When it comes to their group health care plans, virtually all employers have one thing in common: Costs keep going up. For the past several years, costs on average have risen between 5% and 6% a year, and projections for 2014 fall within that range.
But one big employer — the School District of Palm Beach County in West Palm Beach, Florida — has had an entirely different experience: Its costs actually have gone down.
In 2011, the school district's health care plan costs averaged $686 per employee per month. Last year, costs averaged $661 per employee per month. This year the district projects costs will average $634 per employee per month based on claims through May, said Dianne L. Howard, the school district's director of risk and benefits management.
“My goal is not to exceed what we spent in 2013, and it increasingly is looking like we will come in significantly under that,” she said.
For her innovative approach to achieving cost-effective health benefits management for the school district, Ms. Howard has been named Business Insurance's 2014 Benefit Manager of the Year®.
The beneficiaries of the district's health care cost deflation: both employees and the school district.
“Those savings will translate into keeping employee premium contributions stable for all of 2015, as well as allow us not to have to boost funding,” Ms. Howard said.
Achieving that remarkable cost stability was not the result of slashing employees' health benefits. Instead, it was achieved through a multiprong approach that includes:
• A broad wellness program that gives employees attractive financial incentives to see providers for a physical or preventive screening to spot medical problems before they worsen, become much more expensive to treat and result in trips to hospital emergency rooms.
• A diabetes management program that has encouraged employees, through lower copayments, to get health care screenings to spot the conditions early and take the appropriate medications to keep the disease in check.
• Collecting millions of dollars in rebates from prescription drug manufacturers that otherwise would have gone to its health insurer.
• Rigorously digging into claims payments through a data warehouse to uncover payments that should not have been paid to providers.
• Redesigning health care plans to include cost-sharing requirements that encourage employees to question providers on the need for certain services and become better health care buyers.
• Giving employees financial incentives to help their peers engage in activities to improve their health.
From the time she joined the school district in 1995, Ms. Howard said she knew she “could change things for the better. I knew I could make things happen.”
Others concur with that assessment.
“She pushes the envelope and insists on excellence from everyone, including herself,” Howard S. Gruverman, senior vice president and managing director with Wells Fargo Insurance Services USA Inc. in Fort Lauderdale, Florida, wrote in a statement recommending Ms. Howard for the award. Mr. Gruverman serves as an insurance consultant for the school district.
Ms. Howard “is not afraid to step out there with cutting-edge ideas,” said Marilyn Boursiquot, benefits manager for the School District of Palm Beach County. “We are now starting to see the fruits of her labor.”
“She is very focused, while passionate and persuasive. While taking very proactive stances, she does everything with grace,” said Kimberly Sandmaier, the district's wellness coordinator.
Ms. Howard's cost savings initiatives span a wide range and she's open to new approaches.
For example, the school district fully insured its health care benefits plans for years with UnitedHealthcare. In fact, the school district at one point was the beneficiary of a three-year policy in which the insurer guaranteed that its rates would not increase during that period.
Despite that guarantee, in 2007 Ms. Howard beat the drum for the school district to self-insure group health care coverage.
“We saw the level of profits the carrier was making. We needed to take that money in-house. We can take that risk,” she said.
Her openness to new ideas and a willingness to network with colleagues reaped dividends in other benefit areas.
For example, through her membership in the Florida Health Care Coalition, Ms. Howard found out that prescription drug manufacturers will provide health insurers with rebates in exchange for putting certain drugs on a higher coverage tier in which health plan enrollees will have lower copayment or coinsurance requirements.
After learning about the rebates, she approached UnitedHealthcare, which offered to discount its prescription drug plan administrative fee.
Ms. Howard rejected that approach, however, reasoning that the school district would save far more if it received those rebates directly. UnitedHealthcare gave in, with the school district eventually collecting 100% of the manufacturers' rebates, now amounting to more than $5 million a year.
“Our challenge is to stay one step ahead of where the money is hidden,” Ms. Howard said.
As Ms. Howard approaches her two-decade employment mark with the School District of Palm Beach County, her enthusiasm for finding new ideas that improve employees' health and save money for the school district and its more than 21,000 employees and their families has not waned.
“I enjoy the process of getting to the deal, whether it's with an insurer or broker or even the unions,” she said. “I like the preparation and research so that I'm prepared. And then when a deal is done, it is a tangible accomplishment and often times results in cash savings for the district or the employees.”