Analysis: Health pool could save millions

LANSING, Mich. - A proposed statewide health care pool for all public sector employees could save Michigan taxpayers between $565 million and $875 million a year, according to an analysis by the Legislative Service Bureau, the Michigan Information & Research Service Inc. reported.

The analysis said that House Speaker Andy Dillon's plan could save up to $75 million in administration, $200 million in "economies of scale," and $600 million through a menu of "best practices," MIRS reported. Most economies of scale would come through prescription drug plans, the analysis said, according to MIRS.

MIRS said that the analysis found that wellness programs, access to quality care, use of best practices in health care delivery, management of prescription drug use and standardized employee benefits would add up to $400 to $600 million in savings per year.

More than 20 states have adopted a consolidated public employee health program, the analysis said. Some states incorporate collective bargaining at either the local or state level, and other states do not, MIRS reported about the analysis.

In related news, State Superintendent of Public Instruction Mike Flanagan said he continues to support the proposal by Dillon, D-Redford Township, because the potential savings could prevent layoffs and protect educator benefits in the long run, MIRS said in a separate report.

Michigan Information & Research Service Inc., "LSB: Total Pooling Savings $875-$565M Annually," and "Flanagan Offers His Side to Pooling Story," Sept. 9, 2009 (Subscription required)

Michigan Education Report, "On Balance, School Health Insurance Proposal an Improvement," Aug. 4, 2009