consolidation has occurred and basically resulted in higher rates as you can see from the power point that hospital rates, etc. at the facilities are thirty percent higher than other northern california hospitals and their physician expense has risen 3 times as fast as the other physicians in the last 4 years statewide as you can see they've been accommodating a fairly substantial profit margins in double digits most of the time in addition it to that situation we're trying to address and keep health care affordable they're trying to limit the access to the court there's a pending class-action lawsuit that was filed by the u e b t trust affiliated that the

oc w they've challenged the practices of sutter health certain aspects their lack of transparent they're tying hospitals together and so forth it in the suit they see one the first round no court and sutter is appealing so sutter basically came to us with a new provision they've never asked for all lawsuits for all customers and trusts and so forth will have to be arrest traded and not permitted to go to open court we thought it was not acceptable and binding our customers 2, 3, 4 a way we didn't think was appropriate so we're pushing back against that we you know we are happy to answer more questions you might have about this and look forward to try to resolve this issue

before anyone loses their coverage. >> now paul will speak on the specifics of the impacts on members. >> good afternoon paul brown i'm the area vice president for premier accounts i'm to take a few minutes and talk about the potential impact to your membership i believe we've identified about 57 hundred or about one hundred and 12 percent of our membership that are directly impacted meaning they'll have to have a new primary care physician a non-sutter physician i want to back up with our last negotiation. >> excuse me. paul step closer to the mike. >> in our last negotiation with sutter health which was also very contentious we purchasing e

purposing negotiated in a transitional period to take the customer out of the middle so this you go time around we've gone to negotiation we answer or enter into a transitional period members can get care from sutter does have this change their prim care physician until april 1st part of it is rigid requirement we're required to stickle with wrpd to the regulators in sacramento the d mc requires we give the members who must change the primary physician because of a dispute with a group give them 60 days notice we tipped on real estate the letters on

approximately january 15th or 16 in another week or so that the transition to a new primary care should we not reach american people agreement is effective april 1st so it's a bitter for favorable this time around because of the transitional period we're now in but should we not reach on agreement with sutter we will be dropping those letters and we are fully prepared from a customer service center prospective to answer those letters and direct them to other providers in their area should they not contact us we'll automatically assign them to another physician if they don't like that physician we'll

direction them to another provider in their area i'll pause do you have questions. >> one question for mr. unat the scene is sutter asking for language for the right to not have the city sue them. >> yes. yes they want to bind the people who receive health coverage from us from suing in open court on the anti trust ground the sutter. >> the second thing a point out of clarification there's a lot of stiff being said about doctors and hospitals being a physician who is unable to join brown back in 1997 they were investigated by the federal trade and they were not allowed to take doctors i was not allowed to join when i finished

any residecy as a trained doctor so if you're a brown and tom nolan's doctor that takes blue shield and he e you happened to have our office on webster street that's right being next to 0 sutter hospital you as the doctor has specialists at that hospital that you use all the time and their your relationships on how to manage our patience so patients do exist in a volume they have to deal with lots of people especially with a lot of problems if you're a blue shield patient that sees a doctor that used the sutter familiarity and the doctor can't use the sutter facility to get paid your blue shield patient at brown and tom nolan doctor has to go to a

non-sutter facility i'm a sutter doctor and if i send you over to the hospital i'm basically saying i don't know anybody and hope they call me back it's a k345ishg9d endeavor to increase score it's trickier you have your doctor and don't worry you can use my facility you hope the one hundred works just as they did with the specialists i have the cell phones and i know the staff this matters when our taking care of a person there's lots of nuance or so here my big question and now a clarifying statement you can clarify it if you time for those who have who

don't know certifying civil right is about to announce or announces they're to indemnify themselves as i look at this i know they've negotiated with blue cross it is something in here to try to boot you out to launch their thing is that - am i wrong is that kind of right. i know maybe i can't comment i smell something funny here is my comment. >> yeah. i won't want to speculate on that in the current negotiations that is we don't believe that's a factor at all we are norwalk with sutter like we've also negotiated with sutter it's difficult they're good negotiators but i we really don't put into this e situation

it's really, really small image in the sacramento region to your first point i want to talk about brown and tom man but i want to go back to my original comment those 4rg thousand members they'll have to change their primary physician and larger group in the range of 2 to 25 thousand of our members that have a nonsutter physician such brown and 80 lane they admit to a sutter facility those members are going to get a different letter they'll be told they can keep their primary physician but the facilities will not be forwarded or part of the blue shield network so our example of specialist care we definitely

recognize it health care didn't occur in a volume and many multi discipline factors that go into the care of very complex patient with respect to brown and tom lane and other in the east bay they'll continue to refer to their colleagues within in their medical group when they require any type of outpatient or in patient care not going to a sutter facility and there's persistent with us right now in the covered california market sutter is not in our network so c p n m is not in there and tom man refers to other non-sutter hospitals in the city and can i ask which ones. >> i don't know. >> st. mariah's and t sf.

>> this is one. >> there's to. >> is there to. >> is it fair to say it's alameda county that are a little. >> there's far less competition in the berkley oakland area sutter is dominate national in that area as you mentioned the alter is affiliated not through sutter. >> also the north bay a lot of sutter hospitals in the north bay so where does blue shield customers go in merry run and . >> merry run county.

>> uh-huh. >> we have a very detailed plan that basically shows where every there's disruption with a sutter medical group with the alternative group if it's only a hospital what the additional hospital is in that region as well i would mention. >> let me be clear we're referring to the right information is 24 in the blue shield the sutter termination fang shooet the one you're referring to dated january 2013. >> yes. >> thank you are there other questions or comments. >> commissioner lim. >> so we did would you be able to provide the number of members effected for this medical group.

>> yes. >> assuming the negotiation is still going on. >> go ahead. >> and also for members not faekd affected like brown and tom man you'll or be providing a 1040 and we want to provide you a listing of all county affected by a primary care physician change or a potential hospital redirect. >> yep how does it been hitting on the news about st. francis sold to another - yeah. how does it impact. >> the daughters of charity and

yes theirs seating in our area. >> the daughters of charity is not only in our network but a customer we fully expect that should the attorney general allow prime time to purchase them they'll continue to be in our network. >> are there other questions. >> director dodd. >> i wanted to say i did have a conversation s request sutter they contacted me and i mentioned it in my director's report it's important for the board to recall some of you weren't here that three years ago sutter coming in came in when they wanted to buy up the whole business and put st. francis and st. marries out of

business when we launched the acos we want different premiums the brown and tom man sutter premium will be higher than that assuming the utilitytion matched better to be safe than sorry but the premiums effect the costs sutter wouldn't allow us we wanted to create real competition we talked about removing sutter because they were driving our costs up so all the work you've done over the last 3 years to null lists migration i only needed 10 percent in the hospital to blow that out of the water we'll be back to trying to convince people to pay more by largely

because of sutter so it he kind of is something we asked for indirectly and it is happening and sutters rates are higher than any place else in northern california they drive the hospital market and only the hospital p that they compare with a cedarcy new that's the hospital to the stars if we're going to keep please line up on the screen side of the room or anthem or whatever our system we have to control those hospital costs and today blue shield is unable to control them. >> i have another question so assuming this happens and people h that have doctors in the sutter group and have to pick a new doctor does blue shield have

a cap on how many patient the doctor gets. >> i believe some thafls has been done about in discussions with other medical groups whether there's sufficient capacitate there any doctor at any time has the right to close their practice but as of now we feel there is certify capacity of primary care physicians in the community. >> have you reached out to them to make sure they can handle the workload if your sick and can't get an appointment. >> i don't know if our network incredible people have had those dysfunctions i'll add for people in the course of treatment tlrgs a continuity of treatment for the plan so that you know should somebody needs e.r. flowering cancer treatment europe

behavioral health or another needs there's a continuity care where they'll see a sutter provider under those circumstances. >> i want to add the network transition plan was approved by the state department the health care they look forward those soft things to make sure dollars adequate capacity and they found it to be meeting state requirement. >> are there other questions i'd like to thank you both of you for coming on short notice to provide some additional background our on the topic we're not at the end of it and we'll be calling you and wish you well in our endeavors i guess from my own prospective i'll like to hear sutter to explain in the interest of fairness and balance and

representation but i think the data speaks for itself quite frankly we'll have to see how it precedes to the conclusion thank you, again, for coming today. >> thank you. we'll continue to keep you appraised through director dodd. >> thank you. >> is there anything else on that topic. >> public comment. >> yes. as also let's hear public comment on that topic oh, yes. >> can't let it go president of the retired employees of the sfoiks ore phones are ringing off the hook we've been talking to talking to those who represent rertsdz police and fire that have been calling and how it impacts our members

commissioner brought in mri run and son on uniformed personnel are affected we've told many members their primary care will physicians may not be impacted if they're part of brown and tom man or hill or mothering any of the medical groups as the dr. pointed out that occurred to us immediately this is very distressing and i'd like to invite a representative from blue shield to come to our meeting next wednesday and talk to our membership because their very, very concerned we have a lot of blue shield members among retirees and i think if i want to commend blue shield for whatever they're doing to try to negotiate those and i understand that mp mc is the highest cost

in the network since 1947 and now it's a sutter facility and continues at high costs retirees are extremely concerned and i know that activities are being sure because they have families and many of the considerations that the retiree network when our older and have to look for a new physician it's traumatic and our members are really urging blue shield to do whatever they can to be able to maintain the continuity of care and no problem on april 1st and they'll be able to go forward but cost and continuity of care and retirees are in a panic thank you. >> thank you. >> dennis kruger activity and retired firefighters i see some of the alternative hospitals are

going to pick up the membership after sutter is terminates and number of hospitals are for is all i'm wondering through the sale of the hospitals they'll be eliminated as alternative choices for our members and number of the two of the hospitals in the san mateo area i believe i know one for sure has blue shield taken that into consideration that those possibles are sold will they still be alternatives and any other public comment? and is there do you care to respond to many as one the blue

shield representatives? >> yes. we do not anticipate any change in the rest of our network configuration as a result of the sale of daughters of charity to prime to that should that happen and we continue to negotiate with all our providers our contracting people are doing this amendment with itch smaller medical groups and hospitals so they're very professional how they go about f that this has which happens to be the biggest to folks in northern california i welcome the opportunity to present any constituency within the retirees or unions i've spent the better part of the last two weeks talking to our largest customers 2, 3, 4 northern california with only possibly one expectation they're all behind us one hundred

percent wanting united states to fight this fight so i welcome the opportunity. >> i'm sure that the representative who will be contacting you to conclude that presentation are there other questions or comments public comment at this point? if not again, i'd like to thank you for coming today and we'll be in touch to get an update to our next meeting whether it be through you or through the executive director but again, thank you for coming on short notice to share your perspectives on this issue >> the next item is item 4 action item election of health commission commissioner scott. >> i wish to vacate the chair

in favor of commissioner breslin. >> nominations are on for the health board i nominate randy phycology for president of the health service board. >> i second that. >> can i second that. >> second and any any public comment on this item? all in favor, say i. and i opposed? >> it's unanimous we have a new president congratulations. >> (clapping.) i had thought the vice president would be on here we usually do that together. >> thank you i'm to claim the privilege 67 asking the former vice president thought that board be the vice president again and go through that at the next meeting we also as a result

of jean frazer leaving the board have an vacancy that's mire hope to have a a new commissioner identified that's the mayors prerogative we'll abide by his timetable i have no other comments and i consider it to be a approved privilege and honor to be able to serve in this capacity it was quite shocking when jean called in october and said she was going to be leaving and sirens then i've had the good pleasure and honor to work with kaeblg e katherine in preparing this meeting and look forward to doing this this the future to the commissioners i want to be available both formally and informally to you

as we do our work and various membership and constituency of our system it's my hope and expectation i'll find some way to be a part of meetings or gathering or what have you as we go forward i said it at the beginning of my tenure as a commissioner yes we need to meet not only at many time but other opportunity and as president of that board i'll try to actively find a way to eric legally do that as we go forward and thank you, again, for this privilege and we'll precede with the balance of the agenda item 6 discussion item ss h reporting as of november 2014. >> good afternoon pamela levin

chief financial officer in the interest of shortening the meetings looichlg i'm going to briefly go through the report on the trust fund and the general fund administrative through november 30th if there's additional questions i'll be glad to go into detail when we end last fiscal year john june 30th, 2014, the assets were $92.8 million based on the activity the net are $85.9 million a decrease of $6.9 million associated with a $4.4 million increase in the projected city assets and $6.4 million in blue shield neglects net assets

5.5 increase net assets he associated is favorable claims and self-insured he dental plans and 8 hundred thousand decreases in stimulated estimated hmo from the use of the early retirement - i. >> reassurance program. >> reassurance which i'll report on later $800,000,000,000 increase in net assets from interest income that includes the interest on the e e rp fund and 4 hundred thoisdz enthuse decrease for forever turns due to the transfer of the general fund prudent to our

budget we're working closely with on the calculation of the reserves based on the financial results of first 5 months of 2014-2015 we projected a $50,000 balance by year-end and we've rice that project based on funding the borrow text and executive directors policy update we're currently not projecting a balance in professional services it is a very, very tight budget this year and will be next year in terms of professional services this year we will be doing reprojects pro-projections it's difficult to do things workplace you know just a few months and then