about it. it helps to the things we qualify for including our federal programs. also helps with administration of costs. also helps to bring down some of the cost for us at the city. we will have to in -- open enrollment periods and that is something the health service staff has agreed to do even though that is more work for them. i want to thank them for that. we did make some plan amendments that drive the costs down and there is also an application of a slight subsidy for blue shield in order to make sure that we are keeping the risk pool such that we're able to collect the accountable care organization to drive down the cost. to recap, for kaiser, i will not speak of some of the other plans for benefits that have stayed static. for non medicare retirees we saw rates go to 4.9%. that is significant when you take a look at how much we spend

for this senior medicare world. it went from -2.79 to -- on kaiser. blue shield went from 15.4% to 7% increase which is a significant savings and for the medicare component from 19.60% increase to 11.2% increase. these are significant changes and i will speak to those hmo issues. 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.

>> this is one of the museum's longest art interest groups. it was founded by art lovers who wanted the museum to reflect new directions in contemporary art. it has been focused on artists in this region with an eye toward emerging artists. ♪ it is often at the early stage of their career, often the first

major presentation of their work in a museum. it is very competitive. only a few artists per year receive the award. it is to showcase their work to have a gallery and publication dedicated to their work. ♪ i have been working with them on the last two years on the award and the exhibitions. the book looks at the full scope of the awards they have sponsored. ♪ it has been important to understand the different shifts within the award program and how that is nearing what else is going on in the bay area.

-- how that is mirror beiing wht else is going on in the bay area. ♪ there are artists from different generations sometimes approaching the same theme or subject matter in different ways. they're artists looking at the history of landscape and later artists that are unsettling the history and looking at the history of conquests of nature. ♪ artists speak of what it means to have their work scene. often you are in the studio and do not have a sense of who is really seeing your work. seeing your own work at the institution have gone to for many years and has an international audience is getting the word out to a much larger community.

♪ good morning, everybody. i am the director of the mayor's office of housing. i want to welcome everybody to what will be a spectacular affordable housing development, yet another spectacular affordable housing development in san francisco. on this occasion, i have the pleasure of introducing a variety of people who will talk to you about this particular project and to acknowledge the wonderful people who are

contributing to the creation of this housing for formerly homeless veterans. in san francisco, we have tried very hard to provide housing for all those who need housing and provide it not just with bricks and mortar but with wraparound supportive services. this is another example of that. we have on this special occasion a special guest, a person who has been a great supporter of affordable housing, the assistant secretary. before we have heard speak, i would like to ask the mayor for a few remarks at this time. thank you. [applause] >> good morning. we have a very dedicated team. this is a very special occasion. we get to welcome in our secretary of hud who has been a

wonderful partner along with the local hud office. they have been great partners with the city of san francisco. decades. this is a very special project to us. it focuses on our veterans and what we're doing to help our veterans. that has been one of the most important goals and reflections of the values of the city. we want to emphasize every opportunity we can where we say that our veterans deserve all of the help when they come back and are adjusting in life. i know of no greater partnership and with our high offices -- down with our hud offices -- i know of no greater partnership them with our head of block -- hud offices. we had a chance to meet with president obama at the conference of mayors. he had our cabinet members meet with us.

we let him know that mayors across the country are struggling with how we deliver services and deliver on the promises made by this country to take care of our struggling families, low income families. he has delivered with the kind of programs that hud has any kind of programs we have with our local talent. i want to thank reverend fong and others. we have a new director of the mayor's office of housing opportunities, partnership, an engagement. that is bevan dufty. the veterans, the contractors, nicole from our local offices. we have assembled contractors and a marvelous design team.

their expertise is to use old buildings that look worn and unusable and recreate them with the highest level of environmental quality we could possibly have. i know the best talent is here working with cahill and our veterans and veterans' offices to make sure that this housing opportunity comes in on time and does its best to reflect our values. i want to thank everyone for assembling together to make sure this promise is delivered. a special thank you to our hud national office, the secretary, donovan. we had a chance to talk about this system -- specific project. the deputy secretary came out to view the progress. it emanates from the national

leadership by an increasing strongly that we are delivering on our promises. this is why we get to announce that we're still the third lowest unemployment rate in the whole state of california. we are delivering on these promises. thank you for all coming today. [applause] >> at this time, i would like to ask the assistant secretary to come up and say a few remarks. as the mayor mentioned, she is a wonderful supporter of affordable housing. her lifelong career as been committed to economic justice and the creation of affordable housing. she is a personal friend and somebody in the right position at the right time. without further