Non-traditional insurance approach saves ASD millions
When Ashland School District superintendent Jay Hummel visits with fellow superintendents from across the state and attempts to explain the ASD health care plan, the typical responses are blank stares and eye rolls.
Because, he explains, for the vast majority of educators in the state of Oregon who have known only the Oregon Educators Benefits Board plan, which covers almost every district in the state, it simply seems too good to be true.
“They just kind of look at me and go, ‘What are you talking about — oh, that’s right, you’re Ashland,’” Hummel said. “I go, ‘It’s not just because I’m Ashland.’ There’s been some really good work done here that in some ways I think would apply to other districts. Those other districts need to make their decisions based on what’s best for them, but this is a fabulous asset for us, obviously.”
A $9.8 million asset, to be precise.
That’s the whopping figure that Hummel says the district has saved since it adopted a partially self-funded plan through Sophus Health beginning in 2010. Comparable coverage through the OEBB, Hummel notes, would have limited the district’s ability to attract and retain high-quality teachers and programs that Ashland parents have come to expect.
The rates for Ashland’s plan, which includes preventive care and integrated wellness activities, has decreased by 1.4 percent in the last five years as OEBB’s rates have shot up 72.2 percent. Unlike traditional large-scale — ASD has roughly 300 employees — health care plans, Ashland’s is customized for the district’s employees and requires ASD to dump funds into a healthcare reserve account. How much the district pools is based on projections worked up Sophus Chief Actuary Kelly Grebinsky.
Grebinsky and Sophus Health founder, President and Chief Creative Officer Arnie Freiman have worked closely with the district to help design a health plan since Hummel’s predecessor, Juli Di Chiro, decided to make the switch five years ago. The decision followed a series of meetings between Di Chiro and Freiman, who credited Di Chiro with looking closely at the data before making an informed decision.
“(Di Chiro) took a leap because she believed that it made sense to her,” Freiman said. “The leap was to go to a place of intentional ownership. Rather than being a tenant, they became the owner of their health destiny, their health plan. That is a dramatic change. … The earliest pieces that happened once they took the ownership was to design a plan that was in their control and that worked and made sense for the district, rather than going to a plan that made sense for an insurance company.”
It’s proven to be a win-win for the district’s employees, who pay zero deductibles and, for the most part, no premiums.
It’s a plan that’s so good, even Hummel, who was hired to replace Di Chiro in 2013, had doubts when he first joined the district. Not anymore.
“It’s unheard of,” he said. “I’m the catch guy, so I’m going, ‘When’s the rub coming. I’m stealing from something else in order to make this inflated and look good. What are you doing?’ But try as I may I can’t find the rub, other than well-managed benefits. … It’s hard to put into words.”
The net savings opens up possibilities that the district wouldn’t have otherwise.
“I can’t put that $9.8 million on the sheet and say, ‘Well gosh, I now have nine-point-eight million more dollars.’ So yes, I never start with that concept, but instead I’m able to talk about a larger percentage increase in salary, I’m able to talk about hiring more teachers to reduce the student-teacher ratio. I’m able to keep elementary music and P.E. I’m able to keep counselors in the elementary schools.”
Highly educated and opinionated, Freiman, a cancer survivor, is as comfortable talking about the nuances and intricacies of traditional health coverage as he is about the value of his “five aspects of health: physical, financial, spiritual, relational and self.” According to his biography, in addition to founding Sophus Health (based in Seattle) Freiman also co-founded and directed the first school of acupuncture in the United States, founded the first school of naturopathic medicine in the state of California, and has taught financial planning, negotiation, integrative education, community studies and natural health care at the university level.
“Our whole model is, if you stay on top of the utilization of the plan and you support it with learning and intelligence, that’s not what drives the cost,” Freiman said. “What drives the cost is designing programs incorrectly, not giving information and not empowering employees to live a healthy life.”
What does that mean?
“Years ago, we’d start the school year with a big kickoff, where we’d have a keynote speaker and then we’d have breakout sessions — everything from yoga and tai chi to yoga and whatever. That’s a part of the health plan. The whole idea is that we build health into a health plan rather than just selling insurance.”
Joe Zavala can be reached at 541-821-0829 or firstname.lastname@example.org.