GEISINGER MEDICAL CENTER:
AFFECTS OF THE MERGER ON EMPLOYEE BENEFITS
The purpose of this case study is to evaluate the effectiveness of the changes in employee benefits as a result of the merger.
As of 17 January 1997 our HMO, the Geisinger Health System (GHS) merged with the former Penn State Milton S. Hershey Medical Center (HMC). Since then we have moved forward as Penn State Geisinger Health Systems. The merger brought together two long-standing giants in Pennsylvania health care. Both organizations were not-for-profits, shared a common institutional history, and were brought ...view middle of the document...
This case study will seek to evaluate the impact of the merger and changes to employee benefits on employee attitudes, behavior and productivity.
SECTION 1: HMC BENEFITS
HMC employees enjoyed a comprehensive benefits package under the Penn State University system. Under the previous system employees fell under a 22-grade pay structure based on value of work, with each grade having a pay range assigned. Employees enjoyed a choice between three different life insurance plans and several different health care benefits. Reduced tuition rates were available to the employees and their family members for Penn State. Sick leave was authorized for the care of family members. A tax deferred annuity plan was available as well.
Vacation time benefits were five additional days paid time off in December for the University holidays on top of the standard three weeks vacation time for employees with less than 10 years of employment and 4 weeks per year for those over 10 years. Sick leave was accumulated at 1 day per calendar month. Sick leave could be taken for personal illness or to care for an ill family member. Paid time off was also available in cases of a death in the family, involuntary jury duty, and volunteer fire fighting.
Retirement programs for employees included Pennsylvania State Employees Retirement System (SERS) or the Teachers Insurance and Annuity Association/College Retirement Equities Fund (TIAA-CREF). Five percent contributions from annual salary were required to participate in either plan.
HMC employees, retirees, and immediate family were eligible for a 75% tuition- grant for a maximum of 16 credit hours allowing for employees to provide a very affordable college education for their children. One of the intangible benefits of being part of Penn State was association with a respected Pennsylvanian institution and even reduced price season football tickets for those employees who were fans of the Nittany Lions football team. (Reeves 1999 p. 48).
SECTION 2: CHANGES TO BENEFITS
1. Pay- Since the Merger there has been no change to salaries for former HMC employees. The reality is that in a competitive health care market employee wages will be “market driven.” The future may require a slight reduction in employee wages or possibly an increase depending on outcomes within the health care market. Some former HMC employees have already indicated that while their pay has not changed their responsibilities have increased in this new business driven atmosphere.
2. Retirement- Former HMC employees who were on the SERS plan have had to convert to one of several GHS plans. TIAA-CREF participants have been able to keep their old plan.
3. Leave/Vacation-The five paid days for the University holidays has been lost since the merger.
4. Health Care Plan- We have encouraged former HMC employees to use GHP as their health care provider. They still have a choice at the time of this case study but it is...