Efficient and effective schools for ohio

1. Efficient and effective schools for ohio Education Efficiency Initiative: Finding ways to save money while improving student achievement

2. The Governor’s charge Gov. Ted Strickland asked KnowledgeWorks to lead comprehensive review of K-12 education system to: • find efficiencies • maintain focus and investment on improving student achievement Initiative is to: • be collaborative, nonpartisan effort with full range of interests involved • identify achievable near- and long-term goals for modernization and efficiency • share findings for consideration in the next biennial budget

3. Context for initiative Ohio is in midst of economic crisis • Estimated budget shortfall of $8 billion in next biennium • High unemployment rate and rising Medicaid costs But maintaining education reforms is critical • Education and school finance reforms of HB 1

4. Our approach ·   Find ways to improve student achievement without raising costs. ·   Find ways to reduce spending without hurting student achievement. ·   Find additional community resources to help support student achievement.

5. Reduce spending without hurting student achievement Possible strategies • Identify districts that seem to get more for their money in non-instructional spending areas and encourage best practices • Enable greater collaboration among districts and schools to share services • Looking for ideas • How can districts use economies of scale in their favor? • Does the state have a role in economies of scale?

6. Smart Schools Areas of Focus • Pensions • Healthcare • Compensation • Education Technology • Charters

7. How we’ll proceed • Collaboration • Transparency • Outreach • Research-based ideas • Bipartisanship • Comprehensive review

8. How can Ohioans help? • Provide feedback • Participate in studies • Generate and share ideas • Help champion good ideas • OhioSmartSchools.org

9. One Area of Focus: Healthcare • Healthcare is the number two expense to school districts after salary • Ohio has approximately 191,077 enrollees in its school employee healthcare plans, at an annual cost of approximately $1.9 billion • About 72% of districts participate in consortia

10. OH sets context for reform • Ohio passed legislation advocating implementation of statewide pool for school district health insurance plans began in the state’s 2005 biennium budget bill. • Am. Sub. H.B. 66 established School Employees Health Care Board (SEHCB) to create plan by the close of 2006 • The SEHCB contracted with the Mercer Group to develop a state pooling plan in compliance with legislative mandate

11. Revisiting HC Pools • KnowledgeWorks contracted with University of Cincinnati’s Economics Center (UCEC) to examine potential strategies to generate savings and to provide current context to Mercer’s original savings estimates.

12. Revisiting HC Pools (2) • In its Analysis of School Employee Health Benefits: Update to the 2006 Mercer study (November, 2010), UCEC says school districts are already spending about $154 million less in 2010 than Mercer projections. • Recession has depressed healthcare inflation • School districts capturing savings through changes implemented since 2006

13. Revisiting HC Pools (3) • UCEC found additional savings from pooling may be obtainable through the following options: • A mandatory program in which all remaining districts would be covered in a consortia could generate up to $35 million in savings. • Mandating five regional pools or a single statewide pool is estimated to produce about $132 to $138 million in savings, respectively

14. Greg Harris, PhD Public Policy Advisor harrisg@ohioeducationmatters.org www.OhioEducationMatters.org