How One Wisconsin ISD Saved Half a Million on Health Benefits and Increased Benefit Satisfaction

School budgeting season means striking a balance between cutting classroom costs and managing the rising costs of necessities like medical benefits. School administrators again face the daunting task of bidding out their insurance plan with hopes to get the best price for their district, knowing the price is likely to go up, and the resulting shuffle to find extra funds elsewhere in the budget. Cumberland School district in northern Wisconsin knows the struggle all too well. It faced double-digit increases to its employee health insurance — already the district’s second largest singular budget expenditure.

“The way you work within the system is you move dollars around,” said Dr. Barry Rose, Cumberland superintendent. “Many times, that means watered-down benefits and passing costs onto employees through high premiums and deductibles.” After changing health insurance five times in the last six years, Rose couldn’t keep shifting those costs to his employees. He needed better for his teachers.

Finding a cost-effective insurance plan is not just about a low number. If you’re looking for a long-term solution for reducing costs, start by looking at the behaviors your plans promote. Is it reducing friction with teachers, decreasing turnover, and encouraging healthy choices? When employees are empowered to make informed choices about their health, costs go down for everyone involved.

So, what holds traditional plans from meeting these needs? The deductible, for starters. Deductibles have ballooned to financially overwhelming dollar amounts. If your plan doesn’t contribute to your cost until you meet multi-paycheck level deductible amounts, teachers avoid getting the care they need, miss days of work or work sick in the classroom. “People have been conditioned to meet their deductible, and they’ve done nothing wrong,” Rose noted of the behaviors he’s observed in his district. “Once they meet it, what do they do? They go get everything fixed, and it drives up the costs on the backside.”

Polarized health care consumption is one of the major problems with our health insurance structure. People should be able to get care when they need care. That’s what the benefit is supposed to be for. You shouldn’t have teachers showing up to the classroom sick because they are afraid of what their health bill might be — or, worse, can’t afford it. Students deserve better. Teachers deserve better.

What’s the road to better? Districts need to start looking for plans that eliminate deductibles and make healthy consumption of health care easier. People need to easily compare their treatment costs before they obtain care, and the plan should contribute when people need care.

Cumberland found that solution with on-demand health insurance. Statistics on this plan show that when consumers are aware of their exact cost across treatment options, they choose the most cost-effective option 40 percent more often than those enrolled in traditional plans. Consumers are more likely to try physical therapy, for example, and less invasive options before, or instead of, costly surgeries. They also select outpatient clinics or ambulatory surgical centers up to 92 percent of the time over inpatient hospitals. These behavioral changes are helping organizations curb health care costs by up to 20 percent. By switching to on-demand health insurance, Cumberland was able to take their medical benefits cost from a projected $2 million to $1.5 million.

“We’re empowering our staff to make health-related decisions,” Rose said. “We’re empowering them to decide what treatment paths they would like to take. I’m not making that decision for them.”

Half a million dollars in savings is significant for a school district. That money goes back into the system and helps improve the quality of the education they provide. Those dollars relieve pressure across constituents — not only the district, but the taxpayers and stakeholders. And annual budgeting becomes less daunting.

Teachers, also, have one less thing to stress about. “If you’re concerned about health care or how you’re providing for your family, those things are in conflict with each other,” noted long-time Cumberland teacher Dan Hopkins. “And if you’re thinking about it all the time, it can affect how you are in the classroom.” Eliminating the deductible for teachers and giving them clear prices and cost of care up front allows them to focus more of their energy on students.

If switching health insurance plans can lower costs, give teachers some peace of mind and give districts more money to invest in other areas, it seems like a pretty straightforward solution to the yearly budgeting battle. “Sooner or later you have to stop kicking the can down the road,” Rose said. “It’s time to have a deeper conversation about health insurance.”

This article originally appeared in the School Planning & Management September 2019 issue of Spaces4Learning.

About the Author

Matthew Levine is the Leader of Customer Success at Bind On-Demand Health Insurance.