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 per a 1,000 went up. the flu epidemic we had. everybody in the city, there was a bed shortage for the first time in a long time. our days per thousand, hospital days per -- 1,000. it speaks to the management to better coordination of their care in the outpatient setting. the average length of stay similarly. the average length of stay is down 10 percent which is remarkable. 30-day readmission rate is down 7.2 percent. we are not

the only organization that has inspired the attention to readmissions. medicare certainly had a lot to do with that but this means our members aren't being discharged early, if they are being discharged, not early, but in the right amount of time, the medical group and hospital make sure that member has what they need at home and to stay home. the medications are filled, they have the right ament amount of help and they are not having to figure out things on their own. and medical and social workers are helping our members. the coordinated care is definitely improved quality. the emergency room visits are down 7.7 percent. i think hss gets

credit for saying there cannot be this, we close our offices at 5:00 and both medical groups stepped up and said we will offer hours after 5:00 and on the weekends. there have never been urgent care services available in san francisco. all san franciscans can thank us that urgent care hours outside of kaiser are now available through the two major physician groups here in the city. the outpatient surgeries are up.2 percent. that would align that our inpatient beds are down and inpatient length of stay is down. we are doing more outpatient setting. the net is down. it's very difficult to

get a physician who is pretty used to practicing the way he or she practices for 20 years to say, you don't just get to prescribe that anymore. you really need to prescribe things differently. we are changing physician behavior and we are changing in the context of the coordination of care and changing the culture of how care is provided in team care which is a major shift in culture for physician offices. so all of these metrics point to the success that our hmo's have had over these years. they have point to the fact that we have saved money. the question was asked can you compare the aco trend in terms of cost increases to your non-aco trend. blue shield said half is costly as

our aco trends. we have bent that cost curve which is one of our goals. we've had significant overall savings when you look at the premiums. we were able to negotiate last year and hopefully this year. we kept blue shield except -- competitive. they are going to have to stretch competitive this year. kaiser is making affordability one of their priorities and we have improved quality of care. we have a lot to pat ourselves on the back for as do the physician groups. i think some of the hospitals are more engaged than others and when we sit down we sit with the physician groups and the hospitals and talk about why aren't you meeting this number. what happens, even if it's a small number, a small end, we look at where did that data point shift. so, having the employer lower the data

is an extra incentive for them beyond and makes it's more current beyond the rates. let me get neal to explain how we are going to do the targets which is on page 11 and 12. >> for those who are following along we are now on page 11. >> i have a question. so the urgent care services are those special facilities or in the regular doctor offices in extended hours? >> they are extending hours. they are both. so blue shield is contracting with some of the urgent care centers that are popping up. >> how are they getting that information to the members that this is available?

there used to be an urgent care facility. >> lisa, deputy director of health systems. each of the aco's would like to talk to you about their intervention and whenever they extend their after hour services and how they have effectively communicated that to their membership. the other thing is that both have done is implement the advice line so that our members and we've publicized that number on all of our material so they are calling the advice line and there might be an appointment available or giving direction 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