Peranakan heritage food biz Tiap Tiap began selling on a Facebook group, now it’s a full-fledged shopfront

Most food businesses start with a business plan. Peranakan heritage food brand Tiap Tiap started with a pandan cake and friends who wouldn’t stop asking Sophia Yeow to cook for them.

Six years on, what began as a two-product home-based operation during Singapore’s circuit breaker has grown into a brick-and-mortar shopfront on East Coast Road in Joo Chiat. It’s a fitting location for the brand, rooted in the Peranakan heritage of the neighbourhood where Sophia grew up.

Vulcan Post spoke with Sophia, 55, and her daughter, Nicole Lian, 29, about how a small family business grew into a brick-and-mortar brand, and what it took to get there.

An accident that changed everything

Sophia launched Tiap Tiap in 2020 when an accident sent her to the hospital and prompted a reckoning with what she actually valued in life.

She had previously spent two decades in senior marketing and communications roles alongside running a child enrichment centre in Bukit Timah with a friend.

What was important to me was family. So I stepped away from everything.

Sophia Yeow

Sophia sold the enrichment business, gave six months’ notice at her corporate job, and spent time travelling with her parents and cooking for people she loved. 

With encouragement from her friend, Sophia began posting in a Facebook group called Singapore Home-cooked Delights. She started with just three products: a pandan chiffon cake, radish kueh, and yam kueh. She wasn’t sure anyone would buy.

To her surprise, strangers not only placed orders but also shared reviews in the group, helping word spread organically.

Soon, banks and other organisations looking to support home-based businesses during the pandemic began placing orders. At one point, Sophia was coordinating deliveries to 150 locations across Singapore over two days, juggling production and logistics on her own.

Today, Tiap Tiap has set up a 500 sq ft central kitchen in Bedok, while its production capacity has increased by 500% from its early pandemic days.

A mother-daughter business

In 2021, MediaCorp, having spotted her Instagram account where she shared food, travel and snippets of daily life, reached out to ask if she’d consider joining MasterChef Singapore.

Despite having no experience, she did it anyway, reaching the top 24. The experience led her to a subsequent cooking competition for home cooks, the Lee Kum Kee Supreme Chef Cooking Competition II, which Sophia won that same year.

The competitions gave Sophia greater visibility, but to her daughter, Nicole, her talent had never been in doubt.

Nicole grew up watching her mother set the family table differently from everyone else. Sophia would host themed dinners regularly. Indonesian night meant banana leaves and matching crockery; a trip to Athens meant Mediterranean food for a week, served on pieces Sophia had brought back specifically for the occasion. Besides the food, the whole experience surrounding the food was equally important to the family.

“As a kid growing up, I kind of knew there was something special in her cooking,” Nicole said.

So when Sophia started Tiap Tiap, Nicole naturally recommended the brand to friends and colleagues—she already believed in what her mother was making.

After COVID-19, Nicole noticed that while many home-based businesses fell away as restrictions eased, Tiap Tiap’s orders kept coming. This pushed Nicole to leave her corporate career in 2024 to join Tiap Tiap as Managing Director.

Nicole brought operational structure to what her mother had been running on instinct and craft by creating a system of orders that made organising and fulfilling orders simpler.

Sharing Peranakan heritage

By that point, Tiap Tiap had grown beyond cakes.

The brand also hosts Butterfly Table, a private dining experience held in Sophia’s home.

The weekly three-hour dinner combines Peranakan cuisine, storytelling and Sophia’s collection of antique crockery, giving guests a deeper appreciation of the culture behind the food.

Butterfly Table was born after a senior executive who had tasted Sophia’s cooking invited her to cater for Temasek and its board of directors for a month.

That opportunity led to her first private dining session at home—a Peranakan tok panjang for the current Singapore Ambassador to China, Peter Tan, who later told her it felt like coming home.

A measured expansion

Opening a physical store wasn’t an impulsive decision.

Before committing to a permanent retail space, Sophia and Nicole spent two years testing demand through pop-ups, allowing them to gauge customer interest and learn how to scale the business without taking on significant overhead.

Their first pop-up at Takashimaya in 2025 regularly sold out within 10 minutes of each restock, with customers queuing for the next batch of cakes to arrive from Tiap Tiap’s central kitchen.

At Boutiques Singapore, vendors from around the venue reserved cakes before the doors even opened, leaving little stock for the general public by 10AM.

The pop-ups confirmed what years of online orders had already suggested: demand for Tiap Tiap had outlasted the pandemic. Today, around 40% of its customers are repeat buyers who have supported the brand since its home-based days.

With that validation established, the team spent time at the central kitchen refining SOPs, building the team, and working out how to scale production reliably before making the retail commitment.

The shopfront at 374 East Coast Road eventually opened in late Jun 2026. Actual costs came in just under S$500,000—entirely self-funded, with no external investors.

Taking it one step at a time

Today, Tiap Tiap’s East Coast Road store operates as a takeaway concept, offering a range of sweet and savoury Peranakan fare.

The sweet treats are made on-site, while the savoury range and delivery orders continue to be prepared at the brand’s central kitchen in Bedok.

Although Sophia and Nicole still drop by the shop almost every day, Nicole’s immediate goal is to build the business to a point where it can operate without either of them being physically present.

After six years, neither mother nor daughter romanticises the leap from corporate life into entrepreneurship. Passion, Sophia said, is important—but it has to be matched with an understanding of what customers want.

Passion without appreciating what the market wants will eat you up very quickly.

Sophia Yeow

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• Find out more about Tiap Tiap here.
• Read other articles about Singaporean businesses here.

Featured Image Credit: Veronica C via Google Reviews, Tiap Tiap

• OpenAI reveals first branded hardware, the Codex Micro, a programmable macro pad built with keyboard maker Work Louder
• Codex Micro seems to be based on Work Louder’s Creator Micro 2’s layout, mapped to Codex coding-agent shortcuts
• The move reinforces OpenAI’s Codex offering as one of its mainstay areas of focus by allowing developers the ability to perform tasks or interact with AI faster

OpenAI’s first branded piece of hardware is not a long-anticipated consumer device it is building with ex-Apple design chief Jony Ive, but rather a programmable macro pad called the Codex Micro.

The keyboard, which consists entirely of macro keys designed to “supercharge people’s Codex usage,” according to an OpenAI spokesperson at the AI Engineer World’s Fair, is reportedly a collaboration between the iPhone creator and the custom macro pad creator Work Louder.

Simply head to any electronics section or do some Internet shopping, and you’ll see dozens of HDMI cables in a variety of prices, from a few dollars to a lot more. While they are almost alike, the differences between them can have an impact on how your new TV, gaming console or home theater works as it should. The key to selecting the best HDMI cable is not to spend extra money, but to ensure that the cable is suitable for the task at hand. This guide has made all the information available for your purchase, before you buy.

So what is an HDMI Cable?

HDMI or High-Definition Multimedia Interface is a video and audio interface that uses one cable to connect devices. Rather than having to use separate cables for picture and sound, a single HDMI cable will connect a source device such as a streaming box, gaming console or laptop to a display or receiver. The aim of a HDMI cable is not to sound or appear better, it’s to be able to reliably transport the signal you need.

This is where things get confusing for most buyers. HDMI cables aren’t rated by brand prestige or price they’re categorized by bandwidth and performance tier. It is the knowledge of these categories that really leads to a correct choice.

Types of HDMI Cables Explained

Cable with the Premium HDMI Cable Certified label has been tested for performance in accordance with the Premium High-Speed specifications, including the consistent performance of 4K and HDR. The Ultra High-Speed HDMI Cable Certified designation means the cable is tested for the complete 48Gbps that is necessary for the 8K resolution and advanced HDMI 2.1 features.

These certifications are important as the categories represent the maximum possible performance, but not all HDMI cables with the same category will deliver the same performance. Two cables can be marked as “Ultra High-Speed” on the packaging, but only one can have the official certificate indicating that the cable has been independently tested to meet the specification. While uncertified cables may not be necessarily unreliable, it does provide a reassuring level of certainty over a self-reported speed rating.

Every certified cable also contains a unique QR code or authentication feature which can be compared to the HDMI Licensing Administrator’s database to ensure that the cable is a genuine certified cable and not a mislabelled or fake version. This can be helpful when shopping on third party marketplaces, as there is a higher risk of mislabelling than if shopped directly from the retailer.

When you’re making an ordinary purchase, the speed category can be sufficient. For setups that have a high cable count or long cable runs, or those with expensive displays or high-end gaming consoles, opting for a specific certification label (not just a category name) is an extra measure of assurance that the cable will function as stated.

HDMI 2.1 vs. HDMI 2.0

For basic HDR, 4K resolutions at 60Hz are still the predominant standard and sufficient for conventional viewing.

With HDMI 2.1, 4K can be supported at 120Hz, 8K supported at 60Hz, Dynamic HDR, VRR and eARC for Dolby Atmos and similar audio formats.

A caution: An “HDMI 2.1” that’s not always meant to indicate that all of the features in the specification are being supported. Don’t assume the version number is sufficient; look for particular features.

Understanding Resolution and Refresh Rate

Resolution is the amount of pixels that are shown (1080p, 4K, 8K).

Refresh Rate: The number of times the image updates in a single second (HZ) – the higher the refresh rate the smoother the motion, particularly in gaming and sports.

Each cable requires sufficient bandwidth for both, consider how often you want to refresh, NOT how many megapixels you need.

The basics of ARC and eARC, and why they are important for audio.

With ARC, a single HDMI cable can deliver audio from TV to soundbar or receiver, eliminating the need for an audio cable.

The full uncompressed format, such as Dolby Atmos, is supported by eARC which is part of HDMI 2.1.

For audio equipment with eARC support, a High Speed or Ultra High Speed cable will provide true benefits to you.

Does Cable Length Affect Performance?

Yes, somewhat. On longer runs, signal degradation becomes more an issue, especially for high bandwidth 4K/8K signals. Standard length for living rooms is not a problem, but if installing in wall, check for a CL2 or CL3 rating, which indicates that the cable is rated for fire-safety applications in wall.

Do High-Quality HDMI Cables Make a Difference?

Typically, no; analog signals have a variety of subtle differences in quality, while digital signals either do or do not. If a cable has the bandwidth and certification requirements of your system, a low cost cable will do the same as a high cost cable. A better build quality will contribute to durability and protection on long runs, but for most connections, speed tier will be the more important factor than price.

A Quick Checklist Before You Buy

• Identify the maximum resolution and refresh rate your devices support.
• Check whether your setup needs HDMI 2.1 features like VRR or eARC.
• Pick a cable tier that matches those requirements  don’t over- or under-buy.
• Measure the distance needed and factor in in-wall rating if relevant.
• Focus on specifications, not price, when comparing cables.

Final Thoughts

Choosing the right HDMI cable comes down to understanding what your devices are capable of and matching that to the appropriate cable tier. A cable that meets your actual technical needs will deliver the same picture and sound quality as one costing several times more  the goal is compatibility, not extravagance. 

Apple has released a new firmware developer beta build for AirPods and AirPods Pro, preparing the personal audio devices for upcoming iOS 27 changes.

Apple periodically updates the firmware of its accessories and peripherals to account for new features being added to its operating systems. With iOS 27, macOS 27, and others undergoing testing, that same process also happens for firmware updates.

Tuesday’s new firmware, build 9A5314b, is for the AirPods 4, AirPods Pro 3, and AirPods Max 2. The firmware is only available to developers, not to the general public.

The firmware can be downloaded by using the AirPods with an Apple device running iOS 26 or later, iPadOS 26 or later, or macOS 26 or later. There is an option under the AirPods settings interface to enable beta firmware installation.

After enabling it, the update process happens automatically, while recharging and within range of the host device.

Audio changes

While Apple doesn’t state what the firmware is for, it is almost certainly going to enable Apple’s personal audio devices to work properly with changes in its 27-generation operating systems.

Those changes include a redesign of the AirPods settings submenu, including easy-to-read labels and groupings similar to other Settings elements.

A new customizable EQ is also on the way, found under Settings, AirPods, Audio and Routing, then Equalizer.

Apple Watch users will also be able to use Find My to track down a pair of missing AirPods Pro. Lastly, for AirPods Pro 3, the heart rate tracking will now sync with GymKit on supportive exercise equipment.

Photo credit: Australia Space Agency
Over the weekend, visitors wandering along Australia’s Forrest Beach, just north of Townsville, came across something pretty unusual. A host of shining, metallic spheres began washing up on the beach, attracting attention due to their unique shapes and fittings in an area of the coastline where little else happens. Six of these appeared on Friday, Saturday, and Sunday, each almost twice the size of a basketball.

The news of the discovery spread quickly throughout the normally calm community, and before long, Queensland officials and police had established 50-meter safety zones around each of the orbs to keep everyone safe. The men in the big, heavy suits entered and began cleaning up the debris, depositing it into large bins, while they searched for any rocket chemicals that could cause problems. Researchers eventually concluded that the spheres were safe to be around.

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The Australian Space Agency arrived to take a closer look, and their researchers compared the shape, material, and construction of these orbs to every spacecraft component they could find, quickly concluding that these were essentially pressure tanks holding fuel or gases under extreme pressure to help the rocket lift off the ground and into the atmosphere. The agency has already determined which launch it most likely came from, and they are working with other countries to validate the exact rocket and who shot it.

Apparently, these small orbs serve as pressure tanks, keeping the propellants or oxidizers at the proper pressure so that the engines can fire properly as the rocket takes off and zooms across space. They’re rather well protected by thick walls and strong metals that can withstand the heat of re-entry, while the lighter pieces blast away. Over the next two days, ocean currents brought them closer to the Queensland shore.

Similar fragments have already been found on the beach, including an Indian rocket component discovered in Western Australia in 2023, and parts from NASA’s Skylab space station landed in the same state in 1979. Even with all of the new launches taking place across the world, it is extremely rare to locate parts of re-entry gear on land since, let’s be honest, the majority of it breaks apart or splashes into the water. When it comes to dealing with space trash, Australia follows the usual international guidelines. The components that survive re-entry are kept by the country that launched the rocket, and the government must request their return.
[Source]

A look at the dwarf planet Pluto and Titan, Saturn’s largest moon, baffled astronomers after the James Webb Space Telescope (JWST) detected a chemical signature on their surfaces that does not match any recorded in spectroscopic databases. Researchers believe this is not an instrument error, but rather the signature of a compound whose identity remains a mystery—a mixture of materials never studied in a laboratory, or even a compound whose chemistry has not yet been characterized.

The finding appears in a study awaiting publication in the journal Astronomy & Astrophysics. Scientists identified an absorption band centered at 5.113 micrometers on both Titan and Pluto—two worlds separated by billions of kilometers and with very different physical conditions. The signal appeared in observations made with two different instruments on the JWST, leading the team to rule out the possibility that it was a calibration issue or some other type of technical error.

Pluto, the dwarf planet.

Heritage Images/Getty Images

The key to the discovery lies in a technique known as spectroscopy. Each element or molecule interacts with light in a unique way, absorbing certain wavelengths and leaving a characteristic pattern, like a fingerprint. For decades, scientists have compiled vast catalogs of these spectral signatures to identify compounds such as water, methane, carbon dioxide, or ammonia on planets and moons, as well as on other bodies outside the solar system.

In this case, the comparison yielded no convincing matches. Furthermore, at this stage, discovering a chemical signature that cannot be linked to a known compound is highly unusual. Therefore, figuring out what is happening on Titan and Pluto could become the new fundamental question for planetary science.

Researchers have already explored several possibilities. They examined laboratory spectra of ices and organic compounds that might exist on these worlds, including acetylene, benzene, ketene, and a family of molecules known as alenes. None of them exactly match the observed signature. The most likely explanation is that it’s from a known compound that exists in a physical state or mixture never before studied in the laboratory, although the authors do not rule out the possibility that the signal comes from a material whose chemistry has not yet been characterized.

The fact that the same signal appears in two such different places makes the mystery even more intriguing. Titan has an atmosphere rich in nitrogen and methane with a surface pressure of approximately 1.5 bar—higher than Earth’s—as well as rivers and lakes of liquid methane and a temperature of about –180 degrees Celsius (–292 Fahrenheit). Pluto, on the other hand, retains only a tenuous atmosphere of about 10 microbars (some 150,000 times less dense); has an ice-covered surface composed of nitrogen, methane, and carbon monoxide; and reaches temperatures close to –235 C (–391 Fahrenheit).

from the the-lobbyist-with-the-most-money-wins dept

Earlier this year I noted how the Trump FCC, at the direct request of wireless phone giants, destroyed popular phone unlocking rules that would have made it easier and cheaper to switch wireless carriers. The rules, applied via spectrum acquisition and merger conditions after decades of activism, required that Verizon unlock your phone within 60 days after purchase so you could easily switch to competitors.

Verizon, as I’ve long established, hates competition, and early last year immediately got to work lobbying the Trump administration to destroy the rules (falsely) claiming, without evidence, that the modest phone unlocking requirements were a boon to criminals and scammers. Since the rollback they’ve slowly been making unlocking more annoying, hoping a slowly boiled frog approach would keep it on the down low.

Enter one of Trump Corp’s other biggest constituents: Elon Musk and Space X.

I’ve already explained how the SpaceX IPO includes all sorts of fantastical claims related to Starlink (the only profitable company in the prospectus). Musk Corp insists Starlink will grow extremely quickly from 10 million current subscribers to 300 million. As I explain here that’s simply not happening, for a long list of reasons authoritarian pump and dumpers don’t actually care about.

But there’s an interesting wrinkle: to grow, Musk’s Starlink is hoping to increasingly tether Starlink to existing cellular providers. Starlink has increasingly partnered with companies like T-Mobile to extend connectivity for customers when they’re outside of the range of traditional towers.

So in a filing last month sent to the FCC, SpaceX joined a bunch of other smaller providers in pushing the FCC to adopt a new 180 day phone unlocking rule:

“…we write to urge the Commission to adopt a clear, uniform requirement that mobile devices be automatically unlocked within 180 days after activation. Automatic mobile device unlocking is essential to protecting consumer choice, promoting competition, and lowering costs in the mobile marketplace. Allowing a “lock period” of 180 days gives providers enough time to protect against the significant fraud concerns identified by the FCC and to ensure mobile devices are not exploited for criminal acts.”

So for one thing, the 180 day locked phone rule would be much worse (and far friendlier to giants like Verizon) than the 60 day lock window the Biden FCC proposed (but never actually implemented because our regulatory structures are too corrupted to function). You’d also have to doubt whether Brendan Carr, who largely supports big telecom positions across the board, would ever enforce them.

Another point of note is that the FCC’s claims that they had to destroy unlocking rules to “fight crime” are bullshit. They’ve provided zero hard evidence to support that idea. The destruction of unlocking rules was just blatant regulatory capture in service to Verizon lobbyists, using “crime” as flimsy justification.

Still, it’s interesting to see SpaceX suddenly on the other side of the table to Verizon in support of something that could, for once, actually help people.

Musk Corp appears to also have convinced three Republican Senators (Cynthia Lummis, John N. Kennedy, and Eric S. Schmitt) to send a letter to the FCC also supporting a new 180 day unlocking plan. You’ve also got people traditionally lined up against consumer rights — like former FCC Ajit Pai staffer Evan Swarztrauber — suddenly writing op-eds in favor of phone unlocking.

Swarztrauber crafts a bizarre alternate reality in his op-ed where Brendan Carr didn’t destroy popular unlocking rules, U.S. wireless is hyper cheap and competitive (despite his former boss Pai rubber stamping the Sprint-T-Mobile merger), and Republicans aren’t doing everything in their power to undermine internet access affordability. But he does make the correct point that arbitrary phone locks are anti-competitive:

“But mobile locking weakens all the pressure to reduce prices and improve service—and that’s by design. Reasonable waiting periods for phone unlocking to guard against fraud are fine—no one opposes that. But unlocking should otherwise be automatic once devices are paid off, and customers shouldn’t be forced to pay fees or jump through hoops to take their phones—their own property—to a competitor that could be saving them up to $1,000 annually.”

I think SpaceX simply wants to ensure its path into the cellular market expansion through partnership and acquisition, and knows unlocked phones lead to more competition. I think the sudden flood of Republican interest in phone unlocking comes primarily as a byproduct of SpaceX lobbying. I would not be surprised if SpaceX would consider a T-Mobile acquisition to grow very quickly and keep the valuation hype rolling down the road.

That said, I’d want to see the final, actual unlocking proposal before getting too excited. Republicans have historically opposed nearly every telecom consumer benefit policy that matters, their proposals uniformly include loopholes to ensure the biggest companies are well coddled, and it’s entirely possible that the finished proposal could have more than its share of bad ideas. Stay tuned.

Filed Under: brendan carr, cellular, consumers, fcc, phone unlocking, smartphones, telecom, unlocking, wireless

Companies: spacex

• Microsoft’s new Windows 11 recovery method is available for Windows Insiders
• Cloud Rebuild allows users to reinstall Windows 11 and necessary drivers via the cloud, without a USB drive
• The feature should begin rolling out to users on stable Windows 11 builds

Microsoft is continually making adjustments to its Windows 11 operating system through patches that address user pain points, and, fortunately, its latest move is certainly welcome.

As reported by Windows Central, Microsoft has implemented a new recovery method for Windows 11, known as Cloud Rebuild, which is available to Windows Insider users. Cloud Rebuild allows users to reinstall the operating system and drivers from the cloud without the need for a USB drive.

Public school districts appear to be at a near tipping point when it comes to the impact of healthcare costs on school budgets. Premiums are rising so rapidly that healthcare obligations are threatening the ability of districts to deliver critical educational programs, materials, and services, hire, pay, and provide benefits to educators and make improvements to facilities.

A new study conducted by The School Superintendents Association (AASA) and the Association of School Business Officials International (ASBO International) surveyed more than 750 public school district leaders in 42 states about the impact of healthcare costs on their budgets. Findings from the study, summarized in the report “Rising Premiums, Falling Opportunities: The Budgetary Impact of Healthcare Costs on School Districts,” reveal that 98% of district leaders report that rising healthcare costs are having a measurable impact on their budget.

To offset their healthcare obligations, 46% of school districts have modified employee benefit packages, 34% have delayed hiring staff, 31% have reduced or postponed spending on instructional materials and technology and 28% have cut back on the levels of insurance coverage they are able to offer.

These budget impacts are making it hard for schools and districts to remain competitive in recruiting and retaining a high-quality workforce. If not resolved, the problem will quickly become a “crisis,” if it isn’t already, say report authors Sasha Pudelski, director of advocacy at AASA, and Elleko Yost, director of advocacy and research at ASBO International.

How Did Things Get This Bad?

The reason things have reached this point is simple. During the 2025–26 fiscal year, nearly all districts (92%) spent up to 30% of their budget on employee insurance benefits. The leading causes of rising premium costs are increasing prescription drug costs (cited by 60% of survey respondents), more claims for expensive treatments (cited by 56%) and increased utilization of high-cost specialty drugs such as GLP-1s (cited by 56%).

“We are at the tipping point of a cost trend that has been occurring for decades,” explains Lisa Marceau, founder and president of Boston-based advisory firm Alpha Millennial Health and author of “Breaking the System: How Digital Innovators Shape the Future of Healthcare.”

The study findings are alarming, but they are not new, Marceau explains. Rather, they are an added burden on an already stressed system. She says there is sufficient research connecting strong education systems to the health of students, families and communities. When education systems are strained, programs are cut, and teacher benefits are reduced, the impact ripples not just to families and communities but to the future health status and earning potential of students.

Zahava Stadler, director of New America’s Education Funding Equity Initiative, agrees that the study findings reflect a very tough reality facing far too many school districts.

“We want district leaders to use their resources to support students and advance their learning. And we want to be able to hold decision-makers accountable for those spending choices,” Stadler says. “But as these numbers show, lots of school district dollars are spent before they even come in the door, on health benefits whose costs district leaders don’t control. How can we ask leaders to do better with their funding when so much spending is predetermined by factors that have nothing to do with educating kids?”

Taking a Clue From Business Sector Actions

A trend to watch is the growing number of private sector employers eliminating healthcare benefits entirely, something that was once unheard of, Marceau explains. The question for future public education contracts is whether rising healthcare costs will eventually force districts to reduce or eliminate healthcare benefits for educators to manage financial risk?

Right now, we’re seeing the first phase of this, where school boards are hitting the pause button on ongoing contracts and any new projects to assess what current expenditure are necessary and how to improve their investment strategies, explains David DeSchryver, senior vice president and co-director of research at Whiteboard Advisors, a research and policy firm in Washington, D.C.

There is another healthcare-cost factor set to squeeze education budgets soon, Stadler says. The big federal cuts to Medicaid are going to fall hard on states, leaving them to either fill huge new gaps in healthcare funding or let people lose access to care.

In some states, hundreds of thousands will lose their insurance if the state doesn’t step in and spend more on healthcare, Stadler says. That money will have to come from somewhere. States have to balance their budgets. The biggest pot of state spending outside healthcare is education, and he says there’s real reason to worry that states will freeze or cut education funding as the federal government dumps more healthcare costs onto them.

“Rising health care costs create pressure on school districts, but this is not a singular issue,” DeSchryver explains. “If it were only healthcare costs, we wouldn’t hear about it, but it’s not. It’s healthcare costs, plus operational costs, plus gas and transportation, plus salary-schedule pay raises, plus rising special education and clinical service needs, and on and on. All of these are magnified by flat or declining revenues.”

A Successful Funding Strategy in Montana

Pudelski and Yost are quick to point out that there is a lot that individual states can do to counter the healthcare cost challenge. They cite the example of Montana’s school healthcare transformation as “one of shifting from a state of crisis to a position of collective power.”

Montana faced a financial nightmare that would become the catalyst for change, Pudelski and Yost explain. The district in eastern Montana, then part of the Montana Unified School Trust, was hit with a staggering 72% insurance premium increase in a single year. It was the second-highest spike in the state, far exceeding the already painful average annual increase of 35%.

In 2023, a coalition of education groups in Montana helped draft HB 332, a bill designed to create a unified statewide health insurance trust, Pudelski and Yost explain. The results of this coalition building were transformative: 7 out of the state’s 8 largest districts joined the trust. A total of 180 districts opted in, bringing in more than 16,000 employees — far more than the 12,000 required.

This massive pool provided the bargaining power needed to negotiate more competitive rates with hospitals and clinics while effectively buffering against the risk of high-cost claims, Pudelski says.

Long-Term and Short-Term Steps Districts Can Take

Alleviating these pressures is part of a larger system of school funding challenges, explains Rachel White, associate professor of educational leadership and policy at the University of Texas at Austin and founder of The Superintendent Lab, an online research hub focused on the school district superintendency.

“For example, at the federal level, the government must fully fund the Individuals with Disabilities Act and Title I to free up local dollars that are currently paying for these unfunded mandates,” White says. “At the state level, legislatures need to continue to modernize funding formulas so they reflect the real rising costs of operating a school — including healthcare. Beyond the K-12 sector entirely, the nation has to have a real conversation about rising pharmaceutical costs.”

In the short term, education systems can explore alternative benefit models that provide employees with greater flexibility while reducing employer exposure to cost risks, Marceau says. One option becoming attractive is shifting from a defined benefit model, similar to a pension, to a defined contribution model, similar to a 401(k). There are emerging forms of this new model from individual coverage and health reimbursement, direct primary care plus catastrophic care and the shift to self-funded plans that permit more flexibility.

Public school systems are some of the largest health insurance purchasers, Marceau continues. States with large education systems and growing populations generate significant revenue for the health system. From this perspective, education systems can engage in negotiations that leverage this purchasing power.

“State agencies aren’t in a good position to really drive this forward,” DeSchryver explains. “It falls upon local districts, in regional collaboration and cooperatives, to identify best practices and share benchmarks and examples of what successful organizations look like.”

There are decades worth of research available about performance-based management, Drucker-like approaches to organizational efficiency, and outcomes-based contracting, DeSchryver says. It’s not new, but it’s something that schools now have to consider incorporating in their own unique way.