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Health care innovation impacts districts’ bottom lines

As some of the area’s largest employers, local school districts face many of the same challenges that impact sizable private-sector businesses. And while many school districts jockey for recognition for educational quality, some also strive to stand out when it comes to employee attraction and retention through cultures of wellness.

‘Good consumers of health care’

Colorado Springs School District 11 is the only district in the Pikes Peak region to be self-insured. It also has an exclusive care agreement with Centura Health’s South State Operating Group, which includes Penrose-St. Francis Health Services in Colorado Springs. Along with advances in remote technologies that help employees answer health questions without seeing a doctor, the self-insurance model and the Centura care agreement have saved the district millions of dollars since the 2011-12 school year, according to D-11 Chief Financial Officer Glenn Gustafson.

The model, which has been utilized in the district for decades, is tried and true, Gustafson said. “Being self-insured is really important because we control, design and own our plan. We find it to be incredibly powerful,” he said. “I’m baffled by the number of districts that are not self-insured.”

Gustafson said health care across all industries typically trends at a 5-7 percent increase in premium costs annually. During the past five years, District 11’s numbers have remained relatively flat.

“Flat is great,” Gustafson said. “We are tracking way less than the median inflation rate.”

The district does pay for stop loss insurance, which takes effect if individual claims reach $400,000 or more, but “by and large, we are self-insured,” Gustafson said. “We’re constantly communicating that to our employees and their dependents — you may pay a small co-pay, but it’s the district and not an insurance carrier paying the difference.”

The district also picks up 75 percent of family coverage costs, he said. Having skin in the game means employees and the district “must be good consumers of health care,” he said. The district of more than 3,000 employees administers its insurance through The Colorado Boards of Education Self-Funded Trust Inc., or the BEST Health Plan.

According to its website, in 2004, the Colorado Association of School Boards sponsored formation of the corporation “to provide a multi-employer employee health benefit program that offers administrative, underwriting, provider network, reinsurance, shared financial risk and other services … to its member employers. Currently, BEST is comprised of 25 School Districts located in Colorado Springs, the San Luis Valley and several Northeast and East Central locations.”

D-11 is the only district in the Pikes Peak region that is part of the plan.

But proper coverage is only one path to wellness. Maintaining a healthy employee population can take on new importance for a self-insuring entity, especially in education, where time spent in front of students matters.

Jessica Reijgers, benefits manager for D-11, said through its partnership with Penrose-St. Francis Health Services, employees have access to biometric screenings and wellness coaching, including through digital platforms. There’s also a walk-in employee clinic that can address minor urgent care needs, but at a lower cost than a traditional urgent care facility or emergency room.

“You’re able to walk in or make an appointment after hours and on Saturday and for a small co-pay, you can see a physician and get medications on-site,” Reijgers said. “It’s been phenomenally convenient and helpful for staff and it’s located right in the heart of D-11 at Union [Boulevard] and Circle [Drive]. Staff go there, get treated for minor issues, get their prescription and get back to work with hardly any waiting.”

A ‘win-win’ partnership

Kris Baldwin, project coordinator of integrated health partnerships for Penrose-St. Francis, said D-11 partnered with Penrose-St. Francis about six years ago in its direct-to-employer contracting model.

“What that means is, the employer will go right to the health care system and contract for service instead of going through a network,” she said. “It’s not just Colorado, but the whole nation is doing this. We work with the employer and say, ‘Hey, if you want to use Centura facilities exclusively, we will, in return, give you discounted rates.’

“Through that partnership, it’s a win-win because they get lower rates and, hopefully, we get that increased volume of business.”

Other models include preferred plans, where the care agreement isn’t exclusive and the discounts are smaller.

According to Baldwin, the arrangement saved D-11 $1.9 million in its first year.

“If an employer really wants to manage their employee population, they can save money, but they also have to be willing to focus on managing the health of the population and show employees they do care about them,” she said.

There are additional risks self-insured employers take on, including covering catastrophic clams.

“A sick baby can cost millions,” she said.

All facets of wellness

Regionally, Academy School District 20 is second in size only to D-11. According to D-20 Chief Financial Officer Tom Gregory, the district explored the possibility of self-insuring, but the numbers didn’t add up. Today, about 1,500 employees in the district are fully insured through Kaiser Permanente.

“We were paying more in claims than collecting in premiums,” Gregory said of the exploratory phase. “Why would we want to take that risk?”

Thanks to focuses on wellness and connecting employees with appropriate plans, the district’s health expenditures have begun to stabilize, Gregory said.

“If we can match benefits with the needs of our population, it works well,” he said, adding that last year’s plan was the first “in many years” where premium costs decreased. The average savings was 3 percent.

Regarding wellness, the district focuses on physical, mental and nutritional aspects, Gregory said. There are wellness programs throughout the district that include yoga and cooking classes for faculty and staff. There are also annual health competitions between schools and the administration.

Gregory said the district has also begun talks with UCHealth and the Memorial system (the former care provider for D-11) regarding services such as employee clinics and providing sports physicals and first-aid curriculum for athletic trainers and special education teachers.

“We’d like to look at offering things centrally,” Gregory said. “Right now these services could each be coming from a different partner.

“But it’s hard,” he added. “We have to first think of textbooks and paying salaries. It’s hard to add other things.”

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