Transcripts For SFGTV Health Service Board 51216 20160517

Approval with possible modifications of the meeting set forth below, regular meeting of april 14, tweplt 16. I move to approve. Theres been a motion to approve the minutes. Second. And its been properly seconded. Any comments from any of the commissioners . Is there any Public Comment . Seeing no Public Comment, we are now ready to vote. All those in favor signify by saying aye. All those opposed . Motion is carried unanimously. Item 2, general Public Comment on matters within the boards jurisdiction not appearing on todays agenda. Is there any general Public Comment on matters not i stress not appearing on the agenda . Seeing no Public Comment, we will now proceed. I am going to claim the privilege of the chair and move the president s report from its regular order to now. There are a couple things that i want to say and i thought that would be the appropriate forum and if i waited until after the next regular agenda item, they would be superfluous. For some of you they may be superfluous anyway so well go from there. First and foremost, the rates and benefits process is one of the most important things this board undertakes each year under its authority with the city charter. And it is my view, and i think its somewhat shared by all the members of this commission, that we have a bounden duty to look at a wide range of issues each year. To underscore that fact, in november of this year we conducted an Educational Forum and should i be reelected as board president it would be my intent to convene such a session again during the coming fall. That effort was to try to provide a back drop for some of the issues that this board would actively consider and some of it was just merely information, things for us to be aware of in terms of the health care field. While some of the issues that we from time to time may raise are worrysome and may be even troubling to our members, it is our hope at the end of the day, once we have considered them and acted upon them, that there will be sufficient time for people to respond or act or to state their views both here and through our web site. So its with that in mind today that we are undertaking an action item, action item 3, and a lot of people have inquiried me, i have gotten email petitions 10 at a time as members of this board we have and thats fine. We have had some direct board emails that have come in regarding this particular agenda item, as we did with the great relativity discussion last night. And i think all of that is a useful exchange of views and one that we continue to solicit on behalf of our members and we will always give active and concerned and focused attention to those expressions via email or otherwise. So, with that in mind, as we undertake this item today, i would hope that people will listen with an open mind and open thinking, whether it is this topic or any other that might stir such controversy and attendance. Sometimes this looks like an echo chamber. Today im glad to see there are many interested parties that are here and that will hopefully engage and enlighten us as we go forward considering this item. I will at this time exercise my discretion and request that as we get to Public Comment on this item that we will restrict Public Comment to two minutes and my encouragement is that if someone has expressed views that are absolutely coincidentally the same as yours that you would at least say, i agree and then relinquish any further time. That is totally, however, up to you. I am not here to in any way damper free speech. We have enough of that going on in other arenas nationally at this point in time. So if indeed you feel you need to make a comment or 2r go to 3 and we will ask you to close your comments which is our standing protocol here. I would also ask that you give everyone the courtesy that you would expect during your time at the microphone to hear their thoughts and expression and i will ask for your full cooperation on that point as well. So, with that, id like to also thank the work of our actuary for not only bringing this work but for the balance of the items that well be considering in this week and next and also to the Health Services system staff led by our director Catherine Dodd this is a mighty piece of work every year to get through all this stuff. I get involved in meetings that are out of the cycle of committees or the board cycle to meet with various Health Care Providers during the course of this activity and its an important thing that we do that and other commissioners also attend such meetings. But to get us to this point where we can see the light at the end of the tunnel today and next month has baepb bit of a herculean effort and id like to again thank the staff for undertaking this work with such diligence and care on behalf of the members of the system. With that i will close out my president s report and move to item 3. Item 3, action item, consider approval of Sutter Health plus proposed rates and premium contributions for actives and early retirees for 2017 plan year. Aon hewitt. Good afternoon, aon hewitt, actuary. I am pleased to be in front of you to present the results of our observations as to the proposal submitted to us by Sutter Health plan for the potential engagement with the Health Services board in the city and county of San Francisco and other related parties as being able to provide Health Benefits. They came before the board in february and asked for the ability to submit this and they have submitted it and we have reviewed it as best we can with the information provided to date. What you have before you in your packet is our observation. First of all they submitted 3 plans. The way they gave the submission was each of these plans was a comparison plan to the 3 plans presently in place with kaiser, blue shield and city planner under the uhd guidance. So theres quite a bit of information that is simply a comparison of benefits. At this point in time i dont think its necessary for me to go through any of these comparisons to point out whether the benefit is good or bad relative to the benefits presented. We have a presentation, so if we could. Sfgov, thank you. Would you like me to pause . With that being said, in the packet all the way through to page 17, i think it is, is all of these comparisons. Excuse me for that, i dont have a table but id like us to turn over to page 13. Yes, director dodd i just wanted to add what you have done is compare first with blue shield and then with kaiser and where there are differences you have highlighted in the previous pages. Okay, yes. If people twoopblt see where things are different, all they have to do is look at the highlights. Thank you for the clarification, dr. Dodd when you do this exercise and a new plan comes in and either replaces a plan or is added to a plan, you look at what does this mean because people have to elect into this plan, potentially eliminate a plan, the first exercise we did because sutter is part of the now aco vendor with the blue shield, they are a contracted vendor with blue shield, which is a large portion of the population insured through blue shield. And aco. Accountable care organization. They are presently there as sutter. The first thing we did on page 13 was say how many people are presently associated or affiliated with sutter of the overall active early retiree population . So right now if you turn to that page we have 23,182 people that would be associated with sutters medical group, meaning they are connected to doctors, not to hospitals but to doctors. The majority of these are with brown and toler. The remaining people are not associated with sutter doctors or people part of the Sutter Health plan, and thats 13,442 people. So what does that mean to everybody in this room . If this were to happen we have to figure out if we put the plan in place if we chose to put the plan in place, what are we going to do for the 13,442 people . Would we just put the plan on top of blue shield, say blue shield isnt interested any more, theres a lot of issues how to balance the premium situation once they put in their premiums, who elects into this particular pot, et cetera, et cetera. So to distill this down to a quantifiable number that we must concern ourselves with is that we need to be very careful about disruption. Everybody is assigned to a particular doctor under the present benefit structure they have with blue shield so a major concern is we got to be very careful with what we do about the people that wouldnt either stay in sutter or go to sutter if this plan were to be adopted, one or all, wherever we decided to do this at this point in time. So ill stop there and want to make sure thats understood. Yes, sir. Commissioner follansbee. If Sutter Health plus plan were to go through, would sutter withdraw from the brown and tolen aco so those members would have to make sure their providers were now in the sutter provider network, Foundation Network . Im confused. So to answer that question, i would say i dont explicitly know that answer at this time, but under the Sutter Health plan they are part of that organization. They are part of which organization . Sutters. They are a doctor group. I cant say they would dissolve would you like to say . Director, the inaudible Health Physicians brown and tolen are sponsored by blue shield. I think that the success of the, not over the top success but success of brown and tolen over the past 5 years, they would probably continue those activities with sutter, whether or not sutter and brown and tolen called themselves an aco or whether they just did managed care in the more efficient way that they have been doing as an aco, but they would not be a blue shield sponsored aco may i ask in the audience if either blue shield or sutd err would like to respond to that particular question . Are there representatives of blue shield here . If there are, please stand. Are there representatives of sutter here . Please stand. If youd come to the front, there may be subsequent questions on this topic and that way you wont have to go back and forth. Good afternoon, paul brown, im with blue shield california, account manager. Blue shield for 5 years now has been a partner with both aco collaborations, brown and tolen and the other with dignity and ucsf there are two separate collaborations and we collectively individually those partnerships meet quarterly to look at clinical interventions and targets every year and try to achieve those targets. If blue shield if Sutter Health plus were to be the health plan we clearly would not be a party to that aco collaboration. Whether that continues in the configure with sutter, i would ask sutter to comment on that. Thank you very much, sir. Yes, please identify yourself. Rob cornorelli, Sutter Health. As neil alluded to, Sutter Health contracted with brupb and tolen as an organization we use for our members in the bay area. We have a contractual relationship with them whereby the members in the city and county of San Francisco would be able to provide services, in addition to the providers enumerated. So theres a question, then, how we would go forward with our, quote, aca as it currently is constituted. Absolutely. Thats the foundational point to be made here. Yes, yes, sir, thats exactly the foundational point. Well said. Also, relative to those 13,000 people how much money is being engaged in the nonsutter operations, be it hospitals or medical groups. So slides 15, 16 and 17 display for you on an in patient and outpatient basis what kind of dollars are we talking about that we would have to take care of outside of the sutter proposal. So its quite a bit of money. So whats the relevance of this . What do you mean by quite a bit of money . I know its there but would you say it, please . If you look at page 17, for instance, we have the outpatient data page 15. Well start with the inpatient data. On page 15, the inpatient data, all of these are inpatient claims costs that are presently being funded by the Health Service system through the flex funded operation that we presently have with blue shield. These are all part of claims that were generated for the 13,442 people. And the total is . This total is 26,480,000, so its 26 million. So that being the case, if we were to say okay, here is the sutter piece, now we have this piece, now we would have to create first a network and a premium relative to the network to put beside sutter, if we chose to do this, then wed have to deal with these kinds of exposures. What does that lead your actuary to worry about, since i am your actuary, that that rate might be extremely high compared to what sutters rate is. So now we have a bifurcation, we have a low rate and a much higher rate. So you have 13,000 people that are blended that make this equitable and accessible to all 36,000 people, we split it up, this is low, this is high, and all of a sudden we have a problem where to do this the way our mous are written, they would have potentially large contributions. That is another concern about this situation at the present time. How do we deal with this in a constructive and financially sound way . Did i clarify that . Thank you. So thats what the intent of all of that is. Then i wanted to show you, because its our responsibility as an outside party to look at the rates were provided by the Sutter Health plus plan for the 3 plans that they offered and we went and compared all these rates to the present blue shield rate. So we have a rate card for the 93 algorithm for the mou, we have it for the 19683. So we went through all of the plans, we did this as a responsible, ipld party, present all the differences and as you review this material you will see that all the numbers provided by sutter are less than the present combined sutternonsutter numbers that are part of the funding requirement for the present flex funded plan under blue shield. So, yes, the numbers are lower. Thats correct. Does that indicate we should be extremely excited about this at this point . My answer to you clearly as an independent actuary, not yet, because i dont know what the overall cost will be, how to bill that in terms of how it relates to how we do our health care assessments and our rate cards presently under our structure. I dont want to sets a rate. I dont want one thats 800 bucks and one thats 600 bucks. I have to be accountable to all the people and right now we have one number that we charge. We cant have two numbers that we charge and we cant decide that at one Board Meeting. Fair and square . Thats my opinion. We have engaged you. I have to look out for everybody and i cant have those people not happy about what we did to save some money on one aspect of the whole thing. So i dont belabor this point, i looked at this, im excited to do, as you said, sir, and bring opportunities. I think it is a very wonderful thing and i feel very fortunate to be able to present this as a possible opportunity for doing something constructive for the Health Care Costs that allows everybody to have a rich set of benefits at a reasonable price so the promise and legacy of affording health care to all the members of this body, all the responsible people that take care of us, fire and police, i think thats great. But ive looked over this in the period of time we have had this information and i want to turn this to my recommendation. I want to say its not just my recommendation, all the people who help me construct this, the people at hsf, the people back at my shop, they helped me put these terms together so i can present this to you. I dont do this much but i want to read pretty much the whole thing if thats all right. Please do. Aon recognizes the commitment by Sutter Health plus to bring Affordable Health care to the membership served by hsf, which is exemplified by the level of the premium rate submission. Thats a credit. And a commitment of a two year premium rate guarantee. We got one of those from kaiser before this, so this is not unusual, especially what happens in new submissions for new clients. However, it is the opinion of the actuary that serves you, that would be me that it is premature to engage this proposal for 2017 for the following reasons. I list my reasons. First one is the one i spoke to earlier, 13,000 people. Were not quite sure how to do that. The largest proportion of the population would be with brown and tolen as a proxy for what is happening now brown and tolen has an aco claims target. For everyone in this room they are asked to hit this target. If they go below this claims target as part of being a structure where they have a very clear vertical relationship between themselves and the cpmc hospital facility, if they do this, they gain saving dollars. This is part of the apo structure. Not only do we ask you to do this to bring down submissions, to follow the claims cost, we also say we will create a claims target just as they have done in capiation. Theres been difficulties difficulties pars4 attaining that. I feel better about the longterm solvency of a submission if it is now being exemplified in the current spin rates. If this is to be brought back because i am recommending the table that we have hit those numbers and therefore i can say because my job, for everybody whos never been here, my job is to look at the rate, is it right, is it billed right, is it done the way they say it is or are we going to run into a problem . I have to be able to sign off. Thats why you hire people like myself. The other thing i said when i permly personally went through the fact theres all these dollars, is the fact we have to find somebody if we were to ever choose to do this that can sit beside this plan for the remaining people and be able to create a premium and a plan that is efficient and effective for those people. And i have to say in all sincerity and honesty there are no vendors im just going to cut to the chase that are ready to do that yet they need time to build their comparable plan if they choose to build it and if they did do that and we liked this for that portion of the population and they did something constructive for that portion of the population, then we would have an overall cost structure that is more integrated for those people they serve and we get numbers hopefully cop prabl to what we see from kaiser. So this could in the longterm create competition, a retooling of the environment the way it is now and that would be very positive. With that, i say thank you for letting me go over on a cursory level my observations of this and i would hope that we could table this and potentially however your rules of engagement are, sir, to bring this back in 2017. In the meantime i would hope that all parties would collectively together do all they can to bring all this Great Health Care to all the parties. So thats as much as i probably need to say. All right, thank you. I will ask are there questions from any members of the board . Mr. Lim. Thank you. So when you say the substance for the 13,000 members, i have an assumption those members will drop out from blue shield that they wouldnt have a contract with blue shield any more . Thats why you have 13,000 members . Im saying they are presently not associated with a sutter doctor. So when it comes time, they are presently either with Hill Physicians or they are with different doctors where they are not associated if we offer the sutter plan they only have their doctors and brown and tolen in their program. So if they dont want to go and change doctors, they want to stay with their doctors, we have to have a program for 13,000 members. And we dont necessarily have an efficient, well thoughtout plan yet. That is sutter or blue shield. Yeah, blue shield, any of the vendors, yeah, we have to have blue shield afford us this plan, will any vendor or any consortium analogous to sutter, there could be other operations in the works now to say we want to build our own Narrow Network in the city thats not connected to sutter, its ours, ucsf, it could be anybody. I cant answer for who is doing what and where they are in that thing, but im saying i know those kind of proposals are in the works and when and if they are developed and we like this and this then were better off to say well offer both of them. But were not there yet. Were just not there. Commissioner follansbee. Just to make sure im clear, the issues about inpatient and outpatient procedures and all is very clear because basically those 13,000 would lose access to those facilities that were not sutter facilities under this proposal. Is that. They would not lose access. They would have access, but they would have to pay more. At this point in time. We cant even determine, im just being real honest because i dont know the answer, it would take a lot of assumptions as to who elects in and who elects out. I would prefer we table this and then have another program that says, guess what, were in this too. To be real kind of vague, dont mean to be vague but thats my desire and i know it could be possible. Yes, commissioner sass. Although we didnt go through the earlier pages, i was looking at page 3. Yes. And noticing that under blue shield if you are admitted to a hospital theres a 200 copay per admission. If you are admitted under the Sutter Health plan, its 500 a day for up to 5 days. What that says is a person who is, needs inpatient care is exposed to a 2500 payment for a 5 day stay compared to a 200 payment under the blue shield plan. So while the rates are lower for the employees and the city as well, they are lower rates which transmit to a lower premium, it seems that for people who actually use the system, a higher copay, also a higher copay on Skilled Nursing, nothing for blue shield, 250 for 5 days, another 1250 paid, those individuals that wind up needing hospitalization or needing followup Skilled Nursing could be looking at 6,200 in addition annually that they are above and beyond whatever their premiums are. While i appreciate that premiums appear to be lower, its the cost of health care for that population isnt necessarily lower, it seems skewed toward people that dont use the system. Its called cost shifting, at its best. Thank you for pointing that out. At this point. Are there other questions from the commissioners . None. You may have a seat, thank you. Oh, can i ask. Yes, you may. Im sorry, i had one other. That is also on page 4. Okay. We looked at acupuncture and match rider. What is a match rider . Ill answer that. We have a rider in our contract with blue shield and described acupuncture and chiropractic benefit. So they would match that rider. Okay. Any other all right, thank you. The staff recommendation is that the, this proposal be tabled and i would like to, that is the recommendation of the actuary that the item be tabled. I think that that is an inaccurate way of requesting the action of this board. I think you want to defer or postpone action be on this item until the 2018 cycle, rather than table it. Yes. All right. Parliamentarian. Pardon . I did, before the meeting. So were not tabling it, you are recommending that we postpone action on this until we go into the 2018 rates and benefits deliberations. Is that correct . Yes. All right, so with that, yes. So just to make sure im clear on that issue, i guess would it be better to i mean, if we did that, we cant assume that sutter will come back with the same contract. They might come back in a year with a different contract. So it seems like we should either accept or reject with a recommendation that we revisit this in the next cycle with a new contract but i dont think we can table something i dont think we should be tabling something asking them to come back with the same contract. I understand and thats why i wanted to clarify the motion and our action. All right, thats whats before us. I am going to call at this point for Public Comment. Is there a motion . No, not yet. We have a recommendation. Do we want to put that in the form of a motion . Is there a motion from the board . I move we dont consider the Sutter Health plus plan for the 2017 calendar year. Its been moved that we do not consider the Sutter Health proposal for the 2017 plan year. Plan year, thank you. Is there anything that you want to add to that motion . Is there a second . Second. Okay, been properly moved and seconded. Are there any questions from the board . Just wanted to suggest you might want to ask sutter if they want to present as well. Well defer Public Comment. We have a motion, we now will ask the sutter representative do you have anything that you wish to add . Good afternoon again, everybody. So its the intention of Sutter Health to bring before you a longterm proposal for the city and county of San Francisco employees. In addition to the two Year Agreement we have provided, we also provided a third year cap as well. So we tried to demonstrate a longterm commitment to the city and county, being part of this community for well over a hundred years we think its really important for us to be part of the Employee Benefits package for city and county employees as well. Theres all kinds of change happening in the Employee Benefits space. We feel like as sutter has developed a Provider Sponsored Health plan, this is really the next generation where health care is going. We feel like we can offer a strong alternative to what you have today and i just want to be clear that when we proposed this originally to arq our intention was not to replace any of your current carriers. There are a large number of employers such as yourself that are introducing competition in the market place. Its the door, i hope. We want to make sure that we convey to the board that Sutter Health is very interested in being part of your Employee Benefit offering Going Forward in addition to some of the solutions that you have now. All right, thank you for your comment. At this time we will entertain Public Comment. I would ask that each person restrict themselves to two minutes and if you fully concur with the pred says err person just say i agree and that way we can get through this. We have to be out of this room, we have to be out of this room by 4. 30 this afternoon, so thats why were trying to move along. President scott, i will be. And you are. Brief. My name is robert muscat and i am executive director of local 21 but also serve as the chair of the pec this sounds like its headed in the right direction so i dont want to say anything to upset the course that seems to be set here. The Public Employee committee you asked about in one of our previous meetings and i explained to you that it functions like an employer council, in San Francisco we represent all the unions that represent all the 25,000 active City Employees, including the management people that are in mea and it really helps a lot in tackling big problems as we tackled in the past, including the retirement problems that we worked with the Mayors Office on, retiree health, which we worked with supervisor farrell on, migration and wellness which we worked with your staff on, that really allows 25 different unions to come together and do things that are not only sensible for the people we represent but also sensible for the city, the people that live here and count on city services. And all of us are united in asking you to not move forward with the sutter plan. There are certain conditions that i think all of us require as people that believe in San Francisco and love San Francisco and love the ways of San Francisco and sutter is a very antiunion company and were opposed to doing any additional business with them. We were here very recently asking you to join in the court suit that the united food and commercial workers has against sutter, so the last thing we would want you to do is to find a way to do more business with this antiunion company. We should, to the extent we can, distance ourselves from them and appreciate your consideration. Thank you. Additional Public Comment . Commissioners, my name is ed kinchly, im here representing siu which represents about half the active employees in the city and im here to tell you seiu 1021 be is opposed to a sutter hmo plan being approved by your body here today. So were in support of the motion as we understand it. Its clear to us what sutter is attempting to do. They want to increase their market share, increase their power so that they can increase prices and their revenue, not decrease prices. Our goal, obviously, is that members get health care and that the city is able to provide health care for less money, not for more. We all know hospital charges are often convoluted, not transparent, theres little price regulation. A couple years ago in the New York Times made a point of highlighting this in a front page article, the example they gave was of sutters ctmc here in San Francisco and they wrote that cpmc, the states largest private nonprofit hospital, earns the highest net income in california. Prices for many of the procedures at this San Francisco hospital are among the top 20 percent in the country. Sutter is a leader, a pioneer in figuring out how to amass market power to raise powers and decrease competition, said glen melnik, a professor of Health Economic at the university of southern california. You all know that united food and commercial workers has a pending lawsuit for trust violation against sutter. We agree with the previous speaker about what he said about that. Thank you very much. Thank you. Additional Public Comment . Hi, my name is Teresa Rutherford and i am with seiu 1021 and i am opposed to sutter hmo following up on my last speakers note, we do support competition but we do not support predatory players. Sutter has a Bad Reputation for using anticompetitive tactics to drive out competitors. Its known for jacking up its rates and its known for overcharging its members. This is a recipe for disaster. We do not need a company like this prospering or moving any further. It needs to check itself so we do not support sutter becoming a hmo, not the way its operating right now. Thank you. Thank you. Thank you for your comment. Additional Public Comment . My name is robin ho and i am the member of local 21, also a city employee. I have worked for the city for almost 17 years. Im here today to encourage you to vote against the Sutter Health hmo because sutter is known to be antiunion in the past. I am proud local 21 member, union member. I support whatever my Union Decision is, so please vote no. Thank you and i appreciate it. Thank you for your comment. Is there other Public Comment . Hello, members of the board, my name is Larry Griffin and im a member of local 21. I have worked for the city for about 21 years. Im here today to encourage you to vote against the sutter hmo normally we support competition in the Health Care Market, but sutter is such a bad choice we need to proat the time our members from this predatory company. If they come into our market we will have no protection against predatory rate hikes. San Francisco City and county workers already have many options for our health care. We dont need a new plan if it doesnt benefit us in the longterm. Thank you very much. Thank you for your comment. Is there additional comment from the public . Hello, my name is carmen guererra, a local 21 member and also at largement large president. Most of our members work in this building and the surrounding buildings in the area. First of all the city has many choices on the hmos as far as what it has to offer to the city workers and this city should not support or contract with Sutter Health hmo due to their antiunion activities towards its members and workers of its own facilities. And in the past they have had very Bad Reputation how they deal with Sutter Health workers. I happen to have a sister that was a nurse and she was treated very badly by this, you know, by the hmo when she was dealing with them. And the other thing is the city should not award Sutter Health hmo or do any business with them just because of the Bad Reputation and also what you heard from other Union Members here. This hmo will not, i believe will not help me or any of our city workers, our members or even retirees so i recommend that you vote no for Sutter Health. Thank you. Thank you for your comment. Is there other Public Comment . Good afternoon, mr. Chairman, memorandum bers of the board, thank you for allowing me the opportunity to speak here today. And you are . My name is chris moyer, i directly represent 1,000 rank and file pile drivers and 30,000 carpenters within northern california, some of whom work directly for the port and the city and county of San Francisco. I rise today on behalf of my brothers and sister to express our concern regarding sutters Business Practices as well as their unfavorable treatment of labor, the same labor that built this amazing city and has a proud tradition here. Given the history of partnership and support of labor in this town, my fellow pile drivers, carpenters and i would respectfully ask you to refrain from exposing us to sutter hmo in concurrence with the other trades here today. Is there other Public Comment . Seeing no other public oh, sorry. Good afternoon, my name is jeff deritz, im a representative of uapd, the union that represents physicians and dentists that work for the city. As a member of the uapd it wont surprise you that we oppose sutter hmo it seems defering is the direction the board is heading in, so i will look forward to next year and take the opportunity then to go into specific details why the board should outright reject sutter at that time. Thank you for your comments. Is there other Public Comment . Good afternoon, commissioners, claire swansky representing rscc, west bay retirees and a newly ifpe group 21 group of retirees. We are very concerned about this proposal and you heard from our active brothers and sisters, a lot of what they havent been saying also is that this is not an affordable option. If you look at those opportunities to spend 500 a day, up to 5 days for hospitalization where today a hospital admission is either 100 or 200 copay, you can see this is horrible cost shifting. Also in this proposal i see nothing that refers to the opportunity to provide coverage for medicare employees retirees. Which sat on this board i recall we couldnt really take a look at any proposal that didnt address all of our members in the system. Im not even going to talk to you about tuolome and hetch hetchy because they are not mentioned here but i will mention it. I believe this is not a complete submission. Whether or not you put it forward for another year i dont think its going to change very much. I think that it would be in sutters best interests for them to talk to blue shield and United Health care and to negotiate lower rates so that we can all benefit. If they really want to be in this game and they really want to play well with others, they need to be talking about lowering their rates so that their facilities and their providers are much more affordable and that they really are doing whats best for all members involved. I would hope that in the future we only take a look at those kinds of plans that best serve our members and provide affordable coverage, especially for retirees who are on very fixed incomes. This is a significant problem. Thank you very much. Thank you for your comment. Is there other Public Comment . My name is comaway and i am the business agent of the Executives Organization and i would like to go on record for mea that we do stand with labor and we are opposed to the city doing business with sutter. Thank you for your comment. Is there other Public Comment . Dennis kruger, active and retired fire fighters. We concur with all the previous speakers. Thank you very much for your comment and the brevity of them, dennis. Yes. Ladies and gentlemen of the board, i am irma black, local 21, my face is becoming very familiar to you through previous meetings. I want to bring up what my brothers and sisters have said and that is the overall cost. A significant amount of our city budget and its in the interest of not just the unions, whose members are going to be paying these premiums but also in the interest of the taxpayers to choose companies that are affordable because if we see our Overall Health care spike, that means there is less minimum available to do all the other important things that need to be done both in the Health Care System and in the rest of our city and im really concerned we are bringing in a company that has such a terrible track record of not only overcharging patients but also overcharging the Insurance Companies that they have worked with and the cities who then pay that insurance bill. So i know that the recommendation right now is that this be tabled and i really strongly urge you to outright reject this plan. The reality is that we are not a small town in kansas with few options. There are other large insurers that could be courted and i have full faith in hsf and the actuaries you have chosen to find better plans. I dont think that sutter is going to be a good option this year, i dont think they are going to be a good option next year, i dont think they will be a good option after that because they have a long record of a Company Whose main goal is profit. I hope you will take those financials into consideration and please vote against this plan. Thank you for your comment. Is there other Public Comment . My name is Herbert Weiner and i strongly recommend surgical excision of the sutter plan. Basically when i think of hmos always it resonates as homicidal medical offenses and this is surely one of them. Its actually a malignant growth on the other health plan. And i patronize cpmc, most of my doctors are from cpmc they are very good doctors. Unfortunately when i think of cpmc, i think of criminal professionals making cash. I strongly support the rejection of the Sutter Health plan and it should not be tabled, it should be voted down unanimously. Thank you. Thank you for your comment. Any other Public Comment . Seeing we are now ready to vote id like to have our secretary restate the motion so we are absolutely clear about what we are doing. The motion is to not consider the sutter proposal in the 2017 plan year. Are we ready to vote . All those in favor of not considering sutters Health Proposal in the 2017 plan year, signify by saying by name a roll call vote. President scott, no. Vice president lim, yes. Supervisor farrell, yes. Commissioner follansbee, yes. Commissioner breslin, yes. The motion carries 51, 5 yeses, one no. Id like to offer the following motion, that we not consider the Sutter Health plan in 2017 or in 2018, any proposals from sutter applause . So this is a new motion . Thats a new motion. Theres a second . Second. Its been properly moved and seconded that we not consider a Sutter Health proposal in the year 2017 or in 2018. Is there any comment from the board . I just dont see any reason for the motion because you dont know whats going to happen in 2018. The motion, i mean its dead for now. Well, thats the point. I dont know that i want to be in a position next year to actively look at this. The actuary has presented a report today, in my view, that has so many variables in them none of them are going to be resolved in the next 12 months. There would have to be an earthquake in the Health Care Market to get some of this rationalized and i dont think thats going to happen. So if were really concerned about the impact of a plan on our membership with this level of disruption i dont think thats going to get resolved in a year. And i think that we need to be looking at Something Else and thats why im putting forward the motion. I think that time needs to play out in the mashet place, it needs to play out with our aco and the other factors that we know about, rather than this guessing game a year from now that something miraculously is going to happen. I dont believe so. So thats why im putting forward the motion. Commissioner follansbee. I appreciate your predictive abilities. I think the discussion was very interesting and very informative and although you may be right, i also think it puts everyone on notice. By postponing two years it gives whatever entity out there maybe present today or not, two years to sort of pretend like something will happen two years later. I think a lot will happen. I dont know what that will look like, i think we have president ial candidates who are talking about universal health care, et cetera. So i would maybe not quite so adamant about what may be available in 2018. Commissioner sass. I think obviously there are several issues here in my view currently, the disruption obviously is one, the uncertainty regarding those numbers would not be part of inaudible how we would serve them. There is also an issue of whether this really is expensive given those people who require inpatient care face higher deductibles and therefore higher copays and could wind up paying significantly more. The third issue for me is the impact of continuing to struggle or blue shield continuing to struggle trying to come to terms with Sutter Health to keep the blue shield premiums reasonable. I think theres a tremendous amount of pressures that will be faced whether we do this or not. Should Hill Physicians come forward with a Narrow Network that is also less expensive next year and if sutter were to offer the price they are offering next year, i think that would introduce a more interesting kind of proposition. I wouldnt want to be excluded from considering Something Like that if that were to happen. The unfortunate problem with blue shield is that they are, they need to enter into contracts with these Hospital Systems and these Hospital Systems can take very large profits from those contracts based on the pricing that they agree or not agree to. Theres a problem currently with requirements for binding arbitration that are still at issue between Sutter Health and other insurers. So i would rather keep the door open for considering any alternative to our current plan should that come to pass a year from now, if its in the interest of all of our members. Other comments from Board Members . Commissioner breslin i thought the motion didnt say anything about considering them next year, just as far as im concerned over and you can consider anything you wanted to next year. I just dont see any reason for this other motion. Commissioner lim. The board could have a discussion, but i have a question from director dodd, our contract with sutter with blue shield uhc and kaiser would last until what year . We currently will be entering into a new one Year Contract with kaiser, a new one Year Contract with blue shield and a new one Year Contract with uhc in. In 2017 if you approve those contracts today. For one year. Then after in 2018 will we reopen all the contracts . During 2017. I mean 2018. Right, but during 2017 well be working to look at whats available and whats offered and that will come before this board in 2018 and could be a Narrow Network without sutter, it could be a Narrow Network without sutter and sutter, it could be either sponsored by blue shield or sponsored by a Regional Health organization, theres a new one called canopy. Theres any number of things that could be presented to you in 2017 in the beginning of 2018. Which means any other hmo like etna to come to this board and thats their proposal. If you instructed us to put out an rfp for an hmo, we could do an rfp and ask for that with or without certain medical groups and certain hospitals. In the past when weve done 3 rfps since ive been here, none of the major hmos have been willing to offer alongside so if you have the sutter hmo, no other thes hmo is going to want to offer an hmo alongside it because they cant predict where the migration is. We had the specific care debacle and we had specific care in health net and risks shifted from one population to another and we ended up 30 million in debt. We have erred cautiously to agree to offer inaudible . Any other board comments . Any Public Comment . Seeing no Public Comment we are now ready to vote. Can you restate the motion . Restate the motion. Secretary . The motion is to not consider the sutter proposal in plan year 2017 or 2018. All those in favor signify by saying so through a roll call vote. President scott, no yes. Yes laughter yes. Thank you. Vice president lim, no. Commissioner breslin, no. Supervisor farrell, no. Commissioner follansbee, no. Commissioner sass, no. Thank you. It fails. Five to one, yes. Thats called an airing of views. Item 4, action item, approve kaiser rates and premium contributions for actives and early retirees. Aon hewitt hewitt. We are going to have, im sure, a recess moment while people clear the room who have heard enough of this and wish to go about their daily affairs. If you will give them a moment. Good afternoon again, aon hewitt, actuary. You have before you the standard package presented each year relative to the program for Kaiser Permanente and their rates for 2017. As you know or are newly aware of, for newer people, kaiser has been under a two year rate guarantee where they lowered the rate in 2015 and did not increase that rate in 2016, so this year they have offered up their best set of rates for what they want to charge in 2017. And so i also want to let you know when we set a rate, in addition to the rate we are going to review, the rate parts that are presented and hopefully approved, we add into that the renewal, this year the sustainability fee which we have always been added in is now voted in as 3 and we decided the last Board Meeting to include the best doctor which is going to be charged at 1. 40. Do you want to say anything at all . So there are 3 pieces in addition to the kaiser rate and what we say is our premium for actives and early retirees and we will see next month posted by retirement. That being said i would like for you to turn to page 4. When we set the rate in 2015 and for then 2016 we looked at experience through 2013. So two years have passed, now were lacking at experience two years later, which is the 2015 experience and we compare that and as you can see, what we have on this page is just indication of how much the claims costs have changed over a 24 month period. So these changes arent a one year period change, they are a two year period change. So kaisers costs have not increased for this population that much. They have done a very good job in managing their inpatient care and it has actually gone down for this population. Their other medical care because they bucketed this in four major buckets, has gone down. Their outpatient and other is icm and omf, the things we discussed. They are doing a great job. The other is the outpatient, which is doctor care, is basically flat. The other thing that has gone up that has been going up for all of our vendors is pharmacy and as we have presented this board as various times, pharmacy has increased, it has been driven specifically by specialty drugs, you have had presentations in the past by my colleague, dr. Page sykes messler, the clinician, about whats going on in pharmacy but the board has been slowly made aware of this situation and has been apprised that this is happening everywhere. So this is Nothing Specific to this group of people in this population. And kaiser is doing its utmost to manage those costs as well as they can. So, with that being said, what is the next result of their proposal, which is a 4. 79 percent increase to the rates that have been in track for 24 months, they want to raise them that amount of money. Now, before i go any further, for everybody in this audience i will repeat what is my job and the job of aon hewitt is to sit down with kaiser and hsf and go over every calculation that they present to us to determine if every factor that is adjusted to the experience is appropriate to determine if the 4. 79 percent increase is justifiable and the best number that they can present and ask you to accept as rate. We have gone through that exercise, cfo, the director, myself, members of my group have all gone through that exercise and i can assure you they have answered that question to the highest standard possible and the number was derived correctly. So we did our piece. So just for public information, please turn to page 6. What this is is what has always been deemed as important by the board and in the interest of all people insured through kaiser, is how does this affect if you were to accept the rate card as presented, the contributions for the employees . Presently an employee under the 9393 83 pays 38. 78 a month for their contribution. In 2017 that number goes to 40. 78. This is exactly a 2 increase. All of the numbers are here. We do the same thing as a matter of practice for the other major mou agreement, which is the 100 96 93, then as a matter of practice we go through and give you the rate card. This rate card has been previewed, we present the rate card, we take it to hsf, people that work for your cfo at hsf, he checks these, hes been checking these for a long time, he does excellent work, i have to say that publicly. He does a great job and yuri goes through these so not only i, people in your independent shop look at these, all these numbers at hsf, they do a very good job. So with that being said, here is the rate cards. So we could talk a lot about all of this but in the interest of time and pragmatism of getting through the cycle, we reviewed this and i would like to recommend that you accept both rate cards as presented that have been very well reviewed as presented and accept these as the rates for 2017. Now i stop and ask are there questions . Any questions from members of the board . Director dodd i wanted to ask commissioner breslin if the Governance Committee suggested we review how the rates are calculated. Do you want to go through the appendix how particularly in terms of early retirees that specific. I was talking about that for a future educational thing, but i didnt want to take up the time today. Thank you. Glad to do it any time. Are there questions or comments from the board regarding the recommendation from the actuary . Is there a motion . I move to approve. Is there a second . Do you have a question . Comment . Mr. Lim. Not a question but just a point about on page 4. Uhhuh. Okay. inaudible 37. 64 thats not in 2017 because theres a suspension of the Affordable Care act. The hip tax. If there was to suspension of Affordable Care act in 2017 then the rates would have been. Higher. Looks like its 5. 5. I dont know the exact number. May i, as a matder of practice i forgot to do this. Cindy, can you please come up . I forgot, this is rates and benefits, she has a benefit change to share in the public forum. Thank you. One more question. Yes, sir. So the rate, just wanted to point out to the public the rate includes the 1. 40 for the best doctors and also 3 for the Sustainability Fund that we need to increase. All of these numbers are based on all of these rate cards. Yes, sir, this number right here, the 4. 79, is purely the kaiser rate. When you look at the year over year in the rate cards and the comparison to your point if you look at the single rate it goes up 5. 15. Thats because were comparing last years numbers with the 2. 05 for the sustainability did i get that right and the vision and the best doctors. Thats why its not exactly the same number, yes, sir. Just one more question. Its mostly driven by the pharmacy or the pharmaceuticals because of the people that specialty drugs. Yes, simply put, also is we havent seen any increase for two years. Understood. So its a lower base. It had to go up some. Specially drugs mostly applies to all, regardless of what plan. This is the plan right now. Hi, cindy green with Kaiser Permanente. These rates i wanted to point out include two benefit changes. One is the addition of an acupuncture rider we have had for many years. Its a combined benefit, 15 or either chiro or acupuncture or any combination thereof for 30 visits per year. The other benefit we are adding to provide benefit parity to match the other carriers specialty tier, we are providing a specialty tier not to exceed 100 per prescription. Not to question on this item or these benefit changes. Just a question about the acupuncture. I know kaiser has an in house acupuncture service. Is there a list of preferred outside of network acupuncturists as well . Yes, this is the same benefit im referring to. Its part of our specialty through American Health benefit network, its local acupuncturists in the network, the severalreferred benefit. Employees can selfrefer to an acupuncturist or a chiropractor. That is not part of kaiser. So you dont pay extra if you go outside of kaiser . Its a 15 copay. You have this benefit in place with your other carriers. Do you provide Nutrition Counseling . Its provided as part of our nutrition care benefit. I wanted to point out its coinsurance through 100 per prescription, which would be for a month, or is it up to 100 for three months . Its 100 per prescription so that is the maximum up to its up to a 100 day supply, but its 100 per prescription. So its a 100 day supply would be three months, potentially. So its 100 per prescription. You are capped at 1 100 per prescription. If your doctor deems necessary it does not exceed the 100 per maximum prescription. Thank you. Just one more question. On acupuncture, does it require prior authorization from kaiser . No, its a selfrefer. There is no prior authorization from kaiser, they can look online and see what acupuncturists and chiropractors are in network and actually selfrefer. Director dodd both blue shield and kaiser evidence coverage, acupuncture for specific conditions. So its not necessarily acupuncture, you couldnt go to an acupuncturist for diabetes, you would have to go for migraines, it specifically lists what conditions you can go for with both providers. Thank you for your hard work, especially in the prescription area. Its one of great concern across the United States and i can hardly wait until medicare can actually go into the market place and start negotiating for prices. If theres anything that comes out of this current cycle, i hope its that. Im not supposed to say that. Thank you very much for your help. All right, do you have anything else . Its been properly moved and seconded that we accept the rate cards as they are printed. Public comment . Good afternoon again, claire swansky, rccsf, i want to thank kaiser for the nice low rate increase. I want to point out for our early retiree members the costs for dependents are still pretty high when you are looking at 760 per month and early retirees usually go out very often on a vested or lower type of retirement. Some of them go out on disability. So whether or not its kietz kaiser or uhc or blue shield we are watching those issues with regard to early retirees and family rates because theres great concern for our early retirees to be able to afford to insure their families while they have to, in many cases, are forced to go out before they reach the age of 65. Thank you. And i share your wishes for medicare, thank you. Is there any other Public Comment . Hering no other Public Comment are we ready to vote . All those in favor signify by saying aye. All those opposed . It passes unanimously. Item 5, action item, approve blue shield flex funded nonmedicare rates and premium contributions for actives and early retirees for 2017 plan year. We are essentially going through the same exercise we just did with kaiser relative to the same population, we actually are the risk takers for the flex funded population through blue shield and we spoke quite a bit about certains a aspects of that in the earlier presentation relative to sutter. If its okay with the chair, ill just go through it. Id like to have you do one thing. Would you please highlight the rate card, the summary, the rate card and then provide your recommendation. Okay. That would be helpful. So skip all the other stuff. Yeah. If you would please go through the summary, the rate card and then provide your recommendation. Okay. All right, sounds good to me. The summary is seen on page 2. The overall increase for the rate is 4. 26 percent. That includes the component pieces that we talked about earlier, you know, which are the, in this particular case, the 4. 26 percent includes the increase to the rate and the fact that we have to amortize in the claims stablization reserve. So when we go through all of this, we talk about in this particular thing what the increases cost, what the increase is in administrative fee, the fact we get a reduction in the hit tax and thereduction in claims stablization. Unless i completely confused everybody, theres pieces to this, theres the amorization of the claims stablization which was discussed in february and march then we go through all those particular items, we review the underwriting that blue shield provided this year. They provided their expectation of cost, i reviewed that and we are in 100 percent agreement between what they projected and what i reviewed. In the past i have tweaked the number a little bit or adjusted it, appropriate thing to say in this kind of forum. Thank you. So that being said, we are in 100 percent agreement. They came in a little higher, we deliberated and we are all at the same exact number so there is a collective group of people that agree this is a rational expectation of what we should be anticipating as the expense. So is the rate really accurate and the answer is to the best of my judgment its an accurate rate. That being said, we go over year over cost differences on page 4 and then we do as we did before, if we turn to page 6 we look at the comparison of the now present employee contribution to what the contribution will be in 2017 and, as you can see, for the employee only it goes up 2. 15, et cetera, et cetera, there are quite a few employee onlies in this category of coverage for these people that have chosen to be part of blue shield versus kaiser. And so where we head with this, we good to page ate. We have two rate cards. They are essentially the rate cards. The difference in the rate cards is the difference in the mou. Everything else is basically the same. So when we present this rate card i would like to highlight that the number in employee only is 731. 61 on page 8 and the numbers go across to your right. The other number is the vision cost. This repeats itself in the early retiree, then theres the 3, the 1. 40 we spoke of earlier relative to kaiser and for those, i went through that a little fast and i apologize to all parties, the 12. 29, what is that . Present mri you have created a deficit. The deficit means that we charged less than what it cost us. My policy when theres a deficient sis, the claims stablization policy, the board goes into the next rating cycle and charges that back into the rate so we dont continuously generate deficits or surplus, we smooth the numbers out and thats what were doing here. Then the rest of this is the basic exercise of adjusting for the 10 county which was previously approved, the ak twairan difference, this is the rate card on page 8 and then the 196. 83 is the rate card on page 9. So are there any questions before i make my recommendation . Yes, maam. How many lay members are in this set . 36,000. Why do you apply the claims stablization reserve to 196. 83 when they are already paying employee zero for the employee only. We do that for everybody the the country buetion is what does the mou say the premium is picked up. The premium is picked up for everybody. We dont change the premium. The stablization is respective of the premium and not of the employee contribution and the 196. 83 for those people who are e only, they pay nothing. Basically the city remits the entire amount. Are there questions . Commissioner sass. One question. Were not considering retirees at this time, but is any of the claims stablization adjustment occur on the retirees . Not in this case because they are fully insured. The claims stablization is generated in this particular case, yes, sir. Any other questions . Commissioner lim. From blue cell are there any design changes in plan year 2017 . Blue shield representative would come forward. The question is whether there are any design changes. Paul brown, blue shield, california. There are no plan changes this year. Director dodd you are adding life lock or you are adding. Yeah, its actually part of Blue Shield Association requirement and mandate that all blue plans around the country are offering i can never remember a life lock like pod for identity protection. Its going to be an opt in program for all active and early retirees. Im going to claim privilege as the chair, going to ask you this question at another time. I understand blue shield is participating along with a number other health plans in a very active provider update of directories project. Is that correct . Yes. Are you planning at any time to talk about that item before this board . That is something we can come back and talk about. We have a pretty considerable effort underway to make sure theres one source of truth for all providers identified. The only reason im saying this to you is that we were mutually surprised a few months ago, as you well know, with the role plays that you guys have put together and dont have any control over in terms of member information. I would like to, at some future meeting, for you to come forward and explain this new project and how it would impact our members and why you are doing it. By dretor. We already know about the other thing and you cant change it. Im talking about the provider directory. You provide Nutrition Counseling as one of the benefits . I have to double check. I believe that we do. I dont have that particular benefit memorized at this point. I can definitely check. All right, thank you. If youd get back in the queue, director. Why dont you research it and come back with an answer. Other questions from the board for the blue shield representative . Is there Public Comment . And you are . Again, claire savansky, taking a look at the rate increases. Actually im very surprised to see the low rate increase and i guess a lot of that is because of the hit tax being taken out this year, but its nice to see a low increase at blue shield for a change. But i again want to point out for early retirees when you are paying almost 2,000 a month for your family and the increase is 41, when we look at cost of living increases sometimes the cost of living is not even 41 a month in our checks and early retirees also include those individuals who have to go out on disability. And a number of our colleagues who are active employees who go out on disability arent eligible for other additional benefits through Social Security and such, so whatever they get through our system, through the retirement system, is what they are locked into. And again the increases for depen depblts is what we look at the most and it impacts early retirees the most. I know we have had this discussion and weve had issues with it, but whatever we can do with early retirees in keeping those costs down would be greatly appreciated by our organization. Thank you. Thank you, is there other Public Comment . Dean is kruger, active and retired fire fighters. Im glad to see blue shield has changed they are methology to an opt in rather than an opt out, which was the last problem. Thank you. My comment is my personal point of view. Sutter pacific is going through a big change right now as far as those people who have blue shield 65 retired plan and brown and tolen. Ive just been informed through a letter last weekend that my doctors at Sutter Pacific cardiology place where i go are no longer going to be part of Sutter Pacific because they are changing over to ucsf, which is inaudible physician. Im in the problem now of trying to find a new cardiologist within a few days because of this change that i was not notified previously that aparpbtly took place april 1st. And i just want to throw that out to you that this is coming down the pike from those doctors that are practicing at Sutter Health down foundation. Your name is. My name is barbara hughes, retired from muni. Im going to ask you to talk to director hicks about this if you would. Hes right behind you. Any further Public Comment . Director dodd i just feel obligated to make clear that when were giving credit to blue shield for coming in with a low rate, who we should be giving credit to is our self because we are not fully insured with blue shield. So we are paying for the claims that our members are incurring. Thats how much we, our costs increased by those percentages you see in the debt. Thats not blue shield guessing how much were going to spend next year, this is based on how much we spent. We pay those hospital bills directly. Weve been doing this now for 3 years and people still seem to think blue shield is the good guy or the bad guy. Theres no good guy or bad guy, we are paying the hospital bills dregtly. So if the hospitals increase their costs, we will set higher rates to cover those costs, not blue shield. Thank you for the clarification, director. Now what about the doctor . Good question, commissioner breslin the Physician Group is capital capitated. Once someone is in the hospital, the hospital has hospitalists for all those hospital costs, were a large amount of klaipls. Yes, you will recall last year there was an increase in the capitation midyear which showed up in our rates. We pay the doctors capitation, blue shield negotiates that rate and blue shield negotiates the rate with the hospital but we pay them directly. All right, thank you. The recommendation is motion for action is that we accept the rate cards as presented by our actuary. Any further questions . All those in favor signify by saying aye. Opposed . Ayes have it. Im going to do a very dangerous thing. The mind can comprehend only what the end can endure, so we are going to take a 5minute recess. Thank you. brief recess . Item 6, approve uhc Employer Group waiver plan rates to be included in medicare retiree rates. Good afternoon again. What you have before you is our presentation of the active and early retiree rate development. We are fully selffunded city plan which is driven through United Health care. You are fully selffunded under this program as dr. Dodd spoke of under the blue shield plan, the hss trust sets all the premiums, we pay the costs, what you have a packet relative to what is now a very small population for the actives and early retirees. When you say very small, can you give us the numbers . Okay, i can give you the numbers. Turn to page 3. Presentation . Page 3 there were 612 total subscribers in the active population as of december 2015 and we were going to briefly go through this. There are 547 early retirees and we included information about the medicare or post65 retirees, but we are defering voting on that because we want to vote for all the retiree rate cards at the june 9 meeting. But thats the big portion of this population is the post65s with the ppo program, which this is, and theres 5,559, which is the last data point for subscriber count as of item 15. Did we miss item no. 6 . Oh, were doing the wrong item. Were doing. Oh, i completely blew it. Hes making a different presentation. Theyre in the right action eye im tepl. The actuary has crashed and burned. Well particular a pause to get him oriented. Wheres my presentation . Sorry about that. There we go. Thank you very much. So all of the previous commentary from the actuary will be stricken in this portion of the meeting and we are now at action item 6. So i went to the top of the mountain and i rolled right down. I was at my utmost good until now. Sorry about that, i apologize. I went off track there. You have before you the Employee Group waiver premium offered to you through United Health care for city plan. This is a large component of the cost because this is the premium drug cost for the retirees. We elected to do this in 2013, that was the driving force behind going from a physical year to a calendar year. This was elected and approved and driven by the prudence and understanding of the director, dr. Dodd. It was an excellent idea. It lowered the drug spin substantially and has continued to lower the drug spin relative to what was offered by the government post of the implement take of part d, which added prescription drugs to medicare. So this is a very good program. So this year what is based into the premiums is 171. 09. For 2017 rates, hopefully im on the right one, tell me if im going crazy again, is 218. 99. So thats a big increase. What is the amount of the increase . The amount of the increase is 29 percent. I will do my utmost to explain what happened and why this increase is so large. In 2015 when they set the number for 2016, they gave us a preliminary number as part of our process we require the number early in the cycle. We got this number in february of 2015. The government puts out all final notifications and numbers to what this number will be because they send money it United Health care and United Health care pays the prescription costs, so they have to develop a number based on the best information they have. So at that time there is a component called the reininsurance rebate that comes from the government for claims in excess of the catastrophic limit in the drug coverage. It will take quite a while to explain every aspect of how part d works, but let me say that at a certain point its all picked up by somebody else. So people who have extremely large drug bills will not have to incur more than their true out of pocket costs, which is actually several thousand dollars but its better than unlimited cost when you need drugs to exist. So with that being said, the number they used to create this number for 2016 was a number that subtracted a larger number than the new rules said were the case for reinsurance. So what does that mean in terms of this board . Was the 171 a true number or probably a very good number . I have to say quickly, i can go through the exercise, it was a very good number after the fact. So did they come and say, you should give us money because we underpriced this product . No, United Health care said no, thats our number and they knew about that number before they finished, we finished the whole process last year. But they chose as a matter of practice to say this is whats been approved and presented to the board so were going to go with that. So what happens when that is the case . When that is the case the next year everything is supposed to be slightly more expensive than it was, so that number could have easily been closer to two hundred dollars. Relative to that number the 218. 99 is not that big of an increase, but relative to what we got charged last year its a fairly large increase. We have certain aspects of how this number is built in this stack. These are various nuances about what has happened, i have. Which page . Page 2. I have discussed the reinsurance issue and it goes on to say that theres another aspect of egwp where theres a 50 Percent Discount by Brand Manufacturers in the coverage gap. The way thats done has changed slightly so all the new answers of how they credit and try to make this an afford able process changed which put more dollars back on the plan. Is everybody else in the 218 range now and it was 171 and we built our premium for this year off the 171. As best as i know, i truly liked having that 171, it helped generate a lot of cash, but for right now i would like to say before i make my proposal are there any questions . And we actually have the actuary from United Health care whose job is to build these numbers to answer any questions that wed like to pose to United Health care. With that ill stop and say would you like me to call their actuary up or ask questions directly to me or. Commissioner breslin. So youre saying its 218 per member, per month. Yeah. This is added on to each persons premium. Its part of the premium build. Last year the city premium plan for medicare retiree. 280 and change. So 218 of that would be. On top of no, embedded in that was the 171, so 171, we had a stablization reduction last year so there was. Be like threequarter, over half your premium. We had excess cash so we brought the premium down to the 280. I think you are not hearing her question. Its the proportion of this cost for the premium thats being charged. Last year the rate was whatever the rate was. inaudible . And the amount being paid was 170, so you are saying in effect that 170 last year of the 280 was attributable. To drugs, yes. Amazing. That was her question. Yes. Catherine dodd. And what neil is saying is that last year we subsidized those rates so that that rate that you have on the book is not what the rate was. The true rate. It would have been higher. The proportion. I think thats the point being made, is that a substantial overwhelming amount in that premium is related to drug costs. Yes, sir. Thats gun my earlier comments, ill go back to them another time. But its a constant issue. As i said in a few meetings this year going through this issue, its a very specialized subset of drugs that are driving all of this. Its not like aspirin, its like, you know, high incidences of cancer or hepatitis c or what have you that are driving these costs but its having this kind of rebounding impact in the marketplace. So analysis is really interesting to me as well. I guess the question i have, this is proposed for 2017 but some of these issues like cms direct subsidy for egwp, is that going to continue to decrease, are they looking to decrease their subsidy and likewise the brand manufacturer discount decrease, is that likely to the discount likely to decrease . All these things just part of a trend and next year we can expect another 28 percent or whatever . First, i will answer one question and defer the refrt to dr. Dodd. Because of the calculation last year not taking into account what the true reinsured offset was, the number was low. That was low. Thats a onetime hopefully calculation correction, so to speak. So does that help . Yeah. The other are pieces that build a rate, considering the rate was correct that year, year 1 and then 2. So dr. Dodd. So you will recall at the march meeting we included testimony that we provided to cms about reductions in egwp. Those reductions were not mraid made to all plans, they were made specifically to the Medicare Advantage plan. But there were plans that didnt be have those same egwp reductions. And i think we can anticipate that continuing to decrease. I think one of the things about the manufacturing discount which requires us to understand how the medicare drug benefit is set up for people who arent lucky enough to have an employerbased benefit is you pay the first, the initial phase. Then theres the doughnut hole. Remember in 1989 then theres the doughnut hole. Then once you hit that cms pays the initial phase, then once you hit that level you go into the doughnut hole and you have to pay. Once you hit the catastrophic level then they pay for everything and those claims that were talking about are claims that exceed the reinsurance rate that cms carry, you know, the Million Dollar claims, and cms gives you a reimbursement for that. So what the egwp tries to do is create a, is take what an individual person would pay and create a plan around it. So its extremely confusing. The other thing that has contributed to that is that it used to be, and again correct me if im wrong, but weve spent hours understanding this this past week. It used to be that when you got up to that doughnut hole, you are in the doughnut hole and you hit that catastrophic level where medicare kicks in again, if there were claims that kind of spilled over into catastrophic those were counted as catastrophic and they are no longer counted as that, they stay in the doughnut hole. So the doughnut hole got made larger. Now, the manufacturing drug discount is only applied while you are in the doughnut hole. So the doughnut hole got smaller on the bottom end because president obama promised that we were going to close the doughnut hole by 2020. So theres several factors working in the calculation of the egwp and trust me when i saw the numbers and neil walked me through them and i said i want to get on the phone and we had a long Conference Call at the cfo so we could walk through each of these numbers and tried to explain it, tried to explain a very complex concept in two pages. You are, sir . My name is ward brigham, i am Vice President and actuary with United Health care. I am help to answer any questions about that. Your explanation is at a very high level pretty much whats going on. You know, we can drill down and explain in better detail to anybody that wants to understand better, but, yes, the 28 percent increase, its really broken down by several pieces and thats what were going over. Thank you. I do want to point out that when uhc realized that the numbers that we passed last june werent high enough, when the amount wasnt high enough, they are not going back to collect that. They are not building that loss into our rates this year. And thats to their credit. Thank you for that. And thats a fact. So, yeah, were not looking to recoup that number that we had quoted last year. May you be such an example to all health care companies. Yes, doctor. Im still a little confused about what we can expect maybe for 2018 based on these fluctuations in 2017. Do you have any predictive skills in this regard . Right. So one 1 of the issues is were talking about the government reimbursement and how thats shrinking. The amount may surprise you, its only about 20 pmpm thats the amount that gets chipped away at from the governments point of view. With regard to the Employer Group waiver, the structure of the payments for group plans is the thing thats going to be changing a little bit, its going to be based off of the individual bids. That shrinks it down. I could make an argument as to why individual bids are appropriately than group plan bids, but essentially cms didnt listen to a bunch of the outcry that went with it and the explanations, good explanations, in my opinion, as to why they are different. So thats one of the issues. This is a constant battle that goes on between carrier and the government as the government tries to chip away as much as they can and we do what we can to fight on everybodys behalf to try to make it a, keep it as stable as possible because stability goes a long way in terms of making a plan viable from year after year after year. And so, you know, thats one of the pieces is the government reimbursement and then we had the strato claims issue and thats accounting for about half of the trend thats going on. So, you know, we look and hope for stability in the future and, you know, and only can surmise that since cms is keeping, you know, what their initial call letter said, they kept that, which is rare somewhat unusual for them. Therefore hopefully well have some stability now Going Forward and, you know, your future rate increases will be based only on your trend as it should be. Thank you. Any other questions for uhw or uh. Uhc, my initial is w union affiliation. Any other questions for the actuary . Id like to ask a question for the actuary. The other actuary, our actuary. You mention here you considered returning to the drug subsidy what would that look like. This is your first recommendation. My recommendation is that we approve the rate as presented for 2017, which is the 218. 99 and stay with the egwp program. But you also are recommending that we return to the. No, no, he said consider it, i was wondering why, is it a lot more . Yes, it is. Its quite a bit. Prior to the egwp program we had the retiree drug subs Subsidy Program and there is a direct Subsidy Program that is part of the egwp program that is analogous to what the government gives you if you stay as a group program, submit your claims and they give approximately 28 percent back to you as a rebate. We filed the claims and we got the rebate back as hss trust. Then when we became fully aware what this could allow us, we were at a number 3 years ago net of the rebate thats higher than the 218. So we went back and said, okay, now that this has happened is there still any opportunity that, per the direction of dr. Dodd and we checked it out and apples to apples you get what you get with egwp, plus egwp has two other payments to come your bay, which is the gap manufacturer 50 Percent Discount and the reinsurance. So you get 3 payments versus one payment at the end of the day. Is that correct . So the rebates go back to the rates, then, into the. Yes. Calculating it. So as part of United Health cares , the two pieces that ano mentioned, work out to 43 per member per month. The reinsurance is worth 49 per member per month, so thats over 90 in value you would be giving back by going back to the retiree drug insurance program. Thank you. Any other questions . I am willing to entertain a motion. I move we approve the Employer Group waiver plan. Is there a second . Second. There is a second. Been properly moved and seconded that we accept the actuarys recommendation that we approve the uhc city plan 2017 premium at 218. 99 per member per month. Is there any Public Comment or any questions from the board . Seeing no Public Comment, we are now ready to vote. All those in favor signify by saying aye. All those opposed . The ayes have it, its unanimous. Action item 7. Item 7, action item, suspend selffunded plan stablization policy and approve a onetime 5. 55 Million Dollar subsidy of uhc city plan active and early retiree premium contributions for the 2017 plan year from the city plan stablization reserve. Aon hewitt. Actuary, please. Okay, so i will go through the proposal and share with you the information that we have relative to the stricken comments of earlier. So ba what you have before you is our standard package presentation that outlines the experience and the development of the selffunded premium rates for the city plan ppo what we are addressing today are the active population and the early retiree population covered by this program. And i will sort of expeditiously walk you through what slides 3, 4, 5, 6 and 7 are. On page 3 of this stack is just the experience of the active population. As you can see, we are actually collecting premium left less than the expense. This is the case because we have subsidized the premium because as of 213 when we implemented the egwp we were generating substantial surplus that went into the claim stablization and as part of the policy we amortized these amounts into these rates for 2015, so this was expected and that is what the case is. So for the active population, the money was negative by 1. 7 Million Dollars. We take some, we add some observation statistics, i will turn this over to page 5 of the deck, the early retiree population has generated 5. 6 Million Dollars in excess expense. Please be aware, again, the premiums were subsidized. That means we take surplus that was in claims stablization, rolled the premiums down. We are in effect giving the money back, we are not keeping the money. This is a three year amortization policy that keeps things moving along. We also included as part of this package, but we are not voting on this today, the experience as a preliminary overview of the mass of this program which is the post65 retirees that do with the egwp premium built into their rate and we have now decided what we want to do for 2017 for the egwp premium. So, with that, we go through and we explain to you with the best abilities we have what we can do with the information presented as far as taking that information that is in those loss ratio reports and projecting that forward. It is not a large amount of information and we look at it and we actually compute what the trend rates are and look at our book trends as best we can and project what the rates will be relative to the experience we have. We have quite a few trend numbers here. Some are negative, some are positive, but we blend them and go forward with the exercise of projecting experience. You are saying that blended result is a 6. 5 percent increase . Yes, for the categories as we go through all of it. Historically looked at every component of this for the actives, the early retirees, for the medical and the drug and present it to the board so as a matter of practice we went ahead and did the same exercise. Its a small amount of expense and we projected it forward and we compared that to the rates we presently have for 2016. And when we did that, we bought down the rate for a couple reasons last year. We were under the impression that the xietz excise tax would be implemented in 2018 when we did our initial calculations of what the excise tax would be we same saw there was several Million Dollars of potential excise tax given that the active and early retiree rates were so high. As a result of buying the rates down we basically if we went down and reviewed all the documents we presented before, we eliminated that excise tax. The budget bill has pushed the excise tax back two years. At the time the exercise was made it was a prudent and practical decision to consider what the buy down would do and how that affected the excise tax because that excise tax would have been on a base of rate that continuously go up, so we rebate the rate. The other reason we bought the rates down was because the rates were very high and making it impossible for certain people in certain areas to afford this program as presented. And based on the mous some of the people were incurring 400 contribution rates so as a matter of practice, looking at the population as a whole, the decision was made that, yes, we need to do something to make it so that for those people a are have to go use this program, not that theres a lot of them, they would have a rate that was responsible and somewhere in the range of what they were getting. I also want to put out based on the current mous they still have to pay the difference between whatever 93 percent of blue shield is. So they buy it dollar for dollar. So all of those thoughts were considered in what we did. We havent got enough experience, to be honest with you, to determine what the claims spent is 94 this year. So i use older experience, projected it forward with a lower rate base and what happened was i need to increase the rates approximately for both combined 45 percent. The question was presented if we do this will we have to raise the rates quite a bit . And at this point in time the answer is if we chose that route, which is status quo, the answer is yes, we would have to do that. What im saying or proposing as part of the suspension is that to stabilize the rate and see what the result would be after this upcoming open enrollment in that year and what may be the experience, we did gain approximately 300 people in this year, that we consider as a matter of practice without any kind of to take and go ahead and write down the rates again and keep them flat for one more year as a matter of practice to keep them consistent and at that point in time we can go 40 and decide what is the correct approach to take to keep this program open for that population that it serves. And i want to finish with one last point. We have to have some kind of program because we have a huge medicare population. We have over 6600 people in medicare under this program. They are essentially what this program is all about. They do have people that are nonmedicare, they are called splits in some nomenclature in terms of rates. We have to have a rate they can afford to add on their nonmedicare dependents associated with medicare people, so we have the mppo and we have the city plan and therefore having rates in this population that are affordable and respectful of those people is important. So im proposing that we go one more time and keep the rates lower. So what is that amount of money for this given people, its 5. 55 Million Dollars. Thats what will get us in a range that i share with you is an amount of money that would only raise the rate 15 percent. So that would keep us consistent on a twoyear basis. I wish we had more experience and we now more but we arent and i think that basically summarizes what i would like to propose is my recommendation, and to go one step further, we have in excess of i can entertain some questions but i do want to say one more thing. Is that okay . Please. We have now, as of what we presented in february, and i need the piece of paper. 11 million. Sorry about that. I got it. We have 11,586,000 dollar in the stablization reserve, even with the amortization in 2017 of 3,973,000 dollars. If you subtact the 5. 55 million im recommending you still have two Million Dollars in your claims stablization reserve. This is money that is surplus that will eventually be passed back to the population. It can be passed back by rule over 3 years, or you can suspend the policy and make a determination do we want to keep these rates low for one more year. So that is my recommendation. I also in this pass out that hopefully everyone is aware of in addition to the fact we hold and recognize the stablization reserve, we have a contingency reserve. That is a reserve that we hold on our books separate and distinct from the fact that we have surplus moneys or we have definite moneys that were recouping as a matter of practice. That money is 5,179,916 that is sitting on the books to pay for excess losses. We are not in any way shape, or form spending contingency money, policy money, were not in any way shape or form spending ibnr money. Ive been with a lot of joint powers, they are all hising at me right now, they are going they have spent their kupb continue contingency money. Ibnr is what . Incurred but not reported. We are not doing anything in any way shape or form that says if there is money on the books we have to spend it. We are not doing that. With that being said, my recommendation is to go ahead and spend the money one more time. Is that a correct recommendation . We will reat a time it momentarily. I have a question, jeff. You mentioned the contingency, the 5 million. Is that just for the United Health care . Yes, maam. So theres contingency reserve for blue shield as well . Yes, maam. You said there was additional people to this plan early retirees and employees and it looked to me like they were decreased. No, actually open enrollment. I dont have the number. Would you happen to know the number . The question is how many people did we add in 2016 to uhc you dont have open enrollment yet. No, for this year. I thought this was this years statistics, no . No, this is the end of december. We have added oh, okay, they are there. My bad. But it went down, it didnt go up. Wait a second. Wait a second. Maybe i misstated something. The end of 2015. 619 and for the actives . We have the expert in the enrollment. Heather chianello, United Health care. I remember looking at the master open enrollment. What happened is we did have post65 retirees leave the plan because they went into the nppo, the new plan, but we gained, i believe on the actives and early retirees because of the stablization in our rates some members. Yes, overall the number went down because of actives and earlies we gained. Here you show in january 636, at the end of the year its 619. Thats for active employees. Then let me see where are the early retirees, that went down about 10 people too. Starts in january 565, by the end of the year its 547. 2015. Yeah, but thats the end of december. I know that we did look at, it was probably in the fall of last year after open enrollment, the numbers and probably the team can confirm where we gained and. Im going to ask that you bring that back next month as to whether theres been a gain or a loss in the plan. Only because i. Please, go right ahead. Okay, on page 3 of the presentation theres 501 singles, 73 employee plus 1 and 38 employee plus family members. Thats on the very last set of enrollment sorry for my little bit long of the day. These are the numbers right here. It says. Wait, wait, on the experience schedule we ended the year with 501i e only. These numbers for actives are larger, right here. Page 16. What page . 16. 16 . Yeah. These are the head counts as of january. These numbers actually go up. Okay . So can you tell me by any chance how many of these e only the city is picking up the premium . The e only . Employee only. The city pickd up the premium for a lot of employee only, which would mean its not a hardship for that group. If its under the 196 go ahead. Well, theres two issues. Wed have to separate it out, and im looking at marina, by union. The Service International union the city picks up e only but all others the city only pays up to the blue shield rate and they have to pay the difference. Im just curious in this plan how many of e only are. Wed have to go back and look at whos in which union. We dont have that. That would be my guess. Let me ask a real quick question. You are saying for the 196. 83 dr. Dodd spoke to, thos people its the same, the city picks up. No, i can see that. But we dont know who they are. I dont have the counts. Thats the issue. Ive asked you to bring that back to respond to the next question, please. Do you have anything further to add . Yeah, we need to put back. Im asking for the recommendation. The answer is 71. So there is 71 what . Im sorry. inaudible manager Health Service system. We had a gain of 71 actives into the city plan and we had a gain of approximately 30 on early retirees. Of those actives do you know whether the city picked up the entire amount . In terms of their mou agreement . Yeah. No, we have a pretty small amount that are taking advantage of the 166. 33. Thank you for the response. Your recommendation . My recommendation is to buy down the. First, move to suspend. Oh, i have to do that . You have to move. Your recommendation is, no. 1, we suspend and no. 2 that we buy down. They are two different agenda items. This is the stablization part right now. Okay. So i just have a couple more questions. Okay. So now were talking like two million left in that reserve. Thats very low compared to what weve had. What happens next year . Were kind of in the same situation. Weve been there way now last year and this year. Next year there clearly wont be that much more in there. Do you replenish that reserve, can you replenish that like you do in the blue shield reserve . It depens on the experience of the program. If the Program Specific to that reserve, if the program generates a surplus, the reserve amounts go up and you have money that you can spend to keep the rates stable. The converse of that is if you generate a deficit, meaning the premium is less than what you spend because you take the risk, you actually go and assess the program for 3 years. The only surplus is through the medicare people. Right . Not the early retirees and the employees. At this point in time i would have to. Youre looking at this, the only surplus more premiums versus expenditures is the medicare people. So i dont see how thats going to change next year, since you have. I would concur that that is a highly likely correct statement, that we probably wont generate that much surplus, but we just dont know. We havent got the experience to figure out where we will be. Dr. Dodd. If you look at page 5, this is your paid loss ratio. Yes. And the early retirees paid loss ratio is 158 percent, which is substantial. So were spending a lot more on them than they are paying in premium. On the actives its 119. I mean. Im just thats what i said. The only surplus would be the medicare retirees. 100 percent is not even a surplus, it means you are spending less we wouldnt be, if this is our picture next year in terms of what were spending, we wouldnt be adding to the contingency to the stablization reserve, it would just stay the same. So that means the program is so expensive it would disappear somehow. The rates then would be astronomical without this reserve being applied next year. We were in a position before we made what i consider a prudent decision to deal with astronomical rates and contributions up to this year. Those rates were extremely high and they had been left to get higher as people left with Better Health and not pay the contributions required under those programs. Our goal is to best we can lower this rate down and make it something usable in the constructs of what we offered to this pop place. So thats what were attempting to do, something that allows us to have a specific cost, more so for retirees and people in areas where they dont have coverage through kaiser or blue shield. Thats my perspective on it. Is there other solutions, we will of course consider all solutions but for now this is our proposal. One more question. Yes. So the reserve, that is not i mean i cant see that you are applying that to the medicare people or not here, but it was not applied last year. No, it was not and im not recommending. Applied to medicare with nonmedicare dependents. It will definitely be applied to all parties, all nonmedicare dependents or actives or early retirees. So that will show up next month . Yes, all the rate cards will have that in there. This is being applied to the medicare dependents, is it being applied to the medicare families . Thats what i said. Commissioner lim. In prior years prior to the 2016 the stablization comes from surpluses from prior years. We didnt build that in any of our rate. Yeah, you did , you did. By the 3 year but because of inaudible we built a surplus in excess of 20 Million Dollars. So now we are trying to suspend the staipblization reserve and use the surplus to buy up the rates just like we did last year. Commissioner sass. Two things. First off, we started with 11. 3 million and when were done with this round, if we approve the buy down, were left with two Million Dollars. Two Million Dollars without growth in stablization reserves, two Million Dollars isnt even the base line 3. 7 we have by doing 30 percent a year. We are now below even our base line stablization adjustment so not only do we not have extra money to apply out of the stablization reserve, we have less to apply the 3. 7 available this year, last year, we dont even have 3. 7. So we are at a point where we will not be able to stablize rates using that significantly a year from now. No. 2, we havent considered the medicare rates yet for city plan and were going to be doing in the next month. But what we talked about is their rates are going up because of a change in the egwp. So we have a situation where the medicare retirees are going to see higher rates, we dont know what the ppo rates will be, they will probably go up as well, would be my guess, and yet you are not applying any portion of this higher stablization reserve to that population at all this year. So they are going to be the full beneficiary of the increase in the egwp, with no offset from the stablization reserve the way you have it displayed here, which seems to me to be, i think were setting up a conclusion were going to be coming to next month, were going to be looking at a very large increase in their premium when it finally comes forward with no offset of stablization rates for that group, which i find a little disturbing. I feel like were setting them up for a big surprise, the medicare retirees. Is that a reasonable you said before we allocate stablization reserves to everybody. Yes. That was in the previous topic. And the reason we didnt do it for blue shield is because they are fully, they are not under they are a fully insured indemnity product. For the retirees. Yes. But there is not one of those. If you did what you said we would normally do to all the members you would be allocating the reserve to all the retirees. We do. But not the additional amount. Not under this proposal, which is absolutely fine to say we reject this proposal and we would like for you to consider this a different way. Thats totally fine. All right. Im a little concerned that we dont know what were dwoiing to be looking at for the medicare retirees but were making a decision this month. We actually have go ahead, cat lean. I was going to say, it may have been lost in the transition, will you you did say the retirees get the suction subsidy from egwp and. Under rdf thats correct. Go ahead, im sorry. But, yes, its a matter of your concern, commissioner sass, we do have at a preliminary level, the rates that are going to be proposed with the standard offset for the medicare people that are on the rate card pages. And what page are you specifically referring to . We can go straight to page 20. What page . Page 20. The number is our preliminary estimate of the number, which is already out there, with this approach and im fully aware that, you know, theres questions as to how we apply moneys. With this approach its 362. 85. Where am i seeing that . On page 20, if you go to the retiree with medicare column, sir, our preliminary estimate is 362. 85. Does that respond to your question, commissioner sass. Well, the retiree with medicare doesnt. Theres your 218. 99 number in there. How about retiree with family, does that change . Yeah, we have all the numbers right here, what were proposing. Thats a huge increase, the increase for that one. 740 in 2016 and 1,082 in 2017 . I with say thats quite a jump. Which one are you. That would be the last column, retiree and family. Which page . Page 20. The last the last, the difference. Because dr. Dodd says that is the one that would have a family without children, maybe without medicare. But it would have been subsidized by this subsidy. Yes. Page 20, thats correct. That would have been much higher. Page 20 is without the subsidy. Page 22 is. How much claims stablization is going to be applied to that . If we follow the system as has been developed before my time and go to page 22, if you chose the subsidy, the additional subsidy, the number would be 749. If youre looking at the difference, were looking at a 335 difference without the buy down and based on the way it works, the same algorithm for all parties, it would be a 95 difference because the premium goes down because we give more subsidy to the medicare with nonmedicare family group which is the far right column under the buy down. So thats page 22. So the only difference in this number is the amount of the subsidy which is driven by the buy down. It goes from, if you flip back this is getting a little tenuous but its 117. 32. When we do the buy down, we have to look at the buy down on medicare dependent, that raises the subsidy to 367, which lowers the rates. What that means is that the rate is lowered, the contribution is lowered and its a 95 difference. What we did last year made the rates so unrealistic, it makes the rates this year very unrealistic, which they are. I wonder where it all will end. Im looking at the line that says nonbargaining contribution rate. The retiree with medicare only is zero. The retiree with spouse is 165 per month. Uhhuh. And the retiree with a family who is all medicare, so thats 3 people, all medicare, is 452 a month. And then with a family with someone who is not in medicare or 3 or more people is 842 a month. Three or more. Is that what retiree and family is . Yeah, thats the contribution. Shes reading right across the line. Three or more . Two or more family not medicare. One person with medicare and the rest didnt have medicare, or suppose two had medicare and two didnt. One or 2. So they wouldnt get it if they had. They would get this particular rate. In the 842 rate, yeah. What this does is keep the numbers consistent with last year. If you look at the difference between the two, whereas if we did it just based on what we know, im being very conservative in these estimates, this is what it would be. So its a 95 difference for that family. Yeah. One last observation. If instead of taking 5. 5 million this year and leaving ourselves with 2 million, if we said well take 50 percent of the stablization reserve, leaving 50 percent for next year, we would be taking an equivalent amount for each of the two years, we would be taking 5. 5 million out this year and 5. 5 million out next year. We could literally have at least two years of stablization reservess a available rather than taking so much this year and a totally insufficient amount next year. An excellent idea. Just trying to figure out why we decided it doesnt seem, it doesnt seem prudent to me to just raid the fund to the point where wed have nothing left to stabilize rates next year, in 2018. Even if there was no increase in rates next year, we wouldnt be able to hold rates steady because we dont have base line of stablization to apply. I understand your concern, sir. From my Vantage Point that is excess money to be used to the benefit of the membership. In addition to solvency of the program, which is the contingency reserve and the ibnr, its a decision of the board how they choose to spend their surplus money. It is 100 percent to decide what you want to do. I as your actuary look for consistency of rates and to be able to stand here and say on page 22, as dr. Dodd said, this exercise keeps this in play for two years. We run our eyes across the bottom and she pointed out so well no one gets a massive increase if we do the buy down as suggested. Thats our goal because we want a stabilized rate. If we do something less the difference will be higher. It would have been nice to see both. Commissioner lim. But as you point out, what we are using is just surpluses from prior years. Surpluses from prior years that we want to use that, we use it last year, we tues this year and we want to use it probably next year rather than spliting all the surpluses in the next 10 years. These are premiums that we charged all the members in prior years. If we dont use the staipblization reserve then we will go back to the same rate and end up with surpluses in prior years. Thats where we are losing members from this is now to stabilize the members to avoid migration. Thats why we are using the stablization, the buy down, to reduce the rate. And our surplus already from excess premiums that we charged all the members in prior years. Just a moment. Just to make sure im on the same page, which i think i am, when one looks on page 5 at the paid loss ratio and compares the three groups, the actives on page 3 with the early retire years on page 5 and medicare on page 7, one can we what we are doing is stabilizing rates but there are certain groups getting a much better stabilized rate for 2017 based on this current proposal. And i think what were concerned about is whats going to happen in 2018 . Whats going to make this paid loss ratio better when we look at it again next year, can we expect that it will be closer to the medicare 1 00 percent or 92. 5 percent because of Health Care Delivery or are we face it with now no reserve or insufficient reserve to really stabilize rates and now were going to start looking at big rate increases the year after with no reserve. When we didnt buy down, we didnt buy down the 2016 stability, we didnt use the stablization reserve, the early retire years were actually below the 100 percent. You mean prior. Prior years. The reason why it is now 158,000, the monthly premium of 9,674,000, because of the 5 mill wrupb that we used to buy down the rates. Had we not buy down the rates we would would have gotten the 9 million plus would have been the premium that would have been charged the members from United Health from uhc if we didnt buy down the rates we would have gotten almost the same as what we have the paid claims. The issue, continued discussion is we take the step this year and how do we know that well be able to or have the capacity to do something similar next year. Thats the concern i sense here around the board. When does it ever stop . When we run out of money, i presume. If we buy down the rates we wind up with more migration from uhc and what would be left are only sick members which would really jump up the rates. Absolutely. By that time its not affordable any more for all the members. Yeah, completely spiral. Commissioner breslin. Like last year the only sur lus surplus was from the medicare groups. Its not from the retirees or the early retirees, their ratio has always been high. Last year for sure. Everybody was generating cash but it was substantially generated by the medicare retire years because of egwp. I dont see that the early retirees and the retirees are going to go the other direction in a year. I mean i just dont see how thats going to happen. I just am. Director dodd. I think its important to look at this in terms of what each one of these groups options are. The active members who choose city plan, and i will channel Claire Stansky now, are people who dont think they have other choices, whether its because they live in tuolome county or whether they are dissatisfied with whos in blue shield or whatever. Similarly, i think thats true of the early retirees and so one of the reasons were trying to keep them from being in a death spiral is subsidizing them. When i came, the death spiral had begun and now we keep trying to patch it and having it not completely end. The medicare retirees, particularly the ones who dont have dependents who are nonmedicare, do have other options where they can choose any medicare retiree. But the medicare retirees who have nonmedicare dependents are reliant on having an affordable premium, yis why the subsidy of the actives and early retirees, this is a Stablization Fund. Its not a contingency fund. Its how do we stabilize the rates and try to keep those people who dont have other options in that plan. Were trying to stabilize here and, yes, we might be out of money. 2018. 2019. 18. If you look at page 16, look at page 16 at the bottom, before the Stablization Fund, the total premium is 56 Million Dollars at the bottom. Were offsetting it by 10 million, which brings it down to 46. 5 million. Next year, assuming no growth at all in the premium, the premium is 56 million, you are going to subtract 2 million and have a premium of 54 Million Dollars thats going to get spread to all groups and thats where were going to be one year from now. Thats going to be, how large an increase, from 46 to 54, thats 20 percent, 25, 30 percent increase . That is next year. 2018 is the year in which there will not be a viable plan because there will be no more stablization reserves. So i dont, im not i dont like the idea of taking a smaller assignment than this year if its going to drive people out, but i do think you have to realize that 12 months from today when were sit not guilty this room looking at what our options are the rates are going to be going up about 30 percent with no stablization rate to apply against it. We only have 6 months of utilization with a larger active retiree pool. So we dont know if they will come in. It is a crystal ball. But we cant really say this is how much its going to cost since sciu negotiated 100 percent, thats all new as of january 2016. Dr. We all appreciate unknowns. The question is if we were to vote this through, would it be incumbent on Health Services, when we publish the new rates for 2017 to give people a heads up that for two years we have used, we have suspended the stablization program in order to keep rates stable in an other way. So things, this may go alert. Its a possibility. The year after there may be, as commissioner sass said, a very large increase. I think that is a minimum step that should be taken and i guess the question is do we want to rip the band aid off all at once or just do it partially. And the question is that commissioner sass seems to want to have more to be able to Carry Forward next year and if you want to put that in the form of a motion, that will obviously impact what has been calculated here. People will start to see a higher rate beginning now. Are you ready for that . Thats a question. Im ready for it. Hes ready for that. If youre ready to put that in the form of a motion. Okay, i would make the motion that we, instead of buying down 5. 5 million, that we buy down 50 percent of the remaining stablization reserve, leaving 50 percent for 2018. I will second that. There is a second. Been properly moved and seconded. We change the actuarys recommendation and define it as onehalf of the stablization reserve, the amount that i havent calculated. Commissioner lim do you have a number so you can calculate that too . Thats the motion and its been properly seconded. Are there any other questions from the board . Then my concern with that one is, using 5. 5 million you will be seeing a rate increase already for all members. By reducing the stablization reserve then it increases the rates much higher and you will be driving then how do you avoid migration . We might not even have a city plan next year if we have a lot of the members moving out of the city plan. We might not have a need for the remaining money when our claims ratio would even be much higher because if we have a migration in 2017 with more because of the increase in rates with have the members moving out whats remaining are just the sick members and instead of the claims ratio 150 percent it may be two, three hundred percent. We might not have a need for the surplus any more i mean the 4 million thats remaining in the surplus, if we halve it out, we might have a deficit of 10 million because we only have sick members. Its just how do you balance that with the migration issue . Well, if it doesnt happen next year it will did he ever tonightly be the following year the way this was presented. I mean the way this was presented, definitely would mean the death of the program for sure. It means by next year the death of the city plan and we might not even need any more of the surplus if its not affordable any more. All right, any other comments for the board on the motion . Actuary. Preceding the activities of last year i have stated this but i want to restate it. We were at a point where we had to do something because it had deteriorated and rate level was so high that that had gone on long enough. What we are proposing is to keep it vital as long as we can so i appreciate the sense of perspective that, yes, but predating that actions could have been taken a long time ago that we wouldnt have gotten to this. We cant go home again. As we decide what to do, hopefully we will take this as an understanding that Going Forward we wont allow this to happen in the future. That is a point to be taken. So im understanding because of the buy down, i mean we added more members, 71 actives and 30plus members for the early retirees, right, in the city plan 2016. Had we done that instead of having more members coming into the city plan we would have a big migration out of the city plan. Then we wouldnt be talking any more of stablization any more because its not affordable any more in 2017. All right. Is there Public Comment . It never gets easier and thank you for the opportunity to remind myself of who i am, claire swansky, rfccf when i start forgetting that were in trouble. Thank you, director dodd, for your explanation. My concern is that Health Service is in business with its own plan. We have always been in business with our own plan first and foremost. Hmos were added as a convenience for members and a lower cost option and thats true for your medical plan and it was true for the dental. So your first and foremost responsibility, in my view and my experience, is to city plan. So you have 90 Million Dollars in the bank. Weve got it in different little reserves here and there, but thats your money to take a look at and thats your business to keep city plan viable for actives and especially vaibl for early retirees and for the medicare retirees, people have families. Our business, and it was established in the charter originally, was that City Employees are to get the best benefits and to have benefits when other employers werent getting them. And that was the original intent. And the city plan was set up primarily to do that. How you want to play around with the reserves, i think is up to you. I think you have one option in front of you but i think you need to first and foremost consider how you are going to keep your business at a competitive rate against all others. And while we may be subsidizing a flex funded plan because we have chosen to self fund that because we have the money to do so, your first and foremost responsibility is to the city plan and to the members in it and to continue to grow that plan or at least sustain it. And i think you can grow it if you take a look at a more creative option in terms of how you keep those rates competitive. That is your primary business, its in the charter, thats what you do first and foremost. Everybody else is an option for convenience for members, first and foremost its city plan. Thank you. Thank you for those comments. Are there other comments . Hearing no other comments, are we ready for the motion to vote on it . Madam secretary, would you repeat the motion . The motion is to buy down 50 percent of the remaining stablization reserve, leaving 50 percent for 2018. Thank you. Everyones heard the motion and we will now are ready to vote. Do this by roll call. President scott, yes. Vice president lim, no. Commissioner breslin, yes. Supervisor farrell, yes. Commissioner follansbee, no. Commissioner sass, yes. The motion passes. The motion is accepted, 42. Yes, 42. Now well want to see a calculation of this. Yes, id like to. The actuary will be requested to bring back the new calculation at the next meeting based upon this motion. Thank you. No, we have not. All right, so the next item is to suspend the Stablization Fund policy. Took those ought of order because of the prior motion. Yes . Yes. Has that been seconded . No, im looking to the secretary to state the motion. There wasnt a motion. There wasnt a motion. No, there wasnt a motion. Commissioner sass made a motion. Made a motion to use onehalf. Thats correct. Have we passed a motion to suspend the policy . No, that has not happened. So are we going to do that . I move that we suspend the policy. Second. Thank you, we now have a motion and a second to suspend the Stablization Fund policy. Is there any question by members of the board on that motion . Is there any Public Comment . Seeing no Public Comment, we are now ready to vote. All those in favor, aye. Those opposed . Motion passes unanimously. All right, sorry, secretary. We are now to action item 8. Item ate, action item, presentation of uhc city plan selfinsured rates and premium contributions for actives and early retirees and preliminary medicare retiree rate renewal for 2017 plan year. Aon hewitt. I dont know the correct procedure but we just did all that. Thank you. Go right ahead. Item 9. Item 9, discuss item, presentation of uhc city Plan National ppo audit. Aon hewitt. We have, by my lights, some 25 to 35 minutes before we are overtaken in this room. Right. I am going to ask the Board Members as well as the presenters to be focused in their questions and presentation. Your request has been heard. Im dr. Pace and im here with aon hewitt presenting an audit. As you know you were requesting in 20 continue for nppo, we went in and checked the implementation, we audited 10 percent of the population plus an additional 25 sample of medicare with dependents that were nonmedicare. There were no adverse findings found. There were 3 Medicare Beneficiaries where the number that cms had and the number hhs had didnt match and that was easily reconciled and there were two enrollment dates that were confirmed, but otherwise there were no programming issues, all members were enrolled and cards distributed as you would xet. Expect. I would like to thank uhc for their cooperation. Would that qualify as clean. Absolutely. Unqualified would be the other term. Thank you very much for your presentation. We will go to discussion item 10. Do you have a question . Yes, a question. We did approve item no. 8, right . Yes. On item no. 8, its a rate card. These are the premium contributions for actives and early retirees but on item 7 is the suspension of selfplan stablization reserve and allocate onehalf of the reserve. Item no. 8 is the rate, the members will be paying. We didnt approve the rate because the amount will change. We didnt approve item no. 8ing. Not the rates itself . Oo . Item 7. We requested that the actuary bring to us at the next meeting the new rates based upon using half of the stablization. All right . Were at discussion item no. 10, correct . Yes. Thank you. Item 10, discussion item, health plans dashboard, early retirees. Marina coleridge. This is a discussion item thats been deferred i think for 3 meetings and im sorry you are rushed. This is a dashboard created from our all claims data base. Is that correct . Yes, it is. The new all claims data base. Marina coleridge, Health Service systems, Data Analytics manager. And we have a presentation, sfgov tv, thank you. I will make it brief. You can all take your packets home with you and review. To your point, this is out of our new all Payer Claims Data base. We have gradually been going through each of our population segments doing all the vetting of the data and understanding what it looks like out of the new data base. This is our first time presenting the early retirees. We brought the active population with you in january and we are working toward gaining some insight on our retirement population and then Going Forward hopefully we will start to see these fast and furious and frequent with our fully integrated dashboard. Thats where were trying to take this to as we continue to ramp up. Its slow going work though. So the last time you actually saw anything from us in terms of a dashboard on our early retiree population goes back to january 2013 for some kaiser data and in december of 2012 when we brought some United Health care data to the board. So it takes a while to put these together, but were hoping to become more dynamic with this and have this information more readily available to you. I will just say there are several comments here, which are to say the data has looked surprisingly or maybe not surprisingly consistent over the years in terms of graphic, size of populations and also in terms of we combine those pools i dont, but ano does rate cards on active and early retirement populations. So when you take a look at what we spend pmpm or our utilization method we always see that utilization and cost higher for our early retiree population, again not surprising or unusual. The first slides 3, 4 and 5 of the deck, just take a look at those demographics. Those have remained pretty consistent with what was presented the last time to the board. Our total cost pmpm we have seen increases pretty substantially with blue shield and kaiser over the last couple years and when we look at the cost composition, as you know, the big driver there is pharmacy cost. The management report also in the board packet today we have the risk source for both the active and early retiree population. The last time we brought risk scores to the board in 2014 prepared by aon hewitt, these risk scores are now out of our all claims paid data base. Its the same versions of everything and back then our risk score for the early retiree population was 1. 9. Now were looking at it being around 2. 038, so some of the costs also driving from your risk score changes. Then as we go through the utilization metrics, again im going very quickly in interest of time so if you have any questions i can take those, but were seeing the same consistent trends we saw in our active populations. All the metrics, the inpatient days per thousand, cost per day, our procedures per thousand, are all higher in our early retiree population versus the active population that those are with. And we consistently, page 13, again see the blue shield prescriptions about 49 percent more prescriptions in a year versus what we see for our kaiser members. And that was the same in the active pop place, we saw about 50 percent more population for our blue shield active versus kaiser, thats where our big costs are driving from so i will note that for you. With that, in the interest of time i will bring it to a close unless theres any particular questions. Questions . Commissioner follansbee. I thank you for all the risk adjustment issues. The only question i have is on slide 9, 9 and 11 no, 9 and 10. The inpatient costs per day, the conclusion on 10 is discharging members early results in potential greater savings. We pay kaiser on a, theres no claims item for kaiser, right . Its all per member per month. Thats correct. Because their in patient cost per day, if you multiply by days its 48,000 compared to the other two which have higher leepgts of stay is actually less, you multiply their 6 average length of stay times their cost. Its just kind of curious to me why kaiser is so expensive in patient cost. Page metsler, we have looked at that, kaiser population when they are admitted they tend to use more services and resources than what you find when people are admitted perhaps slightly earlier and be stay a little longer at a blue shield or uhc facility. But it takes a lot more for people, as you know, having worked for kaiser to get admitted in the first place. It does raise im trying to ignore my kaiser experience i was also chief of staff at another hospital in town that was not kaiser. But if these are the issues, it raises the quality issues about one could argue that the patients who have kaiser are getting admitted, if its a higher threshold what does that mean for care, the short stay suggests theres no adverse outcome if they are getting discharged but are they getting discharged prematurely, readmissions, theres a complicated formula. This doesnt really address all the issues in that sense. We have looked historically at readmission rates and also looked at what services kaiser is able to provide on an outpatient basis prior to someone really needing an admission so we can try to at least somewhat quantify the quality issue. Thank you. Are there other questions from the commissioners . Thank you very much. Thank you. Public comment . Seeing none, we will go to item 11 . Oo. . Oo item 11, discussion of Health Care Value initiative which compares benefits across governmental and private sectors. Aon hewitt. Id like you to give us the punch line. I cant hear you. So basically the headline is from a member cost, out of pocket cost perspective, members pay far lower than your competition or other Public Sector industry so their out of pocket costs are lower. From an employee contribution perspective, there are employee contribution is significantly lower than benchmarks, looking at Public Sector as your benchmark category. Then if you look at the total cost of the plan, you are very similar from a total cost perspective but a really Important Note that the employer actually subsidizes much higher portion of the cost. And i would ask if you could have them pull up this slide. Sfgov tv, we have a presentation. Yes, that particular slide because its important. Its very important, right. Im looking at the line that says employer cost. So the employer is subsidizing over 11,000 dollars and from a total percentage basis that represents 85 percent of the total cost that hss is subsidizing. And if you compare that to Public Sector they are subsidizing at a rate of 66 percent, so again significant subsidy from the Employer Perspective and positive impact of employees from a lower out of pocket cost and a lower contribution component. If you turn the page, this is an interesting benchmark, were not only looking at out of pocked, contribution, were looking at efficiency of your program so how well is your program run. What we do with that component is to neutralize your cost based on your demographic, your plan design and your geographic location. If you look at the financial index at the bottom, anything over 100 percent is a really good thing. If you look at hss you are almost at 117 percent efficiency rate, so you are running your programs very well and you are doing it again better than your competitor set. If you look at the Public Sector they are at about a 105 percent efficiency rate. Overall, very strong employer subsidy and you are running your programs very efficiently. Bottom line. Thaupb you very much for that outstanding report. I know ano has been trying to get that in front of us for 3 months now. Again, thank you. Director dodd, excuse me, we are now finished with the benefits and rates rates and benefits committee portion of our meeting. We are now going our regular Board Meeting. Is everyone with me . This will be a very short Board Meeting. Director dodd, item 12. Item 13, direct rrs report, director dodd. I would like to start out with personnel and introduce edward tang, our new benefits analyst. He is what . Our new benefits analyst. He previously worked at Social Security administration so hes coming in at city college so hes coming to us with a lot of experience. Its great to have him. Welcome, delighted to have you. We dont have with us but our Communications Department doubled in size and we now have a graphic artist working with our communications manager, rosemary, the new staff person is danalu, she brings lots of Staff Experience and has already shown her creative value. Welcome. I think the other thing is we have begun the work, as ive said in two previous meetings, on the Employee Engagement survey. The Governance Committee was updated on that on may 10 per a previous board motion. And the chair of the Governance Committee has spoken to the firm principal, so we will be doing a survey at the end of june, i think, weve gotten it moved back, to look at Employee Engagement. In terms of operations we werent able to give you specifics last month but we did point out that our march calls were increased greatly due to the 1095s being mailed out. The board had requested that we prepare a cost analysis of the implementation of the Affordable Care act informational reporting on the forms 1094 and 1095. The total software and postage was 136,927. To mail out and calculate two forms. Thats part of the Affordable Care act. The total hours was 1867 and when you think of one employee its essentially one fte because one employee is 2080, so we used just under one employee to get all this done, but it involved several departments and a tremendous amount of work on our Data Analytics department and our operations department. There are two slides in the deck that further explain this. Thank you. Rather than having those presented we put them in my report. In terms of Data Analytics, our system is down right now while the system converts to microsoft 9. 2. The exciting part of that is that well have Access Management systems, and leave management systems. Many of our problems happen when people are on leave. And of course this will provide a path to e benefits. Marina gave you the information on the Data Analytics risk scores and that they remain similar to what we had in 2014. And lastly, our enterprise content system, which is the digitizization of all of our thousands of records, is moving along and well be looking to work with the vendor the week of may 23rd. In terms of finance, ill just say that we, last month and this month selected a vendor for developing an action plan to improve the web site. Its extremely timely because our web contract notified us, gave us less than 60 days notice that theyve been with us since before rosemary came so our web hoster is giving up the business and we are scrambling to find a new hosting service. And wellness is very exciting, i talked to you briefly last month about the colorful choices, we have already had 2,251 people enroll in colorful choices. The overall january to march visit to the Wellness Center increased by almost 2,000 but the unique visits decreased. What were learning is people are coming back for more ak ctivities, which is great. The Management Team participated in two half day Management Team trainings which were very helpful. Im working with senator herpb hernandez staff. We are working on an update on Fertility Benefits, our Fertility Benefits are like 20 years old. That will come before the board, try to bring our fertility benefit into the current state of science. Had a presentation on Kaiser Permanentes extensive teleconferencing services, attended an aon wellbeing workshop and i attended the catalyst for change meeting, also very helpful, allowed me to validate what uhc was saying about egwp with the state of pennsylvanias egwp experience. Then i end by pointing out the pharma increases, the news continues that johnson and johnson is raising its prices on the leukemia drug but we also see prices being raised on generic drugs, not just specialty drugs. Finally is the packet i submitted to the state legislative committee on sb 932. Unfortunately it was not heard yesterday at the meeting, or maybe fortunately because one of the things that it does, it sets rates for Emergency Services and as you probably know, San Francisco General Hospital is a revenue generator for San Francisco General Hospital so they had objections to this. So we will be working with the author and with the group on health, this is being sponsored by the Pacific Business group on health, to try and make it do a carve for San Francisco General Hospital or whatever we need to do to support this. It has very important components including eliminating exclusivity klauses causes clauses, you cant say if you are going to be on our network you have to be exclusive and not provide other networks. It eliminates the requirement for mandatory arbitration for antitrust and prohibits clauses that prohibit the disclosure of rates and essentially rates and costs. So its the exact kind of transparency bill that were looking for and we just have to work with the citys Health Department long enough to find a compromise. It will go to finance committee and the senate and then probably be put on suspension because it does have a small Financial Impact to the state and it will be taken up in the context of the state budget, but its a very exciting piece of legislation in terms of our longterm issues with pairing Health Benefits with lack of transparency with all the things weve been wanting and unable to get. So that concludes my report. Also included in your report is an updated calendar for the rates and benefits, i just call that out to everyones attention. All right. That updated calendar has the board of supervisors hearing dates on it. Actually the next one, this one doesnt. Oh, sorry. Well look forward to that update, secretary. Now lastly or next. Item 14, discussion item, as of march 21,. I know you will be concise and focused and clear. Pamela levin, chief financial officer. As you know, june 30, 2015, that trust had a balance of 81. 5 million. We last month we projected that that balance was reduced to 77. 3 million and this month down to 72. 1 million, which is a difference of 5. 2 million. The 5. 2 million is predominately due to unfavorable claims experience for blue shield, march was a horrific month and im happy to say that next month will be, looks like it will be better. So of the 5. 2, that was 3. 4. Dental had additional claims to it but its still consistent with last years numbers, 1. 3 of the 5. 2 and the remaining 500,000 had to do with city plan unfavorable. So were on top of these watching it to make sure that we, you know, are managing our finances in a fiscally responsible way. Thank you very much. Are there any questions on the Financial Report . Any Public Comment . Hearing none, we will move to the next item. Item 15, discussion item, report on network and health plan issues if any. All right, we have . Good afternoon, Kaiser Permanente, quick announcement on a public announcement we made last month that we will be expanding to Santa Cruz County effective in january of 2017. We will be opening through new medical offices in watsonville, santa cruz and Scotts Valley and we will be utilizing Watsonville Community hospital for the inpatient services. That took 20 years. It did. And how do i know that . I dont even want to ask. Any questions . Thats outstanding. Glad to hear that. And from our blue shield representative . Paul brown, blue shield chl i was able to confirm on break that nutritional counseling is covered as any other office visit. Just thought id share that. What are the restrictions on it . I dont believe there are. Has to be determined to be medically necessary. So you cant just have it because you think you need it. Correct. You have to have a malady first, you have to have an illness first. Yes. Or convince your doctor. I dont like that part at all. Thank you. Thank you for bringing that information forward and next . Item 16, discussion item. No, theres another. Sorry. United health care. I just wanted to take a few minutes and share some comments on the medicare ppo plan. From the period of september 14 through december 31 our preenrollment call center took a total of 753 calls with an average speed of answer of 5 seconds and during that time only two calls were abandoned, meaning they hung up before they could be assisted. October was the month with the highest volume, with 480 of those calls. After the plan went live on january 1st we had a total of 1,824 inquiries during the period of january 15th through april 5th. The top 5 inquiry types are people calling in to validate their benefits, such as is a service covered and whats my copay. The second most frequent call was members calling to update their phone number or email address. Third was getting help finding a provider. Fourth was formulary lookup and then fifth was claims related. And in closing we just want to say that we think those volumes and types of calls are well within normal limits for implementing a new plan. Thank you very much for that information. Weve had no complaints. No complaints. Well, ill run right out and put in a call. All right, next item. Item 16, discussion item, opportunity to place items on future agendas. Any Public Comment . Next. Opportunity for the public to comment on any matters within the boards jurisdiction. Is there any Public Comment . Hearing none, we stand adjourned. meeting adjourned