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Project Title:Collaborative Health and Wellness Strategy to Reverse Rising Healthcare CostsInstitution Name:Central Michigan University Innovation Category:Operational Efficiency Project Director:Jacqui Pridgeon, Director/Benefits and WellnessContact Information:(989) 774-3661, pridg1ja@cmich.eduWebsite: https://www.cmich.edu/fas/hr/Documents/Health%20Care%20Committee%20Report%20'12%20final.pdf
Project Description:

Central Michigan University employee group leaders and administrators are reversing rising healthcare costs by combining common purchasing and consumerism methods with an innovative gainsharing wellness program. Employees who complete four wellness components* receive their “share” of a fiscal year-end positive balance in CMU’s self-funded health plans. Plan benefits rank among the strongest for Michigan universities, while annual medical and prescription drug plan costs have declined. CMU and its health plan members have avoided $11 million over the past five years in comparison to 11 of the state’s other public universities.

 *Components include an annual health risk assessment, exercise, annual physical, and wellness screenings/programs.

  • Stabilize and reduce CMU’s average self-funded health plan per capita (per employee) costs.
  • Improve the health status of CMU employees and reduce health risks among the population covered, as measured by the annual health risk assessment.
  • Maintain competitive, quality and valued health plan coverage in comparison to other Michigan public universities.  
  • Average annual per member per month health plan costs have increased only 1.9 percent for medical and 0.1 percent for prescription drug annually during the past 5 years.
  •  “Lifestyle scores” from the annual health risk assessment have improved and the number of members indicating high health risk has decreased from 28% to 17% during the past five years.
  • CMU health plans feature zero deductibles and coinsurance for hospital/surgical services compared to an average 4 percent coinsurance fee and $221-single/$450-family deductibles at other state universities in Michigan.
  • For FY13, medical illustrative rates (premiums) decreased by 2 percent and prescription drug rates were held flat. 
Challenges/Problems Encountered:A trusting relationship among various union representatives regarding CMU’s healthcare cost control strategy had to be leveraged in order to effectively collaborate and promote health and wellness initiatives. This was achieved through the establishment of a Health Care Committee consisting of member liaisons from each employee group with a focus on continually assessing health benefit trends/issues at CMU and within the health care industry.
Evaluation Approach:Health and wellness cost and utilization data are compiled, analyzed and benchmarked on an annual basis through a coordinated effort between benefits and wellness staff and plan/program vendors. This information is reviewed by the Health Care Committee and by the AVP of Human Resources and the VP of Finance and Administrative Services. In 2012, a report highlighting health and wellness success was released to all faculty and staff for the first time.  See website link listed above.
Potential for Replication:Success of health and wellness initiatives depends on the organization’s culture, benefits strategy and unique needs and concerns of individuals. Senior leadership engagement in promoting and supporting the programs/initiatives is essential but sometimes difficult, as a return on investment may take several years. Transparency is a key element, and unionized environments will need to assess how the effort can be aligned with the overall employee relations approach.
CEO-to-CEO Contact:George E. Ross , Presidentpresident@cmich.edu
(989) 774-3131
Date Published: Wednesday, February 13, 2013