Alum Rock schools get into health care business [San Jose Mercury News, Calif.]

Feb. 07--In the lopsided battle to preserve an ever-shrinking budget, the Alum Rock Union School District is making a foray on a new front: community health care.

Every time a sick child misses school, the district loses state revenue. Now, through a partnership with its health insurance broker, Keenan & Associates, Alum Rock has become a conduit for offering discounts on prescription drugs not only to employees, but also to residents in the East San Jose district -- and beyond.

Anyone with or without insurance, with children or not, with an Alum Rock address or anywhere else may sign up for a special card to secure discounts of up to 20 percent on brand-name drugs and up to 85 percent on generic drugs. Alum Rock is the first school district in the state to offer the program.

Neither the cardholder nor the district pays a fee for the card. If it sounds like there's a catch, it's that the card issuer reaps a fee, which is folded into the drug charge, for every prescription filled.

"Our interest is in having healthy kids in school," said Alum Rock Superintendent Jose Manzo.

Many of Alum Rock's families are uninsured or underinsured, and not getting medical attention or proper medications can be costly. Student illnesses are costly to the district in lost learning and dollars -- about $40 per student per day. And because Alum Rock's enrollment is declining -- shifting demographics and proliferating charter schools together siphon about

400 students annually -- its budget is shrinking by millions of dollars as state revenues also disappear. But costs don't decline proportionally.

For Torrance-based Keenan and card issuer EnvisionRxOptions of Twinsburg, Ohio, the deal with Alum Rock expands a market for pharmaceuticals. More patients get access to discounts that Envision already has negotiated in 60,000 pharmacies nationwide.

'Modest' fee

Keenan and Envision last year created a similar arrangement in Sacramento County and were reported to be collecting a dispensing fee of $2.50 per claim, whenever the prescription cost was lower than the pharmacy's "usual and customary charge." Kathryn Mueller, in product development for Keenan, said the Alum Rock charge is "modest" but declined to say how much it is.

She said that even for patients with insurance, the discounted drug prices may be cheaper than using their own insurance.

For instance, in some cases the discounted cost of a prescription may come to $13.

"If you have a $20 copay, we beat your insurance by $7," said Meryam Alaoui, vice president of sales for Envision. If the pharmacy's regular price for the drug is less than Keenan's price, the customer will pay the lower cost, she said.

Keenan offers discounts on nearly all FDA-approved brand-name and generic prescription drugs, so its backers say anyone would find the card useful. The card also secures discounts on supplies for diabetics and even on prescription pet medicine.

Besides Sacramento County, Keenan offers similar discount card programs for residents of Los Angeles and El Dorado counties and the states of Florida and Ohio.

Following Alum Rock, Keenan is working to offer its card through the San Mateo County Office of Education and the Redwood City School District.

Keenan's prices are posted at www.keenansaverrx.com.

"We encourage people to compare prices," Alaoui said.

Neither Keenan nor Envision would estimate the number of customers the Alum Rock agreement could bring in, but the population of San Jose'sCity Council District 5, which overlaps substantially with the school district, is 97,510 people.

The card promoters see all of them as potential customers.

'A good idea'

"This is a good idea," said Bertha Razo, who picked up an information sheet for the program at Cureton Elementary School, where she has a kindergartner and fifth-grader.

A month ago, her husband fell sick and required antibiotics. Although he works in construction, he has no insurance. The prescription cost the family $101, an amount they couldn't afford, but Razo said, "We couldn't decide not to buy it."

Paying for health care puts a huge dent in the family's budget. Razo also gets no insurance from her part-time job, ironically, in an insurance office. Prescriptions, she said, "are expensive, and I buy them because I need to buy them."

She hopes the Alum Rock-Keenan plan will give the family better access to medication, but she also said she would have to evaluate its merits once she has tried out the card.

Manzo said he's pleased to offer a discount that can benefit not only the district's own part-time workers, but also families in the community.

"It doesn't cost us any money," he said. "It's a benefit to us and for some of our community."

Contact Sharon Noguchi at 408-271-3775.

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