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Frequently Asked Questions

What was announced?
The Health System leadership has charged a committee to review and make recommendations regarding options for reducing the costs of current paid time off programs for Medical School and HHC staff.

What is meant by “paid time off” in the Medical School and HHC?
In the Medical School, paid time off includes season days, vacation days, short-term sick days and short-term disability -- also known as extended sick time.

In the HHC, paid time off includes PTO and extended sick time.

Holidays are also part of paid time off but are not included in this review.

What are the objectives of the review?
The committee will provide recommendations that will better align UMHS paid time off benefits with the market concerning:

Our goal is to maintain a market competitive program while generating cumulative savings to UMHS of at least $15 million by 2018.

Why are we considering changes to the paid time off programs?
The Health System must remain competitive as an employer while managing increases in labor-related costs to meet our near-term objectives, assure our long-term success and enable our tripartite mission.

In a recent benchmarking study conducted by a leading consulting firm, AonHewitt, an analysis shows the Medical School paid time off benefit is above market with a market index of 108 (meaning it is 8 percent higher than the average among peers). This places the Medical School between the fourth- and fifth-highest when compared to 23 academic peer institutions. This benefit comprises 39 percent of the overall value of all Medical School benefits.
 
The HHC paid time off benefit is also above market, with a market index of 118 (18 percent higher than the average among peers). This places HHC between the first- and second-highest compared to six local Health System peers and above the top position compared to the 11 national/regional peers. This benefit comprises 41 percent of the overall value of all HHC benefits.    

If we reduce benefits, will that make us less competitive in terms of staff recruitment?
Our goal is to maintain a market competitive program.

When will the committee make its recommendations, and when will these changes take place?
The committee is meeting this fall, and will make recommendations to Health System leadership in November. Included in that will be a recommendation on when any program changes should begin.

How can we provide feedback to the committee?
You may provide feedback at UMHS-Compensation@med.umich.edu.

Why do we have to consider these changes now?
We work within an incredibly challenging health care environment nationally, one that requires us to remain vigilant about our costs, demonstrate our value and make sound strategic investments. Our planning suggests we must close a projected $200-250 million gap in the Health System by 2017.

Why can’t we make cuts elsewhere?
We are. We face the same financial pressures as other hospitals and academic medical centers, and we’re stepping up to that challenge by increasing productivity, making smart operational and capital spending decisions, and reducing labor and supply costs.

We place a high value on our people and the benefits they receive working in our Health System, and benefit expenses are among our largest financial investments. Benchmarking shows we spend significantly more on benefits than our peers, so we must thoughtfully review those expenses.

What principles will guide the committee as they develop recommendations?
Principles and considerations that guide the Committee’s recommendations include the following:

Who is on the committee?

Content experts will attend meetings as needed.

Will these changes affect the faculty?
No. Faculty benefits were reviewed, and they are already in line with peer academic institutions.

Benefits for bargained for employees are covered by their respective collective bargaining agreements, and changes are subject to negotiations.

What institutions were in the peer groups?
The Medical School peer group included:
Columbia University
Cornell University
Duke University
Emory University
Harvard University
Indiana University
The Johns Hopkins University
Massachusetts Institute of Technology
Northwestern University
Ohio State University
Stanford University
University of California
University of Chicago
University of Maryland
University of North Carolina at Chapel Hill
University of Pennsylvania
The University of Southern California
University of Texas System
University of Virginia
University of Washington
University of Wisconsin
Washington University in St. Louis
Yale University

The HHC peer group included:
Local health care organizations
Beaumont Health System
Detroit Medical Center
Henry Ford Health System
Oakwood Healthcare, Inc.
St. Joseph Mercy Health System
University of Toledo Medical Center

National Academic Healthcare Organizations
Baylor Health Care System
BJC Health System
Cleveland Clinic
Duke University
Indiana University Health, Inc.
Mayo Clinic
University of California, San Francisco Medical Center
University Hospitals Health System
UNC Health Care System
University of Pittsburgh Medical Center
WakeMed Health & Hospitals