Bucks County IU 22: Labor-Management Consortium Saves on Health Care Costs

Bucks County Intermediate Unit 22’s new health care consortium is saving 15 school districts $5 million in the 2012-13 school year – and something more. A joint labor-management focus on wellness is expected to reap savings through healthier employees.

IU 22 formed the consortium of Bucks and Montgomery County school districts when superintendents sought help with rising health care costs. The initial savings come from the consortium’s establishment of a self-funded system that collects premiums to pay directly for all claims. The buying power of 9,000 employees, and 27,000 total lives, helped the consortium save on administrative and other costs.

Now, a consortium board comprising labor and management representatives from each member will oversee the system and also implement wellness and preventive-care initiatives. Through the consortium, districts have access for the first time to health-trend data, such as rates of chronic conditions including diabetes, hypertension, and high cholesterol.

Using that data, labor and management are working together to target areas of need, promote healthy lifestyles, and bring down costs by preventing complications. Having labor representatives at the table adds perspectives that boost effectiveness.

“They’re able to help us understand what may work and what may not work,” says IU 22 HR Manager Rebecca Malamis. “If we want employees to get flu shots or see value in disease management, what incentives will be most effective?”

Managing chronic conditions is expected to bring significant savings.

“In the first few years, moving to self-funded health coverage saves administrative costs,” says IU 22 Business Manager Wendy Macauley. “Then the real savings comes from actually reducing claims. To reduce your claims, you need a healthier population.”

The consortium has been “exciting for all of us,” says Malamis. “The role of the IU is to be able to offer choices for our districts. Offering options is what we do best as an IU.”

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