school employees health care board implications for ohio’s public schools and school employees
TRANSCRIPT
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.
Presentation Approved by the SEHCB, Updated 3/19/08
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.
Presentation Approved by the SEHCB, Updated 3/19/08
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
Presentation Approved by the SEHCB, Updated 3/19/08
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
Presentation Approved by the SEHCB, Updated 3/19/08
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)
Presentation Approved by the SEHCB, Updated 3/19/08
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
Presentation Approved by the SEHCB, Updated 3/19/08
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
Presentation Approved by the SEHCB, Updated 3/19/08
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.
Presentation Approved by the SEHCB, Updated 3/19/08
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.
Presentation Approved by the SEHCB, Updated 3/19/08
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
Presentation Approved by the SEHCB, Updated 3/19/08
Major Components of New Legislation:
• 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
Presentation Approved by the SEHCB, Updated 3/19/08
Major Components of New Legislation:
• 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.
Presentation Approved by the SEHCB, Updated 3/19/08
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)
Presentation Approved by the SEHCB, Updated 3/19/08
SEHCB Responsibilities
• 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
Presentation Approved by the SEHCB, Updated 3/19/08
SEHCB Responsibilities
• 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
Presentation Approved by the SEHCB, Updated 3/19/08
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.
Presentation Approved by the SEHCB. Updated 03/19/08
“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
Presentation Approved by the SEHCB. Updated 03/19/08
“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
Proposed Best Practice #2
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
Proposed Best Practice #3
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
Proposed Best Practice #4
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.
Presentation Approved by the SEHCB. Updated 03/19/08
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)
Presentation Approved by the SEHCB. Updated 03/19/08
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.
Presentation Approved by the SEHCB. Updated 03/19/08
Opportunities for Feedback
• Advisory Committee representation of stakeholder organizations
• Public comment at April and May SEHCB meetings
• Electronic feedback through SEHCB Web site
Presentation Approved by the SEHCB. Updated 03/19/08
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,
School Employee Member
Larry Morgan Scott Nisley
Robert Hancock Vacancy
School Employee Member
Vacancy
Presentation Approved by the SEHCB. Updated 03/19/08
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