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 should get trying to get early detection. that's the long-term strategy of trying to keep health care cost while you are still managing. it's making it an interesting concept. i appreciate the

question. >> thank you very much, doctor. >> paul brown. i'm area vice-president for premier accounts at blue shield. i want to answer commissioner fraser about other customers. we have other customers that do risk adjust. it's increasingly more common to recognize the risk that richard fish talked about. in particular those that have a self funded plan that they feel like is being selected. that is their risk. they will set that contribution on their level. i would be happy to identify them. >> okay. thank you. and you, doctor? >> terry hill, once again and commissioner fraser we do not

contract with employers as richard said. we don't have actuaries. but i do want to make the point that we like brown and toll an use pretty sophisticated risk tools to help us target interventions and some of the outreach that we do. let me just say one thing about the limitations of those risk. they are worth using and we are committed to them in this industry standard. we had our epidemiologist to look at the utilization of health care services in city and county. it turned out the two populations on the risk tool looked similar actually quite identical. what was unique about the higher utilizing population is the population they needed more care was that they were from socioeconomic

areas that were rated lower by using standard federal techniques. so there are, so to economic differences that don't show up in our diagnosis and age based etc risk tools, but and that i think is one of the keys to moving the movement towards population health to the next level. you probably heard of hot spotting. who are the people who really need help? how do we find those people? we are absolutely committed to moving this whole agenda to the next level. >> all right. thank you. are there other questions from commissioners? commissioner lynn? >> yes. my personal opinion what is missing in discussion related to health care is part of the discussion is the

population here where we are changing the environment where we are doing integrated care management and that's the focus to really list the readmission to the hospital. thank you for bringing it up. i would be remiss, thank you for all your work and thank you from blue shield from brown and toll an dignity and health physicians, thank you for extending the affordable health care and thank you to lisa and staff for getting involved in the affordable. aco. i applaud what you are doing. thank you. >> any other questions? >> blue shield? do you have any comments that you care to

share. please come forward and identify yourself. >> thank you. margaret bead, blue shield. thank you so much for an allowing us the opportunity to speak. this is an exciting opportunity for us at blue shield to be involved in this aco. a lot of it has already been said. but this is very unique because we have a four way partnership. really you don't see that. this is my first time being involved in something like this where you have the employer at the table, a big hospital, two large medical groups sitting around the table sharing their information, looking at what works and what doesn't work and really getting in under the hood. that just doesn't happen in health care. it's been very exciting and we've been able to do some really

innovative things. you heard about our transitions manager. that's fabulous. this person walks that patient through even before the patient comes into hospital as an elected admission and hold their hand and takes them to the outpatient and makes sure they are settled at home and is available at home if there is a problem so that the patient doesn't have to get readmitted or from their perspective doesn't have to leave their home, their family and they can stay at home. i just want to thank everybody for allowing me to talk about this. it's a wonderful thing. i appreciate all our partners coming today. i want to leave you with 1 story. this is one of many stories that we have with respect to our patients and this one is one that dr. green from ucsf provided for me. we had a 66-year-old

grand mother, very active had a stroke in july. the care transitions manager met the patient on her first inpatient day and did a discharging follow up call to make sure the transition home was safe. because the relationship established by the care transition manager, the patient and her daughter felt comfortable to contacting the ctm. her blood pressure rose which is what caused the stroke. she called the provider and she called the transition care manager. that transition care manager was able to located the doctor on call and was then able to help patient manage the blood pressure on home and was able to follow up the patient and