this point. >> all right. i thank you for those clarifications. i think that this under scores and i will start this colloquy a bit. the results of the efforts of discussion during the past fall season with the staff and your team to try to get to this place, i think broadly no one solicited my opinion this is extraordinary news in the main and as it's more talked about has to get over the skeptic of this belief that you are not buying in our business somehow but i absolutely feel that you have come to this discussion in very good faith in trying to layout a way of partnership that moves up substantially beyond where we were. so, i think these are very reasonable expectations. we ask if you had strategic issues that you were actively

considering that would have an impact on our rates that you let us know about them. that was a very explicit request last year. so i think it is wholly reasonable on our part that you would have that expectation of us. >> absolutely. there is a segment that you offer at every meeting that gives us an opportunity to address you with things that are going on in the market. >> all right. thank you for that. director dodd? >> i just want to clarify the caveat number for optical benefits we would only be able to agree to that if it doesn't violate our vsp contract. i think we talked about that before. you are okay with eliminating that if it isn't in any violation? >> absolutely. if you have a restriction from doing that, we would recognize that. you are absolutely right. i forgot that piece. any other questions? >> other questions from the board at this point?

>> commissioner fraser? >> this is the lawyer in me. is this the rate of single employees. we have a multitude of rates. so what is the explicit understanding that yours remain lower even if it's by one penny? is that okay? >> if our rate is lower by a penny and blue shield came in and united came in equal, that's not something we are going to come to the board and argue about. if our rate is $25 lower and there is no differential between the two categories and there should be normally. you pay 100 percent of the employee rate, for example, if that was an

option, that's your contribution strategy even though our rate is lower, we've accepted that and we acknowledge it. it's where your normal process to develop the contribution generates a difference. and you may choose to eliminate that entirely. that goes against what you normally done or you made it lower. so you are choosing to disadvantage us rather than it being part of your contribution strategy. >> good luck writing that one down. >> sounds like a question of intent. the intent behind the decision making, not just the decision itself. >> that's correct. >> my hope in the act of dialogue that we have maintained, if that was going to surface again, we would know why and what and who and when and so on. >> exactly and we would have a dialogue. all we are saying here is that we need to understand it to make sure

that our second makes sense. that's really what the caveat is about. we made assumptions when we put this rate out and we want to make sure those assumptions are in the ballpark accurate. if not, we need to look at it to decide if it changes it and we would have conversations about it. >> other questions from the board? if there aren't any? >> i want to make that recommendation to interlocking -- locke it in for 2 years. do you want to consider making a motion today. it's completely your call. >> i move we approve the fully insured new option for 2015 and also the minus 2 percent

for 2015-2016. >> is there a second? >> i will second that motion. >> it's been properly moved and seconded. is there comment by the board? it's for the 2 years. comments, questions? is there any public comment? affirmative public comment. i'm not supposed to say that. is there public comment on this item? it is absolutely remarkable when things go up

we hear, when they go down, we don't hear. no public comment? are you then ready to vote? all those in favor of the recommendation as provided and described will signify by saying aye? >> aye. >> all those opposed. the ayes have it. so ordered. i would like to claim the privilege of the chair to call on one of the representative of kaiser to make some comments. this is not dress rehearsed so i have no idea what peter is going to say. >> thank you commissioner scott. i think i did really want to comment on what you actually said and so thank you for giving me just a couple minutes here. this renewal and all this interaction we've had the last year has been a huge step forward on journey we've

been together and built on that relationship. we have consistently engaged with hss staff to explore our share challenges and figure out how to make progress. i did want to thank the entire staff for really engaging us. we've had some difficult conversations but they have been straight conversations on both sides and both of us have moved forward. in fact we have a couple meetings coming up where we are going to continue to talk about what we can do together around clinical quality, better ways of controlling cost and improving the health of the population and we are looking forward to that work. some of it is really breakthrough work with what we have not done with any customers. it's very exciting. as you know the rising cost of health care is a challenge that we are all facing, this whole country is facing. both insurance carriers and health

care providers need to rise to this and ensure they can afford health coverage as demands in your budgets. we know that. as cindy has pointed out and others we are still the lowest cost plan for you but we recognize we have to do more and more to become more affordable to you and to our members. and what i think the questions are going to be is how are you doing it? this is great news. when rates go up, you want an explanation. when rates go down, there should be an equal explanation. it all comes down to how are we making things more affordable. there is not one answer. and fortunately this is not a single year thing. it's going to take years and years of hard work to continue this trend. we are approaching this by looking at care transformation, increased quality and then our own cost of goods or input cost. all three have to be addressed

and they have to be addressed year over year over year. and through all of this, our focus on delivering the best quality service and access is unwavering. we can't give up on those to break down cost. in fact, what we are finding the higher quality you have, the more you are engaging the members cost actually do come down. so one or 2 years does not make a trend. i think i need at least three data points for trend, at least. i plan on you continuing to hold us accountable and we are committed to working with you and for you and with 88,000 groups and over 7 million members in california. they very much, i appreciate it. >> before you take your seat, any other questions? this is a piece that is somewhat unrelated to the direct topic, but i think that many of us are aware that today the

announcement was made from cms regarding the release of physician level data for those recipients of medicare or physicians who practice and accept medicare payment. i would imagine that if someone went on the website and looked at that stuff right now it's probably a massive data points. but at some point in time i would imagine that there would be groups like the center for payment reform and others that will start to digest this data and start to bring an interpretation about medical practice. i know there is permanent medical practical and standards and so forth. i would like at a later date how you are going to share with us this form of transparency in the market with your delivering medicine to our members. you don't have to say we are going to do it and all

the rest of that today, but it would be a question and i think will be an -- emerging one over the next several moss -- months and would be great to have you here to respond to that. >> we'll work with staff next week and we've discussed pricing with kaiser permanente model and looking at the finances typically. it is a great idea. it is different. the rates come out later. cms gives us the target dollars and we can also talk about the quality and access there to. >> for the record would you identify who you are? >> peter an drade from kaiser permanente. >> all right. we'll go to item 3. review city plans preliminary

self insured rates for hss active, early retiree and retiree members for 2015 plan year. >> this is item 3. aon hewitt. this is going fairly quick. what we have done is updated the data from the last time. we now have the county. the only thing we are missing is the second part of the plan is the algorithm and blue shield is not finalized. this is not done. we want to say a couple things and ask if there is any questions. first we want you to look at page 2. when we

came before you last time the overall increase was a minus 19 percent. now it's a minus 21 percent. so these healthy small people in active early retiree population and these 7,000 people in the retiree population are busy and not going to the doctor a lot. so i applaud them for not spending a lot of money. with that being said i want to turn you to a couple items and answer questions and since we are not going to vote on this until we are final done, that would be the final recard. i would like to turn you to page 3 and look at the rates. we are now at an overall adjusted for what we shared before the clear stabilization at $271 and that's a very low number. we have crossed the 30

threshold. i just want to plant the seed that this is going to help everybody. we've reviewed the stabilization and still have approximately $20 million in that and these numbers are v e very good. without any other comments we have all the data here. i'm happy to share that things are stable for january and february and that when we finalize rate cards in june we'll have one more number and we'll be done. we are not changing the rates, just the contribution before we determine for blue shield, right now it's a 5 percent increase and hopefully it's lower than that. with that, any questions. >> any questions from the board on this item? any

public comment on the item. seeing none. item 4. approving dental plan renewels. delta care dhmo fully insured continuing fee commencing january 2015. pacific union hmo active retiree dental. delta dental actives. >> good afternoon, my name is gabriel. as you are aware there are six dental plans that are offered to the county employees and retirees and we will be reviewing the renewels for five of those as you are all aware there was a meeting in february of this year and december of last year where we discussed the delta dental

retiree ppo and a n is survey with a lot of responses. next meeting in may we'll come back and we'll be discussing that renewal then. we'll just jump right into the the retiree renewels. first we'll talk about the delta care hmo through 2015. we've included it in the presentation just for your information so that the rates found on page 5 will continue through the end of 2015. the retiree union hmo this has been the rate for a while now and it's offered another rate pass on this plan for another 2 years. the rates found on page six will be guaranteed through the end of 2016. any questions about the retiree renewels at this point? >> questions from the board?

all right. we've move on to the active portion. on page 8 we've included the delta rate hmo retiree rate guaranteed for the end of 2015. with the retiree pacific union hmo, the active pacific union hmo has also offered a rate pass for 2 years. the rates found on page 9 will be good until the end of 2016. that brings up to the active ppo. the plan is running well. we have looked at the data. we've run

regression and we've used that trend and what we have received and as you will see on page 11, there is, it would be justifiable to decrease the premiums by 1.4 percent. now, although that rate decreases justifiable and hewitt recommends a pass for 2015 to basically be conscious ervative -- conservative. the rates we are proposing are found on page 11. those are the same rates that are in effect for 2014. and just also by way of reminder, the delta dental administrative fee for this plan is under rate guarantee is $4.38 per employee per month and that's

good through 2015 as well. with that, are there any questions? >> questions from the board? there are no questions from the board. >> all right. then our recommendation would be to approve the rate passes that we've presented you today. >> i'm ready to entertain a motion. >> are we ready to approve the retirees as well? >> all but the retiree ppo. >> all right. i move that we approve or accept the delta care hmo, the retiree active hmo through 2015, pacific union hmo, retiree active hmo rate to extension to 2016 and the active delta dealt ppo. the active delta dental ppo rate pass for the plan year

2015. >> is there a second. single family >> second. >> it's been properly moved and seconded that we accept these ascribed. is there any discussion? is there any public comment? >> my good colleague. >> i'm claire vont e. i represent the retirees. yesterday we received a number of inquiries with regard to the survey that's been sent out and i realize that applies to the ppo rates that are on the calendar for the next month and there is a great deal of confusion with regard to the benefits. the reason

i'm speaking now is that a number of members came forward who belong to the hmo dental plans and they believe that because of the language in the benefits booklets that hmo gives them that maybe a little different in the language than the benefits booklet we give them twroord -- with regard to the benefits that they are not getting the benefits. that the hmo are interpreting the benefits for two cleanings a year only pay for one cleaning a year and they say the calendar says it must be every six 6 months as opposed to two a year. a little bit of a difference. so they don't get their second cleaning a year. things like that. there are also some concerns remaining for benefits and affiliation where they are still being

over charged. i would like us to look into those relationships with those hmo dental plans so the retiree members are getting the full benefits and not really taken to the cleaners and being forced to pay very high rates. i will be submitting some names to lisa on specific cases that we learned about. this is a great concern. while i appreciate the fact that these rates are being guaranteed for another year and 2 years, i think that's significant. i would hope that what we find will not make a difference in the kind of services that our members get and not cause higher rates in the future. >> thank you. is there any other public comment? hearing none we are now ready to vote. all in favor of the recommendation will signify by saying aye?

>> aye. >> opposed? the ayes have it. it's so ordered. we are now ready for item 5. city clerk: action item. blue shield aco medical group review. catherine dodd. >> catherine dodd, director. i'm going to present on this and aon will present part of it. i'm going to stand here. >> thank you. no explanation is needed. >> for those in the audience, i know the board members know that history, but for those in the audience you may remember that blue shield with an in a fast spiral in 2010 and in

response, to an rfp, we put in the idea of a patient centered home which was an idea that was just being talked about then that ultimately became the accountable care organizations of today. it's an idea that to paul groundey from ibm and the idea that you coordinate people's care. it's something that hmo's are thought to do very well. we learned they didn't do it as well as we thought. calipers had already done this with blue shield in the sacramento area and they had early good results, early good returns financially. so when we did an rfp, blue shield came out as a vendor and they didn't want to just pilot 1aco, they wanted two. blue shield and the

medical group. as you remember we had this conversation in march 11, 3 years ago and we announced the forming of these aco's. the contribution is negotiated by the union and further exacerbated the spiral and as a result the employees share the blue shield. kaiser had a distinct advantage and the employees shared increase. so we the employees in union negotiations now and if all the employees adopt a more equal contribution model the rate disparity will be closer than it's ever been. this is an effort that lisa has led in terms of crunching the numbers for all the parties has been extremely time consuming with aon's assistance and

involvement of other city agencies. the fact that we are as far as we are on this today is because of her leadership. the presentation just briefly will discuss how this has been mitigated by the implementation of the cco's. not only the cost of care has been reduced but the coordination of care has been approved and blue shield has been maintained a competitive offering. as you heard earlier, aco is designed to decrease utilization over health services or to increase coordination of care. the structure, we were the first in the bay area to do this. so calipers did in sacramento and we did it here. when the first accomplishment of this patient center care was the partnership between the hospitals and physicians. previous ly the hospital and

physician groups didn't talk that much and i remember the time when the social workers and the medical groups weren't allowed in the hospital and they didn't talk to the discharge plan in the hospital. and the whole idea is what ms. jones was leaving with and this is a whole area to establish and it took a while to get used to the in fact they were working together. blue shield make it clear that the primary care physician has to drive the aco and we monitor the direction of key indicators. i also just want to point out that we are different than other aco's because we have an employer involvement in the aco's. we participate in quarterly meetings and we look at the numbers and we add suggestion and we add sometimes more

hard nudging than other times, but the medical groups know that we are on top of these numbers. and that's unusual. usually the employer is not at the table. we are looking at length of stay, readmission rates and examining catastrophic cases, monitoring emergency department visits in the old days we said emergency room visits and analyzing the drugs spent and whether or not the generic prescribing rates were improving. today all of those metrics as you will see have improved. the influence is clear, the blue shield for 2013 renewal they requested a 13 percent increase, a double digit increase, a second year in a role of double digit increase. in 2012 the board decided to go flex funded. the

increase was actually when we looked at the utilization was only a 2.5 percent increase. the rational for lower premiums is one that helps the aco accomplish their goals and lowers the overall cost because they set goals and they need to live within them and achieve them. to remind you an aco is an integrated net deliver network model where they and the hospital work together. they talk to each other electronically and in person and look at clinical best practices which are different from medical group to medical group. they integrate their data and they report it out. and the idea that they are even reporting it to aco but also reporting it to their board of

directors and they know if the prescription rate is above 70 percent and below and they work with their particular pigsz -- physicians to go through that metric. i'm not going through all of these. it's a long process to go through them and they initiate the contract and they engage numbers in the physicians and employer and then we monitor the outcomes and assess how to improve integration. if you go page 9, i think our recent experience is probably tells an important story. this looks at the data from july 2010 to june 2011 and compares it with 2012 through november 2013. so while our admits