and not just saying, i don't know what's open in your area. just go to the emergency room. a lot of innovation. >> all right. >> something i don't remember we've ever really shared at the board level that is as part of the structure there are incentive pay out targets that pay out of the trust to aco's brown and hills physician group. when these things were taking flax, we were alerted by blue shield that is their only mechanism and that is what you consider a self funded or minimum p premium structure. that's universe arch -- arch we are not being asked to make a funding arrangement. say the average rate for the program at brown and toll an is $600

and we say, based on this utilization, this drug cost, these catastrophic claims for your population, this is the status quo. now, if you do these initiatives that they are going to talk about and we look at where your present bed day rates are etc and you bring them down 10-15 percent, they that number now becomes $530 for instance. with that, we say if you hit that target, no. 1 that we talked about on page 1 and you go all the way to target no. 2, there is a 50/50 split. hss for the money that goes down on a per member per month basis. that money is equally split between hss and brown and toll an and various facilities that are

associated with brown and tolley. then there is the stretch target. say the initial target is x, then the next target is 10 percent below that and we have a stretch and sometimes the percentage allocation is higher or lower depending on if we are doing a 50/50 split. that's what we are trying to show you on page 11. so that we want everybody to be aware that those exist. then there is a second thing is an example of how this works on page 12. so talk to your target is 550, second tier is 510 and final pay out level is 490. so if you cross over 550, and you go to 510, there will be a certain allocation of the money on a certain split. then if you go down, i didn't make this super complicated and fancy. once you are at 490,

no more pay out. with that, we have an example. they get to 530 as an example. there is a $20 difference in the average cost per member per month in the entire year. they have 20,000 people times 12 and the allocation is 50 percent. that turns out to be $2.4 million that is now paid from the trust to brown and toll an for instance and associated facilities as part of that which would be like cpmc, etc. these targets are jointly negotiated which i think is pretty good amongst my unto contracted actuary with blue shield and brown and tholeey. we talk with blue shield and because of their association with the groups themselves and with the association and we

go yay! or nay. i have never had a session where we all talk together and we hope at some point if it's proper within the structure of the contract relationships we would all like to be together. that being said are there any questions about the fact that these exist and how they work? >> i would just say that i know in the early part of this work i was affiliated with another major organization in california, as this was being talked about, i know there was a little bit of skepticism about how all of the details would begin to work and what would be the longer term benefit of trying to do it. i'm very pleased that after a couple of years which seem some manifestation that it could be put together but it takes time and money. the money is a bit of the driver

on both sides of the equation. custody -- kudos. >> the 50 percent goes to, it's 50/50 percent between hss, the medical group and associated hospitals? >> yes. >> so hss would get what percentage of this? >> half for every dollar below the threshold. >> the medical group would get how much? >> it is an allocation. say they get half and the facility would split it up. they split up their 50 and hss would keep theirs. >> we should have said it was 50/50 between aco and hss. the aco has identified themselves by their medical groups and they contract with the

hospital. >> so some goes to the hospital and some goes to brown and toll an, but not back to blue shield? >> no money goes back to blue shield. not true? correct me. >> can you direct that clarification? >> i have a clarification. so lisa said our money goes into our stabilization reserve which allows us to adjust the rates accordingly. in theory, we have money to adjust the rates. >> and the targets themselves, the amount of money that is set aside for targets are built into premium that you approve. this is not money on top of the premium. this is money we are already collecting already inside to incentivize coordinated and quality care. >> we are setting aside from

where? >> i'm not sure setting aside is the right way to think about it. >> what we are essentially doing if you save money, if you spend less from the premium, you will get less of it. giving them a financial incentive. it's not being set aside, it's nothing like that. you can earn some by saving money. >> it's just paying somebody to do what they are supposed to be doing strikes me like giving your kids allowance for cleaning a room. it seems that it's the opposite. we have targets for kaiser. if they don't meet it, they give us money. if they don't meet this, if they meet this, we give them money and if they don't meet it, we get nothing. >> i understand your perspective. the medical group, they have to build infrastructure in order to accomplish these goals. in my

conversations with them, they say their only goal, they want to compete, they want to stay in business and if kaiser can do it with better management. they say we have to have an organization which was brought to you in 2010. in their mind, these targets are bonus money, to pay for their infrastructure so they can accomplish the goals in the initiatives they are talking about. they are not looking to pad their walt. -- wallet. they are looking to pay for the structure. when you have to take a registry of all this and communicate properly, it takes time and money and skill sets need to be developed. so i hear what you are saying, but from them it's a matter of building a structure so they can go forward as a competitive well organized and

well structured entity. >> that's just some feedback. >> like the infrastructure. they paid a lot of money for that. so did they ask for money back? >> mean, i don't know, maybe i'm over be laboring this. >> they plow it back into their systems and they are fully insured and we know that they have saved money on our membership. so this is an environment in which we are at risk and the medical groups are at risk and if they save money, previously blue shield was there and they came in under our premium, blue shield kept that money. hopefully they brought it back to

innovation. now, blue shield isn't getting that. we are saying if they come in under premium, debit to keep half the money and half the money goes into our reserve. so, it's that difference between being at risk or not at risk. if we are still dealing with blue shield, blue shield would be negotiating these kinds of targets with them and paying them and keeping the difference splitting the difference the same way. but in this instance we are doing it. this is only the second time we've done it which is why we are trying to explain how it's done. >> it seems like when you pay money, it would incentivize the provider to give less care, maybe when the person needed it. i know they can give too much care but i feel it go the other way because they look at their level now.

>> which is why we are monitoring their admission and length of stay. we are looking at both of those to balance it out. but this is an action item and that we do need to, probably want to let commissioner fraser, i think that in 2013 they didn't meet their target but in 2014, the experience is already better. in 2013 with the big flu. it was an extensive year all over. hospital use for the first 3 months of 2014 was between 60-70 percent better than it was in 2013. which is positive and we want to incentivize those payments. so the 2 medical groups will tell

you what they have done and what they intend to do. they would like to present briefly. but they are in all of those areas where the outpatient population management, inpatient management, emergency department utilization, member engagement and wellness and medication management. and that's the toll an and hill and how you move complex care from the hospital or how you keep them out of the hospital, emergency department use and member engagement wellness. it's slightly different. we will need now that we might generate some surplus if they come in under, we'll need to set aside funds for this. we'll need action by the board to recommend that we develop a policy. >> do i understand there are representative from brown and toll an and hill present? i

would like to afford them a few moments. so whoever the representative are, would you please come from brown and toll an and hills physician and we'll do brown and toll an first alphabetically. it's not by preference or anything like that. thank you very much. if you would please identify who you are? >> i'm richard fish from brown and toll an. ceo. >> welcome. >> thank you. thanks for having us here. this is a project that's been and i have spoken to you before and it's been near and dear to our heart and important to address it. certainly the labels that have been mentioned the collaboration with the hospital which means getting our staff together with the hospital staff in the er and the hiring of nurses and really to support to t up for the discharge. having a

dedicated hospital group that centers around your patients and knows our staff. a significant discharge plant that we started with the county and patients that works from before the patient's discharge to make sure everybody understand the plan and what's going to happen afterwards. it works all the way through having the hospital make the hand off and we've added staff that contacts most patients. there is a criteria for those who need this. that work with them on the telephone and make sure they pick up their discharge. now e that that discharge process there is so much going on at a time when nobody can really absorb the information. which is why we have this problem. people don't under and they can't follow through and we give it a day and

three days and we contact them and we have the discharge notes and make sure that our clinical team that did they pick up their meds, did they meet their part of the appointment and the cardiology, the right doctor. having that level of intense interaction and not wait for a problem that we would deal with it that we think our system historically has leaned towards. i mentioned after hours. we have two in our office to extend their hours evenings, weekends. we put out flyers, newsletters, calls to folks that were hitting the er that we thought wouldn't need to to make sure are aware of this. the city and county population is open to all of our population but the volumes continue to go up through awareness. we've also contracted through awareness

care and from our verbiage through urgent care, there is a higher level of licensing required for you urgent care than after hours. most of the volume is for extended hours that truly needed urgent care but not needing er. i would close by saying that we've learned a lot about this population. i know i have spoken here before but i can't give up my moment in the pulpit without mentioning it. >> we didn't mean anything by that. >> would you believe that we appreciate the studies that have been done to look at the risk of the populations that select each delivery system and make sure that we are all setting the expected cost structure and the rates

commensurate to the risk of the population that's being served. medicare was out first with this risk adjustment on the medicare program. now all the exchange products are using a different methodology. we believe that's the future for all the programs in overall populations of the patients. if you have a 10 percent more expensive premium, but you are taking 12 percent more expensive people, it's not actually cheaper. we need to get that denominator to evaluate the numerator. i know there has been a lot of work in this regard, if we can support this effort to make sure the patients regardless of their acuity are getting the level of care they deserve and that you are paying for the care that you should be paying but getting the highest quality of care. >> thank you very much. >> i have one question. how many urgent care facilities

do you have? >> in san francisco we have two after hours care, one urgent visit. >> just urgent care. >> urgent care. there is a second that has limited hours. there is one with extended hours with urgent care and we are opening up a second sight in the spring and we have one in the east bay. two after hours and one urgent visit and a second one coming. so we'll have four soon all within the city limits in addition to the hospital services. >> any other questions or comments? thank you. >> good afternoon commissioners. i'm terry hill. vice-president for performance strategy for hills physicians. it's a pleasure to see you

again. it maybe somewhat reassuring to you to say that we are in our 5th year of the calipers project which covers 41,000 members in sacramento. for the first four years we just found out we have exceeded our savings target. this is not some idea that is a flash in the pan. it can work long-term. we are talking about making foundational changes in the way we deliver care and holding ourselves collectively responsible which i think is the key. that of course kaiser colleagues have exploited for a long time and we are now doing as well. a number of our programs are now quite mature. for instance our care transitions program as richard explained, this is a

very critical time. we feel extraordinarily good about the day-to-day transition manager and we are launching a very innovative pharmacy program this year including having our hills pharmacy go over the patient list for some of our clinics prior to the primary care physician seeing the patient and putting sticky notes in the electronic charts. some of this is quite innovative and we feel very good about that. we have long had the usfc care center across the street. if someone calls the urgent care center for an appointment because you can do that, we have a process

in place by which the patient if there is time in the primary care physician office, the patient is redirected back. we have been very directive in this care. these health handbooks to every family in the program to be helpful. and on the cover it says call your pcp first. in terms of additional urgent cares in addition to the one on -- we have contracted with five additional urgent care facilities to help boost our access to care. and i will stop there. my colleagues from ucsf medical center and dignity health and blue shield are here as well. we are passionate about this work and

feel like it is the key to transforming american health care. >> okay. would you take a moment, doctor and please introduce those folks or have them stand. >> dr. adrian green assistant chief medical officer at ucsf, we have jennifer kesh yann, representing dignity health and patty hobart representing ucfs medical center. >> we are on tv here, so if you stand, we'll see you. can you all stand. >> we have dr. margaret bead representing blue shield. >> thank you very much for your dedication and input to this effort also as well. and brown and toll an, do you have a colleague here as well? would you please stand and

have them identify themselves. please stand up. all right. we thank you all. >> all right. i would like you before you leave today to get your names and affiliated titles to our secretary so it will at least be recorded in the minutes that you were here affiliated with this presentation. if you do that, i would greatly appreciate it. if you don't care to be

recognized, that's okay too. we are public. >> are there any other comments that you would like to share at this time? >> commissioners, bob muss skat, chairman of the public employees committee and local 21. good afternoon. >> can you bring the microphone closer? >> i wanted to come by and thank the hss board and staff for their leadership vote on kaiser and blue shield, the work that you have done has been terrific. if you remember it seems like a week ago, but the last time we went around with the kaiser rate increase, i think it was a very intense time. it wasn't particularly comfortable for all of us and in the end it really took a leap of faith to believe kaiser's position with us that going forward things would be different. i think our trust in peter and the other kaiser

representative seems to be the right decision. i think the employees are very please d with the outcome. we are very appreciative of your diligent effort. i know there is more work in the future to be done and we do appreciate the effort and leadership that you are demonstrating. thank you very much. >> thank you for making that a public comment. we appreciate it. are there any other questions? >> i would be interested in hearing from brown and toll an on the risk justadjustment. if you can talk about where we should be going in that regard. the other question is what your perspective on the population health challenges. and what we are all facing. we are not asking the doctors to

solve the problems in terms of what our communicating is creating in terms of health and in terms of approving the health of our employees as well as our residents. >> all right. please identify yourself again. >> richard fish, background and tollen. the risk adjustment is near and dear to our hearts. it's not at a patient level we are talking about. it's when you have 5, 10, 20,000 patients in a pool being supported through one program. the resources that it takes really dramatically vary by the demographics and health status of that population. one of the things that technology has given us and all the data around and the insurance organizations around this is much much more sophisticated tools in measuring and

predicting what the predictive modeling and what that is going to cost. the tools are out there and it behoves anybody paying for care to use those. second, pricing to that and making it all the way down possible to the employee contribution. at the population. if the folks choosing brown and toll an are 10 percent healthier, then the employee cost. if the premium is 10 percent less, then the employee cost is less. if it's 10 percent the other way, it goes the other way. if we only look at the premium price and say one is more and less expensive without understanding the expected cost of that population, you are only looking at, you come to one set of answers and if you look at the divided risk

score you come up with a different set of answers versus what was the value and what is more or less expensive. >> i think we understand the concept of risk judgement. are there other methodologies that you are using? >> we do with medicare. they use what they call hcc category by diagnosis. the exchange is uses a retro spective looking back. we do a light underwriting. we are not as sophisticated within our group but we have a team that looks at the cost, expected cost of the population and we do price premium for that.

>> to be specific, do you have other employers who are actually using a risk adjustment in their payment structure with you? >> i don't know because we don't contract directly with the employer. we do that, the population we are covering -- >> insurance companies? >> insurance companies, absolutely. >> the second question is the population. >> andrew schneider from brown and toll an. the question of population is new in health care. in the case of what it's done in 2 years perhaps radically changed payment reform and now we are trying to change delivery system reform to match that. that's what this is all about. to do that you have to manage your whole population. not to over simplify a population, but if

you put into big buckets. we know some of the statistics five 5 percent of the population are 60 percent of the cost. all the programs you hear about here about the interventions we are trying to put into place mostly are directed at that 5 percent. that is the bulk of the cost and that's where you are going to get early and long-term successes when you have expandible programs. the population health has to stand the population of your employees. that is a different set. the first set is high intensity in their actions. that's the infrastructure required to truly individually help each patient with that level of a need. on the population side we use the same robust analytics to identify the sick population to understand what preventative measures haven't they gotten that they