How ORS Develops Its Retiree Healthcare Plans: The Health Initiative Strategic Plan
The Michigan Public School Employees Retirement Board, with the support of the Department of Technology, Management, and Budget (DTMB), began a healthcare strategic planning process in the early 1990s. Since then, 22 quality and cost-containment initiatives have been implemented into the health plan provided to Michigan public school retirees.
All strategic initiatives focus on a quality and cost goal. The quality goal is to measurably improve the quality of care enjoyed by members of the Michigan Public School Employees' Retirement System. The cost goal limits the rate of cost growth to the compound rate of inflation and real economic growth.
Under the Michigan Public School Employees' Retirement Act, the Public School Employees Retirement Board and the DTMB director have a joint role in the approval of the strategic initiatives. The strategic planning process begins with a presentation of the initial package to the board and the DTMB director, followed by a public review process, in which feedback and comments are received. The board and DTMB director review the public comments and any recommended revisions resulting from the public feedback. The last step is for the board and the DTMB director to approve the final package.
These strategic initiatives have averted costs that would have been paid by the public schools in annual contribution rates, or by retirees through increased premiums, deductibles, and copays. In total, the initiative process has saved the plan more than $1.4 billion. Several of these strategic initiatives leveraged federal funding opportunities. The combination of quality enhancement, cost saving, and maximization of federal funding has allowed the continuation of quality retiree health benefits for public school employees.