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Even with the new contract, the Los Angeles district might have to lay off employees and make other cuts to cover a $670 million budget deficit that the district projects for the 2009-2010 fiscal year.
The Rockwood (Mo.) School District has held its health care cost increases to about 3 to 4 percent annually, about half the national average, for five years, reports David Glaser, chief financial and legislative affairs officer. The self-insured district in part bids out its prescription drug coverage every three years and asks bidders for their lowest prices on the 10 medications most commonly prescribed in the district, as determined by Rockwood’s benefits manager.
With efficiencies like that in its health plan, Rockwood agreed with teachers for salary increases averaging 6 percent this year and 5 percent next year. “The increase is the full cost of teacher increases including their annual step increase,” Glaser says. “Most people recognize that the great teachers are underpaid.”
A committee of administrators, teachers, support staff and retirees that oversees the district’s health insurance plan understands that “the more expensive the plan is, the less money is available for salary increases, and that influences how they approach it,” Glaser says.
In Schaumburg (Ill.) School District No. 54, where premiums of $12.7 million for medical programs are 6.45 percent of the district’s budget, the cost of claims is less in inflation-adjusted dollars than it was six years ago because fewer claims are being submitted, says Mohsin Dada, assistant superintendent for business services for the Shaumburg district.
Schaumburg’s health benefits plan ties the district’s contribution to the dollar amount of claims that employees submit. The district pays the full premium for employees “as our claims are contained,” Dada says. But if the total dollar amount of all claims submitted this year goes up more than 5 percent over last year’s total, employees will have to kick in 50 percent of the premiums next year.
Schaumburg’s district also has an aggressive wellness and preventive care program that reimburses employees for heart, blood pressure, cholesterol and similar checkups. The district’s benefits committee is considering paying part of the cost of health club memberships and reimbursing employees who enter programs to help them stop smoking or lose weight. But that is a sticky issue, Dada says, because some committee members feel that “if people have not taken care of themselves, why should we pay for them to do it?”
Meanwhile, the district also cuts costs through its early retirement program for teachers, replacing teachers who retire at the $90,000-$100,000 salary level with “relatively new” teachers who start at around $40,000, Dada says. Schaumburg offers an incentive of up to a year’s salary to encourage early retirement. “It’s a win-win situation for the teachers and the district,” Dada declares.
On-Site Clinics
Some districts, including Houston (Texas) Independent School District and Maryville (Tenn.) City Schools, cut costs by operating their own clinics on district properties. Offering primary care services through a worksite clinic costs less for employers than having employees visit off-site doctors and hospitals and also reduces time lost by employees who would seek care elsewhere, according to a Mercer report, “Survey on Worksite Medical Clinics.”
The Houston district, with 30,000 employees, will open five on-site clinics this fall that employees enrolled in one of the district’s four medical plans can use at no cost for primary and urgent care, wellness coaching, and health care referrals. Concentra, a health care provider for other Houston employers, will operate and staff the clinics.
Benefits-eligible employees who are not enrolled in a Houston district medical plan, or individuals employed as district crossing guards, with no other health benefits, can use clinic services for a $25 copay. All active district employees, regardless of their participation in benefits plans, will be able to get free annual health screenings and flu shots at the clinic, and school bus drivers can get physical exams for as low as $5.
