California Education Coalition for Health Care Reform A new direction in health care purchasing for the public education community Introducing a Statewide

California Education Coalition for Health Care Reform

A new direction in health care purchasing for the public education community

Introducing a Statewide School Pool for Health Care Benefits

Janet Walden, Center for Collaborative Solutions, CECHCR

John Glynn, J. Glynn & Company

ACSA Business Services Council – February 23, 2011


California Education Coalition for Health Care

Reform

• Joint Labor-ManagementHealth Benefits Training

Helping districts and unions become informed purchasers, not just payers

of insurance!• Solutions for reducing

costs and improving quality


CECHCR Member Organizations

Association of California School Administrators (ACSA)

California Association of School Business Officials (CASBO)

California County Superintendents Educational Services Association (CCSESA)

California Federation of Teachers (CFT)

California School Boards Association (CSBA)

California School Employees Association (CSEA)

California Teachers Association (CTA)

Community College League of California (CCLC)

School Employers Association of California (SEAC)


1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Year

Health Care Cost Increases

58%

124%

Health Care Costs Grow 226% Faster than All Other Core Educational Mission Expenses

Budget Cuts + Health Premium Hikes = Crisis in Public Education

Educational Cost Increases

(Non-Health Related)


1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

$4,500,000,000

$5,000,000,000

$5,500,000,000

$6,000,000,000

$2,494,403,395

$2,713,748,321

$3,050,988,422

$3,416,287,095

$3,809,476,978

$4,141,480,778

$4,453,877,356

$4,726,123,269

$5,078,581,838

$5,342,054,525

Health and Welfare Expenditures, General Fund, All K-12 Districts and County Offices of Education(Object Codes 3401-3402, 3701-3702, & 3901-3902)

Year

Public Education Spends $6.7 Billion on Health Care

Budget Cuts + Health Premium Hikes = Crisis in Public Education


School Health Care Costs Projected to top $10 Billion

2,494,403,39

5.00

5,596,515,82

7.69

10,344,343,4

23.60

Health and Welfare Expenditures (District Portion)

Actual Historical Data NHE Projections

Sources: H&W Object codes (3401-3402, 3701-3702, & 3901-3902) 1998-2008; HHS National Health Expenditures projections 2010-2019


Employee Premium Contributions Jump 79% in a Single Year

2,494,403,39

5.00

5,596,515,82

7.69

10,344,343,4

23.60

Actual Average Employee Con-tributions ‘08 to ‘09




Employee Contributions Projected to Top $9,000

2,494,403,39

5.00

5,596,515,82

7.69

10,344,343,4

23.60

Employee Contributions Jump 79% ‘08-’09



$9,360


California Health Rankings

50th in quality of care47th in cost of care

---The Commonwealth Fund,

State Scorecard on Health System Performance, 2007

We cannot improve quality - or reduce costs - one purchaser at a time


Something Must Be Done

Voluntary solutions from the health plans and healthcare providers are not forthcoming

Federal Health Insurance Reform does not provide for changes in existing employer provided health care benefits

The status quo is not sustainable - Action is urgently required


The Solution is In Our Hands

We must develop innovative ways to provide the leverage and purchasing power we need to: Reduce costs at the district levelEase administrative burdenSpend less time in collective

bargainingHave access to comprehensive data

http://images.google.com/imgres?imgurl=http://churchinthecity.ca/journey/wp-content/uploads/2006/02/serving-hands.jpg&imgrefurl=http://churchinthecity.ca/journey/?page_id=3&usg=__6boOXly4PfKCvqYa1qWCRwYPiJs=&h=792&w=1448&sz=204&hl=en&start=3&sig2=Grwwog9z1TJf7wUUTEmUxQ&um=1&itbs=1&tbnid=CqKzUWgWlG1EiM:&tbnh=82&tbnw=150&prev=/images?q=hands&um=1&hl=en&tbs=isch:1&ei=wofHS63CK6eytAPS7-T0BA


A Statewide School Pool for Health Care Benefits

Introducing a sustainable solution:


A 1.6 Million Member Statewide School Pool

• A Statewide School Pool will lower costs and improve services for public education employees and their families through increased district leverage in purchasing and negotiating health care benefits

• Second largest risk pool in the U.S.


A 1.6 Million Member Statewide School Pool

Schwarzenegger signed AB 256 in 2005

Mercer projected immediate savings of from $217 to $401 Million

Additional savings on future premium costs

http://upload.wikimedia.org/wikipedia/commons/0/0b/Arnold_Schwarzenegger_Signature.svg


CECHCR Examines Options

CECHCR examined the Mercer Report

Engaged with education leaders from 21 stakeholder organizations

Developed a proposed design for a statewide school pool

http://www.clker.com/clipart-17089.html


Fundamental Elements of a Successful Design

Everybody in the pool!

The pool must be sufficiently large to provide significant economic leverage to drive down costs


Fundamental Elements

Size matters and so does design and execution.

Bigger is not better

is better

When you have better, bigger helps!

Better



Choice – must provide a range of affordable plans that equal or exceed current offerings

Quality– provider networks must be value-based designs that promote quality outcomes and appropriateness of care



Premium rating – must provide a premium rating system that is reflective of regional variations in cost of health care services

Wellness – must incorporate active health promotion programs and incentives to increase health status



Local Control – must allow districts and employee groups to choose plans and funding contributions

Governance – must be representatives of all funding stakeholders and assure ongoing responsiveness to local education community needs



Ease Burden – must enable reduction in collective bargaining efforts and ease administrative burden

Marketplace competition – must encourage competition with the health plans and providers it engages



Transition plan incorporates for an orderly migration to the Statewide School Pool

Incorporates objective performance criteria for the Statewide Pool and transitional voluntary pools


Now is the time!

The leadership of the education community must be proactive to lead this effort

Recently signed federal health care reform provides the momentum for us to advance those efforts and focus them on California’s Schools


What Happens Now?

Continuing dialog with CECHCR member organizations and other, interested parties

Drafting Legislation

www.cechcr.org


A Statewide School Pool for Health Care Benefits

Questions & Answers

Documents

California Education Coalition for Health Care Reform A new direction in health care purchasing for the public education community Introducing a Statewide