Pennsylvania school districts could collectively save hundreds of millions of dollars annually by allowing the state to buy health coverage at bulk rates, according to a new state report.

But because individual school districts and teachers unions buy and negotiate health coverage separately, districts continue to waste money on fast-rising insurance premiums, and the potential savings are never realized.

The report, released this month by the bipartisan Legislative Budget and Finance Committee, says consolidating school health care benefits could have saved $585 million last year, without coverage changes, and could produce greater savings in coming years.

State Rep. Michael Diven, D-Brookline, has been pushing for the consolidation and said it should be a priority for the Legislature. He's drafting a bill.

"We could save in excess of $2,100 per employee," Diven said in a statement. "If we purchase health benefits at the state level as opposed to the individual districts, we can free up $835 million [by 2010] that could be used either to fund property tax reform or improve classroom performance."