1. California Education Coalition for Health Care Reform A new direction in health care purchasing for the public education community Introducing a Statewide School Pool for Health Care Benefits Janet Walden, Center for Collaborative Solutions, CECHCR John Glynn, J. Glynn & Company ACSA Business Services Council – February 23, 2011

2. California Education Coalition for Health Care Reform Joint Labor-Management Health Benefits Training Helping districts and unions become informed purchasers, not just payers of insurance! Solutions for reducing costs and improving quality

3. California Education Coalition for Health Care Reform CECHCR Member Organizations Association of California School Administrators (ACSA) California Association of School Business Officials (CASBO) California County Superintendents Educational Services Association (CCSESA) California Federation of Teachers (CFT) California School Boards Association (CSBA) California School Employees Association (CSEA) California Teachers Association (CTA) Community College League of California (CCLC) School Employers Association of California (SEAC)

4. California Education Coalition for Health Care Reform Health Care Costs Grow 226% Faster than All Other Core Educational Mission Expenses Budget Cuts + Health Premium Hikes = Crisis in Public Education Educational Cost Increases (Non-Health Related)

5. California Education Coalition for Health Care Reform Public Education Spends $6.7 Billion on Health Care Budget Cuts + Health Premium Hikes = Crisis in Public Education

6. California Education Coalition for Health Care Reform School Health Care Costs Projected to top $10 Billion Actual Historical Data NHE Projections Sources: H&W Object codes (3401-3402, 3701-3702, & 3901-3902) 1998-2008; HHS National Health Expenditures projections 2010-2019

7. California Education Coalition for Health Care Reform Employee Premium Contributions Jump 79% in a Single Year Actual Historical Data NHE Projections Sources: H&W Object codes (3401-3402, 3701-3702, & 3901-3902) 1998-2008; HHS National Health Expenditures projections 2010-2019

8. California Education Coalition for Health Care Reform Employee Contributions Projected to Top $9,000 Actual Historical Data NHE Projections Sources: H&W Object codes (3401-3402, 3701-3702, & 3901-3902) 1998-2008; HHS National Health Expenditures projections 2010-2019 $9,360

9. California Education Coalition for Health Care Reform California Health Rankings 50 th in quality of care 47 th in cost of care ---The Commonwealth Fund, State Scorecard on Health System Performance, 2007 We cannot improve quality - or reduce costs - one purchaser at a time

10. California Education Coalition for Health Care Reform Something Must Be Done Voluntary solutions from the health plans and healthcare providers are not forthcoming Federal Health Insurance Reform does not provide for changes in existing employer provided health care benefits The status quo is not sustainable - Action is urgently required

11. California Education Coalition for Health Care Reform The Solution is In Our Hands We must develop innovative ways to provide the leverage and purchasing power we need to: Reduce costs at the district level Ease administrative burden Spend less time in collective bargaining Have access to comprehensive data

12. California Education Coalition for Health Care Reform A Statewide School Pool for Health Care Benefits Introducing a sustainable solution:

13. California Education Coalition for Health Care Reform A 1.6 Million Member Statewide School Pool A Statewide School Pool will lower costs and improve services for public education employees and their families through increased district leverage in purchasing and negotiating health care benefits Second largest risk pool in the U.S.

14. California Education Coalition for Health Care Reform A 1.6 Million Member Statewide School Pool Schwarzenegger signed AB 256 in 2005 Mercer projected immediate savings of from $217 to $401 Million Additional savings on future premium costs

15. California Education Coalition for Health Care Reform CECHCR Examines Options CECHCR examined the Mercer Report Engaged with education leaders from 21 stakeholder organizations Developed a proposed design for a statewide school pool

16. California Education Coalition for Health Care Reform Fundamental Elements of a Successful Design Everybody in the pool! The pool must be sufficiently large to provide significant economic leverage to drive down costs

17. California Education Coalition for Health Care Reform Fundamental Elements Size matters and so does design and execution. Bigger is not better is better When you have better, bigger helps!

18. California Education Coalition for Health Care Reform Fundamental Elements Choice – must provide a range of affordable plans that equal or exceed current offerings Quality– provider networks must be value-based designs that promote quality outcomes and appropriateness of care

19. California Education Coalition for Health Care Reform Fundamental Elements Premium rating – must provide a premium rating system that is reflective of regional variations in cost of health care services Wellness – must incorporate active health promotion programs and incentives to increase health status

20. California Education Coalition for Health Care Reform Fundamental Elements Local Control – must allow districts and employee groups to choose plans and funding contributions Governance – must be representatives of all funding stakeholders and assure ongoing responsiveness to local education community needs

21. California Education Coalition for Health Care Reform Fundamental Elements Ease Burden – must enable reduction in collective bargaining efforts and ease administrative burden Marketplace competition – must encourage competition with the health plans and providers it engages

22. California Education Coalition for Health Care Reform Fundamental Elements Transition plan incorporates for an orderly migration to the Statewide School Pool Incorporates objective performance criteria for the Statewide Pool and transitional voluntary pools

23. California Education Coalition for Health Care Reform Now is the time! The leadership of the education community must be proactive to lead this effort Recently signed federal health care reform provides the momentum for us to advance those efforts and focus them on California’s Schools

24. California Education Coalition for Health Care Reform What Happens Now? Continuing dialog with CECHCR member organizations and other, interested parties Drafting Legislation

25. California Education Coalition for Health Care Reform A Statewide School Pool for Health Care Benefits Questions & Answers