Pioneering school districts avoid layoffs

Turn a bit of a deaf ear to the woes of Wisconsin school districts that are terminating staff because of budget constraints and applaud those who have led the way on mining gold from real health care reforms.

Most of the districts that are reducing staff have taken a pass on reforms of bloated health costs – reforms that have already been thoroughly proven out in the private sector.
Those districts shifted 12.6% of health costs to their employees through premium hikes, as enabled under Act 10 passed by Republicans last year 12.6% of costs. That helped offset the cuts to K-12 education imposed by the GOP-controlled legislature, but that’s pretty much as far as they went. They went only from their own end zone to their ten-yard line in terms for benefit management.

They didn’t adopt consumer-driven health plans that couple higher deductibles with off-setting personal health accounts – a plan design now adopted by nearly half of private companies. Savings average 20% to 30% because of more intelligent utilization and purchasing by the newly minted individual consumers.

They didn’t move aggressively to install on-site primary care and comprehensive prevention, wellness and chronic disease management programs. Savings can be as much as one-third by keeping people out of dangerous and expensive hospitals.

Most didn’t go to self-insurance, which smaller corporations are now adopting in droves to harness costs.

Fortunately, there are a few exceptions in Wisconsin, such as the West Bend, Elmbrook, New Berlin and Greendale school districts, which have saved millions through such innovations as going self-insured, raising premiums and adopting consumer-driven plans. Greendale put in an on-site clinic to keep its people healthy.

They have not relied on huge staff reductions to balance their budgets. They got innovative and aggressive in managing benefits. Further, their employees will lose no health coverage. Indeed, they will love their new plans.

The same story has played out at the state level, where the Wisconsin health plan put in the higher premiums, but not much else.

The result is a still under-managed plan for state employees. The taxpayer share per employee, after the premium hike, is an es
timated $13,000, compared to about $8,400 for best practice large private employers. Wisconsin is about $2,000 above the average for four neighboring states for public employees.

The price tag for Wisconsin state employees runs about $1 billion, so there are hundreds of millions to be saved – beyond the cost shifting.

Under Act 10, benefits are no longer a bargainable issue, so all that’s missing is the guts to do what the private sector has already done.

This entry was posted in Business and Education. Bookmark the permalink.