This article examines issues on health care costs and describes measures taken by public districts to reduce spending. As in most companies in America, health plan designs in public districts are being changed to reflect higher out-of-pocket costs, such as higher deductibles on visits to providers, hospital stays, and prescription drugs. District managers are asking teachers and other employees to bear more of the monthly premium costs. Others are opening their own clinics to treat employees. In at least one state--Ohio--several dozen districts have banded together in a health care consortium that cuts administrative costs for all of them. Such savings on health benefits allow districts to boost teacher salaries, a key issue in union negotiations. Some districts have also cut costs by encouraging veteran teachers with higher salaries to take early retirement, to be replaced by younger teachers at lower salary levels. (Contains 4 online resources.)