Most local governments have seen costs of heath care for employees and retirees increase over the past five years anywhere from 6 and 15 percent. These changes have prompted several cities and counties to change their benefit strategies.

Cost increases are due to a variety of reasons, including increased claim and prescription drug costs, aging workforces, insurance price increases and changes to federal health care policy, according to a nationwide survey released by the Center for State and Local Government Excellence (SLGE).

The survey found several examples of creative increase offsets by city and county governments.  

Asheville, N.C., reported it saved $4 for every $1 invested in its chronic disease management program, called the Ashville Project. The program is a collaboration between Mission Hospitals, pharmacists at the University of North Carolina Chapel Hill and the North Carolina Pharmacists Association. 

Launched in 1996, the program provides education and personal oversight for city employees with chronic health problems including diabetes, asthma, hypertension and high cholesterol.

Through the project, employees with these conditions are provided with disease education through the Mission-St. Joseph’s Diabetes and Health Education Center. Patients are then connected with community pharmacists who can ensure they are using medications correctly.

Corpus Christi, Texas, too, saw reductions in health care costs by conducting a dependent eligibility audit and by establishing an on-site wellness clinic. 

According to city materials, the clinic provides employees with care from a board-certified nurse practitioner – a registered nurse with advanced training in diagnosing and treating common illnesses. The aim of the clinic is to meet the routine health needs of some 3,000 city employees to keep claims costs down.

The city also conducted a dependent eligibility audit of its workforce to ensure that all enrolled dependents met current plan rules, according to the report. Though officials were skeptical the process would yield significant savings, the audit found a large number of ineligible dependents who were removed from plans.

After the audit and the opening of the health clinic, the city says it reduced health care costs by $1.84 million, according to the report.

Across the country, most local governments have made changes to the way health care for employees is provided. The report found 57 percent of respondents increased cost sharing of premiums, and nearly 50 percent of respondents reported changes to the types of insurance provided. Of those reporting changes, 19 percent shifted employees to a high-deductible plan with a health savings account and 14 percent established health reimbursement plans.

"Local government programs that contain costs and improve employee health are among the most important strategies," Elizabeth Kellar, president/CEO of the Center for State and Local Government Excellence, said in a statement. "Wellness and disease management programs are offered by a majority of local governments and are valued by employees."

Download the full report, titled Local Government Strategies to Address Rising Health Care Costs, to learn more.


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