The new plan model’s appeal to employers seems clear: CDHPs delivered substantially lower cost per employee than either PPOs or HMOs in 2008. CDHP cost averaged $6,207 per employee, compared to $7,815 for PPOs and $7,768 for HMOs (Fig. 5). Of the two types of CDHPs, HSA-based plans were less expensive than HRA-based plans ($6,027 compared to $6,420). 

The most obvious explanation for the difference in cost between CDHPs and the other medical plan types is the higher deductible. But even compared to the average cost of PPOs with deductibles of $1,000 or higher ($6,661 per employee), CDHPs still cost less by over $400, even though CDHP enrollees are not significantly younger than enrollees in PPOs with high deductibles and are more likely to elect dependent coverage (which drives up cost per employee). The 2008 cost increase for CDHPs was 4.0 percent, compared to 6.3 percent for PPOs and 9.1 percent for HMOs. 

 “With deductibles in traditional PPOs rising, the CDHP is becoming a more attractive option for employees who have a choice,” said Mr. Bos. “If your employer puts money in the account and you don’t use many services, you can end up ahead.  But it all depends on how you use health care.”

The table above taken from the CAG report illustrates the key opportunities to moderate cost growth.  Clearly there are two overwhelming problems – benefits and SPED.  The specific report on SPED is quite thorough and unfortunately does not identify any silver bullets.  However, one item that stands out is the overall increase in compensation for aides in the current contract.  This will certainly need to be addressed in the upcoming negotiations.

A potentially controversial thought (not present in the CAG report) is to examine how NPS can turn its reputation for SPED excellence into a profit center by capturing out of district placements from other communities thus leveraging our expertise, infrastructure and fixed cost.  A nod in this direction has been discussed in relation to the proposal to create an alternative high school and generated initial positive response.  Is further exploration warranted?

Benefits are an area that requires a lot more analysis.  I have been dismayed at the “our hands are tied” attitude from the administration and school committee to date on this topic.  Yes – there are real issues within municipal collective bargaining regulations that need to be taken into account.  However, this cannot be an excuse to abdicate the responsibility to thoroughly investigate and propose alternatives.  At least we will know what is being left on the table!

One alternative that has been frequently raised is to join the GIC.  I will tee up another one here and go into detail in a future post.  We could shift from the traditional plans we offer now to a high-deductible consumer driven health plan (HDCDHP).

Other specific items of note:

o  The existing contract makes it very costly to have teachers take on extra administrative or management duties (for which they would be compensated).  This dramatically limits the flexibility of school principals, especially at the elementary level, from leveraging the skills of experienced teachers to provide a better support structure for the rest of their staff.  This restriction should be eliminated from future contracts.


o  The bulk of our professional development funding appears to be going to creating central roles of curriculum coordinators, math coaches, and others who provide indirect support to the teachers rather than directly to the teachers to fund continuing education and skill building.  Has this model been proved to be more effective?  Do the teachers agree?  Have we asked them?