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School Employees Health Care Board

School Employees Health Care Board. Implications for Ohio’s Public Schools and School Employees. 2 Billion Dollars. This figure represents approximately 13.5% of all education expenditures in the State of Ohio.

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School Employees Health Care Board

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

  2. 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

  3. 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

  4. 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 Original Stakeholder Groups Presentation Approved by the SEHCB, Updated 3/19/08

  5. 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

  6. 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

  7. SEHCB Legislative Recommendations Major Goals: • Improve school employees’ health • Manage costs Other 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. Major Components of New Legislation: • Change in composition of Advisory Committee to include 2 representatives from each of the following constituency groups: LaborManagementInsurance Industry OEA BASA Consortia OFT OASBO Health Plans OAPSE OSBA Underwriters Presentation Approved by the SEHCB, Updated 3/19/08

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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 3/19/08

  18. 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

  19. “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

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

  21. Proposed Best Practice #1 Employee Wellness Programs • Healthy 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

  22. Proposed Best Practice #2 Disease State Management • Process of organizing care for specific high-cost and/or high-volume diagnoses • Research-based method of improving health outcomes and reducing costs • Improved management of chronic diseases such as asthma, diabetes, obesity, and cardiovascular disease

  23. Proposed Best Practice #3 Access to Specialty Networks • Specialty networks provide access to clinically superior healthcare for complex medical conditions • Examples: transplantation, cancer, chronic kidney disease • Addresses cost and quality concerns

  24. Proposed Best Practice #4 Dependent Eligibility Audits • All health care plans to undertake periodic eligibility audits • Aggregate results of each audit to be furnished to the SEHCB • Evidence that this practice can reduce costs 7-13% annually

  25. 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.

  26. 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

  27. Opportunities for Feedback • Tentative SEHCB Meeting Schedule: April 17, 2008 May 13, 2008 June 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

  28. 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

  29. Members of the School Employees Health Care Board Presentation Approved by the SEHCB. Updated 03/19/08

  30. Members of the Public Schools Health Care Advisory Committee Presentation Approved by the SEHCB. Updated 03/19/08

  31. Questions? http://sehcb.ohio.gov For further information or to contact the School Employees Health Care Board, please visit our Web site: Presentation Approved by the SEHCB. Updated 03/19/08

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