the department has more to say but i want to thank you for the work your folks have put into it and the work you will do going forward. katherine dodd. >> thank you very much. i could not ask for better member of the health service board because she pretty much said everything i needed to say. she summarized the changes we made. we were fortunate the board acted swiftly after proposition c passed, which allowed us to go from changing the plan year. the other thing that is before you related to the plan year is the 10-county service. the charter requires this every january and we will do it again in the spring and every spring. to service that can most populated counties in the state. we were able to do that and look at what their rate was and bring this significant rates down so that our overall increase is only 3.4% increase

compared to a national average of between seven and nine. i think supervisor chu summarized the remaining things. i will call on our action or to give you specific details of the highlights. -- our actuary to give you the specific details of the highlights. >> good afternoon. i am your retained actuary and i will go with item five which is the 10-county survey. that has been completed and it has been completed and done as is specified in the charter. for calendar year -- fiscal year 2012-2013. before i say more about it, i wanted to let you know. it is on page 11 of your

package. on that page, you will see that the change for the existing number of $503.94 has gone up to 522 cents -- $522.90. a 3% increase and that would be in -- a contribution that is offered by the 10 largest counties in california, excluding the city and county of san francisco. that is on page 11. interjecting at this point as was previously shared by both parties, this is -- proposition c has been enacted. we have moved to a short plan year for -- to december 31, 2012. that was done as additional information. to closely and improve

administration with a flexible spending account, streamlined processing and reduced rates. that being the case, we wanted to inform you that as was said, we will bring additional computation of the survey -- compilation of the survey. starting january and ending december 31, 2013. the number has increased to $522.97 from $503.94 or $19.30. -- $19.03. i will be pleased to answer any questions about the 10-county service. any questions? supervisor chu: no. we called both.

>> i will go over the history of what happened and give you information for item 6. the information -- ok. what we did is i worked on behalf of hhs with the direction of katharine dodd. your -- as to what the starting point was and the outgoing -- outcome of what boat -- those negotiations were. i calculate on behalf of people who have the city plan which is yourself. the premium equivalent rates for those people, those are basically based on sound actuarial principles and reflect the anticipated costs of what we think the future claims will be and incorporate the present administrative fees. we also did a projection of the dental plan which is the plan provided for the active people.

in this process as was previously discussed, we started and got to a point where because of proposition c, we got six months rates with no planned changes and that saved $8 million, $8.30 million to be more correct. we had had a series of meetings where we presented a plan benefit change option to the health service's board and a set of benefit change options were proved that added an additional $8.70 million savings. starting from a certain point of a high overall average, we reduced that average, that impact down by $17 million in combination. with that but, i think it was said the basic information that was -- what happened for kaiser was they changed the office visit co pay and the outpatient surgery copayment.

it is in the document. blue shield, there was additional changes, the copiague and outpatient and inpatient surgery and some pharmacy copays and they did change the out-of- pocket maximum period for the city plan there were no explicit benefit changes. what they did was open the access from the option ppo to the open choice ppo which did not have a disruption but basically allows you to get a better rate at available facilities where benefits are provided. for specialty -- the added a specialty drug management component to the drugs which will allow you to manage to those drugs better and allow for a better use of those in reduced costs. this plan changes were presented and approved. as i previously said, the effect of all of these was an

additional $8.70 million over the transition from a 12-month set of rates to a six-month set of rates. what they plan changes do is a line copiagues -- align copays. when we go into the next open enrollment for obey at calendar plan year stanek -- starting in january it is not anticipated there will be no planned changes at that time. also, i i would like to -- i would like to inform you, a law was passed, as b 946 which requires that you -- it was called the autism act. all the compliance is required as july 1, 2012. all three plans, the cost impact

is an additional set of services and it was determined by blue shield and our analysis for the city planner where i do the calculations that there was no need to increase the previously determined premiums. kaiser, who has the largest concentration of children, added an approximate value of $922,000 to these -- to their costs so that was slightly increased costs. this was to be determined by was determined by the end of the renewal cycle for this shortened plan year. after all this was done, we were at the $17 million savings that i shared with you. it was decided to -- blue shield as a part of the nonprofit pledge offered two amounts of money to hhs that they could determine how it wanted to apply

them and it was determined to apply a certain amount of that money to the blue shield rates and that amount of money was 5.2 -- mullah -- $5.20 million. it makes contributions for the shortened plan year. people who enrolled in blue shield and in most cases it cost neutral, there is no change. it was -- what it does is make it for the people who stayed enrolled in blue shield board decided to enroll in blue shield, they would not see any increase in their contributions. given that there is two [unintelligible] and they had seen people leave as a result of the difference in the contribution in keyser and blue shield it was determined this was a good idea to take this one time amount of money into consideration because of its availability and apply it to

the rates. and so the hope is that will help stabilize what has been a deteriorating population of people from blue shield to kaiser. for information say, you're kaiser rates are on page 12. your blue shield rates in your packet are 13. uhc is 14. dental is on pages 17 through 19. is there any questions before i continue? supervisor chu: this is an important point at something that was brought up at the health service board and was a matter we grappled with as well. this is the use of subsidies. as many of you know, we had entered into aco's accounts will care organization. at least a year ago. the point of the aco's and they work with an entity like blue shield.

we're supposed to coordinate with the doctors and patients to improve the experience. so when someone is hospitalized and get this charge, is there someone to follow up and say are you making -- taking york medication to prevent re hospitalization? some of the huge increases we saw initially had a lot to do with the couple of things. there is many factors they had toward figuring out what those rates will be but they look at what our experience was a. we have large surgery's and expensive procedures that were done for our population and that was one factor. one of the other factors is the risk pool. are we getting our different providers seeing healthier enrollments, more kids, more families being enrolled in different health plans? we saw with a price differential for blue shield and kaiser in the past year, we saw a lot of migration of families into kaiser. there is a host of reasons why

people migrate. it is not always tied to what the premiums are. it has to do with the economy and a number of different factors. people were migrating to kaiser and blue shield experienced a deteriorating population and risk pool. the idea was to allow the aco's to work and apply a subsidy to allow that differential and hold a constant so people would not deteriorate any further to allow time for the aco's. the idea is we would put in $5.20 million out of the blue shield commitment in terms of a credit to stabilize it. on a one time basis. that was very important that the health services system made. we had no interest in continuing to prop up blue shield. that is not the intention to subsidize a private insurance company. we wanted to make sure we allowed a aco -- the aco tow

ork -- to work. this was meant to be a one time investment. there was $18 million, $19 million that had been remitted or given us credit from blue shield so we're not using the entire amount, only $5 million. about half of the benefit will go to the employees and half will go to the employer. the city and county will receive half of the benefits but the employees will see half of that benefit in terms of lower premium costs. i wanted to elaborate on the reason why the health service board acted to utilize the $5.2 million to let you know this is not something we intend to do on a continual basis and guiliano with the split with the benefit is. that was a very much talked- about topic at our health service board. and so with that, -- with that. >> thank you for elaborating. i wanted to share things relative to the dental plans.

we raided the dental plans and created premium equivalents rates for the self funded. as you can see on page 17, the rates for the employee rate went down relative to the others and the other rates of the e plus one and plus two went up. there is no rate change. one thing i needed to share and that is historically, hhs has charged a composite rate or the same rate for members whether employees choose e or eplus one or eplus 2 coverage. this is effective starting july 1, 2012 in order to be compliant with imputed income requirements.

hhs will discontinue charging their rental -- the dental rate and charge the tier rate which was asked to calculate for the coverage local elected by the employees are members. that is a change i wanted to make sure -- [inaudible] correctly about that. i would like to go through some ativan numbers -- aggregate numbers. this summarizes the six month plan year. this is only an increase of a $11.6 million. when we started this exercise we were looking at $33 million. $22 million has been taken out of the till, said espy. this is a true 0.4% increase including dental and as was said earlier, that is below the national average of 7%. lastly on page 25 of your

packet, it goes into the split between the $351 million in terms of how much the employer spent and how much employees spent. right now your spend is 88% as employer. and 12% or 12.1%. 87.9% and 12.1%. that is the differential between what the employee pays and what the employer pays. that number, but to numbers are $308,000,000.42000001 -- $308 million and $42 million. regarding board approval is included in your agenda for item

6. i have no other things to share with you. supervisor kim: let's go to our budget analyst's report. >> page 8 of our report, the six month cost for all the health plans is 351.3 and that includes the unified school district. on the bottom of page 8 we point out that the audit found the health services trust fund had increased by $13.3 million or 93% compared to june 30, 2010. this would be a jan 30 of 2011. that is showing -- sean on the table on page 9 of our report. finally we point out that ms.

dodd pointed out the implementation of proposition c has not resulted in a reduction of costs. we recommend you approve -- approve the ordinance that is before you. supervisor kim: -- supervisor chu: are there members of the public who wish to speak on items five or six? seeing none, public comment is closed. colleagues? >> motion to approve these items. thank you for your great work. all your work and helping to negotiate these rates. supervisor chu: we have a motion to send items 5 and 6 forward with recommendations. thanks to the department for all your hard work. we know you'll be back in july

for the next set of rates. thank you. we will do that without objection. thank you. do we have other items before us? >> that completes the agenda. supervisor chu: we are turned. -- we are adjourned. >> thank you for coming to the larkin street youth center. [applause]

thank you for host in this very important announcement. it is one we're very excited to do. this is a little background that we want to give. a few people need to speak. we are excited about where we're going. we have to put in the right context.making, but it is also that where we come from and where we're going are linked. this is a tribute to them. [applause] supervisors, jose cisneros, our treasurer, thank you for being here. the department of public health. [applause]

our two chiefs, fire and police, thank you for being here. [applause] our school district, hycrdra mendoza, children, youth, and family. thank you for being here. [applause] joaquin torres, thank you for being here. we will give you more resources. you will not be the only person here. [laughter] i also want to thank all of the members of the community, whether it is wells fargo, the intra-faith council, the staff from hsa and public health, they are all here.

i know they are feeling some really great bribes -- great vibes because of the announcements we have to make. it has never been about a campaign for an election. it has always been about a campaign to improve lives. i will take you back to a moment a few months ago. let's get things done. no, let's get things done better. [laughter] i saw that in the middle of the night and thought that it worked. that was really good. bevan and i already knew we had a great director. little did we know we would have an opportunity to have the director of great programs that we want him to be in charge of in this administration. i have said all along that we

need to improve our delivery of services. we need to bring hope to a lot more people. we need to be a bigger tent. consistent with the things i have mentioned since the inauguration that i feel strongly about that resonate with communities, we need to get jobs out there. we need to get job training out there. if you care about homelessness, you ought to be a big advocate of job training. that will help to sustain people's ability. even though we find shelter, we need long-term shelter. the housing trust fund working group that we're doing is on that. the people on the street, where is their hope coming from? it has to be that we register our support for them in every possible way. getting all the different agencies around housing, better

quality services for our homeless and those wanting to not be homeless as well as those who are already in the system. we need even more leadership. i will take this opportunity to personally thank darius for his wonderful years of work. [applause] no one has ever said it was easy, but we are out there every day on market street, third street, a town -- chinatown. every single day he was out there asking for help. he got that help. he said he wanted a little break to go to dpw. he is going to be a continuing partner as a result of that. when he left, we immediately thought about who we could find

who would care enough and also embrace the direction we have been talking about, the fulfillment of more promises, the fulfillment of a long promised we made, and also have the sensitivity, passion, and compassion that will lead us into the next generation of work that we must do to end homelessness. that is our goal. it is not about temporary shelter. it is about our long-term goal. that means we reach out to people. we try to make life changes. we tried to get a situation where better decisions can be made. we want to get people supportive care and housing. hopefully, it will be short and long term. there is another great advocate walking in.

[applause] director of the housing authority, so many resources are needed, henry alvarez, thank you for being here [applause] i could go on and on. i know that bevan is eager to get to work. as we talk about this work and shared our passions and vision. iwe also went to our individual offices wondering about the best acronym to have. [laughter] you cannot lose this. housing opportunities partnership engagement are well deserving titles in and of themselves. when you put all that together, it spells something we both

share. that is hope. that is the underlying reason why i asked bevan to come on board and take on this massive but very serious responsibility. we have to work on the future, hope for everybody in the city. i am committed to this. we always had a strong commitment to it. i know somebody behind me has registered that commitment and hope for so many years. the former board president, supervisor, and the one who authored the 10-year implementation plan to end homelessness in the city, angela alioto. [applause] >> we are into the new year.

i just want to say how excited i am that you are going to take this position. what is really important to remember is that the plant that we have implemented from june 29 of 2004 until today and of the wonderful leadership of our new mayor is that our san francisco plan is an example for the united states of america. for every state, our plan is the one to follow. [applause] we have house over 8431. permanent, support of housing. the 10-year plan takes care of the chronically homeless, a subsection of the general thomas -- homeless.

i want you to know, bevan, you are probably going to be sorry that you ever met me. i will call you to come pick up a person on the corner. it is so great to see the inter- faith council here. [applause] they are the group we go to when we need immediate housing and people. please make sure you remember that inter-faith council is the one to call. we're the best. we're going to stay the best. we have a new director. it is going to be so exciting. we have the general plan and the homeless population plan. it is one we need to continue. we need to see