and supply unless i go and request a is surplus transfer. >> all right. any other questions from commissioners? >> any public comment on this item? >> >> seeing none, we are going to take a 10 -minute recess until by that clock at least because i think there are different clocks. 2:40. next item. item 8. action item review results of 2014 health service board performance evaluation and approve recommendations to the board. >> the meeting was on november 9th. how much you would like me to repeat here. there

were 9 recommendations as action items we can take in going forward. would you like me to read those off or should we just -- >> i'm going to assume the commissioners have read them? >> yes. >> i move we approve these recommendations. >> is there a second. >> second. >> great, any questions, comments in >> just an objects -- observation and comment. some of these have a multilayer issues behind them. it would be the government's committee to go back with details that might support one or more of these steps. it's not more like these are the nine things we are going to do. i wanted to put that clearly in the

record. i have made a motion in the committee to send the full committee forward risking in a public forum says this is the plan of action for the next two 2 years. it is not the case. it's rather that this directionally sets out to where we are going and we would bring these back for further discussion. >> there were a couple there that were also noted on our last evaluation two 2 years ago which we hadn't changed. part one was the education issue for the board and another one was to talk about the trust, a policy for the trust. that was also brought up in the last evaluation and nothing has changed. going fort the governor's committee

should look at this closely and have a meeting more than we had in the last couple of years. that would be my suggestion. under the circumstances -- it's been moved and seconded. is there any further comment. >> do you have any timelines on quarterly reports on the progress of these recommendations or some timelines that say for no. 1 just for an example that we did to be done in 2015 or in nine 9 months or 12 months otherwise we have these recommendations with no timelines of when we are getting to meet all of this. >> i think the committee should decide how they are going to calendar these on

the agenda, the items otherwise it will be on the agenda next year. >> any other comments or questions from commissioners? >> any public comment on this item? >> >> i'm speaking more as a former member of the board. i'm glad these items are on the table. one of the concerns identified had with the budget problems a lot of the board education was going through the cracks and there was a time when anyone was brand new on the commission would be sent off to one of the conferences to do if fiduciary training. there was a lot of good that hadn't been done on the board because of budget constraints. there is a

definite limitations as to how fund money should be spent but when it has to do with an issue that impacts the entire membership, it can be in fact be paid out of the trust. i see this as very valuable and i would expect that it not only go on here but governance that there would be more discussion about this in the future and i would commend you to bring this back before the board. i think it's a benefit and enhances the staff. thank you. >> any other public comment? >> great, this item has been moved and seconded. all in favor say, "aye". >> aye. >> any opposed? all right. there you go. no ab sensations. next --

abstentions. >> item 9. approve timeline for skuf directors 2014 evaluation. >> we discussed this timeline for directors evaluation hadn't been done since 2010, so what we decided is we would go back to january 2013 to kind of include some extra time and take into consideration that our director was out for a time. so i would move the time period for january and we solicit from the director time period for consideration.

that could mean back to 2013 for the directors input for the evaluation. 2010 was when the last one was given. it would be 2011 on. so that's my motion. >> is there a second? >> i is second. >> any discussion? >> >> you have the timeline as far as the period covered, but when are we going to do? >> >> this is before the is survey and before any written comments from the board. >> is this to be done within the next three months? 3 months? >> >> yes, as soon as possible because it's way over due.

we are waiting for dr. department dodd to finish the is survey. >> any other questions on comments from commissioners? >> any public comment on this item? >> all in favor say, "aye". >> aye. >> any opposed? there is no opposition and no abstentions. thank you. next item. >> item 10. discussion item. risk scores report. >> good afternoon, what i bring to your attention and i have two things so i'm going to talk on these. the presentation terld and why

i'm here today. in december 11, 2012, we discussed the metrics pool for the kaiser and uhc and at that time we were able to get from vendors a very clean set of rx tapes, pharmacy tapes and run the analysis and we presented that analysis. what we suggested at that time was that the kaiser had a much better set of risk and the differential was approximately 5 percent. so we presented this material, we used the information that we could and risk scorings where you take all the drug use over the period of one 1 year and you say if they took this drug you add it to go and

accumulate it and say this risk that is this data and the end result is if one is normal, or above that, it means you used less resources or more resources. this is the actuarial tool to establish what the set of risk looks like and they like to take into consideration what is going on that we can probably effect through wellness program and they call that perspective analysis. for a diabetes program for that. you like to score your population. when you have a big population you want to be current and you want to say how they stack up against the other. >> i just wanted to ask you if you can slowdown if you could. i think the concept of prospective and current are important and i want to make

sure everybody is getting it. >> i think that's fine and i think people can also ask questions. >> you want me to start over? >> okay. i will slowdown. we have created an answer and once we had the answer, kaiser said, woah, you did this on rx and we have a completely different pattern. >> please do not use rx. >> i will use pharmacy. we have a different way of prescribing pharmacy. can you do this analysis on a medical diagnosis and report back to the board what you find out. so you said we are here in terms of better risk, blue

shield is here and we don't think we are that far apart. we ran all the data and it's a very actuarial exciting process fosh -- for a person like myself. it's like a christmas party for me because it's neat stuff. this is a big day for me because i get to talk about risk analysis, so big times. that being the case, we rerun the information and what we want to report back to you is that the spread or the differential risk is not 15 percent but when you incorporate a medical diagnosis approach to this is more like 10 percent. i sent this to the kaiser actuaries and they concur. what does this mean? >> we are right here at a 1.17 with blue shield and 1.08 with kaiser when we do

retirees. we've established through playing year 2013 what do two populations look like, what i would like to share with the report in brevityey i would like to say we have done this and the risk score has improved and that is worthy of consideration. when we look at the current risk with blue shield when we looked at aco, the risk score dropped from 1.7 to 1.1. the aco's eliminating admissions therefore lowering the risk score. if you don't use resource and they don't have anything to put into the risk

simulator, then it goes down. you are frowning. >> you -- i am frowning, because you still have a diagnosis but you may not be admitted for it. >> the only way the data is collecis upon admission. >> is it only hospital data? >> >> it's hospital data. >> you don't use outpatient data. >> it is hospital and outpatient data but if you don't have the resource use, it is not counted on the risk score. >> if you have a diabetic on the outpatient setting. >> they are totally counted. >> if you have a diabetic who is not managed well and goes into hospital you give them a higher risk score because i hate to say sounds like what you are rewarding is poor

medical management. >> if you have a chronic diabetic that comes to the hospital, they come up as a higher score in the concurrent risk score because they went to the hospital. but if they do not end to the hospital on a concurrent basis and they are managed because they are not going to the hospital it lowers the risk point. that's all i'm pointing out. >> it's very important for the audience to understand that if you have two people that are identical being treated in two medical systems and one is getting care that avoids hospitalization they will have a lower risk score. it does not mean in fact that they are less risky and of a less of a diagnosis. we should not read

into these scores at least the way you are doing it, a definitive believe to the medical care system itself. >> exactly what you said is what i'm sharing. >> to carry that out one of the things to realize a difference in risk score did oes not necessarily mean that if you have a lower risk score you should pay a different premium. what was mentioned before is there is a difference in risk score that means that kaiser having a lower risk score from what was presented, the difference in the premium is not equal distance to the difference in risk score. that may not be the right conclusion to draw. it maybe that kaiser is in fact just managing the same type of people from a medical

management point better. >> that's why we used the risk scores because when be used the drugs it was only an amount of efficiency in the program and they said we are much more efficient. i wrote it down in all the material and you divide it by 1.5. there is this much better efficiency and they said this is not true, just what you said and that is correct. the implication is what you just said which i can state that kaiser given the difference in the premiums all things being equal, all cost structures being equal is a more efficient system. that's a correct statement. i can say that without having bias one way or the other. i want us to measure this every year to

see if we are by practice of medicine in any of these agendas come back next year that you were at 1.7, this is a very good metrics and now because of this analysis, that's a very good number, so things have improved in terms of your resources being used and managed. >> is there a way to develop a score that would in fact allow us to say these two people are identical and we stop there and why are your premiums different in do you understand that? >> we wouldn't have taken into account based on the diagnosis. >> it's the utilization based on the diagnosis and attached

an rvu to it with the national basis. that's the whole thing. can you restate that so i can answer it correctly? >> >> i can at least restate it. you just said the risk scores reflect efficiency in the delivery system as well as underlying risk, the mix of the two, my question is can you take out the efficiency of the system so that we could say, if there were the chronic diabetic here and the chronic diabetic here we can count up how many are in each system and look at the premiums they are paying, are they justified by the underlying medical condition of the individuals or are we actually paying out of proportion to that? >> yeah, that's exactly when you take the premiums. >> excuse me, that yes, in my

view has a very big ambiguity to it. i don't know what question you are saying yes to. >> she says she wants to take two diabetics in two different systems and say if you took the risk scores and analyze the premiums would they be equivalent at the end of the day if they are being treated with exactly the same efficiency. and she's saying if we were to take those dollars and find out that one still cost more for all things being equal, all risk scores being the same, then that system, system a is inefficient compared to system bchl. that's the question. that's why we do these analysis because we want to analyze the risk, look at the systems and say, this is a 1.5 and this is a 1.5, why is it three much more here, something is wrong. that's the

intent of this kind of work. >> didn't he just contradict himself? >> >> i have a feeling you just contradicted what you did say before. i don't want to drag the rest of the commission. perhaps we can have a conversation afterwards about this. to sum -- it up, i was surprised that you had taken the score of whether someone had gone to the hospital or not and posed okposo pose -- to the diagnosed. we are comparing an apple to an apple. for these two apples why are we not paying the same amount. for me you is ed the same two things. even in the risk score that someone didn't manage well and you send them to the hospital. that's not a

risk score, but a reflection of medical -- i'm being confused by your explanation of it. let's move on. >> well, i have a more basic process question. so frequently we come to these discussions with some of these topics and we believe everybody with us within the past six 6 months and knows exactly what we are talking about and i beg to differ on this topic. it would have been profoundly helpful with these materials to have some context why we did this, why we undertook this and what it will do once we get at a result. you are explaining it and you explained it to some of the satisfaction of the president, but i'm saying that's the round out of this discussion for me. yes, we had a variance, we've gone

back and looked at it and here are the results and now these are the implications of it. for public digestion that would be helpful. >> advice taken. okay. >> are there other questions from commissioners? >> >> can i just clarify from your point commissioner scott, we've been pushed by by one of our vendors to risk adjust the rates. is there really that much difference? and based on just the diagnostic analysis, just a pharmacy analysis and age and the urls in the document,

there was a huge difference between kaiser and blue shield and kaiser said we have a different prescribing pattern of blue shield so will you go back, kaiser could have done the analysis themselves. they wanted it to be n.d.p. -- independent and they went back and did it independently. i will admit it was my understanding that the data itself, because i remember we talked about kaiser having 16 diagnosis because they keep more data and blue shield having three, that we had to say this is how many diagnosis we are going to look at for each claim but what we are looking at is the actual what the diagnosis was when they were admitted to the hospital. we weren't looking at ambulatory data. when i got admitted to the hospital last year, i had a cancer

diagnosis, diabetes diagnosis and rb diagnosis. those are the three diagnosis that were made at the hospital. your point commissioner is we are not looking at the people who are well managed are and i'm saying, i'm repeating your point because we will revisit this issue with red -- request from the vendors that having a low risk score that you didn't get sent to the hospital. >> that was well said. >> that is precisely my point about context and application in this particular case and it needs to be a part of this if we are going to have this discussion annually, then we need to frame kind of why we

are doing it, what it is and what the result is because that doesn't communicate year to year. we'll walk out here today and i can guarantee you no member of the public or most of this commission will remember exactly what we said on this topic. so we need to talk about points of continuity. i'm not talking about the result, i'm talking about the presentation in this particular case. >> okay. i'm dismissed. >> you are not dismissed. is there any further comment? >> any public comment on this item? >> we managed to confuse you. i'm with you. it's a christmas party for you and me. >> and there is a white paper that goes along with this.

thank you. next item. city clerk: item 11. uhc city plan audit follow up, aon hewitt. >> i'm going to ask that you move forward with your presentation. >> today's presentation was closing the 2014 medical plan audit in addition there were many questions asked during our last presentation regarding the methodology and extrapolation. page 2. just

to give a recap plan evaluation method ology. we looked at 220 claims for the entire year of 2013. the sample size there was a question about statistic relevancy. sample size 95 percent plus or minus 7.5 percent. we'll get into presentation on how we broke down the claims for strata and the amount of claims we looked at. there was a question in our last presentation about the high dollar rate. we looked at 10 high dollar claims and the stage reasonable -- renal disease

claims and our sample of 10 claims will not statistically relevant, did you tell provide a highlight and overview of how the uhc process those types of claims. an example, one of the errors we did identify on the audit was from our targeted claims. just from those 10 claims we looked at for each set, we were able to determine a picture of how uhc processes each of those types of claims. plan methodology, we have the payment errors and non-payment errors. when we get to the actual audit we have some items that agree or disagree or lack of consensus. with uhc, if they have identified and corrected an error prior

to our audit they do not consider that an error. that is one area where we differ within our scores. question on the methodology why we looked at the 220 claims. the sampling is a stratified random sampling methodology that does not take into account the size of the group, nor the population covered, no matter what timeframe we looked at. we would expects similar results. >> it's an error rate driven formula. the point is because it's an error rate driven formula, there