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Stockton Unified School District

Labor and Management take on Health Care Costs and Quality

CTA Summer Institute, August, 2009

+Description of SUSD

• Stockton Unified School District• Employees: 4,000 Schools: 52• Students: 38,000 Budget: $350 million

• Management/labor relations were tenuous

• Change in M&L relations to a collaborative approach for crisis resolution

• Saved $3.7 million in health benefits costs

2SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+History of Health Benefits Committee

• Did it work?

• Trust level

• Broker’s role

• Barriers

3SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+CECHCR’s training

• 2007 – hospital performance score card

• 2008 – roles and responsibilities of HBC’s

4SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What didn’t work and why?

• Long time broker did not pursue alternatives

• Insurance committee meetings with Health Plan produced reports, but no understanding or movement

• Management/labor trust still missing

• No internal ability to challenge health care experts

5SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+Healthcare Cost Crisis

• 33% increase in premium costs • $500 out of pocket increases for employees• $9.1 million for district

• Broker said it’s the best he could do

• Late notice of renewal rates:• Enrollment delays, second enrollment period• No time to do anything about it

• Panic ensued

6SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+We stood up together and said “No”

7SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+How we “figured it out”:

• Labor retained external expertise who could challenge health plan/broker and collaborate with new management external healthcare experts

• Management retained external actuarial expertise to work in conjunction with labor’s expert

• Formalized and educated joint labor/management insurance committee based upon CECHCR principles to develop internal expertise

8SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+How we accomplished what we did

• “Second opinion” process to challenge underlying assumptions:• Got legitimate access to claims data• Gap analysis of broker/plan presentations

and actual data

• Joint press conference

• RFP process

9SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+Health Plan’s Justification

• 39% increase in hospital admissions

• 76% increase in inpatient days

• 68% increase in physician office visits

• 44% increase in outpatient surgeries

• Paid out more in claims than district paid in premiums

• Lost money on this “book of business”• Health Plan’s overall profits for this time period

$194 M

10SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What we discovered

• Auditing of actual utilization data did not support those epic trends

• Quality of Care variations between medical groups was significant

• Cost of Care variations between these groups was significant• higher quality groups had 60% lower PMPM costs

• Health status of members revealed tremendous potential for Wellness & Health Promotion interventions

• Competing Health Plans were very interested in our business

11SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What we see differently

Health Plan SUSD

12SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What we see differently

Health Plan SUSD

13SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What we see differently

Health Plan SUSD

14SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What we see differently

15SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+SUSD Today

• New health plan partnership with Blue Shield of California • Issued RFP to investigate benefits of migrating to a larger self insured pool

• New focus on quality of health care providers• Blue Shield Provider Quality Rankings• Communication toolkits: Using information to get high quality care

• New focus on active Wellness & Health Promotion• Collaboration extended to Kaiser & Blue Shield working together

on Wellness of SUSD Community

• Building internal knowledge in Insurance Committee with CECHCR educational tool kits & expanded collaborations

• More thoughtful use of external health care experts

16SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+What mistakes to avoid?

• Blind faith in vendors & external advisors• Not building internal knowledgeable insurance

committee members

• Believing the “you can’t see that data” ploy• HIPAA has provisions for all plan sponsors (even

fully insured) to have controlled access to claims data

• Most plan agreements contain similar audit provisions for accessing claim data

17SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+How to accomplish same or similar results in your workplace

• The power of a positive “No”

• Get CECHCR Training• Joint Labor-Management Health

Benefit/Insurance Committee Training• Healthcare Provider Quality Scorecards• Insist upon quarterly utilization update reports

• Get a “Second Opinion” when rates get too high• Seek proactive “transparent” expertise to the

extent that it does not exist internally.

18SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009