Mary Jane Smetanka, Star Tribune
June 12, 2004
The University of Minnesota is saving roughly $16 million a year by going to self-insurance rather than staying with the state's health insurance program, a Board of Regents committee was told Thursday.
Last year, the university dropped out of the state plan after 34 years of participation because school officials thought they could save money and offer more health plan choices to employees through a self-designed plan. Annual out-of-pocket costs for employees went up. But the average employee contribution of 20 percent of the cost of their health care premium is less than the 25 percent that the average Minnesotan pays, officials said.
"I would say the program is stable and reaching its goals," said Frank Cerra, the university's senior vice president for health sciences.
To save on drug costs, the school is exploring the possibility of starting its own pharmacy on the Twin Cities campus to serve employees, which Cerra said could yield significant savings.
This year, the cost of self-insurance is projected at almost $124 million, with employees paying about $23 million of that amount in premiums. The total does not include co-pays, deductibles and other out-of-pocket expenses for employees.
As a group, university employees are healthier than the general insured population but have a higher rate of certain ailments because they tend to be older, Cerra said.
The university started offering flu immunizations in the fall, has a campus walking program, and is exploring other ways to emphasize prevention, screening and education, and to reward employees for losing weight, eating well and generally watching their health.
Below is a great article that talks about how research at the University is moving into the marketplace.
St. Paul Pioneer Press 6/9/04
Getting U ideas to marketplace
DAVE BEAL
The University of Minnesota's romance with the state's entrepreneurial community, a relationship marked by countless twists and turns over the years, appears to be entering a stage of more-intense commitment.
A few measures of progress:
• The Carlson School of Management's Center for Entrepreneurial Studies has embarked on a summer-long study that could lead the university to strengthen its commitment to business development.
• David Hamilton, the U's top research administrator, has emerged as a key supporter of the center and other efforts to commercialize university technology.
• The Minnesota Business Partnership just added U President Robert Bruininks to its ranks. That's a first for the business group, which has never had a member from a public institution. The desire of both the partnership and the university for closer ties dictated that move.
• The university's Office of Business Development will move this fall from the U's East Bank Campus to the school's new technology incubator at St. Paul's Westgate office complex.
The development office helps university-related startups get off the ground. At the incubator, it will be closer than ever to the state's entrepreneurs, startup funders and top researchers.
Hamilton hails the late Tony Potami, who turned the university's interest in commercializing its technologies into a formal program in the 1980s. Potami, who was 61, died last Thursday after a battle with cancer.
"He was a far-seeing individual who helped the institution immensely," Hamilton says.
The university, he says, must find ways to get more of its considerable research into the marketplace. "This is all about making sure we capitalize on our intellectual property" to benefit the state, the university and investors, he says.
Some institutions — notably the Massachusetts Institute of Technology and Stanford University — have long been leaders in encouraging faculty members and researchers to take their discoveries to the marketplace. Two principal ways exist to do this: by licensing technology to businesses and then benefiting from the royalties it produces, or through startups that create jobs and wealth.
However, as Hamilton and Carlson center official Doug Johnson note, the U was long a laggard in this area. Little of the wealth generated by some of the U researchers' most popular inventions — the Gopher Internet browsing system, the process for making taconite, the black box that records data in airline crashes, seat belts — found its way back to the university or the state.
Simply put, the U's recent experiences in commercializing its research fall into three areas:
• The "early Potami" years — when the school built up its Office of Research and Technology. This period grew out of the federal Bayh-Dole Act of 1980, which cleared the way for universities and their researchers to own and license to businesses the technologies they invented. In the biotech field alone, that act led faculty members across the country help start more than 500 companies.
• The "chilling effect" of the 1990s. Disputes arising out of the sale of ALG, a transplant drug developed at the school, led many faculty members and researchers at the U to shun any involvement with for-profit ventures for fear of being tainted with controversy.
Dr. John Najarian, chairman of the university's surgery department, was acquitted of charges arising from the sale of ALG, but also was forced to resign. The National Institutes of Health, the source of gushers of grant money to researchers at the university, put the U on probation.
• The Yudof-Maziar era. In the late 1990s, U president Mark Yudof and his top research staffer, Christine Maziar, worked to make the culture at the U more hospitable to tech transfer.
Hamilton led the university off probation, a stressful six-year process that lasted until 2001 and spurred the U to create an elaborate system to tighten oversight of its research.
Now he has high hopes that the entrepreneur center's study, to be done by four interns, will lead to more progress. They will write a plan to nurture U-affiliated startups, offer more help to U employees who want to commercialize research, provide outsiders with a single point of entry to the U and look into prospects of offering "gap financing" for promising ideas and companies.
Doing more to commercialize the university's research is a two-step-forward, one-step-back journey because the process and the university itself are complicated.
The increasing budget stress that the U and federal research budgets are coming under doesn't make it any easier. Nor does the fact that many corporate research budgets face rising pressure from Wall Street.
Yudof is gone, and Maziar just announced plans to take a top post at the University of Notre Dame.
Yet the U's new administration, led by Bruininks and interim research chief Hamilton, clearly has taken up the cause.
That's good news for Minnesota, and a fitting memorial to the work of Tony Potami.
Dave Beal can be reached at dbeal@pioneerpress.com or 651-228-5429.