úx. >> so good afternoon let's all staples for the pledge of allegiance

and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all good afternoon. welcome to the regular health service board meeting of march 12 2015 mr. secretary. >> commissioner scott excused commissioner lim commissioner farrell commissioner breslin excused commissioner shlain we have quorum forgot to mention commissioner scott will not be making the meeting item one please. action item approval about the modifications of the minutes meeting special closed session

on february 2, 2015, of regular meeting february 12, 2015, is there any connections to the minutes? i move to approve >> i second. >> public comment is closed. hearing none those under oath. >> i. >> opposed motion carries. >> item 2 discussion general public comment on matters within the jurisdiction not appearing on today is agenda. >> any public comment related? okay hearing none next item >> item 3 action item commended agenda approval the items previously discussed on february 12, 2015, the rate

stangs and sf 2016 and fiscal year 2016-2017 general fund administration that budget. >> 2015-2016 and fiscal year 2016-2017 health care sustainability care budget. >> so those 3 items were discussed urging the e during the committee and also during the last most meeting and it has been discussed it is only content agenda any public comments? i move to the approve >> this is an action item. >> i move we approve all 3. >> i second. >> public comment. >> any public comment on this item? hearing none those in favor >> i. >> opposed?

motion carries so we're going to the rates and benefits next item, please. >> item 4 presentation of 10 county survey. >> good afternoon dan hewitt you have before you as item 4 the standard packet the development of two 201610 county contribution amount per the chapter h s tucky have the survey for the employee only contribution for their plans certainly all the counties are in the package if you get to look at the kind of programs and so we have the employee only contribution right now the map is we take an individual county we take what the employee only

contribution for the various programs we average that and take the averages and compile to the populace county and come up with the average of the averages this is the mechanics so strictly without any further i'm to turn you to the page of the answer comparisons and the answer is on page 2 and written in the intro the answer a 579.24 last year the number was 567 portfolio 80 when i presented the numbers tentative numbers in the january meeting i used the 3 percent increase historically the numbers vary between the low 2s to 5 percent this is a very good number a applies based on

the various county as far as changing benefits and what their contributions their flat in the present timeframe for the 10 county so that's a number and i want to share a couple of things before i make a recommendation to approve the resolution this is number is not used because we changed the formula for activities one hundred 93 siu and this approve contribution has a standard for everyone else that is 93 percent and 93 plus one and 83 percent this is pertinent it is part of the required ways of developing the rates and contributions what the city and the individuals pay for early are retirees and c cd part

of the terrorist in the san francisco unified school district they used the charter technology county the only place to negotiate it it relative all the retirees that's relevant to me and then relevant to you a san francisco unified school district and c cd with that i'd like to is are there any questions before i make my recommendations to approve the amendment. >> questions from the board? >> should i - i recommend you approve the 57924 this is an action item do i hear a motion. >> i move we approve that. >> i'll second that. >> any public comment?

it's been moved and seconded all in favor approved motion carries >> item 5 discussion item review 2014 blue shield non-medi-cal claims mr. hewitt. >> you should have in front of you a presentation called the blue shield non-medi-cal experience as you probably remember we started in 2013 and we are fortunate able to lower the premiums from the proposed fully insured amount that blue shield was suggesting we held them flat under 2013-2014 and into 2014 and absorbed a little bit of the alternate claims expense and if you look at this

example and run our eyes coordination it it shows the various items costs by month to month and at the bottom you'll see the premiums for the full cost loss ratio was this number indicates were it was a one hundred and 4 percent it varied what we brought in covered the costs at the end of the year we brought in $275 million and we spent $290 million that was approximately $5 million of the dollars were used to fund our r n r reserve and could notcy reserve in june of 2014 we analyzed the reserves has part of the annual audit progress from 48 to $22 million we have a

reserve and moved it another $900,000 approximately and so from an actuary be prospective we'll expensed all the items and their you know so that means you've 1y5i9d a twist for calendar 2014 now i have another exhibit on a subsequent page i go line by line 2014-2015 where i sort of say this is what the cost was in 2013 and the cost in 2014 so this sort of is highlights where did the extra expense or change in the run rates or the expense rates come from so i'll stomping stop before i walk through this any questions. >> questions? go ahead

>> go ahead and finish up okay on this page we're going to show where the costs came from over here you can see we took the costs in total dollars for riffling and gave you the per member per member that's cost per person and it turns out this is $1,138 we did that for 2014 and the term member means subscribeer not each individual person in the nomenclature so if you run our eyes where it kicks off it gets expensive well, the add man fees we've recorded increased our period over period costs 51 percent another area we found a lot of increases in cost also plans and all payers was in

prescription drugs now that's been recorded to the board that was something we were not sure how much the drug would cost but the bill was a lot we understand this year's pricing competition so hopefully that's not an accelerating cost to be fair to the board itself actuaries part of the progress or other expensive drugs coming in the that i'm you're the risktakers we'll be paying r x claims costs they are expensive we got american people increase and it was on a p m that's the best way because the mile-per-hour was a 4 percent and so our aco everybody get

their increases that does not come every year so let's overall costs the program has gone up we're well and sufficiently retired and have absorbed those expenses i'll immunizing explain while pit this into the claims stabilization and charge it back any questions as far as this status is concerned. >> one question of the 40 dwlrs per member per month do you know how much is the health insurance. >> $40 probably just about all of it. >> okay. >> because everything else is pretty much the same. >> thank you.

>> okay. >> it's kind of expensive and so we have a couple of points we've made some clarifications one the points of reference what's the overall loss ratio if the expense is increasing our reserves your loss ratio is one hundred plus percent we have policies so sufficient reserves so when we dpo do one over the remilled premiums to the trust fund i'll take you through in a minute collect the money over a 3 year amption so your fully solvent any questions. >> any questions from the board? no >> that's it. >> thank you any public comment on this item? hearing none next item please.

>> item 6 review blue shield vs. fully impact analysis. >> this is an additional report and this report is basically to now step back as the 2 year cycle and looking at what we did with flex we believe in our aco we're going not liking the premium that was suggested by our partners blue shield tell us what we can gain by lowering our premiums and is where we're at at the end of the cycle we've dated all the data here's the premiums would have look at if

we stated status quo and this is what we brought into the house we go month to month by month so what goes on this shows month to month what it would you have looked at and what we brought into the house we summarized this in a table i want to turn to the first table to give you an idea what we were looking for 2013 if you go to the far end at the total lines it's $309 million if we stated and accepted the renewal from blue shield fully insured blue shield from the h s f trust would have received assuming the head counts are correct 3 hundred and some employed let's lower the number for the people in blue

shield was $281 million that's a substantial gap in costs it turns out that's $28 million at the bottom then you brought in $281 million but at the end of the day before you fund our reserves you ended up $31 million ahead on a cash basis so you brought in the money and said oh this is working great we have to fund our reserve and the contingency reserve that is a was a very good decision and you want to know we've changed our funding we're at risk how are we doing this is a detailed document what was on the table what was the spread you how much better off are we have this example and

from the expense in 2014 some money came out of the trust we didn't collect every dollars we built up cash but spent more than we collected in 2014 but as a whole how are we looking from a truly if we are fully insured all the money is gone we're the note fully insured where are we and how much cash in the bank blue shield by itself regardless if you have $20 million in your surplus or one hundred employed blue shield paying its own way period that's the policy of this board your one hundred percent committed to each of and every one unless we subsidize or bring money from the general surplus of the trust each the self-funded programs pay their own way so if we don't get there

we go get the money this schedule on payment 4 sort of outlines in big dollars when happened to the program if we stated fully insured we would have sent out it's a a theoretical number for 2014 we don't know what would have happened to immigration if we took the fully insured we were worried about that accident board was appreciative we don't want anyone else leaving it was an excellent assessment of the situation but looking at it and give me a general for knowledge or you are $55 million ahead and you've increased the enrollment in the last period by reconfiguring the contribution to the actualy every step has improved the financial situation

more than i've ever seen in my thirty years it's incredible so we breakdown in more detail kind of at the end of the day you need to have $36 million in reserves you have $24 million in cash left overdone depending on how you time to speak where we were so at the end of the day you'll see in my final presentation we recognize that fact you'll pay yourself own way i hope this is informational to when we took a risk if which is great and you're in great shape you've saved a lot of money i applaud you so any questions about how good a job you did (laughter). >> any questions. >> yes, ma'am. >> we wouldn't e we couldn't have done it without you your

combines to and you're the cfo so credit where credit is due i the board took a risk by you had a large hand. >> that's the end of this discussion. >> so we saved $55 billion and the board savings $55 million and not only that but we saved by subsidizing part of it and avoiding immigration from any other plan so we have a savings and across no migration from whole. public comment? >> good afternoon, commissioners claire president

of the r ac sf i find this compelling to find the $55 million savings you i'm curious when it saves the city if in fact the city how much it saves the trust more importantly i'd like to know how much it saves members we're talking about how much it saves the employer that is very, very important and how much we're dealing with in terms of the trust how much we saved the members because when i sat on this board one of the things how much is the bottom line or how much it saved them this is a rashlgz program i'd like to see that reflected in those kinds of reports thank you. >> so i think the $55 million it is a savings on the trust but

not - the members saves but depending on how the splits were done t so hopefully, the trust saves the money. >> i think if we multiplied $55 million by 14 percent which is what we estimate the average employee slash contributions we come up with $7.7 million thank you. >> didn't know where the decimal point was i agree. >> thank you. >> is there any public comment? hearing none next item and item 7 approve you blue shield stabilization mr. hewitt. >> this is great glad to be up

here i've shared in sort of a general way how 14 turned for blue shield this is our document it is policy we calculate the surplus on the yearly basis and a.m. intents either a substitution from the rate or addition to the rates so all programs on american people amortized basis are fully one hundred percent responsible for their own costs no other entities does this to the part of instruction i've said i think it is great but i'll say that one more time the calculation is displaced on page 2 showing what we brought in and paid out and have that number i spoke to

earlier we add $4 million in change in our reserve we've increased bye bye one hundred plus million dollars that is the same number that 50 number is added to the number we started last year which is on page one so we carried forward $2 million we had $3 million in excess in 2013 but we took a little bit of money out of 2014 because of the fact we have to carry it with you'll that considered we look at it and other things that happened in 2015 we have those two numbers the 2.053 and adding the two numbers together we need to recoup $13 million plus 2

hundred and 33 4 hundred and 55 thousand 2 hundred and 33 the rule we take a 3rd of that put it into the rates which i finish the discussions with blue shield that's a line item on the card and the following year for the next rate which is 2015 we have carried forward $8 million bylaws plus so what makes that number go down in we have surplus in 2014 and have fantastic aco do their fantastic initiative and manage the care we could see a surplus we've net the surplus and less money to adjust in the rates so i'm objectives i have to be

optimistic i want blue shield so stay other than that's a statement of my opinion it's not expected without further ado are there any questions. >> yes ma'am. >> i want to add the remaining recess plan for 2017 and 2018. >> yes. absolutely it goes on any other questions i want us to approve the allocation of the this is my recommendation the $4 million 4 hundred and 85078 for 2016 rate development and the chair forward of 8470445 that's it this is an action item do i have a motion from the board

any questions. >> the motion is two motions; right? >> stabilization policy. >> i made two. >> for 2016. >> yes, ma'am and say that again. >> okay. i want to add that o policy $4 million 4 hundred and 85 thousand dollars to the 2016 rates based on the way we do that and also i want to have you approve the carry forward so in the minutes and everything $8 million 9703455 we have 4 numbers. >> i move that we accept the recommendation of the actualy. >> hewitt. >> any public comment? hearing none those in favor of

the motion >> i. >> opposed monoxide carries. >> next item, please. >> item 8 action item for the city plan for 2016 plan year mr. hewitt. >> i apologize. >> we don't have a deck on this why don't you explain the stop. >> in most self-funded arrangements some sort of a stopwatch you put a premium to reinsure the threshold $300,000 plus so if you have a smaller pool and you don't have surplus cash or stabilization reserve you don't want to as a

enterprise to absorb the risk our recommendation is that since you have a very large stabilization reserve and a up substantial contingency reserve and an i b r reserve you don't need to fund a premium for stop-loss at the present time and the majority of the costs are in the medicare portion we seldom see large excess claims this is our opinion and that was what we would like to - is that an action item. >> no stop-loss is required from the actualy. >> so for clarification what's the dollars threshold for the stop-loss. >> the dollars threshold. >> the stop-loss. >> you could go really high we go