+ 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 2 SUSD 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 3 SUSD 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 4 SUSD 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 5 SUSD 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 6 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+ We stood up together and said “No” 7 SUSD 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 8 SUSD 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 9 SUSD 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 10 SUSD 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 11 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+ What we see differently Health Plan SUSD 12 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+ What we see differently Health Plan SUSD 13 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+ What we see differently Health Plan SUSD 14 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009

+ What we see differently 15 SUSD 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 16 SUSD 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 17 SUSD 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. 18 SUSD Labor-Management Coalition Challenges Health Plan Costs CCS Conference, March 2009