Paradise Valley Unified School District (PVUSD) Controlling Medical Costs

Paradise Valley Unified School District (PVUSD) Controlling Medical Costs


In a world where the healthcare system is changing on a daily basis due to sweeping federal changes under the Affordable Healthcare Act, constantly changing technology and an increasingly sick and aging population, most employers are faced with cutting benefits, eliminating benefits, or seeing astronomically high renewal rates.  Bucking this trend is the Paradise Valley Unified School District (PVUSD) which was a founding member of Valley Schools over a quarter century ago, which established a purchasing cooperative for school districts to pool their purchasing power to reduce costs.  Starting first with liability insurance, then workers’ compensation, PVUSD moved its healthcare and other employee benefits under the Valley Schools Employee Benefits Trust (VSEBT) nearly ten years ago now, and it has paid dividends.



Under the trust, PVUSD is able to choose its providers, plans and benefits as an individual district as it always has, while in returning receiving more choices, lower rates and expert consulting from the staff of VSEBT, Aon/Hewitt and Hays Consulting at no additional costs.  This year, starting fiscal year July 1, 2014, PVUSD elected to break out their plan tiering into four tiers from the traditional two tiers which have been in place for several years.  In simpler terms, they went from just single and family, to four levels determining how many are covered under the plan.


This represented a premium savings for employees who have a spouse or child(ren) only on their plan and only a slight increase for those with more family members.  The district costs are expected to now be a 2.1% reduction from the prior 2013-14 plan year.

Not only are costs going down, but PVUSD was able to expand their preventive drug list for health savings account plan members which means more preventive drugs at a copay prior to meeting their deductible for those on the HDHP plan.  That will provide additional savings to those employees and encourage better health in the long run by making preventive and maintenance drugs more affordable.


PVUSD also continues to focus on efforts to encourage good consumerism and physician quality, and cost and efficiency.  They implemented the UHC Premium Provider Advantage Plan.  Doctors who are rated both for high quality, satisfaction and efficiency receive two stars in the UHC network directory.  If members choose a Premium Physician, they will have even lower co-pays. This allows the employee to remain in charge of their doctor choices while providing additional options for savings.

Congratulations to PVUSD for its ongoing cutting-edge vision for providing the best quality benefits to its staff and their families while utilizing innovative tools to reduce costs!



VSEBT Quarterly Benefits Meeting to Explore Health Issues

The April Quarterly Benefits Meeting conducted by the Valley Schools Employee Benefits Trust (VSEBT) will include a number of recognized health and benefit experts briefing human resources and benefits staff on how better to serve their staff and their family members.  Aflac’s expert on benefits will start out the session, followed by presentations on HIPAA regulations regarding patient privacy, and COBRA administration and legal issues from Eiverness Consulting Group, Ltd.

untitled (2)

The program will conclude with presentations by Andrea Billings of Aon/Hewitt on the latest changes to the Affordable Health Care Act regulations regarding variable hour employees and a report by Hays Consulting on renewal trends and medical cost factors.

Andrea Billings, Aon/Hewitt

Andrea Billings, Aon/Hewitt

Congratulations to VSEBT for maintaining such a vigorous program of information and updates for their participating members.  With healthcare changing every moment, it is good to know some organizations are staying ahead of the changes.


HIPAA Training and Compliance

The Health Insurance Portability and Accountability Act or HIPAA was enacted in 1996 and has been amended several times.  In addition, thousands of pages of rules have been issued.  HIPAA’s major purpose was to allow Americans to port coverage when they leave an employer to go to another employer, so they would not lose benefits.  It also enacted some of the strictest privacy rules in the world about who can access your medical information and how it must be safeguarded.


In an era where NSA intelligence gathering, drones and other concerns exist about privacy, it is more imperative than ever that people be fully informed on medical records privacy.  Compliance means that only people who directly have a reason to see your information for billing or treatment are allowed to, and only for that portion they need.  It does not allow for non-encrypted emailing of the information, sending it to an unsecured fax, or even sharing it with family members unless you specifically authorize it in writing.


You can imagine the impact of a spouse being treated for an STD from an extra-marital affair being told to the other spouse.  Or the effect on co-workers or employment if they know you have an infectious or terminal disease.  It is none of their business unless you and no one else thinks it is.  That is why organizations owe it to their patients to train anyone who comes into contact or potential contact with this information.


The Valley Schools Employee Benefits Trust (VSEBT) offers annual HIPAA training seminars to staff and members that may come into contact with personal health information (PHI).  This year they are including information from Aon/Hewitt on how such information and compliance tools can be found on the new benefits dashboard provided to VSEBT members.  The class can be taken both in person and by webinar.  They are conducting their next seminar on the morning of August 21, 2013.

If you are a member of VSEBT, or are interested in participating, contact Sheri Gilbert at 623-594-4370.  Only current and prospective members of VSEBT will be able to attend.




Planning the Key to Healthcare Savings

Planning is one of the keys to long term healthcare savings.  Each year, the Valley Schools Employee Benefits Trust (VSEBT) hosts a planning session in which all of its member organizations participate and are briefed on various issues.  The organization is a professionally managed trust that allows group purchasing options for its members.  This commitment to providing information, a look back, and a look forward, followed by effective planning has consistently reduced costs and saved millions per year for their members.

Tom Boone, VSMG

Tom Boone, VSMG

This year, the following items were briefed on their agenda:

Opening Comments – Tom Boone, Chairman, CEO, Valley Schools Management Group (VSMG)

1.2013/14 and Beyond – Long Range Planning – Lisa Rafferty, Aon/Hewitt

2.Benchmark Data – Dave Petta, Aon/Hewitt
3.Financial Statements and Claims Experience Reports, Andrea Billings, VSEBT
4.Valley Schools Update – Patrick Dittman, (VSMG)
5.Procurement Versus Trust Participation – Options in Insurance Buying, Bill Munch (VSMG) and Andrea Billings (VSEBT)
6.Healthcare Reform – Lisa Rafferty, Aon/Hewitt
Open Discussion
logo vsmg
More organizations should regularly discuss their current performance, upcoming changes, and plan for the future.  Too often organizations do not pay attention to their healthcare or other employee benefits except at renewal time, and then it is a rush to make stop gap decisions to get rising costs under budget.  This may lead to poor choices and pushing more costs onto burdened employees.  Careful planning and discussion and lead to long term strategies, well thought through and explored, that yield much more manageable increase curves over time.
aon hewitt

VSEBT Keeping Healthcare Increases Down

Over the past many years, employers have been facing double digit increases in healthcare costs.  A recent study, conducted by Aon/Hewitt, the largest employee benefits company in the world, compared the four year base increases on an apples-to-apples basis and showed the remarkable results achieved by Valley Schools Employee Benefits Trust (VSEBT) over the last four years.  These results are a combination of professional management, wellness programs, comprehensive information and planning, and the benefit of group purchasing by groups of employers.

aon hewitt

logo vsmg

Here is one of the key charts that shows overall trend, or medical inflation for the trust.


–Aon Hewitt’s trend survey illustrates expected cost increases for the average employer before  any changes in plan design
–Trends are as reported by carriers and have a conservative bias
chart 1

Local Governments Win Healthcare Awards

Three major awards were given out by the Valley Schools Employee Benefits Trust (VSEBT) to major employers in Arizona for their outstanding efforts in providing healthcare and other employee benefits to their employees.  During the same event, gifts were donated by employees at their expense for the Toys for Tots Drive:


logo vsmg


The three major awards earned were:

Outstanding Achievements in Wellness 2012BALSZ School District.  This award goes to employers who focus on wellness programs for their employees and show marked improvement in costs and positive life outcomes as a result.


Laurie Colter & Lisa Apley

Best Business Practices 2012The Town of Queen Creek .  This award is achieved by following all proscribed laws, accounting, financial practices and HIPAA requirements and having the most timely payments, documentation and fewest errors.


Deb Davis and Nina Waters

Lowest Per Member Per Month Costs – Tolleson Elementary School District (TESD) – This award goes to the employer with the lowest claims costs on a per member per month basis.  This is usually do to a well-structured plan with a focus on wellness initiatives.  Much of this particular award is due to the last few years of conversion by TESD over to health savings accounts plans which allow their employees and families to keep unused funds each year in their account.


Lisa Rafferty of Aon/Hewitt, Andrea Billings of VSEBT, and Darlene Kracht of VSEBT


Congratulations to these three employers for their outstanding achievements!

Healthcare Planning

In today’s healthcare market, with so many changes and the impacts of National Healthcare Reform unclear, it is important for every organization to have proper healthcare planning.  Unfortunately, for most employers, even larger ones, healthcare is something looked at only during renewal time.  Valley Schools Management Group (VSMG) in conjunction with their consultant, Aon/Hewitt, provide annual healthcare planning sessions with the leaders of all their employer organizations.  These include the top executives and the human resource officials so that they can be informed at all times of where healthcare is going, and how to plan for it.  VSMG plans and implements for change on a regular basis for its members, but does not view that as enough.  “We need to make sure all our members stay informed of our efforts, understand the reason for staying ahead of the curve, and approve of the direction we are leading,” said Tom Boone, Chairman and CEO of VSMG.

Tom Boone, VSMG

Tom Boone, VSMG

logo vsmg

Attached here is one such document provided to their members to keep them informed of the ongoing processes at VSMG:

What Does Your Benefits Consultant or Broker Really Do For You?

In these changing times in healthcare and employee benefits, with a slow economy and high unemployment, it is more important that ever to reassess your operations.  One of those is the area of health consultants, or benefit consultants.  As with travel agents, who used to get discounts and plan your trips for you, consultants and brokers are losing in the new changes in healthcare.  Airlines stopped giving discounts to travel agents and paying for free travel.  They could not give you a better a deal than Travleocity, Priceline, Expedia, or a host of other sites.  That is why very few travel agents survived.

In the new employee benefits arena, increasingly brokers are challenged to provide savings you could not get in your own market.  Some try to complicate matters or keep their clients in the dark about what they do.  Brokers can get anywhere from 1% to 20% or more depending on the size of the contract, the type of employee benefit, and the incentives they have to place business with certain insurers.  “Free brokers” still get paid, but they get paid by the insurers.  That being the case, do you really think they are working for you?  Or for those who pay them?  As the market consolidates and National Healthcare Reform is implemented, many brokers and consultants will go away, unless they have some new value added.

That is why I am so impressed with the new model of purchasing cooperatives.  They work exclusively for their members, not the insurers.  They are able to negotiate huge group discounts with insurance carriers, and hire their own consultants that work for them and are not allowed to take any compensation or incentives from carriers.  The Valley Schools Management Group (VSMG) is one such purchasing group, and perhaps one of the best in the country, saving their members million in premiums and overhead costs per year.

The VSMG does not hide its practices behind a veil of secrecy like the Wizard in The Wizard of Oz.  On the contrary, they hold quarterly benefits meetings, board meetings, do presentations at each member site, hold an annual information conference, report regularly and openly on their audited financials, investments and expenditures, and even have an annual study session to explain to each member organization exactly what they are doing.  Here is a Power Point from one such recent meeting.  Does your broker or consultant do this for you?  In this case VSMG, run by Tom Boone, hires Aon/Hewitt as their consultant for the trust, Aon/Hewitt being the largest benefits consultant in the world.

QEB 03272012 revised

How would you like this type of in depth reporting a dozen or more times every year?  If so, contact Sheri Gilbert at 623-594-4370.

Strategic Healthcare Planning for Employers

You might ask what “strategic healthcare planning for employers” even means?  Next to salaries, benefits are often one of the highest costs to an employer.  An employer can simply toss the dice and see what the costs add up to, or they can think strategically about their healthcare costs, the same as if they were deciding whether or not to open or close a manufacturing facility, to adopt a product line, or to move their headquarters.  By strategically planning efforts to create a healthier, happier workforce with less stress and better diet, exercise and lifestyles, an employer can see huge returns over time.

If your health benefits cost $20 million per year, then saving just 1% per year due to strategic health planning can cut your costs over a ten year period by $19.4 million.  (This assumes you drop a 10% annual increase to a 9% annual increase average.)  Your costs at the end of ten years at ten percent will be $51.9 million per year at 10$ growth, but shaving just 1% off that can change your ten year budget to just $47.3 million.  The benefits literally accrue more as time goes on.

So how can you do this?  You can’t get your whole workforce to eat right, exercise and be healthy all at once.  It is also illegal to only hire healthy or younger workers.  The way to do it is baby steps.  Early detection of diabetes, prostate cancer and breast cancer drop your expected costs from $150,000 per patient to $10,000 per patient.  Just getting your workforce to go to their doctor once per year and get their screenings on time can save well over 1%.  Incentivize healthy choices like smoking cessation, healthy cooking classes, wellness programs, exercise breaks at work, ergonomic atmospheres, reducing stress, can all have dramatic savings impacts.

Only a few employers are really committed to wellness.  One such local employer is the Paradise Valley Unified School District.  Their employee Insurance Committee will be working with Aon/Hewitt and the Valley Schools Employee Benefits Trust (VSEBT) to accomplish strategic healthcare planning for teachers and other employees of the district.  The VSEBT already offers ready made programs including WellStyles and PREP, which offer either awards or lower premiums in exchange for healthy choices.  These programs were designed and implemented by Sheri Gilbert of VSEBT specifically to address school district needs.

By focusing on individual employers, the strategic wellness plan can be tailored to that organization’s culture, structure, and specific health needs.  In the case of school districts, they have a higher number of women employees and a higher average age and tenure.  This means more emphasis is placed on stress, depression, migraine prevention, and breast cancer early detection.

Each employer should seriously examine its own healthcare costs to see how you can impact the bottom line by encouraging healthier, happier, and less costly employee benefits by offering rewards to your employees for good healthcare choices and regular examinations.



It is rarer than ever today to see an organization that is cutting its own budget instead of charging its members more and more each year.  It is refreshing to see that an Arizona organization that serves teachers, school districts, cities and towns and other entities can tighten their budget.  For three years in a row now they have managed to keep costs 10% lower than in 2009.  Kudos to VSMG!

reposted from VSMG Press Release.



August 27, 2012

Phoenix, Arizona – The Valley Schools Management Group (VSMG) Board, voted unanimously to approve a no increase budget.  After having already cut ten percent of their total operating budget in the prior two years, this will be the third consecutive year with costs significantly lower than in 2009.

“It is an ongoing challenge to keep reducing costs and to maintain a high level of service year after year,” said VSMG Board Member Tom Elliott.  “However, we provide services to public entities that have already been hit with dramatic cuts and we believe it is our responsibility to bear the burden as much or more than our members.”

“We look at every budget item in great detail, and if it is not completely essential, we eliminate it”, stated Tom Boone, Chairman and CEO for VSMG.  “This year we have saved significant costs by changing from paper mailers to electronic postings and working with our insurance providers to keep their costs low through effective partnerships and negotiations.”

Recent studies by Aon/Hewitt, the largest employee benefits consultant in the world, confirm that VSMG has been saving dramatically for its members through cooperative purchasing and low administrative costs.

“It is getting tougher each year to keep our costs at zero increase and below, especially since most of our administrative costs are external.”  Ted Carpenter, another VSMG Board Member added, “We have to purchase stop loss insurance, claims processing, disease management, COBRA administration and many other items from vendors, and we have to keep their negotiated costs flat as well.  With double digit increases in health care each of the last three years, that has been difficult, but we have managed through hard work.”