MSSC Business Case: Transforming Healthcare Benefits Introduction: In July 2014, the Municipal School District of Shelby County (MSSC) Trust was formed in Memphis, Tennessee, following the merger of Memphis City Schools and Shelby County Schools. This Trust, comprising four municipal school districts and three cities, aimed to provide superior healthcare benefits to their employees. Challenges: Financial Crisis: Memphis City Schools faced a growing financial crisis due to decreasing funding since 2008. Healthcare Benefits: The newly formed city school systems needed to establish their own benefits structures, meeting the State of Tennessee's requirement for equal or superior benefits compared to the merged district. Solutions Implemented by Sherrill Morgan: Self-Insurance Plan: Provided MSSC greater control over healthcare spending. Stop-Loss Insurance: Managed risk by securing stop-loss insurance, establishing predictable funding projections. TPA/ASO Selection: Managed the plan, paid claims, issued ID cards, and controlled costs using direct contracts. Strategic PBM Selection: Selected a PBM specializing in innovative solutions for government entities, focusing on drug effectiveness. Direct Hospital Negotiations: Controlled costs, improved outcomes, and gained greater savings through direct negotiations with hospitals and local facilities. Innovative Plan Design: Co-Pays Only Plan Design: Eliminated deductibles and coinsurance, providing employees with predictable out-of-pocket expenses and benefiting providers by removing the need for balance billing. Outcomes and Results: Financial Stability: Transitioned from no cash reserves to an expected $22 million in cash reserves by 2025. Cost Reduction: Achieved a 19% reduction in pharmacy spend. Healthcare Cost Control: Maintained year-over-year increases in healthcare costs between 1-3%, significantly lower than the national average of over 10%. Ongoing Improvements: Opened on-site medical clinics, added Reference Based Pricing, negotiated direct contracts, restructured medical plan benefits, and implemented innovative approaches in drug coverage. Conclusion: MSSC's partnership with Sherrill Morgan has led to remarkable financial security and superior healthcare benefits for its employees. This business case highlights the innovative strategies and continuous improvements that have made MSSC a model of effective healthcare management. Read the full business case here -