a prescribed number of times per week.  Kirch (2011) proposes that these efforts will benefit the institution through long term health care cost savings by creating a healthier student body and academic workforce, as well as a more satisfied workforce.  The author also mentions unique opportunities that institutions who act as insurer and provider have (Kirch, 2011).  He cited Penn State Milton S. Hershey Medical Center as an example.  Leaders at their medical center not only instituted a system of health care and wellness education, but they also tiered employee contributions based on income (Kirch, 2011). 

            Given the rising health care costs across the nation, and the ever-decreasing government subsidies to higher education (ironically, in many cases due to Medicare and Medicaid spending on the national and state levels), it is paramount that higher education institutions take a critical look at their insurance plans and the activities of their providers to find ways to reduce spending in this area.

Glenn, D. (2005). The health-care tussle. The Chronicle of Higher Education, 51(20), 21-22. Retrieved from http://vnweb.hwwilsonweb.com.ezproxy.memphis.edu/hww/results/getResults.jhtml?_DARGS=/hww/results/results_common.jhtml.35

Kirch, D.G. (2011). Higher education and health care at a crossroads. Trusteeship, 2(19). Retrieved from http://agb.org/trusteeship/2011/3/higher-education-and-health-care-crossroads