Harvard says health care costs are growing at an ‘unsupportable’ rate (Boston.com)

November 1, 2012 – Harvard University’s (Aaa / 57583R5N1) top financial officials are sounding an alarm about the rising cost of medical benefits for its employees, saying costs are growing at a rate “unsupportable” relative to revenues. In Harvard’s annual report, being released Friday, officials said that while they want to keep offering generous benefits, the school “cannot simply continue with the status quo.” It is the first time the nation’s richest university has addressed employee health care so directly. Benefit costs at Harvard hit $476 million for the year that ended June 30, double what they were a decade ago, with health care accounting for the largest portion. The university’s medical care obligation for retired faculty and staff is causing even greater fears. At $901.5 million, it’s nearly equal to the pension obligation for retirees — $910 million. Rising health care expenses are a critical issue for many schools, said Richard Doherty, president of the Association of Independent Colleges and Universities in Massachusetts. “Colleges and universities are taking a good, hard look at everything they can do to manage costs so they can manage tuitions,” Doherty said. “Health care is certainly one of those things that have been driving up the cost of education.”

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