Penn State, Wellness and the Relationship With Third Party Service Providers

The Penn State University faculty Senate is moving toward its special meeting to vote on a resolution relating to the suspension of the Penn State Wellness program and the institution of a more robust engagement basis for structuring any future program,. (e.g., Special Faculty Senate Meeting to Consider Penn State Wellness Program: Announcement of Meeting of Senate Council to Review the Petition Along With Petition Text).  

(Pix (c) Larry Catá Backer 2013)

In that connection, it may be useful to consider not only the relationship among university stakeholders, but also between the university and its external partners, particularly Highmark.  To that end this post republishes the 2007 announcement of the current basis of that relationship and its collateral effects.  Further detail may be useful in judging this relationship and its consequences for the way in which the Wellness Program was developed, structured and operationalized.

PSU gets $25 million from Highmark
2007-03-08 12:26

By MARTHA RAFFAELE

HERSHEY, Pa.

Highmark Inc. will give Penn State and its medical center $25 million and enter into a 10-year contract to administer health care benefits for 60,000 university employees and their dependents under a deal announced Wednesday.

"This new agreement will not only improve the quality of health care for Penn State employees and their families and increase access and affordability to much-needed services, it also holds tremendous promise for medical research and care for patients," Penn State President Graham Spanier said at a news conference announcing the deal.

Under the agreement, Pittsburgh-based Highmark committed $20 million toward the planned Penn State Children's Hospital in Hershey, nearly doubling the funding raised so far to more than $45 million, officials said.

Highmark also committed $5 million to clinical research for cancer and other diseases, including infrastructure improvements that are expected to benefit other area hospitals.

Penn State plans to use a combination of private funds, medical center reserves, borrowing, and federal and state grants to build a 180-bed freestanding children's hospital that will include a pavilion dedicated to the treatment of children with cancer. The project's estimated cost is now more than $300 million, and the Penn State Milton S. Hershey Medical Center needs to raise a larger amount in private donations than the $35 million target it set roughly five years ago, hospital spokesman Sean Young said.

A groundbreaking date has not yet been scheduled for the facility, said Dr. Harold Paz, the medical center's chief executive. Construction should take less than four years, he said.

Paz said the $5 million research donation could, over the next 10 years, "transform the way we approach health, wellness and prevention, not only here in central Pennsylvania, but across the nation."

The current children's hospital -- 123 beds located primarily on the medical center's seventh floor -- annually sees more than 6,500 inpatient admissions. More than 125,000 children are treated on an outpatient basis.

"Playing a role in providing children and families with the tools and practices needed to lead longer, healthier lives is also what the Highmark mission is all about," said Dr. Kenneth R. Melani, the insurer's president and chief executive.

The company's contribution to the children's hospital was not contingent on Highmark administering Penn State's health plan, he said.

"At no point was there any trade-off between the three pieces," he said, referring to the two donations and the contract for the health plan.

Highmark entered into a similar 10-year partnership with the UPMC Health System in Pittsburgh in 2002 -- a $520 million deal that called for both parties to share the cost of converting the financially ailing St. Francis Medical Center into a new children's hospital, among other things.

Highmark did not take over the administration of UPMC's employee benefits, however, Melani said.

"It did lay the foundation, in some respects, for what we did here," Melani said.

Starting Jan. 1, 2008, Highmark will become the exclusive health-benefits administrator for nearly all employees, dependents and retirees of Penn State and the medical center. The agreement covers about 28,000 employees and 32,000 dependents.

A Highmark spokesman would not disclose the value of the health care benefits contract.

It covers all but one of the 24 Penn State campuses. The Pennsylvania College of Technology campus in Williamsport, the newest addition to Penn State, will be excluded, said Penn State spokesman Bill Mahon.

Highmark, the state's largest health insurer, serves about 4.5 million Pennsylvania residents. It operates as Highmark Blue Cross Blue Shield in 29 counties in western Pennsylvania and Highmark Blue Shield in the rest of the state.

Harrisburg-based Capital Blue Cross currently administers the medical center's health care benefits, while a variety of insurers do so for Penn State's campuses.