Kitzhaber nixes universities’ hopes of cutting health costs

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Wednesday, January 09, 2013

 

Oregon’s seven state universities have been clamoring for years for more independence from bureaucratic state regulations. As taxpayer support for them has waned, Oregon University System officials argue, the schools should have more freedom to run themselves like businesses and control their own costs. And two years ago, Gov. John Kitzhaber agreed, signing a bill that gave the universities some of the freedom they sought.

OUS officials have found a way to use that newfound independence to save money—$67 million in the next two-year budget—on employees’ health premiums.

That’s savings that could lower students’ tuition. But it’s also too much independence for the governor: Kitzhaber has told the universities no.

“It’s craziness,” says state Rep. Mark Johnson (R-Hood River), who co-chaired the House Higher Education Subcommittee in 2011. “It’s just another way of the system saying, ‘We’d like to be efficient,’ up until it threatens one of the sacred cows.”

In this case, the sacred cow that’s being protected is the Public Employees’ Benefit Board, the insurance pool that negotiates health-care coverage for 50,000 state employees. Currently, 13,000 OUS employees—about a quarter of the pool—get their health coverage this way.

But an analysis by OUS finance chief Jay Kenton given to lawmakers last month shows the universities pay $33 million-plus a year more into the insurance pool than their employees get back in benefits.

 

Read more in Willamette Week.

 

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