california education coalition for health care reform a new direction in health care purchasing for...
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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
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
California Education Coalition for Health Care Reform
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)
California Education Coalition for Health Care Reform
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)
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
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
California Education Coalition for Health Care Reform
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
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
$9,360
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
A Statewide School Pool for Health Care Benefits
Introducing a sustainable solution:
California Education Coalition for Health Care Reform
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.
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
Fundamental Elements
Size matters and so does design and execution.
Bigger is not better
is better
When you have better, bigger helps!
Better
California Education Coalition for Health Care Reform
Fundamental Elements
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
California Education Coalition for Health Care Reform
Fundamental Elements
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
California Education Coalition for Health Care Reform
Fundamental Elements
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
California Education Coalition for Health Care Reform
Fundamental Elements
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
California Education Coalition for Health Care Reform
Fundamental Elements
Transition plan incorporates for an orderly migration to the Statewide School Pool
Incorporates objective performance criteria for the Statewide Pool and transitional voluntary pools
California Education Coalition for Health Care Reform
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
California Education Coalition for Health Care Reform
What Happens Now?
Continuing dialog with CECHCR member organizations and other, interested parties
Drafting Legislation
www.cechcr.org
California Education Coalition for Health Care Reform
A Statewide School Pool for Health Care Benefits
Questions & Answers