College Faculty Rip Dye on Budget, Healthcare
By John Byrne

A tense College Faculty meeting Tuesday was ripe with discord, as professors shot barbed questions at College administrators over the current budget deficit and a forthcoming healthcare plan.
“The agenda item for today is the budget,” Dean of the College Clayton Koppes began. “I want to have what the students refer to as an open forum.”
But what was supposed to be a forum for budget discussion quickly devolved into a heated debate over the future of the College’s new healthcare plan. Some faculty expressed concern that increased healthcare costs could negate their raises.
Passing sizable health insurance costs onto faculty and staff represents a dramatic shift from the current system, where the College bears nearly all of the cost.
Faculty asked College President Nancy Dye if she felt this change was “fair.” Dye responded emphatically.
“I do think it’s fair. I also think it’s necessary,” she said. “We have had an extraordinary healthcare plan at Oberlin College, but it is not sustainable.”
“There is no way for the College to continue to add millions of dollars to align with a budget that is out of control,” she continued. “We have a plan that we can no longer pay for any longer…. The cost sharing is so unlike elsewhere in the world.”
“The truth of the matter,” Dye said, “is that if we do not get this under control, this institution will be harmed irreparably.”
Administrators charged the faculty’s benefits committee last winter with proposing a new healthcare plan after healthcare costs ballooned to $9.2 million. The committee hired a consulting firm, Mercer Management Consulting, to evaluate the plan.
The current arrangement, Benefits Committee Chair and Economics Professor Jim Zinser said, “was as generous as Mercer had ever seen.” Among other things, it included unlimited psychiatric benefits and coverage at the Mayo Clinic.
“The plan,” Zinser, added, “will include increases in cost.”
The maximum share the College could afford was reduced over the summer to $7.5 million from an original $8 million, he said.
The new plan, Zinser said, will include significant deductibles, bring the College’s share to 90% of coverage and lower the co-payment for pharmaceuticals. Also, there will be a larger network of providers, including international options, he said.
But, he added, the current price per person is unknown, as negotiations with a third-party company continue.
From there, the tone quickly soured.
Economics Professor Robert Piron asked Zinser if he would tell the faculty the size of the deductibles proposed in the new plan. When Zinser couldn’t answer, Piron disclosed them himself, pointing out the unseen cost employees may bear under the new plan.
Single employees, he said, will have to pay the first $250 of healthcare costs each year, and employees with family coverage, $750. This figure is the out of pocket maximum per year.
Yet if employees ever go to out-of-network hospitals or physicians, the costs rise dramatically, Piron said. Single employees could pay up to $500 and family employees up to $1500. This does not include the employees’ premiums.
With the premiums, he said, “If you’re out of network, it is $2,500 for a single and $5,000 for a family.”
Politics Professor Marc Blecher noted that when deductibles and co-payments were taken into account, employees would be paying for significantly more than the 10 percent Zinser had suggested.
“The faculty member would be paying about half the cost,” he said. “That’s a lot.”
Dye, Zinser and Associate Vice President Ron Watts discounted this notion.
“The employee share through premiums will be 14 percent,” Zinser remarked.
English Professor James Dobbins then queried about the budget deficit.
“It seems like we’re trying to do a nibble strategy,” he said. “Is the administration also considering the possibility, to retain the medical metaphor, of amptutation?”
This brought a round of laughs.
“Yes,” Dye replied. “I’m not sure I like the amputation model here, but definitely [we’re seeking] a more strategic model.”
32 positions have been eliminated through the hiring freeze, Dye said. “They will not be coming back in the near or foreseeable future.”
Piron then went on a self-described “tirade,” chiding the administration and the Board of Trustees for promising to bring faculty salaries to a competitive level. The new healthcare costs, he said, will nullify any raises this year.
“Most of the raises that everyone got will be wiped out with the healthcare with normal utilization,” he said. “For the first time in my memory, we will have actually reduced the nominal take-home pay.”
“If this bores you,” he added, responding to those who seemed to be irked by his speeches, “I think there’s no hope for us here.”
“In the ‘90s, we ran millions of dollars of budget surpluses,” he continued. “One of the things we can do is make sure this hard landing never happens again.”
He proposed that the College create a reserve fund to help allay the mushrooming healthcare costs. “The budgetary life of surpluses at Oberlin is eight nanoseconds,” he said.
Dye shook her head through parts of Piron’s speech, and said that while she agreed with the idea of reserve funds, no money was currently available.
“We could say let’s cut another million dollars on top of the one million dollars we cut,” she replied.
She also said that she believed that faculty salaries had been made competitive, except at the full professor level.
“Raises through the ‘90s were good across the board,” she declared.
When asked whether the College was looking at ways of enhancing revenues, instead of simply making cuts, Dye responded positively.
The Board of Trustees, she said, had signed off on the addition of 30 students to the student body, and plans to add 130 beds for new student housing. Both of these decisions will augment the College’s annual revenue.
Noticeably absent from the meeting was Vice President of Finance Andrew Evans, who was at a finance vice presidents’ conference, Koppes said.