As with nearly every employer in the country, Colorado Springs School District 11 (D11) was faced with increasing health benefit costs from, and in large part due to, an aging workforce and an increasing incidence of chronic illnesses.

This trend was hurting the district because the escalating expenses reduced the flow of money that went to education, specifically hindering the district's ability to offer competitive salaries and hire qualified teachers.

However, due to a program that emphasized minimally invasive surgery (MIS) over open surgery, D11 saved nearly $1 million in direct hospital and surgeon claim costs over two years.

D11 is a K-12 school district representing the majority of students in the Colorado Springs area, and is home to 3,400 employees - including 2,000 teachers who support 30,000 students in 60 schools. The district's self-funded health plan covers 6,000 lives and is governed by an insurance advisory committee.

The business of education in Colorado Springs is very competitive. Parents make decisions which are strongly influenced by the value and quality of teaching provided at the school district. During the past decade, D11 lost 4,000 students and saw a significant decline in revenues. Several factors played a part in the enrollment drop, including the cost of the health care benefit program and its impact on its ability to recruit and retain teachers.

D11 wanted to increase enrollment in the district by enhancing both the quality of education in its schools and elevating its reputation among employees and the community. To achieve this, the district needed an effective, long-term plan that would help reduce operational costs in order to maximize cash flow to the classrooms and teachers.

Finding a solution

The school district streamlined its health care offerings as a way to increase quality of care and reduce costs across the entire system. One significant value-based benefits design change D11 made was to revamp its medical plan to emphasize minimally invasive surgery (MIS) to members over more invasive, open surgery, when appropriate.

D11 evaluated the most common surgeries conducted under its medical plan and determined that by streamlining the type of surgical procedures performed, with a focus on minimally invasive surgery, patients would reap significant health benefits, and D11 would reduce unnecessary surgery-related costs.

Five surgeries were selected for the MIS initiative: colectomy, gall bladder removal, hysterectomy, bariatric and appendectomy. These five surgeries were selected as a focus of the program after consulting with D11's partners at Memorial Health System, Medical Network and its medical director to ensure that the program would be successful and provide the anticipated benefits.

Claims experience provided by Medical Network was used to help select the surgeries by examining the savings of MIS over open surgeries. Minimally invasive surgeries outside the five selected continued to be available to patients.

By advocating the use of MIS, which required no additional investment by D11, the school district was able to achieve immediate savings and to provide immediate benefits to the patient.

The medical plan was designed so that members who opted to undergo a minimally invasive surgical procedure over open surgery would be offered lowered copayments: $400 less for an in-patient surgery and $200 less for an outpatient surgery.

D11 provided its members with the necessary resources to become better health care consumers and make well-informed decisions regarding MIS, such as informational materials and links to Web sites that addressed the benefits of a minimally-invasive approach over open surgery, how the procedures are performed, tips to help patients speak with their doctors about their options and the risk factors that might exclude them from MIS.

Results

Recognizing that healthy employees are the foundation of the future success at D11, it was essential to continue to focus on quality patient care first.

The MIS program helped achieve that through faster healing, less pain and scarring, and quicker return to normal activity. Anecdotally, officials learned of employees who had put off surgeries in the past due to the long recovery time but after learning about less invasive options, took the step of treating their condition and coming back to work better than ever.

D11 saved almost $1 million of direct hospital and surgeon claim costs over a two-year period - a conservative cost-savings estimate, given that only direct costs were assessed. Other expected indirect benefits included reduced employee absenteeism, improved productivity and reduced expenditures for post-surgery prescription drugs and rehabilitation services.

D11 also lowered its premiums, which helped ensure the D11 medical plan was competitive and affordable to employees, reduced substitute teacher costs due to quicker return to work, and reduced hospital-acquired infections and related costs.

Improving the quality of care and containing health care costs is helping Colorado D11 to reach its strategic goal of allocating more dollars to the classroom and raising its reputation as a school district that values its employees.