University of Pittsburgh
February 21, 2000



PITTSBURGH, Feb. 22 -- The University of Pittsburgh has reached a three-year agreement with UPMC Health Plan, the medical insurance arm of UPMC Health System, to become the exclusive provider of medical insurance coverage for the University's employees, effective July 1, 2000.

Pitt Chancellor Mark A. Nordenberg noted that the agreement reflected the University's goals of achieving the broadest possible range of coverage choices for employees while holding costs, to both individual employees and the institution, at manageable levels.

"This new contract with UPMC Health Plan allows us to maintain high quality coverage for the University's faculty and staff, while mitigating the trend of escalating health care costs. That is a remarkable accomplishment in light of the marketplace turmoil that has afflicted health care throughout the nation. The credit for this achievement is shared by the human resources staff and the representatives of the faculty and staff governance groups who aggressively explored the positive aspects of a sole source arrangement with UPMC Health Plan," Nordenberg said.

"The results were extremely positive – actually creating the possibility of some reduction in overall medical insurance costs during the first year, as well as an agreement that cost increases in subsequent years would be reasonably capped," Nordenberg added.

He emphasized that, along with the cost benefits to the University, the new agreement also offers financial benefits for the individual employees, while maintaining the full range of coverage currently available to employees. Had the University continued its program of offering employees multiple carriers from which to choose, some of the considerably higher costs of that option inevitably would have been passed on to employees.

"The University weighed all aspects of the switch, recognizing that some employees would be initially inconvenienced by the change, but this agreement clearly offered the best combination of individual and institutional advantages. The very significant cost increases to be avoided through this agreement will benefit not only the University as an institution, but also, through substantially more limited premium increases, its employees. And we are committed, along with the UPMC Health Plan, to providing all possible assistance to our employees to ensure positive outcomes to this transition," he said.

The agreement guarantees that Pitt employees will retain the same types of coverage choices previously available. UPMC Health Plan offers Comprehensive (deductible), Point-of-Service, and HMO options. Additionally, the UPMC Health Plan HMO offers a number of features not available with other HMOs, such as open access to physicians and specialists within the UPMC network.

UPMC Health Plan provides access to more than 4,000 physicians in Western Pennsylvania. A full service health insurance company, UPMC Health Plan currently covers approximately 200,000 individuals, and provides medical insurance coverage for many of the region's major employers.

As part of the new agreement, Pitt employees will continue to have access to a full range of prescription drugs and pharmacies, and they will be covered during international and domestic travel.

Nordenberg also pointed out that a beneficial by-product of the new agreement is that the University is now better positioned financially to provide a new employer-paid, short-term disability insurance program for staff. "Faculty members have long been covered by a salary continuation policy, but no similar protections ever have been available to staff members. This, then, will be an important addition to our existing portfolio of benefits," he said.