School Employees Health Care Board Implications for Ohio’s Public Schools and School Employees

School Employees Health Care Board

Implications for Ohio’s Public Schools and School Employees

Presentation Approved by the SEHCB, Updated 3/19/08

2 Billion Dollars

• This figure represents approximately 13.5% of all education expenditures in the State of Ohio.

• Health care is the fastest growing cost driver for local school districts, with health care cost increases far outpacing inflation.

• Rising health care costs inhibit our ability to best serve the needs of Ohio’s students and have negative economic impact on school employees.


Genesis of School Employee Health Care Board

• Am. Sub. HB 66 (2005 Budget Bill): established 9-member School Employees Health Care Board and 18-member Advisory Committee to investigate the feasibility of a statewide health insurance pool for public education employees and create a compliance plan by the end of 2006.

• No pooling requirement could be implemented, though, without further action by the legislature.


Original Stakeholder Groups

SEHCB:• 3 School Treasurers• 2 Superintendents• 1 School Board

Member• 3 Individuals with

Health Care Expertise

Advisory Committee:• Non-administrative

employees: OEA• Treasurers: OASBO• School Boards:

OSBA• Consortia• Health Plans• Brokers/Underwriters


Mercer Report

• Through an open bid process, the Board hired Mercer in July 2006 to complete a feasibility study on statewide healthcare pooling. Mercer’s final report was issued in December 2006.

• 87% of Ohio school districts provided data for the report.

• Key Recommendation: Establishment of five mandatory regional insurance pools


Mercer’s “Spectrum of Opportunities” Identified Savings by Interventions:

• Voluntary Regional Pools:

$30 - $45 million)• Mandated Disclosure/Transparency

($60 - $85 million)• Mandated Best Practices/State Standards

($120 - $170 million)• Single Mandatory Statewide Pool

($140 - $190 million)


SEHCB Legislative Recommendations

Major Goals:• Improve school employees’ health• Manage costsOther Principles:• Maintain stakeholder involvement and buy-in• Avoid unnecessarily bureaucratic new

arrangements• Take advantage of cost-savings opportunities

suggested by Mercer without mandated pooling


Five Key Recommended Components:

• Mandatory disclosure of cost and design elements of health plans

• Expansion of SEHCB to include three non-administrative school employees

• Empowerment of the SEHCB to establish and enforce best practice standards

• Consideration of pooling arrangements for certain types of health care plans that offer demonstrable economies of scale (i.e. prescription drugs; population health management)

• Preservation of collective bargaining rights


For each percentage of savings generated by the development of Best Practice Standards, Ohio school districts will achieve an estimated aggregate savings of

$20 million.


Legislative Action: Am. Sub. HB 119

• As part of the biennial state budget bill passed by the legislature in June 2007, most of the Board’s key recommendations became law.

• Am. Sub. HB 119 was signed into law by Governor Ted Strickland.


Major Components of New Legislation:

• Change in Composition of School Employees Health Care Board to include 3 additional members who are non-administrative public school employees



• Change in composition of Advisory Committee to include 2 representatives from each of the following constituency groups:Labor Management Insurance Industry

OEA BASA Consortia

OFT OASBO Health Plans

OAPSE OSBA Underwriters



• Requires all school district and educational service center employee health plans to contain “best practices” as set forth by the SEHCB

• Authorizes the SEHCB to establish compliance standards for meeting best practices.


SEHCB Responsibilities

• Adopt and release required best practice standards required of all public school districts

• Ensure that all cost and design elements of health plans be readily available to the public (transparency)



• Support health plan sponsors through education and consultation

• Maintain commitment to transparency and public access of its meetings and activities

• Promote cooperation of all stakeholders in identifying implementation strategies



• Promote cost containment measures aligned with patient, plan and provider management strategies in developing and managing health care plans

• Prepare and disseminate an annual public report on progress made by health plan sponsors related to cost containment and improvement of the health status of public school employees and their families


Summary of Major Goals

• Reduce the rate of increase in insurance premiums

• Reduce the rate of increase in employee out-of-pocket expenses

• Improve the health status of school district employees and their families

Presentation Approved by the SEHCB. Updated 03/19/08

Timeline

Best Practice Standards will be required of all health plan sponsors (i.e. school districts and consortia) 12 months after the Board has released standards and they have been approved through the state rule-making process, or as applicable collective bargaining agreements expire.


“Best Practice” Defined*:

• A procedure, activity or action that has demonstrated greater effectiveness than competing procedures, activities or actions in achieving a given objective in a particular setting with a particular population. The goal of best practices is to derive the greatest value for purchasing health insurance and health care.

*as adopted by the SEHCB on 11/14/07


“Value-Based Purchasing” Defined*:

• The organized attempt by purchasers to ensure and improve the process, quality, and outcomes of health programs when negotiating costs with providers and insurers.

*as adopted by the SEHCB on 11/14/07

Proposed Best Practice #1

Employee Wellness ProgramsHealthy lifestyle programs target

behaviors and lifestyle issues before significant illnesses occur

Proven to offer potential for controlling healthcare costs

Evaluation, Health Risk Assessments, support programs, education and engagement are all critical components


Disease State ManagementProcess of organizing care for specific

high-cost and/or high-volume diagnosesResearch-based method of improving

health outcomes and reducing costsImproved management of chronic

diseases such as asthma, diabetes, obesity, and cardiovascular disease


Access to Specialty NetworksSpecialty networks provide access to

clinically superior healthcare for complex medical conditions

Examples: transplantation, cancer, chronic kidney disease

Addresses cost and quality concerns


Dependent Eligibility AuditsAll health care plans to undertake

periodic eligibility auditsAggregate results of each audit to be

furnished to the SEHCBEvidence that this practice can reduce

costs 7-13% annually

More on Best Practice Proposals

Each proposed best practice standard includes specific proposed rules to which each health plan sponsor would be required to comply.

Evidence of compliance will be required to be furnished to the School Employees Health Care Board.


What’s next?

• Consideration of Proposed Best Practice Standards:

2nd Reading – April 17, 2008

Potential Vote – May 13, 2008

State Rule-Making Process to Follow

• Development of 2nd and 3rd Phases of Best Practice Standards (Fall 2008-Spring 2009)


Opportunities for Feedback

• Tentative SEHCB Meeting Schedule:April 17, 2008May 13, 2008June 11, 2008

• All meetings take place at the Ohio School Boards Association Building in Columbus and are open to the public. More details are available on the SEHCB Web site.


Opportunities for Feedback

• Advisory Committee representation of stakeholder organizations

• Public comment at April and May SEHCB meetings

• Electronic feedback through SEHCB Web site


Members of the School Employees Health Care Board

Stephen Loebs, Ph.D. Chairperson

Chris Mohr,

Vice Chairperson

Steve Clark

Scott DiMauro,

School Employee Member

R. Reed Fraley Dr. Louis Goorey, M.D.

Chris Holland,


Larry Morgan Scott Nisley

Robert Hancock Vacancy


Vacancy


Members of the Public Schools Health Care Advisory Committee

Gregg Gascon, Ph.D.Ohio Education Association

Ken BloodOhio School Boards Association

Kelly McGivernOhio Association of Health Plans

Jim TimlinOhio Education Association

Van KeatingOhio School Boards Association

Tom SullivanOhio Association of Health Plans

Brenda PowellOhio Federation of Teachers

Dan DoyleBuckeye Association of School Administrators

Mark SchwendemanOhio Association of Health Underwriters

Kelly SingletonOhio Federation of Teachers

Larry ZimmermanBuckeye Association of School Administrators

Janice WalkerOhio Association of Health Underwriters

Fred McGrawOhio Association of Public School Employees

VacantOhio Association of School Business Officials

Barbara CoriellHealth Insurance Consortia

David HamiltonOhio Association of Public School Employees

Barbara ShanerOhio Association of School Business Officials

David ManningHealth Insurance Consortia


http://sehcb.ohio.gov

For further information or to contact the School Employees Health Care Board, please visit our Web site:

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School Employees Health Care Board Implications for Ohio’s Public Schools and School Employees