How a Colorado school district created a healthier culture
School districts have struggled for many years with the escalating cost of healthcare.
Do you have to reduce benefits to be affordable? Do you have to shift costs between the school district and the employee? Is there a better way? In Colorado Springs School District 11, we think we have found one.
For over 25 years, the district, the largest in southern Colorado, had been self-funded for healthcare. We believed that we could cut out the middleman (insurance companies) and ultimately save costs.
This model worked well throughout the 1990s and early 2000s. We had our bumps and spikes related to the occasional large claim, but the overall long-term results were successful.
We were able to manage our increase in costs with minor plan design changes and small premium increases. We were even able to add wellness and disease management to create a more consumer-driven plan and to encourage healthy behavior.
But then came the Great Recession of 2008, and healthcare costs were virtually frozen for nearly five years. Doctors and hospitals were forced to hold down price increases and utilization remained stable.
There were also no premium increases for five consecutive fiscal years. But we soon recognized the pent-up demand on the healthcare system: As soon as the recession was over, prices immediately started to jump.
Allies in affordability
We knew we needed to be aggressive and explore some untraditional options. First, we switched our hospital network from the local municipal hospital to the Penrose-St. Francis Health Services system. Penrose-St. Francis is part of the Centura Health network, comprising 17 hospitals and dozens of health neighborhoods in Colorado and Kansas.
The new system offered creative ideas about investing more in wellness and prevention, rather than in sick care. Penrose-St. Francis not only brought favorable rates, but it also provided a quality of care previously unknown in our plan.
In addition, it introduced various programs to target specific high-cost plan elements in order to reduce utilization expenses. For the first time, we were truly partnering with our hospital provider rather than operating in a vendor-business relationship.
One of the more creative plan additions developed through the partnership was the opening of a dedicated health clinic for District 11 employees and dependents. This clinic is centrally located in the district and is convenient to staff. The clinic offers basic services without the wait of a doctor’s office or an emergency department.
Other innovative programs include biometric testing, wellness coaching and exercise classes.
Penrose-St. Francis—along with assuming the role of a preferred network provider—has helped accelerate District 11’s efforts to meet its objective of delivering sustainably affordable healthcare while developing a culture of health throughout the district.
A way forward
Health benefits continue to be a vexing problem for school districts in Colorado. Typical costs for an aging employee demographic are outpacing minimal funding increases.
Our district tried a multitude of approaches to address these challenges—including redividing the total cost of healthcare between the employee and the employer, and reducing benefits coverage.
However, we didn’t see meaningful results until we were able to convert our Voluntary Employees Beneficiary Association trust relationship to Colorado’s Boards of Education Self-Funded Trust pool—and then partner with Penrose-St. Francis.
There is no doubt the ever-changing healthcare landscape will continue to be a challenge in the future. The additional complications of the Affordable Care Act have certainly added complexity to the plan.
But now, with the strategic help of our partners, the district is on the cutting edge of healthcare and looks forward to a future where benefit costs will not overwhelm the district or its compensation structure.
Glenn E. Gustafson is chief financial officer and Jessica Reijgers is employee benefits manager for Colorado Springs District 11.