this would have to happen in the span of a month. i don't think in the possible. this would be the timeframe we're locked into to get it back to you as early as september 3rdrd. so assuming we get approval now the next slide says we have between september 10th and september 30th which is 20 calendar days to do all the work to get the work and do the calculations to get it into the system to send notices to all the members. this takes three to four weeks and then another three to four weeks to get the materials out to your members. we have 20 total days and 13

business days to get that done. we think we have insufficient time to get this done. it's the same issue the health board have is to deal with >> supervisor avalos. >> is it true for your presentation. so you're saying that option b is a bad option? i'm joking and a that i'm not going to say >> the question i have is about option a. opening statements a doesn't preclude the negotiation rate it's toward the 2015 rate when

do they begin >> to some expect they've gone already there are some commitments high-level commitments but it could start immediately. >> i think that, you know, if we're not going to be doing option b we need to make sure that the work we're doing today is going to have an influence on 2015. i'm concerned but when kaiser comes they're not going to be able to present a starting point null april 2015. and so it looks like we're not going to have firm basis for negotiations until that time

which doesn't leaf enough time to pertaining prepare the 2015 rates for our climax around the budget. it looks like our efforts are going to be taking it or leave it from kaiser >> we'll be discussing to them and we've had some earlier discussions with them is plan design changes that would move us a little bit more into a self-insured model which we get the immediate benefit independent of you know of of the process. so if i move to a different plan model that's a different impact. the second thing it's possible that we can get a better linkage

between the off the costs and the actual volume we captioners so that's a available component. so there are design changes we can do. you're right they need a certainty amount of histories to put together the proposal but the methodology is something we can work on between now and then and they can bring back some alternative ways to - they would be looking at typically they'd do in april 2013 and project it to 2015. we're going to get a result likes we've had but it's incumbent upon them is kaiser

willing to access accommodated profits to give back to employers next year. i don't think anyone who we've talked have will have to come from kaiser. so, you know, i can't will you what it's going to be but i don't think meanwhile it's going to be the same. and if it appears there's no intention to make the change we can look at alternates we could freeze additional enrollment or reduce enrollment and find ways to get people to voluntarily move away and we can look at on

the one hand, other plans. so i think we have optioned too. but at any event, you know, just on this i've covered enough on the implementations. we do need to remember, if we doing go to a two plan model we have two self-insured plans we can utilize the risks. and there's a big difference between taking risks. the pricing going forward with kaiser could be very much impacted by kaiser. the competition is the best control we've got over the providers and that has some

impact. if we only had blue shield and the city plan we couldn't hold the line on cost increases either. so the private hospitals could raise their prices and even though we're self-insured we're blue shield the city is paying those claims. so if you get a situation where the competition didn't feel the competition of kaiser it could chan changely. and the budget would have to be recalculated we have to post for the health care benefits and that would have to be recast because it would be a ripple effect. so that's on health care implementations the 46 thousand

members have to find new provided as the co- pays would go up. the member contributions in their paychecks could go up if we go going down that road. right now for the e plus one or two or more you can see on this chart the difference is like double and triple on a monthly basis so how that would play out we'll have to see. and finally there's legal obligations if we don't make our january one or october deadline. there could be legal obligations for missingor deadlines but there could be members who or so upset people can leave kaiser

and there could be lawsuits. this is unbalanced and probably an unpractical course of action. so i'm not - if you have any more questions i'll be happy to try to answer them >> staff any questions at this point. >> we do have some representatives from kaiser they have some materials to present if that's all right. >> absolutely. >> you guys have copies

correct. >> great. good morning. i have our senior department peter. and there's quite a few slides and my intention so to go through the first 10 but certainly able to answer questions. it's a compliment but just very quickly on the agenda we're going to review the market trends for 2015 around the wellness a great question has been raised if kaiser choose not to be renewed and the

transparency. on slide 3 a very quickly overview on the calibration. we have a total increase in the green bar and it's broken down into blue as the kaiser portion of the calculation that's been presented for the total of 58.01. when you add them together you'll see the percent that was referenced and on slide four we thought what would be helpful is do a fairly high-level of the process. greg shared with you the packet of information and the details behind it. so when we develop the utilization the rate for the following year the core component is the claims

utilization the actual confidence in terms of volume that's experienced by your members. what you'll see here between 2011 and 2012 there's american people increase for a total 5 point plus increase. just for a comparison for the books in kaiser there's a about 3 million members our comparative is slightly below but in alignment. this is generally at the lottery level how do we take that information. there's a process with lots of factors but we take the

information from 2012 and that includes the inpashtd and out partiality and surgery and mental health substance because of these and ma ternlt lab and so forth. we look at the gender and age of those services. as an overall in a couple of key areas that are that come out is maternity for example, there are more delivers and the stays are a little bit longer which is a more intense procedure. oftentimes this shows lower invests but if you have a furrier number come in but stay

long-range you'll see the prices go up. so we take all the data we capture throughout 2012 and use it for the projection of 2014. what is it i expect to happen and what's the cost to cover those services in 2014. we apply our administrative costs charge which is our margin and unnecessary thorough 2014 that build up to 320.48 and then there's the additional tax to get to the total. on slide of one of the other questions that was raised or questions this was asked is to look at this from a historical prospective. this is one year the blue bar

represents the renewal costs from 2006 until this year and this is a trend of information over the same period of time. we remember as far back as we could and summarized the two afternoons. and the market has been 10.2 so close to 4 percent difference. if you look at the last 6 years we've w50i8gd that gap. our average has been slightly less than 5 percent for the city. slide 7. so to summarize the 2014 level greg spoke to that frail well,

we've projected the information forward to he'd the claims experience in the 2014 for the employees and the retirees and their families. as greg stated we use the methodology for the large group of employers. so the commitment for 2014 a great question was raised. we talked about beginning immediately so what does that mean? working towards mutually clear objectives about what we're trying to do and that's gone the conversations. the analysis of data. there are models that in fact do the approach and you have that with our other two plans.

we've gone those conversations and the goal is to work towards the successful renewal. regardless of what methodology you use it the claims information. we won't have met 2013 information is it can't happen until the information has actually happened. the information that we do the engagement is the underlying data. we talked about the most important piece and donates the claims information. we looked at that kwaerl and annually and those conversations will happen >> supervisor mar. >> to supervisors avalos question how early would we start.

you're saying immediately. what would have been the normal time now that you've started awe that is >> we'll typically have in a normal somewhere with most employers we've got a quarterly data most often on their desire we'll start around february or march talking about benefit changes is there go anything they want to see different. we add if our trend information at the beginning of april and that's the normal timeline >> i'm very pleased that the sharing of information on a monthly basis and really looking at the o ms and icm the acronyms the data m that was shared with the department. >> one more comment you all

have to share a budget. we don't know what the budget is to run our entire program. we have estimated that but that budget doesn't get set and based on that budget and estimating how many members are that are going to come through the program set the increases for next year. this is an internal budget we have to do internally >> thank you. okay. so on to slide 9. so a little bit more detail on the commitments we've made pa to h ss. again, this is a level slightly below the documents that we've provided in hardcopy. it's sent over to the 0 data

depository and that's another way to evaluate that data on a regularly basis. in addition to the indicators on the process twice a year. we'll be working towards looking at our current performance guarantees and focusing on any which one conditions from a budget prospective human resources how low are remeeting and stooed the metrics for the members health and for the cost control. and the last component is around wellness so working on not just a year by year basis but by a week by week method and the flu

season we look at that a timeframe. we're looking at a research project around evaluating the true effectiveness and highway we know learn from the process and apply it into future engagements. and, of course, those involve lots of details and coordination >> i really am appreciative of the monthly reports and the discussions on the relevance of the material. i know we have additional nurses who have helped with flu shots

and the research study as well i hope we can get more details on that and even in quantitying how much that is for the city. i guess i was saying i'm appreciative to the work behind the scenes with our staff and i guess what's still in my head you've given us the long-range of the plan for san francisco. i do so the profit margin and again, i'm going to slide 16 from the may meeting where it shows in the past 5 years the profit margin just going up significantly especially last year and this year. and i think the concern as sum

are saying kaiser is gouging other jurisdictions and that $15 million and i know the ac a-1.17 percent by roughly the leveling million dollars is a profit margin and i'm not sure how much kaiser is taking in that profit margin but could you address that >> yeah. i think we've been very public around the margin that we budget for our entire program is between 4 and 5 percent. we've said this for four years publicly so when with he do your overall budget setting we're bukt to get that four and a half percent and that's used for additional technology. so when we price our 8 thousand

or so large group consumers we have throughout california we set a price that it come in a way we budgeted it should be 5 percent. but what happens is we don't get every thing right on what their costs and utilization are going to be. but the law of large numbers we will not get every single group right but when you add them all up it will come out to 4 percent. we can argue how much we made on your individual group over the last several years we don't believe it's as much as state but we did make a margin on the group and it's also around four

and a half 5 percent. so we'll do everything we can to be transparent and with the possible risk sharing we'll be able to both share in gains and losses with you and have more transparency there. i hope that helps >> thank you so slide 10 the last two. so there's some questions raised and greg had outlined one the questions but i wanted to convey based on the information we heard last week and what we shared was if the contract isn't renewed we need to find a way for reimbursement but without a contract in place there's no way

to be reimbursed for services render then we will need to work diligently to transition those numbers to other care providers. there's legislation and rules around that but we need to engage in this direction. and the last slide is the summary. this is a year around reporting. the left side it the reports. what we add to this is a monthly claims feed that provides f that information to the depository and that's it for our form presentation peter >> i want to make a statement around our tennis how commented we are to you as a client and commented to our employees and

members in the city and county 70. we've done a lot of great things together in the city and county of san francisco. we've worked with the unions for years and years and years and we take care of a huge amount of your employees ease we want to live up to that and be a good citizen of the city and county of san francisco. at this point our relationship is not where i think every one of us want it to be we can move closer or farther apart. we want to move with the staff forward and make this mutually saefs for you and us. i want to be clear we'll be transparent. we will work hard to provide the service and medical care to your

employees in the best way we can and in the most affordable way we can. this is our mission this is 1 hundred thousand employees that kaiser lives for to take care of. i want to remember everyone we're the cheap itself carry. we're fully insured which maples we take 1 hundred percent of risk and we think that 4 percent is reasonable given what's going on in the marketplace. we're committed and willing to serve the 45 thousand members and employees. those are our neighbors too. thank you >> i really appreciate that statement of continuing the long

60 plus year partnership and really the com i am not around the wellness program is appreciative. i want to talk about the nature of getting more data to have that mature trust and the term is proprietary and we'll not address that >> let me start with you regret the use of that word i wish our organization had not said that. what you have here will describe the risk and utilization leads

to the cost it leads to. i think the bigger question you want the answer to say one year an off the invest costs $40 and next year it's 42 this year. i can tell you the risk of your group drives the renewal. let's look at the increase. new and more expensive drugs, technology and building facilities for your men's and building hospitals. there's a huge number of things that drive inflation we'd love to sit down and talk about that. and what we're doing to drive down those