board forum of the health service board of the city and county of san francisco to order. would you please stand and recite the pledge of allegiance. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. >> now i'll ask our board secretary to please call the roll. >> roll call, employees [pr*-ez/] scott. >> present. >> vice president lim. >> present. >> supervisor farrell excused. commissioner ferrigno excused. commissioner follansbee. >> present.

>> commissioner sass? >> present. >> we have a quorum -- >> oh, i'm so sorry, commissioner breslin, i'm so sorry. >> we're not trying to write anyone help. we need all the help we can get [laughter ]. >> that is exactly right. thank you, secretary. with that, we'll go to discussion item 1. >> item 1 discussion item opening remarks. president scott. >> yes, would i like -- i would like to be sure that we all understand what this meeting is about today. there are a couple of features that are not customerary for meetings of this board. there will be no public comment unless after the closed session which is scheduled later for today. we have a hard stop on the forum at 4:00. at which time the board will go into closed session to her member appeal.

after that we'll reconvene and go through protocol of whether we disclose or don't disclose and if those of you who are familiar with the sunshine ordinance understand why we do all of that. so that will be the time if there were any general comments on matters under the board's jurisdiction that we would receive those. so i just wanted to be sure that we all understand the protocol and ground rules for today. i would also like to talk a little bit about this forum. this is the third such time we have done this. we have tried to step-back from our day-to-day operational and policy questions as a board, and staff members as well, to take a broader look into the field of health care, regarding issues that might be ultimately before this board before a decision. to say that we're in a

season in transition today particularly would be a vast understatement. we had to run the gauntlet so to speak to get into the building today because of what our democratic is and our country. for everything there is a season. i would put it to you, that we are approaching and will be entering into a season of policy change, it's might impact the work of this board, and its purposes. but we are not -- we are not and i want to stress that in a season of change in our mission here, under the charter that we operate. i'm reminded of a poem by the english poet -- i'm sorry, irish poet, william butler yates. in the poem "the second coming," which was written after the first world war in

1919, he said, "things fall apart and the center does not hold." for many of you, that might be kind of where we are based on recent outcomes in the public arena. but i would prefer that we have a different image in our mind, as we undertake the work of this board, in fulfilling its mission to our members. many of you have probably seen or heard of the image of the greek god in mythology by the name of cisifhis the king of cornith, through his own deceit and cleverness and the planing is of a man raleighing a huge boulder to the top of the hill.

that is cisifhis. in rolling the stone to the hill, there was a penalty. he would get it to the top of the hill by night and in the morning it would be at the bottom of the hill and he was, again, to push it up the hill the next day. the lesson for this board in my view and for our staff is that the lesson is not one of endless work and drudgery fors us and not an image of endless labor and futility. i think the the message is one of work and purpose and hard work on behalf of the members of the health service system for whom we serve, and to provide ultimately affordable, quality care to those members.

our mission is endless. and we will have only moments of rest, pause and renewal for this board today to, take a step-back, take a breath and try to get a wider view and that is what this forum is dedicated to today. as we come back into regular session next month, we'll pick up the boulder and begin your journey together. with that i will now turn it back to the secretary and i think that our acting director, deputy director of operations, mitchell greggs has remarks as well. >> i just wanted to give a brief update on open enrollment, and that our full open enrollment report will be in the december board's regular meeting. that will have all of the details, but i just wanted to recognize the volume of

work, the amount of work and the staff really stepping up to it. so we knew it would be a large open enrollment this year because of the plan changes and some of the new benefits that people are seeing and some changes that we have done within the plans. so we knew we would get a lot of calls and face-to-face interactions. we have received over 10,000 calls, about 3,000 more than last year and we managed to keep all you have our service-levels with that, too. we received 10,600 pieces of paper, open enrollment applications and that is anywhere from 3,000-4,000 more than we typically do and we're now at 90% of having those processed. perhaps one of the biggest increases and one of our biggest challenges we wanted to do this year and get out there and communicate more and have more face-to-face

interactions with mills and we did it through the retiree sessions and flu clinicks with health fairs in parts of the city. so a good approximate number, we talked to about 6,000 people face-to-face this year, that is almost triple what we have done in years past. we're also out there doing robo calls this year, specifically to the population that will move from blue shield and from the city plan coordinated benefit to the new city plan. and so we have done those specifically to those to help them know this is going to happen, the timing of what is going to happen as far as getting their new id cards and help our staff not get so many calls on january 1st and when people realize their benefits change and where? so we had really good responses about that and we had some really good

responses about the additional services and additional communication services we put out there. again, next month we'll have a lot of specific details in our usual presentation of open enrollment. thank you. >> thank you very much, deputy. commissioner follansbee. >> i just want to thank the staff. i want to the first open forum, i think, for the season, which was in the library in the conference room and in the auditorium. it was packed with representatives from both health plans who articulately answered questions. i think for the first event i was quite impressed with the expertise, the satisfaction that was evident in the audience from people who came up to ask questions during the session and then came up afterwards and i want it congratulate the staff and the health care representatives in their participation in the communication sessions. thank you. >> i know that commissioner breslin and ia attended the

retiree session for the city and county of san francisco with over 500 people at that event with the flu clinic and our executive director was there as well. and presented part of the program. but again, i think there have been -- there was a commitment by both kaiser and particularly the broader new health plan, uhc, to really outreach during the course of this open enrollment. to me, it was very evident that they did that and more. i understand there is supposed to be another series or we're engaged in other series of robo calls with retirees and so forth. so you may want to comment on that? >> those are our last series of robo calls are happening right now. we do about 1500 to 2,000 a day, until we reach the full amount, which is approximately 9,000. we do that mainly because if we were to do all 9,000 robo

calls at the same time, we would get more calls into our service center, as well as the plans' member services phone numbers. so those are going on now and will be wrapped up early next week. specifically we're telling people about they get their confirmation newspaper partners when had he receive their new id cards and to give them numbers that they can contact united health care if they want to ask questions about the new plan or find out if their doctors are already billing them for that plan. >> again on behalf of the board for those staff memberses who are listening and i know some of the management team is present in the chamber, i want to express on behalf of the board, our profound thank you to the hard work that you have undertaken to process and support the open enrollment of our members. it's not uncharacteristic that you day in and day out do this type of work and we thank you for that. so with that, we'll move to discussion item no. 2.

>> item 2 discussion item. review of the hss charter and administrative code sections. erik rapoport. >> as erik approaches the podiums, i want to put a little bit of context why this is the leadoff activity for this forum. over my tenure we have had numerous references to administrative and charter code sections, sometimes by the amendment of the plan documents and sometimes guidance coming from our counsel and others who might be bringing matters before the board. so i asked erik this spring to undertake a task, and that was to pull together in one document that could be clearly laid-out what was applicable to the work of the board?

our role as commissioners? the scope of our work, the duties, et cetera, et cetera? and recognizing that this is a document for this date in time. there can always be additional tweaks and amendments, but we wanted to put this into one document. so that everyone would have access to it, and we wouldn't be living by the memory of myself, or other commissioners about what we thought might be there, but really this is what the guidance is. so i asked erik to do that. he was very diligent and we have the resulting document today, and we'll ask him to walk us through it at a high-level. >> yes, thank you very much, commissioner scott. that is exactly what i did. as you noted this document, i took off the american legal publishing website which has the update to day city charter and codes. so the website location is

at the bottom of the document if you want to find it, especially going forward. as these charter sections and codes can be update. you type in american legal of publishing and hit on code library california, san francisco, and then all of the san francisco codes and charter sections will come up. and you can make sure you are relying on an up-to-date version as compared to the version that is accurate as of today. so what this was, as i went through the charter and administrative code sections, and basically cut and paste all of the code and charter code sections that you felt were relevant for the health service board and i intend this more to be a reference document for the board to have all of these sections in one place. i will take a few moments to go through it at a high-level and if you want me to speed up, let me know. >> we will. >> i can tell. so the first one and these are in order -- in the

order as they appear in the charter and i put the admin code sections at the end. so just because something is earlier doesn't mean it's any more important. charter section 4.1 02 lists the general powers and duties of city boards and commissions. this is also -- this is applicable to the health service board. you can read that when you have a chance. the one section that comes up on page 7 is last paragraph. we have had discussion about that. which says that effectively each board or commission should work through the department head, regarding relative affairs of the department. however, nothing herein shall restrict the powers of the board or inquiry as provided in charter. as we previously discussed, those powers of hearing or

inquiry that the board decisions make. and making reports, which we are doing every year, which is good. section 4.1 03 has additional rules and regulations for how boards and commissions work and note in section a1, this is the rule that requires ten days' public notice, if you are going to change a board policy or rule as compared to the usual 72-hours required under the brown act. further down on page 9 this is the section that states that unless otherwise required by the charter, it's it requires a majority vote for board members to make as decision to vote on any decision. and further down in the middle of the page right above paragraph c, it requires members to vote yes or no, and you can abstain

unless there is a separate vote by the board allowing members to abstain. it lists the current composition of the board. and the terms of service on page 10. and on page 11, lists the specific health service board powers. these are in addition to the powers or limitations of charter section 4.102, 103 and 104. specifically, the key power or responsibility of the board is to put health plans into effect as set forth in chapter section a422, which we'll get to in a minute and section 5 authorizes the board to act on member appeals, and this is where the 60-day requirement comes from. that the board those hear a

member appeal within 60 days. the next one is just background, charter section 12202 is the basic provision for membership in the health service system, which is members of the health service system shall consist of all officers and permanent employees of the city and county, unified school district, community college district and such other officers, employees and dependents and retirees as provided by ordinance. that ordinance is administrative code 16700, which is at the end and we'll get to. so the entire list of all eligible health service board is administrative code 16700. charter section 12203 affirms that the health service system is a trust fund administered by the board in accordance with provisions of the charter solely for the benefit of the active and retired members of the

health service system and their covered dependents. so the charter is broken into two parts. they have the numbered section and for some reason they have set up a separate appendix. so i don't want to say "substantive ." but those related to the health service system are in the appendix. it's somewhat duplicative in the charter section says the health system is hereby established and contains a religious exception, which i don't think i have had questions about in last 15 years. charter section a421 allows for planned residents and i don't think that has happened to my knowledge. >> if i have a question on page 13? >> yes. >> a421. subject to the requirements of state law and budgetary fiscal provisions the health service board is authorize

by two-thirds vote of the entire membership of. the health service board to adopt plan -- i believe it's a major ity of the vote, although it wasn't changed in this section apparently. >> this i think is a section related to san francisco residents. and so i don't think this provision is operative. i can take a look at historical nature of it. i think you are referring to the next section, which is a422. >> for members. >> yes, for members you are correct that the board has the power to adopt plans for a majority vote for members, but we still have that three/fourths requirement. plans shall not become effective until approved by ordinance of the board of supervisors adopted by a 3/4th of its members requirement. >> what is the difference in residents? and members? >> again, what i want to do is just go through these provisions.

there are a series of historical provisions that i haven't looked into and if you have specific questions i can take a look at that and get back to you. i'm reading that section as authorizing -- i assume, with board of supervisors approval, they ever wanted to create a health plan for san francisco residents, that there seems to be some charter authority for doing that. again, no one has asked me about that since i have been general counselor over ten years. >> maybe that is the ground rule, if we can just note questions. >> i put it in there. >> we'll note questions and then we'll have follow-up. i have said on other times we're not trying to boil the ocean today and answer every issue. :so noted. we'll come back if we have to have some follow-up. >> okay. >> thank you, erik. >> my understanding this is more of a review. >> yes. >> and in terms of actually providing legal advice, i'm probably going to need more time to go back and look and that is one section i really

haven't spent much time on. >> okay. there may be some historical understanding too, that we can consult. >> >> yes, correct. >> thank you. >> and that third paragraph of charter section a422 requires the actuarial report and rates and benefits package that is submitted to the board of supervisors every year. a423 sets up the schedule for approving plans, and the process for calculating the 10-county amount, which is referred it in the charter as the average con striction. that con striction. contribution.

other expenses with obtaining and disseminating information regarding plan benefits and costs, the investment of such fund or funds as may be established, including travel and transportation costs. member wellness programs, actuarial expenses, and expenses incured to reduce health care costs. so these are the allowable expenses on the top of page 16 that can come out of the trust fund. otherwise, it has to come out of the administrative budget that isa proved by approved by the board of supervisors every year. there is an historical sense of specificity and charter section a425 is another historical section and if people have questions if they could ask me later. a426 regarding member choice within the system. >> we're now on page 17?

>> at the top of page 18, i'm moving quickly. >> okay. >> minor change in prop c regarding member selection. so now members have the right to select a duly licensed physician who is made available through health service system plans. that change was made to allow at some point if the health service board wants to adopt a national hmo plan and the idea is that they would be able to do that with that change. so now i'm going to spend a little time on charter section 8428, the central charter provision related to the health service system about eligibility, and contributions, and benefits. and so i'm going to go through that, if we can go to page 19? first of all, these

definitions become very important and are central to who is eligible for benefits from the health service system. the first definition is "credited service." i am just noting that because prior to prop b in 2008, employees vested for retiree health care after five years and health service system essentially deferred to the retirement system. if you retired after -- which in the minimum amount of time you needed to retire from the retire system is five years for vesting allowance and prior to 2008, you vested after five years. so if you retired, that was sufficient. but after 2008, employees get 100% of the benefits only after 20 years. if you are hired on or after january 10, 2009. so this is required -- the health service system to begin making its own determinations regarding

what credited service is. there is a definition of "employers." which also includes the san francisco superior court to the extent that they elect to participate, which they have. and there is this definition of "hired on or before january 9, 2009." the at the bottom of page 19. that is an important definition, because it's those employees that were entitled to 100% benefit at the end of five years. if you don't fall within this definition, it means you were hired on or after january 10th and you are subject to the 50%, 75%, and then 100% contribution-level. >> it's called graduated eligibility? >> correct. so this definition of "hired on or before january 9th." has certain -- it excludes as-needed employees who never earned 1040 hours, during any 12 -month period endings on

or before january 9th and employees who separated with the employers before that time. additional language was added to the redevelopment agency that i'm not going to go into now. the main point we drafted language, so that everyone would be able to tell on january 10th, which side of the line you fell under. so going to page 21, this -- to be eligible for retiree health care from the health service system you have to meet this definition of "retired person." and the "retired person" has six sections that goes on to page 22. it looks like a lot, but if you once you understand it, it's not quite so bad. the first three sections under "retired person," are for employees who are hired on or before january 9, 2009. that is section 16789 1.

section 2 is surviving spouse, et cetera. and 3 is surviving spouse or domestic partner hired on or before january 9th, 2009. and 4, 5 and 6 are the same for employees hired on or after january 10, 2009. the big difference if you are hired on or after january 10, 2009 and this is in subparagraph 4 on the bottom of page 21, you are also required to retire within 180 days of separation from the employers, and you have to have a minimum of ten years' of credited service with these employers. no longer can have you credited service with any state agency, but it has to be one the four employers with the health service system, and this 180-day rule

was designed is to i guess eliminate what was happening you could have employees that could work from age 20-25, for five years, leave their money on account in retirement system and go off and work and then retire 30 years later and come back and get retired health care. this basically requires you to be able to retire within 180 days of the separation from the employer, and to be able to retired fromers you have to be 50. once you are eligible, we move into section b on page 22, and talks about the employers' contribution. what is required the employees are required to contribute all funds necessary to efficiently administer the health service system for each member

they're required to contribute the average contribution or the premium for the employee-only premium, whichever is less. and c, retired persons who are hired on or before january 9, 2009, there is a formula for what they get. we could and maybe in a year we can have a whole other day and i would hopefully aon could come and provide support on how the actual retiree rates are calculated. at a high--level, they get a subsidy for the difference between the active rate and retiree rate. they get a discount for any contributions towards medicare, and then at the bottom on page 23, you divide the remaining premium by two. and that is how you calculate the retiree-only premium. so that is that formula. >> if my memory serves, i

think the actuary has walked us through a bit of this calculus as we have been talking about retiree rates over time. we'll make note and when we go into that process this year, we'll underscore and relate it back. >> right. >> to this page 23, so that we're consistent. >> right. which you when you see the summary rate sheet, that formula is reflected here >> ug thank you. >> page 24, talking there you have employees who have

section e is categories for contribution. 50% contribution is for working at least ten, but less than 15 years of credited service with the employers. and 75% contribution for 15-20 years' of service. we added in a section f for employees that work five years. they can still participate. they just have to pay 100% of the total premiums. and g we put in a chart to simplify it. or just to summarize it. but the chart is really a reflection of the language we just discussed. we had a special category -- this all came as a result of proposition b, pension and health care reform in 2008. where in return for moving

to this gradated benefits structure, employees got a pension improvement, and so this is where this was coming from. h, said for employees that had separated from employment on or before june 30, 200 1 and retired on or -- this is part of the second pension and health care reform measure, they get the same formula as the other retirees, but don't get the last 50% discount that the other retirees do. page 27, a. this is the language that gives the dependents -- you get 50% for the first dependent. so that is section a on the top of page 27. so now we move to page 29.

this just has the administrative support for contributions to the fund by the controller for premiums, and confirms that the health service board shall have -- >> would you repeat that? >> this section charter section a429 has the charter support that allows the controller to -- the health service system to determine and certify to the controller the amount to be paid monthly by members to the system for the purposes of the system hereby created. the controller is supposed to deduct said sums from the contribution of the members and the health service board shall have control of the administration and investment of the find, et cetera.

>> putting up the yellow flag for all that might be interested as we go forward in our work this year. it was raised last year and our chief financial officer pamela levin has retained the firm and we have met with the group and met with other members of the staff. this is my no means an aspersion on any work or any officer of the city and county of san francisco, but part of the due diligence of this board and i just raise that point. please go on. >> the next charter section has a definition -- [speaker not understood] a431 confirms that claims, any claim by a member is against the health system

fund and not the city. in general, there is a severability clause. and now we move on to the administrative code sections. >> would you pause here? >> yes. >> and clarify for me what the difference is between the charter provisions, the appendix that you have referenced and now we're into the administrative code? >> the appendix is part of the charter. >> yes. >> the charter as adopted by voters and carries the force of state law under the california constitution. the administrative code is an ordinance that is passed by the board of supervisors and can be revised by the board of supervisors without any approval by voters. >> i have noticed, particularly with the season of these propositions that many of these things were attached to the police code. why is that? >> i assume -- i mean to

the extent that you have a charter section where the board of supervisors is the moving party, they usually come -- they come to our office to help draft it and if you should at some point go take a look at the american league publishing corporation. you can see all of the types of city codes there are. and the attorney usually tries to pick a place in all those codes where they think it's going to be most appropriate. >> i see. i found it to be illuminating to the dignity fund, deserving funds for the age under the police code for the city and county of san francisco. someone asked me were they trying to lock them up? are they felons or what? i had no idea. >> now we're on to administrative code sections. these are ordinances passed by the board of supervisors.

just quickly i'm going skip from page 31 to 45, all of the administrative code sections related to eelections of health service board and it also includes elections for the retirement board and the retiree health care trust fund. i found a mistake on page 31b that says it references for trustees elected, and it really should be three in that 1650b. hopefully at some point we'll get a chance to have the board of supervisors amend that. but that is actuallies -- i cut and paste this from the admin code. now we move to page 45. i'm not going to go over these admin code sections regarding the elections, but if you have questions about them, this is where they are. and we have the department

of elections, who is really great at moving the health service system through this process each year. the one worth noting is on 44, and goes to 45. that giving and receiving anything of value and consideration of voting is prohibited. i always like to make people aware when there are criminal penaltis for violating code provisions and that is on page 45c any person violating any of the provisions of this section shall be guilty of a misdemeanor and upon a final judgment of conviction of same, shall be removed from office and may also be subject to a penalty, of not more than six months in jail and/or fine of not more than $15,000, as well as removal. so we just all want to be sure not to manipulate any elections. >> thank you. >> the administrative code, this is what we referenced earlier. this is authorized under section 12200 and here is

where the board of supervisors has specifically listed out all of the employees and officers that are members health service system and you can take a look at that. it requires 20 hours a week for as-needed employees and listed elected officials and the commissions. on the bottom of page 48, you can see this is where all officers, employees determined eligible by the san francisco unified school district, community college district and other agencies. and 16701, eligibility for employer contributions. this confirms that the members of the boards and commissions if you are not otherwise an employee, get only the charter-determined contribution, the average contribution. 16701b is one that comes up

a fair amount. states that you basically get your charter-determined contribution and collectively-bargained charter contribution for 12 weeks on leave and you have to pay the full premium unless you are under one of these leave categories and it's fairly expansive. it's another aspect of what health service system those administer. 16704 is really no longer

applicable because we have same-sex marriage recognized in this country. and it requires city attorney certification and i have to check on that. charter section up to 6905 create the support for the city's cafeteria plan. we have a cafeteria plan, which is a good thing and last, but not least, i'm just putting in the definition from charter section 2102 regarding city contracting for services. occasionally we get questions following the contracting provisions in chapter 21 when procuring services? there is an exception on the

last page, page 56. for services related to health plans and health benefits. 55 pages. >> about 25 minutes, two minutes per page. we have all commited it to memory. >> that is 30 seconds a page. >> yes, we all committed it to memory. the effort was to put the document together and as we go through our work this year and where appropriate questions are raised. we'll come back to this document. we now all have one common reference point, and i thank you, counsel, for taking the time and effort you and your team to put this together for us. >> so now you don't need me anymore? >> that is hardly the case. [laughter ] >> are there any questions from the board members at this point? >> one question. i'm trying to follow the

progress of the consultant's work on developing an investment policy and seems for a period of time there was some -- i was kind of waiting for a final understanding of which provision really governs the investment policy that we're going to be developing? and whereas the treasurer is -- i think they are controlled by california government code section 6700.3 and 27000.3 and you identified a provision here in the charter for us, that is the investment -- >> for insurance purposes. >> for insurance purposes. is that, in fact, the final conclusion of the city attorney? and is that the advice that is being given? >> we have provided advice to the health service system on that. i think maybe we can ask catherine. i think that is generally where we are headed.

we have advised the health service system that both of these provisions apply, 53600 and provisions related to insurance. >> both apply. they are more conservative and more limited than what would be suggested from a charter here. so to me that is important -- if they both apply, that seems -- to explain it much more than just the insurance. >> right. i think they are working on that and when they get back to you, they are going to have to provide their advice consistent with those restrictions >> both restrictions? >> correct. >> that is significant. that is significant direction for them. if we followed the charter alone, we wouldn't be subject to the california code. >> correct. >> that would give us far more latitude technically in the types of investments we

could consider. >> correct. >> right. thank you. >> and as we undertake that project, we'll get confirmed understanding from the city attorney, the guidance that they provided to the consultant. that will be a part of the working documentation when we get ready to bring the policy forward. i think that it's going to be critical that whatever the interpretive advice and guidance as we develop the policy is somehow attached to it so it's not lost in memory why we interpreted this way versus another way? that would be work for the future. >> we have given high-level advice to the effect and may be follow-up questions as to how they harmonize all of this? >> in my view, when we come to the point of presenting final recommendations, we need to have kind of the

interpretive understanding how we got there. >> we need to observe the requirements of both sets of provisions, which sets the parameters around what we can and cannot do. >> right. >> to me that is an important consideration. it appeared to me for a while, the only reference to the health service board in the charter was for the insurance definition. that it wasn't clear to me if this would also be in place? in the treasurer's policy they don't mention the insurance as a basis and only mention the california code and for them that is the only provision that applies to them. >> that is precisely the reason why, as we get to our recommendation, this background and context to me is going to be as criticals in the final report as the policy itself. so that it be written

guidance and attached with the policy. here is the policy. here is the charter. state provisions, whatever the requirements are, that lead us to making this recommendation. so i don't see that being something separate and apart from the work of the final document. so that is part of the task, mr. chairman. thank you. chief levin, as you are within my hearing. are there any other questions of the counsel on the administrative and charter provisions and codes and the appendix? anything else? for today? >> thank you. >> all right, thank you very much, erik, for undertalking to do this. with that we'll move on to

>> item no. 3. >> can we pull up the presentation? >> sfgtv, thank you. >> i'm not quite as tall as erik. good afternoon. president scott, members of the board. my name is paige sipes metzier and i would like to discuss today the future of pharmacy, if you will. :as seen through my crystal ball or aon's crystal ball as a week ago. >> knowing your work is endless as we started this forum, i want you to tell me at the end of the this is a pot of gold that reduces pharmacy costs. but you can't do that today. >> i cannot do that today. >> all right. fine. thank you, paige. >> i can actually probably say the exact opposite. [laughter ].

>> okay. all right, thank you. i thought this would work, but it's not working fast enough. >> can we get some help in terms of making this full screen or whatever she needs? >> i just need the page turned. >> page-turner, thank you. >> thanks. is so what i would like to do is start out start with our current point of view and believe it's the role of providing pharmacies to get the right drug to the right -- through the right channel

at the right price for your members. and that is the best strategy for managing what you opened this presentation with, the costs. so the lower the cost, the lower the complexity. if you will, we will use some generics as an example, 65-75% of medications issued today fall within this dotted box. they are routine maintenance medications. they are short-term generic antibiotics and there are some painkillers. moving up the escalation and complexity and cost is some of the brandnames. expensive brandnames and some of the new diabetic treatments for people with diabetes. where it becomes really

critical that compliance occurs. teat at spectrum you have your specialty drugs that are extremely costly and complex and you have to look at how they are administered. they may be oral or through some infusion. they have very high drop-off rates because some have significant side effects. and you really need to have assistance in managing it to make sure that compliance is achieved. because here if i don't follow the drug regimen, the drug you are paying a lot of money and we'll have further examples in this presentation will not be doing the intended benefit because of the lack of compliance. and there was just an article out today, and one of the little snippets that i get is that about 31.5% of people on

hypertensive medications, those treated for blood pressure are not compliant. so it's one of those where compliance is really the issue, and the more the cost, the more the complexity of the drug they are taking, the greater the need for compliance, and the less likely that you might not have total compliance. so if i'm looking into my crystal ball with my 2015-17 forecast, i use two of the top vendors and they are not necessarily the big one and i'm in the sure where optum fits, but just two reference points we make. they publish annual trend reports. as you can see, what they are expecting for traditional drugs, again the genericks, and some brandnames and

10.5% increase in costs whereas if you look at the specialty drugs, they are expecting that to be almost double that of traditional drugs. and that would be by 2017, we will see costs will be around 20%, 19.5% if you use cvs caremark and of. that is significant. because unfortunately, the cost of the traditional drugs doesn't offset the costs that you then incur with specialty drugs. yes, sir? >> you are saying that we're going to get a 22% rise in the specialty drug area roughly? >> right. >> 21.. but the graph seems to be coming down for some reason.

explain what that is. >> if you look across from 2013-17, you'll see that we started at a low point, because really specialty drugs started creeping into the trends somewhere around 2012-2013 and really hit in 2014, whenever the hepatitis c drugs came on and it just exploded since then. so what we're doing here, saying that costs won't increase, as much as it did in 2015, which was the high-cost year. it will still maintain a 20% growth or 20% change in costs. >> it reminds me of the federal budget. we have an increase that is not as much and we call it a decrease. >> that is correct. >> thank you. >> i'm still having trouble

with that, 2014, 32. 4%. 2017 is 19.5%. it's minus 14 how can you say they are going up? i'm not getting that. >> i'm not sure -- where is the minus coming from? >> no, she is say -- >> it's 14 minus. >> no that is 14 through. that is a range, 14% to 19.5% increase. that is not a minus. and so what it's saying in 2014, the increase was 32.4% and we're expecting that the increase will be a range of 14-19%, and as i said, i'm taking the worst-case scenario here. in the projection of the increases. >> i don't know -- >> so to be clear when we talk about costs we're talking about the prices. >> yes.

>> no. 1. and no. 2, the increase is annual increase. so between 2013 to 2014, cvs caremark had 32.4% increase in costs in that year-period. >> yes. >> 2016-2017 is 14.9% increase compared to the year before. >> yes. >> so each year it's an increase. >> it's compounding >> it's compounding. >> all right. >> it's compounding and that is a critical point about all of this. as we have looked at these, and director dodd has pointed this out year-over-year in our health plans. so that we get the spikes and it is seemingly, you know an upward trajectory and we

haven't gone back. it's not been a rubberband, but it's been additive. >> it's been additive. that is correct. >> commissioner sass. >> if you using a rate of change year-over-year to define what the graph shows, it would be much more helpful if this chart included a legend that showed the rate of change, rather than these absolute numbers. because translated to what appears on the graph. when i look at the first column 2013, it says 15 and 14 and look above and there it is 15 and 14 on the charter and look at the second year that says 32 and 30 and there it is, 32 and 30 in the second hashmark. but the third hashmark, i don't see a 15 and i don't see a 22. so i don't see a 21 and 22 on the hashmarks at that point

in time and no longer corresponds to the information on the ledsing. something about the way the legend is displays stops being meaningful when you get into the forecast. it seems meaningful in the history, but not in the forecast. if there were a reason it would be much more helpful to me. >> i think on the graph they used a midpoint. whereas the bottom they didn't. so that maybe why we're not quite corresponding. >> 14 and 19 would average out to be a little -- it would be about 16 or 17%. >> that is correct. >> and 21 would be 21. so on that one you have 21. >> correct. >> for whatever reason with express scripts you don't use a range, cvs and caremark you do. >> it depends on how their report presented their findings, their data and we reflected that out.

>> so it makes caremark looks better as express scripts for whatever reason. >> for whatever reason. >> so this is instruct ive about chartss and graphs and something to be kept in mind. it's a learning and educational forum for everyone. >> for everyone involved. >> for everyone involved. thank you. please continue. >> so specialty drugs. why should we care? specialty drugs usually only account to 1-2% of the population -- are used, excuse me by 1-2% of the population, but they now account for almost 30% of drug costs. in next 3-5 years, specialty drugs are expected to exceed 50% of your drug trend. so where we have looked historically for genericks and have been able to reduce the price and now they don't have the volume to offset

the increasing costs of the specialty drugs. because their spend is while they may be -- you may be treating a lot of high blood pressure with a generic, the cost is $5 a script, whereas this cost for one person of us getting one of the eight hep c, which are $84,000 a treat will cover several tens of thousands, i'm not doing this fast, but at least 8,000 people. from that perspective, it's economies of scale can't be achieved. so looking at absolute dollars and the per cent of drug spend n2012, we spent

$92 billion on medical. of that total, 30% was drug spend. and then for pharmacy, the gray is pharmacy, the black is medical and i think i need to look at the color -- >> yellow and blue. >> yellow and blue. so if you look at graph, thank you. so you'll see that it the pharmacy spend is 30% and the medical spend is the blue. moving up to 2018, we're expecting that the costs will be $235 billion for the overall costs of which 50% of that will be due to pharmacy. >> one of the most disturbing things that i have heard in the last 24 hours, commissioner follansbee, commissioner lim and myself were able to participate in in a conference call with the

pacific business group on health and with all anticipated change in the health care act under the new administration, and the better way -- there is a pamphlet by speaker ryan called "the better way," and i encourage board members to get that document and read it as to directionally where we could be going with some changes about whatever repeal and replace may mean? my question is whether indeed medicare,cms would be actively allowed to get into the field of negotiating drug prices as a part of any future policy change? and at this particular meeting, the answer was no. it doesn't seem to be the political will particularly after this campaign season to do that. but unless there is some

larger intervention on behalf of people who are actually bearing the costs, i.e., employers, this is going to be unbearable going forward. it really is -- and unsustainable, in my humble opinion. so i put that out there again, please. >> okay. i'm not going spend much time on slide 5. it's just examples of specialty drugs, and if they were administered -- what the different kind of drugs and what their annual costs are. drugs for multiple sclerosis and others highlighted here. one of the things that i wanted to do is you have a couple of graphs in here that are highly technical and i'm not going focus on the chart, except to highlight that when gleevec came on, and it's a drug used for leukemia and

this was back in 1965-74, if you had 123 people that were diagnosed, 123 would have passed on. whereas today, because of gleevec, if you have 302 diagnosed, only 15 of those would die. and so as you can see, the years of referral has gradually gotten longer and longer, so that right now if you look at the top line, which is what color? black. that if they were diagnosed and got gleevec, they basically would be getting a 93% survival rate. specialty drugs do promote long-term -- promote

survival in certain instances. if we look at another example such as hepatitis c and you look at the timeline of approval. so we have the first one, which was back in 1998. and it was peginterferon because rib viran and duration of the treatments and cost of therapy was $24-48k. if we go down to 2013w the introduction of solvadi into the marketplace, if you will, the cure rate is up to 95-99%. it takes 12 weeks of treatment, which is anywhere from half to to 1/4, but the

cost is twice and you look at 2014. we have pretty much maintained the 84,000. however, we have been with harvoni able to reduce a little bit of the treatment. however, some people may require a second course of treatment and you have maintained the high 90% of survival rate, or cure rate, i'm sorry. and so i just -- that is just an example of a very visible in the marketplace drugs because of the direct-to-consumer advertising that we have seen over time. and i don't know if you have seen the most recent direct-to-consumer advertisement, but it goes that baby-boomers, anybody born from 1945-1964 are encouraging everybody to be screened. because if you do have a 95%

cure rate and therefore one would expect one would see at some point in time a decrease in the use of this medication. >> can i just make a comment? >> mr. follansbee? >> this could be a whole two-day educational forum because i think it's a really complicated area. so i understand the advertising for hep c screening, et cetera. the problem is that obviously clerk clinically the situation is much more complicated because people with screen positive for disease and yet have no consequences of that infection and may have cleared it and yet the advertising doesn't really ask people to think about some of these issues. unfortunately a lot of these new drugs and i come back to

your leukemia example. the current licensing in the united states -- we get more and more options and then the price of those left up to the pharmaceutical companies themselves how they can market this and all of that, but not really based on additional infection cured or additional year of the lives saved per dollars. we have no way to really measure the impact of all of this drug development research and licensing. although i think this is really important and critical, there is a lot of room for improvement, and in the same conference call what i heard is that a lot of the impetuous will now be on states to really look into drug pricing. which unfortunately excludes national programs i.e., medicare.

but for employers and all of that they will look to each state and that is the same forces that limit national action seem to be op operative in every state including california in this area. >> please continue. >> let's move on to slide 8 and some of the drivers of specialty costs, are price inflation, of course. new drugs coming on to the market. new indications for the drug. lack of generic or biosimilar alternatives. and direct to market consumer, where the demand be tested may drive some of the increase. one of the examples i want to use is ms, or multiple sclerosis. the cost of multiple sclerosis drugs because they have improved, have

increased from last -- $10,000 a year to over $60,000 per year. so what you can see from this graph, and again, it's only here for illustration, is the shadow pricing that occurs as manufacturers begin to release drugs and you'll see the next drug is priced similarly to it. it may or may not exceed it, but in most case it's very close to it. so that there really wouldn't be a price incentive to choose one over the other. even though the manufacturing costs of one may be greatly different than the manufacturing cost of another. >> so shadow pricing is a factor here? >> yes, very much so. so the next i think, four -- three slides. i just want to look at some of the things that are new entris into the specialty

drug market to give you an idea what is coming up. you have new treatments coming on for of

being about $653 for annual sales of 4.3. over the past ten years, you'll see it now as used arthritis, crohn's disease, et cetera. it's very nice if these conditions particularly they can be quite debilitating and if they are responsive. but now, the average wholesale price for a prescription is now $1229, and the sales went -- if you will, from 4.3 million to 4.6 billion over a course of ten years as more and more indications and approvals were given for this medication. and that is the lifecycle of drugs, if you will. >> that is used for all of these different -- >> yes.

>> then no. 4 what i wanted to talk here very briefly, we have gone through biosimilars before. it's a biological product with special manufacturing criteria and similar to fda and doesn't possess any meaningful differences and doesn't mean it's the same product, but it's similar. and we now have historically whenever we have seen brandnames go from to generic, we have somewhere around 75-85% decrease in cost, particularly whether lipitor might be an example when it went generic, the costs significantly dropped and you saw that in your trend. however, the savings with biosimilar going back a little bit back to discuss

the shadow pricing, the savings will be there, but it's only estimated in the range of 10-25%. >> i noticed on next few slides you go into various types of biosimilar issues and i think we have had some of the discussion. if you could move -- forward to >> i will. >> to specialty site of care management. >> i will do so -- you mine mean i can't show you the chart? >> you can and go to the website and this presentation is posted >> so specialty site management is 76% of employers now are really participating in or carving out the management of specialty drugs. they have a vendor that focuses and specializes in

managing people and making sure the utilization is appropriate. so that we're able to start people out with very small script sizes instead of 30-90 days when you may usually get. they start at 7 days or 2 days to make sure that they are able to tolerate the drug and whether or not they are able to -- would they continue complying with it? and otherwise they do it by site of care management. in other words, they only authorize certain sites to administer the drug. so that they know that site will follow certain care management protocols for that drug. and that inturn is the method of managing the cost by managing how the drug is administered and how the member then is supported in becoming compliant with it. moving on, as you can see,

if we're looking at an outpatient hospital cost, administering a drug is about $605 to go into a hospital for either some type of infusion or care and whereas if you did it in the physician's office it would be $115. so moving on to the changing market, which is on page 21. currently 86% of all drugs are administered are generics. generics only account for 22% of the gross costs. 80% of all generic prescriptions as i mentioned earlier, only costs less than $20 per script. and 75% of all generics have price inflation of less than 2%. we can of course pull out different drugs that have gone up significantly, but overall, it is a very slow-growth.

however, one of the things we have seen is retail pharmacis have become more into some of the savings that you want to achieve through mail-order. i.e., you are able to get 90-day subscriptions at a much lower price. and that is because the retail networks have made similar arrangements as what you were able to do through the mail-order. also the number of brandnames coming off patent is shrinking. we also have a little bit of the pharmacy manufacturing company helping on the other side with co-pay cards and unfortunately, those are invisible to you as the employer, because you still would get the same bill. even if the member isn't paying their expected cost-share. so moving on to page 22, what you see is that rebates is the percentage of gross costs have increased from the

mid-single-digits up into the high teens, up to 17-19%. 21% of all the rebates are coming from specialty medications. and inflation-protection rebate as a percent have almost able doubled even though the inflation has occurred. what we're looking at as rebates become a percentage of the gross cost, the improves look to drive increased market share through preferred market status. in other words, if you use this drug, because it has a highest rebate, you'll have lower costs and that is a way of making sure that this drug, which might be higher cost in general, but have a greater benefit, you'll not exclude it from the formulary.

we have already talked about the specialty -- >> would you go to 24? >> i am. 24 will be my last one. >> okay. thank you. >> basically what i wanted to say, and uhc and i have uhc numbers for 2015 and i thank them for that. what you can see, and we're talking about your trend over the past past four years. 2012, pharmacy was about 10.5% of the total medical spend, and the medical claims were about $80.10 for blue shield. for kaiser, which of course has their own internal pharmacy program, they were able to produce it at 44.06, with the same end result, which is 10.5% of what the total medical bill was.

but we had a little bit of a decrease in 2013 for blue shield as somewhat we now think as generic came off brandnames to generic and they were able to lower their claims then for pharmacy down to 78.91. but it did increase as a total of the medical spend because it wass a good year from medical spend perspective. kaiser pretty much maintained. 2014, again the specialty impact of specialty drugs weren't quite there yet, and as you can see, blue shield did experience quite a jump. 19% increase. and it went up only a little bit of your total spend to

15.7. kaiser also experienced not quite as big as of jump, going from 44 to 49 or 45 to 50, and grows from 1.8 to 10.9% of change or 11% of the total spend. 2015, specialty drugs, at that point in time, pharmacy now, where it was for blue shield $80.10, it's now $108.15 per member per month. and change is 14.8. of that $108, 28.5 is specialty costs for a total impact on your medical spend of 17.8. for kaiser, again, running slightly lower than blue shield because of their contracting process, their medical claim spend is now

$63 and the change is still a big change at 20.6, of which 31.1% is specialty drugs. it's 13.8 of the total spend. for that same year recognizing that uhc has a much smaller population or the city plan has a smaller population, and the population is older, their drug spend for that year was $278.78 per member per month. of which $126.5 was specialty, or about 45% specialty ratio of that drug spend. i mean it was significant. they have a significant area of hiv and with that, knowing that we're running out of time, is there any other questions? >> questions from members of the board on this particular topic? this is one that i know that

we'll be coming back to when we're in the rates process. so this is kind of a broader context. commissioner sass? >> in looking at the increasing prices of treatments for all of these various specialty drugs over time, i have certainly heard and understand the argument that the research and development costs for -- and the drug trials associated not only with those drugs that are ultimately approved for many drugs that don't get approved and they incur all of these costs on the way to non-approval ultimate, all get somehow rolled up into the price of the drug is finally released. that seems to be the economic or the value proposition. the price of the drug is not associated with the efficacy of the drug. so whether it should be or not, i personal think it should be, but it is not.

but then there is another thought hoar and certainly the accusation that the drug prices are because of monopolistic prices among very large drug houses that are able to get whatever price they choose to offer, because the drug is absolutely needed. the epipen seemed to be an incredibly good example of that. it just seems to me, there should be a place in all of this for some form of regulation. i think maybe in another world that ended two days ago, there would be maybe hope that kind of thing could happen. in any event, it seems to me to be kind of unacceptable and unsustainable for this to continue. i don't know, is your thinking -- is your feeling this is more a function of just monoptlistic practices on the part of the drug houses or something that could be deferred on the cost

of the research and development to get the drugs to market? >> i'm going defer and i don't think it's my position -- >> probably not. >> i can just use an example of direction is. discretion. as you know there is significant outreach because of the opioid epidemic currently going on. and one current trend as we're able to begin impacting the use of opioids they expect to see increase in cost for those who appropriately require opioids, so you probably won't see a change in the trend for the cost of opioids, but you will see a reduction in the number of users. so i'll let you draw your conclusions from that. >> dr. follansbee? >> i think this is really

critical on both health plan for us, state and national-level and i think it's very complicated. the example that i would like to throw in as we think about solution is penicillin and it's the oldest antibiotic we have and for months this year we had no long-acting penicillin available for the syphilis and saying only treat pregnant woman with long-acting penicillin and everyone else should go on doc recycling. you talk about compliance once a week injection compared to daily antibioticks, you could imagine where the efficacy drops off because of drug availability. now there is no logical explanation in terms of production except that the

pharmaceuticals companies are in complete control of availability, pricing and there are just numerous examples that we need to be able to address. and we need policy, and i am discouraged the policy won't come on the national-level, regardless of who is in the white house or who controls the congress. >> right. all right. paige, again, thank you for providing this context and background, and i would encourage those who are observing today, that we need to be thinking of these things in terms of how they will impact us when we go through the rate-setting process. we tried to laid the foundation today on some of these topicks, so we don't have to spend as much time when the rates are presented, and there is a background context. so this particular presentation should be a background piece and a reference piece as we go through our rate review and

discussion of designs and other issues during the year. and i would ask our consultants to refer back to it as-needed, okay? as you bring us other information. thank you so much for your time today and your expertise. >> i just want to make an observation. so many of these problems could be controlled by diet or lifestyle. and with 50% of the california people have diabetes or pre-diabetes, that could be preventable. that adult diabetes. somehow to get for the population to get some control of their health would help a lot. i don't know how much these wellness programs are helping throughout the country or not, you know? is there a relationship to the wellness program in any -- i was reading an article that said they haven't been able to figure out if there is. >> i mean, i have several articles, one that was just

released yesterday from really long-term, meaning 20 years. but most people haven't been doing it long enough. the real thing is that again, the employers really need to look at what other things are impacting lifestyle? not only the movement, but what type of foods are available? what types of foods are being supported that cause -- that are cheaper than buying an apple? i mean, there is a number of different things besides people making the choice. there is a number of supports we have in place in the united states that really doesn't encourage good choice. so while i think that yes, people need to be more responsible for their health care, and be more aware, i think they also can use some supports. >> item. all right we're going to stop on this topic and from my light, we have been at this

for an hour-and-a-half and i would like to declare a five-minute recess at this time. [ gavel ]cess to an end and i want to be very, very clear with the process that we're going through here. we know we have a number of other presentations, but we have a hard-stop at 4:00. and with that, if we don't particularly get through a presentation today, it doesn't mean it's lost to eternity. we have another board meetings and we have tried to structure board meetings where there is discussion and information items available. so we'll cover all of these, if we don't get through it today. because of the constraints on the physical location we have to be out of here by 4:30 and we want the member appeal to have full and proper airing,

and before paige and we go to the next item i'm going to ask counsel to correct something for the record he has 15 seconds. >> he was very kind to remind with respect to the statement issues made about the ten-county amount since the city and unions have gone to the 93/83 model that language takes precedent over the 10-county amount. >> we'll put that into the context and thank you or actuary as always for continued guidance. we'll move to discussion item no. 4. >> item 4, presentation of infertilize trends. >> paige sipes-metzier and i would ask you to make sure it's clear as i go through

it. first of all infertility is defined as "not being able to conceive or become pregnant despite having frequent unprotected sex for at least a year." and this is for most couples. infertility may result from an issue either on the female side or the male side. so who is infertile, moving on to page 3? >> go ahead. >> 10-15% of the couples in the united states are infertile and some are the result of being same-sex couples because you wouldn't have the opportunity to have exposure to the other required for the embryo, but couples are waiting later to have families. women are delaying pregnancy in order to establish careers and more women over 35, which is what we see in san francisco, are having their

first time pregnancies. moving on to page 4 and 5. this is currently what your infertility benefits are: so right now blue shield has a waiting period and so does kaiser and basically you have to have a year of unprotected, frequent intercourse. and then there are certain other criteria that determine whether or not you are infertile? so different types of procedures are here, such as getting the sperm into the egg and it's covered both kaiser and uhc are silent on this. we do cover different ways of getting the embryo into the uterus, which would be a gift, ivf or zift and they

are all defined in the glossary, and currently your benefit is 50%. after deductible i'm supposed to make sure i say. >> just so we reference that, it's 50% after deductible for all three? >> yes. >> if the plans have deductibles. i think only one has deductible, which is uhc. >> so the others don't have a deductible? >> no, blue shield and kaiser are 50% whereas uhc is 50% after deductible. >> thank you. >> and i was amiss, i would like to thank kaiser for their peer-review of this presentation, because as a result it's much clearer. >> thank you. >> so who provides

infertility treatment? both blue shield of california, and city plan have designated panels of people who are approved to provide infertility treatment. kaiser either provides it in-house, because they have selected reproductive facilities in northen california, as well as southern california or they have contracted providers in areas where they don't have coverage. but basically, all have a restricted network of people who are considered in-network providers for this service. who is eligible for infertility treatment? currently you must be medically documented you are infertile. so there are women who have reproductive issues or males

with abnormal sperm. how much did infertility treatment cost? the range of infertility treatment, depending on how many cycles and how many procedures are required and medication, ranges anywhere from $30,000 to $60,000 for approximately a 31% chance of a live birth. however, there are also additional costs just of the infertility and the pregnancy, if you will, not the long-term cost of any child that may require medical care later. but should you have a single birth, the range for the caring of the newborn is about $20,000, if it requires a little -- whereas if you have multiple birth can be upwards of $400,000 during the prenatal period of care and does not include lifetime care. so what i want to do now is

talk a little bit about some of the procedures that are coming along to improve effectiveness of infertility, or if you will, assistive reproductive technologies. one is assisted hatching. what this does, it breaks the eggshell or the shell over the egg to allow the sperm to penetrate. and what happens as a result of this, they have noticed there has been a higher rate of implantation. another area in which there has been a lot of study is on embryo development. a normal embryo receives 23 sets of chromosomes from the eggs and 23 sets of chromosomes from the sperm. however, not all embryos are developed with a set of 46 chromosomes. and embryos that have an abnormal set of chromosomes are said to be -- nu ploid

and i'm sure i'm not pronouncing that right is recognized as a major reason for failed implantation. these are embryos that a normal, in the normal process of reproduction would not have implanted and now what is happening when you have all of these eggs now that have been impregnanted. so you have embryos. however, you don't know which embryos are good. so you put in four. and you may have none take, you may have four take or you may have one take. and so what happens is turning the page on page 11, there is now a test that historically has been used for people who have known history of genetic problems. but now they are able to go in and look at the embryo at

day 5, and see how many sets of chromosomes are there? and they can choose not to implant those that don't have 46 chromosomes, or 46 sets -- it's not 46. it's 46 sets of chromosomes. as a result, they have raised the success rate of implantation up from 31% to closer to 85%. and the need for multiple embryos to be implanted is lessened. so you have a lesser likelihood of having multiple births. so moving on to page 12, another approach also is then once you do the pgs, the pre-implantation genetic screening. what they are looking at is what only transferring one embryo and making sure that

embryo is not anuploid. so what we're looking back at is what is the goal of the infertility benefit you are providing? >> would you pause for a moment? >> sure. >> i will call on deputy director greggs. we haven't had a review of this benefit in a number of years, my understanding is that correct? >> that is correct, least five years. >> at least five years. all right. so this again, as we have tried to do with other policy areas, when there has been a substantial period of time and we have not gone back, and looked at a benefit, one that we just recently changed -- have forgotten -- was it adoption? >> yes. >> the adoption benefit. we went back and coming out of the forum, we talked about it, and then came back and said, well we need to kind of update this to provide the type of quality, affordable

benefit to our members. so this is another example of that. so that is the context of why we're spending time today to lay the background so as we bring this forward a little later we'll have some context. again, i would ask you or aon to be sure that we reference back to this presentation -- not that we don't have to spend the time, but the people will understand that these things get tied together. >> right. >> if i could also add, too? >> yes. >> talking about it's been at least five years since we look at these benefits and the reason we have started looking at them, in those five years, employees from the city and county and other employers have contacted our office wanting to know more about benefits and what we can do to provide benefits that they another other employers could be offering? , as well as elected

officials reacting to their contingencies wanting us to provide more diversified benefits for our diverse membership. >> so the goals are to make sure that the services we're providing through the infertility benefit are those that will result in a live, healthy birth. that we want to be respectful of our resources and we don't want to have people using or having to have multiple cycles of medication, as well as treatments, or long-term, having babis that require significant hospitalization post-birth. we also recognize as he said and this is perhaps my politically-correct statement saying we have a culturally diverse population here. not on do we have ethnically

diverse, we have a sexually diverse population and this benefit may or may not recognize all of that diversity. and it currently we want to make sure that the current the treatment that we're recommending reflects current medical science. so we want to make sure that if there are treatments that improve the effectiveness of the resources we're spending that they are at least available for our members. >> with that, i think that with those goals in mind and knowing that this is going to return to us, we probably could end this presentation. >> if i could, i would like to do two pages and i'll be done. >> go ahead. >> first of all, i just want to make sure that i think in the past it was infertility benefits -- i think now the better term for it is "assisted reproductive technology." and so when we come back, we may use a different term. >> okay. >> and we really want to look at two things. we want to remove barriers

for people that currently may not be eligible for infertility because they don't meet the current medically-documented standard. or we also would want to consider some of the new treatments that i previously discussed. and with that, i thank you. >> thank you, paige. >> i just have a question, what would be the barriers now? >> if you have not had unprotected hetero sexual contact for over a year, regular, you would have to find a substitute way of documenting that you are infertile by having a different way of being exposed to the opposite -- to the necessary egg or sperm that you might need. >> these benefits were always available to same-sex couples. >> it is, but the question is are there any other ways

to achieve that medical documentation of that? so it's just a discussion to have. it may not change, but it is just to put it out there, because some people may not be willing to go through -- would prefer to have the documentation occur through stimulatization of the egg rather than have to go through the inter uterine insemination, those types of things. i would be glad to answer in future, but for the time being, there are some tests to look at how we could satisfy that requirement for documentation in a different manner? >> okay. that would be no more than a prudent review of the policy and requirements. so we look forward to this coming back to us as a topic and thank you, paige, again as always for your expertise in this area as well.

>> thank you. >> with that, we'll now go to a discussion item on an update of the cal index. >> yes. >> some of you may be saying what is the cal index? and the presenter will comment and talk about it after the secretary introduces the topic. >> thank you. item 5 discussion item. update on cal index, jerry peters, cal index. >> thank you. good afternoon. thank you for having me. it's a good question. >> just a moment. >> yes. >> just so that -- because there is a presentation on this, we do recall that there were a group of health plans, who got together earlier this year, and created the cal index. and we had a presentation and i forget if it was in the spring of this year on this topic regarding what it was? and that was after we had

people getting letters that they were going to be in it and we didn't know how. we started coordinating about what the letters were going to say, and so forth, through director dodd and her staff. we were given a preliminary, at least understanding, of how this data was going to be utilized in the context of why the health index was being created. so i, along with others, have said, okay, are they doing what they said they were going do with this? or has it changed? or what is going on with it? so this is how this item got on the agenda today. so please, and you are again? >> my name is jerry peters the general counsel and interim ceo of cal index. >> thank you for coming today. >> thank you. i have a slight disadvantage,

i am not 100% sure of what were you told last time. >> let me share with you a programmatic understanding that was shared in this forum. >> sure. >> this cal index was being created in a way that health information could be easily shared should i be injured somewhere in the state and i wouldn't have to worry about one provider or another being able to have access to this information on me. and thereby, it would be shared in a convenient and quick way. that was one of the programmatic outcomes of this. and dr. follansbee, or commissioner follansbee may remember others, but it was in the context of sharing health data in a way that could indeed assist in the delivery of care in a variety of settings. there were questions by a number of us about whether it was going to be shared with

other providers, or other marketing resources and so forth? we were given assurances it would not be. >> if i could just add, so our understanding was that a, that all health plan were essentially given a letter to essentially opt-out, but they were automatically enrolled unless they read the letter and optedout. and that this information would be available not to the health plan members themselves. they could not request to see or get a copy of the information that was now being stored having been provided by the various health plan -- contracted providers. but the members still couldn't find out what was being stored and what was being transmitted to other

providers, emergency rooms or offices and another component was that could collected data could be used for research? there was no identified institutional review board yet and no research protocols, but this was also written into the program. that the enrollees' data could be used in a research context, but it wasn't clear which it would be initiated and for an update on whether or not that has been initiated? >> so it's out of all of these questions that you here toe. >> i will first try to remember them in order and approach them as such. by way of context, really quickly what we're trying to do is follow -- well,, it may be moot nowadays, the obamacare policies of bringing information together. most states in this country already have this on a state

wd basis. wide basis. we're find and california is fragmented. to bring them together in a single statewide that the patient can go anywhere in the state. right now you can go to santa cruz and it works, inland empire and it works, but going from inland empire to santa cruz, your record is not available. so i think 47 other states already have this and we're behind. so that was our big-picture goal in doing this. the way we have been doing this, we have been studying what everybody else has done and most of these take about ten years to put together. we have been trying to do it for about two years and i should say the movement actually began well before obamacare and most people were doing it in 2000.

it takes a long time to get going and i say this in the context of answers. i remember the research one and the opt-out is the other one i recall. on research, what we're trying to do quite frankly, is bring the rest of the state of california up to what kaiser does. i mean kaiser has a system. they do everything we're doing. they do it internally and use epic emr system and there are 10 million californians that right now their record is consolidated. they use it for research, and quite frankly, go read the papers. they do great things. as you know, we're sponsored by competitors of kaiser, but there is no denying that kaiser does great things with what they do. 30 million californians don't get this benefit. we were put together fortunately the plans decided somebody needs to fund this and pull this together so the other 30 million can get

what the other 10 million are getting in kaiser. in terms of the research, i need to emphasize we're a nonprofit and not here to make money. we give ourselves to a break evening and we're not allowed to sell to research. that is prohibited both by the people who fund us and it's in our charter, prohibited in our policies. so we're not out going through the pharmaceuticals, and making a lot of money off. it we're allowed to get reimbursement of our costs and that is. usc, ucla and these are the people some day and i will answer your questions, some day that is our hope to be able to collect it and actually we would love to hook up with kaiser, so all 40 million are together. you know, i'm sure everybody here is familiar with research. one of our key problems is sample size. dirty data and sample size are the two primary things causing people to still die because our research cannot

be done right. and that is what we're here to try to solve. so we're just not there yet. i mean, quite frankly, we're probably years away. when we do, everything that we have requires that we do it by law and as you pointed out with the rfb and quite frankly, some of the largest systems -- i mean whether it's dignity, sutter, all of these people are going to be participating. we're going to be more regulated than even kaiser is. let me just put it that way, because everybody has their rules and we're trying to balance those along with the legal rules that of course we'll comply with. it's the law. ; we have no choice. so i think with the research and i'm going to ask if i have answered the question? we're not there yet and probably not close, to be real honest, but when we do do it, we're going to be subject to the same restrictions that everybody else is. on a business-level, we'll probably be subject to more, because of our participants.

>> any other questions on the research? research issue? >> so again, what are the 30 million people missing? >> i'm sorry, i didn't hear. >> you wanted to give the 30 million people access to something to have that they hadn't had before? what are they missing by not being in this pool? >> that is a good question and i was going start with that and i got sidetracked. it's longitudinal patient record. what you have is -- i mean kaiser is not perfect, but mayo clinic, it's not just kaiser. cleveland clinic and i can go down the list. there is a bunch of very well-organized provider organizations, some people call them integrated delivery systems. what you do, like right now, i'm not in kaiser and so my record is spread out three hospitals and silgrowed. siloed, three different hospitals and four different doctors have it and nobody has put it together in one

record. so they don't know what medications i'm taking one place versus the other. they don't know what procedures i have had and if i come into the emergency room and they need to know that and let's say i was unconscious -- they would not have quick access to that. where at kaiser, they do. because they bring all of their records into the single lpr and the kaiser doctor opens it up and says here is the whole history. i got it. this is the first thing that we want to make available is the availability of all of the information relevant to that patient being available to the provider, when it's needed. no matter what specialty, or again the hospitals, also. so if you want to put our no. 1 focus is getting that available to everybody who is not in kaiser. >> well, i guess this gets to the second question, and the one at the center of our concern. this effort just seemed to emerge out of thin air.

i mean, you know, the way you are describing it, tends to a nobler purpose and we got a little bit of that. at the same time, the fact that i, as a person, was not -- was not given the opportunity. wanted to hear what the purpose is and to go through a loop-de-loop if i didn't want to participate. it just seems counter -- it made it seem as there was something nefarious happening as a member to me. so it didn't build the confidence that, yes, this is the outcome, and this is the reason. and this is how we want to go about it. there was just no rationale provided other than we're doing this and if you don't like it, you can opt-out of it. and it put it in a

completely different light. >> so i'm cognizant of your time. i will tell a slightly embarrassing story that actually related to that. before i joined cal index in january, i was a partner with laithen and watkins a large law firm and i was in health care. so for 33 years i have been practicing health care law and representing doctors and hospitals and you would think i would know about these things. i had a personal experience that my best friend and my mother died within a short time of each other and i was angry and pissed off. these things shouldn't have happened. with my friend, they identified the five genes and knew what it was and we have drugs to deal with three of them and they were just too short. they are within five years of figuring it out and they can't get the research.

ucsf, i talked to bunch of researchers who said we don't have the data. i said i love practicing law, but i'm done. i never heard of anybody collecting the information. so i spent a year with a business plan and had at all ready to go and as i talked to some people, these things exist all over the country. what is embarrassing, how could i be a health care lawyer and not know these existed? similar to you, i had never hear of it in my life. after getting over the embarrassment, i found out that ballews said california is big and fragmented and asked to bring me on. i am in the area and i hadn't heard of and it the people who didn't tell you at the

right time, they just made a mistake. it's easy for me to say, because i wasn't around. all i can say is that i apologize for that. >> in the interest of time, maybe we should get some specifics. right now you mentioned the 30 million goal. where are you? how many enrollees do we have, no. 1 and no. 2, is it was unclear from the sessions that we had how providers were incentivized to provide that data? since all these systems that you are trying to integrate have different medical record systems even kaiser took a few years -- i'm a retired kaiser physician. >> $5.5 billion. >> it took them a few years after the systems were up

and running northern and southern california and into hawai'i. and there were different processes for each site. so no. 1 how many people are enrolled in california as of today? and no. 2, is again, what is the incentive to get the data and quality assurance of the data you are getting into the medical record is, in fact, accurate? >> 9.5 million are enrolled. that is not fully accurate. so i want to explain that, is you have a better idea of that, but that is the number. here is the reason it's not accurate: it's from the payers' side. so we have that component and someone was mentioned -- i forget -- someone was mentioning the issue of like how do you know if people are taking their medications? that is a good example of what this is for. cal index is the only one in california that we're mixing the payer data with the

clinic. we go to the hospitals and doctors and get into a single lpr and infuse the clinical data which is the only way to tell realtime if they are taking their medicine. so this is one of the reason it's costing so much, and i'm going explain why it's not fully done yet. the platform to create this brand-new platform, which no one other than kaiser has at least we're able to find. so we are been spending two years to develop this special cost software and we have done the lpr testing in the beginning of september and it works. we have some contracts sign and i could mention some names and some are confidential. >> you don't have to. >> i appreciate that.

we're just now starting to bring the providers' side in. the ballews have put theirs in and other payers were deep into talks with them and the goal was to have all the payers, to be practical, we're going to get the largest providers first. then it's a matter of the years it's going to take. and we'll hook up with the local ones. our other goal, they have already invented the wheel. why redo it? we hope to facilitate the process, but don't expect this to be one or two years. it has taken taken. >> would you be willing to come back at another time to talk about your progress and a little bit more about your structure? where you are physically located? >> emeryville. >> that is useful. and so forth. you identified yourself as the interim ceo.

and general counsel and i'm still not aware who is on the board. >> i could tell you quickly. >> i'm just saying would be willing to come back at another time, given our constraints this afternoon? >> sure, any time. >> are there questions from other commissioners? >> just a quick question. so aside from the ballews, who are the other payers that have already? >> right now we only have the two blues and blue shield. >> it's expanded to other payers? >> yes, we want them all to participate, the key is to participate to give us your data. the mission is about letting providers have all of the data on each patient. each patient should be protected that way in our view. >> all right, other questions or comments from commissioners? thank you for coming today. and we will have -- there can be follow-up questions, that we might want to raise with you and we'll take it as a matter of course. again, this whole opt-out and opt-in issue is still a

profound concern for our membership. >> could i just deal with that very quickly? i can be quick. what we did, when we started and i wasn't the person doing it. so i wasn't there and i'm not defending anything. but we went and looked at what other -- we were looking at what everybody else was doing. we were late to the game and some do opt-in and advice we were given is opt-out is the way to go. some people say they don't even have to do that. we disagree and we think the patients that right. so we have maintained -- i think it's obvious that the patient should have that right, personalingly. so that is what it is. but i just want to clarify, we didn't make this up ourselves. we were trying to follow the industry norm and stay within the industry norm to bring people together. that is what drove the issue. >> thank you. all right. we now have a question of

choice, macra or looking at industry implications? macra or looking at industry implications? let's go with macra thank you, item 6, discussion item, presentation of macra overview stephanie glier pbgh. pacific business group on health. i can get started while we pull this. pbgh is a nonprofit organization that has been around for 25 years.

we have 65 members who are mostly large employers. however, there are some non-employer members as well, including city and county of san francisco. we're very proud to have you as part of our membership. our organization uses the strength of our members who collective purchase health care services for 10 million americans and to drive cost and quality throughout the health care system through initiatives and in care rezion, payment innovation, transparency and life. so today we're talking about mac ra. medicare access and chip reauthorization act of 2015, which rolls right off the tongue, i know. today we're just talking about the payment component and it's primarily a payment system for physicians, nurse practitioners and physician

assistants who care for medicare beneficiaries. before this in general medicare pays physicians using fee-for-service. from a doctor's perspective, the more you do, the more you get paid even if the services are not necessary. it has caused a lot of problems and has been generally unsustainable and that has been true for a very long time. in the '90s, congress tried to deal with the problem by enacting a policy known as the sustainable growth rate or sgr. as you see on slide 4, if you are following along on paper, there is an image that tries to layout how the formula works. every year there ways target was a target set and at the end of the year, medicare

would say where are they? and the next year there would be an across-the-board cut to all fizz [shra-pb/] payments in medicare, regardless of whether it was a specific specialty or regardless it was a specific region in? all would be a payment cut same percentage across the board. so this model seems fairly straightforward. but it didn't work. nearly every time that the sgr formula called for a cut, congress took action to stop the cut from happening. slide 5 is almost impossible to read this. congress never wanted to have [speaker not understood] so while the goal of substantial growth rate was to reduce medicare costs the

teeth of the policy were never put into use. so last year despite pretty substantial gridlock in congress, macra, the medicare access and chip reauthorization act also known as the sgr fix was passed with bipartisan support with huge majorities, in part because it received a huge amount of support from the doc community. because of the looming cuts that were supposed to be 21% for the next year, which is very difficult to imagine taking a 21% pay cut. so macra replaced the sgr and said this policy doesn't work and we're not going to use it anymore and have updates through 2025. and we're also going to add in new policies that attach bonuss or penaltis to your performance. so you you'll get a flat uh date or very small update

and we'll pay you more or less. >> when you use the word "update," you mean "increase?" >> i do mean increase. >> >> what you can see bottom is the secretary of health and human services and last year announced an ambition commitment to move away from fee-for-service into value-based purchasing. in 20 16 she announced the goal of having federal health care doctors be attached to quality improvements and cost reductions through alternative payment models and that number would increase to full 50% by the end of 2018.

this isn't just happening with the federal government and the private sector is joining along and after the secretary made the announcement, a coalition of 20 major health systems announced this they had agreed and committed to moving 75% of their business into value-based payment arrangements by the ends of 2020. so mackra came on the heels of both of these announcements and cms, the centers for medicare and medicaid services, cms was in the position to transform the system into value-based payment arrangements. you may be wondering if that changed this week? we know that with a trump administration and republican congress, there is some uncertainty about what is happening with health care in next few years. on the other hand payment reform and value-based purchasing have been big parts of the republican health care agenda for many years. and so, although some of the specific details may change, we think in general, this trend is going to continue, especially in the short-term.

so where are we now? we again are talking about the macra quality payment, the bulk of the bill. the quality payment program does a first thing and first streamlines multiple existing cms programs into the single new merit-based incentive pay system called mips. the quality payment program provides incentive payments for participation in advanced alternative payment models or apms and pays clinician for value -- this slide is a little unclear, but to clarify, doctors can choose to participate in either the mips, track or apm track. there is a little bit if you don't quite hit one track you can do a combination, but in general they are an either/or choice. so how does the mips track work? merit-based incentive pay system is mips and it's the

default track. in mips doctors get a traditional payment and see their bonus based on the composite score based on quality, practice improvement activities, advancing care information, which is also known as meaningful use of health information technology and costs. so that third category has a lot of words associated with it. it's using health i.t. well. this looks like a very complex program. the categories are weighted differently to make up the total, final score. there are quite a range of reporting requirements for each category, but although it looks very complex, three are existing programs that have been rolled up in the mips program. >> which are they? >> quality advancing care and cost and the new one is practice area.

>> thank you. >> so i'm going move on to the next piece. overall, if docs do well on those four categories, which again are call the practice improvement, using health i.t. and costs they can see, as much as 4% bonus if they do well in next year, or 4% cut if they do very poorly. those bonuss and penalties increase over time. so in this way, even the baseline program for medicare physician payment has become tied to quality and value. so it is, in fact, moving into the value-based purchasing space. however, many people see the mips track as essentially just tweaking the system around the margins. while we'll see likely some changes from this new program, it's not going deliver the system transformation that people are hoping for. in that way, a lot of folks are hoping and really through the promise of macra in the other track n. this track

doctors can earn greater rewards for taking risk or for their patients' outcomes. this is an umbrella term that incentivizes care. some alternative payment models that you have talked about before are bundled payments such as episodes of care for hip or knee replacement. rather than paying for a service separately. i know you use accountable care organization contracts now, and a number of primary care models including the patient-centered medical home. why are these important? they are part of the bigger movement to value-based purchasing that is happening across the market. many people see that the alternative payment models areplore more promising way to drive change, because you are fundamentally changing the way the payment isa societied with associated

with quality of care. it's not cost alone, but it's quality in the outcomes and care. this slide shows the requirements to qualify for the alternative payment model track where physicians can earn 5% bonus and i'm not going read these to you, but to call out two important pieces. one is the amount of financial risk that a doctor or practice must take on. they have to go beyond case management fees or shared savings. and they have to be responsible for down-side risk for the care of their patient. second, there is a minimum volume requirement that you see in the taking at table at the bottom of the slide and in order to qualify for the bonus. when the quality payment program was first proposed this past spring there there were only a few ways to quality for the article i don't believe payment model track. it was a very high bar. many people voiced their frustration with this.

as issues said the alternative payment model passed and seems the most promising make to get system transformation and folks are more eager to participate in that model. cms heard that concern and the final rule they proposed many more options to qualify for that model. this slide shows the programs that were finalized as the qualifying programs for 2017. and the next slide shows the programs that we think are very likely to qualify in 2018. so cms is building more and more opportunities to participate in this track in and we're also going to have recommendation s from an advisory committee for doctor-focused alternative models that can be considered. so this program seems very complex, i'm sure. it is. there are thousands of pages of regulations of what the final program looks like. and because of that, to help

doctors figure out which track to take and how to make sure that their practice is ready to succeed, 2017 was finalized as a transition year. so rather than going 100% in the program on january 1st, 2017 there are multiple ways to succeed. so starting coming january, these are the four ways to participate and not see a payment cut. they will not have a payment cut if they do one the four things here, first to qualify for the track that we talked about. the second is if that of they are able to submit any data in categories, one measure, cost data that cms has through claims and report that they did one improvement activity, that will make sure that they do not see a payment cut at all. if they only report for a short period of time, they won't see a bonus.

if they are able to meet the reporting requirements for each category they could see a small or modest bonus for the 2017 year. so that is a quick and dirty overview of the macra program and under the trump administration we're expecting most of this to remain the same. it's possible that the administration will reconsider many some of the specific details particularly the minimum requirements to qualify without seeing a payment cut. but in the short-term, this rule has been finalized and we're expecting it to be implemented starting next year. so what does this mean for the health system? first it's a big part of the value-based purchasing. they are tied to patients and tied to better quantity tied to health outcomes and tired to coordination and effectively using health i.t. like seeing your lab result

or making sure you don't have duplicative tests. program is also driving alinement outside of medicare and the quality measures being used in the mips track are also being used in medicare advantage plans and also being used by the large national carriers in the market. and we're also expecting to see the actual design of alternative payment models to align as well. in a couple of years doctors will be able to use their volume outside of medicare to qualify them as eligible for the alternative payment bonus as long as the programs that they are participating in outside of medicare meet the same criteria as apm track inside medicare. finally because it builds on existing programs the docks who do have experience with alternative payment models now are the ones most likely to succeed quickly in the first few years of the program and likely to get

the 5% bonus in addition, to the incentives already bottle into the program design. so if you get shared savings for performing well, you get the shared savings and also the 5% bonus from medicare. so it's a big incentive to succeed in that model. for san francisco, because you do have a lot of experience working with acos and other models it's likely that the doctors that your members are seeing now will do very well in this program >> that is encouraging. >> okay. i have said this a few times already today and it's a very complex program, but there a huge number of resources to be able to succeed in this program. this is say screen a screen shot of the website run by cms and really importantly includes a toolkit to select specific measures to see how their practice is going to

do? so they can make sure that they are reporting the measures that work best for their practice. there are a selection of other government-sponsored resources to help practices who are working on quality improvement. some of them are listed here. there are also -- thank you, next slide. there are also a number of resources outside of the government. the professional societies in particular are very committed to helping doctors get ready for this big transition and the american medical association in particular has a huge number of resources. where practices can actually submit their data from the previous year to see how they would stack up to a medium benchmark there is >> so as you take a breath, i know this has been an area of interest by commissioner breslin. do you have particular questions that you wanted to raise? >> just looking at it, it would be a lot of overhead for the doctors, extra overhead. you don't feel that is true? >> you mean --

>> for people to calculate every patient and see? it just looks like a lot of extra. >> the reporting requirements? >> yes. >> and that has been a concern. so as i mentioned before, three of the four categoriess in the mips track, where there are most of the reporting requirements that i listed. three of those categories are existing programs. so most of these practices already have experience running these -- reporting this information to cms. there is an argument that some of it is burdensome. cms is puting a lot of effort in moving away from paper-based measures and into emeasures and trying to make it seamlessly connected as possible. so if you are using electronic records it should be easy for you and your practice to pull the information out of the medical records and compile them and report a single number to cms. if your practice is not

doing that kind of work already, the first year, transition-year option is designed specifically to test your system to make sure your system knows how to do that and submit just one measure to cms in each of the categories. >> as a footnote, over the past couple of years under aca it has been actively supported by cms. they have done training and provided grants and equipment, the whole nine yardses. is that true or not? >> that is true. >> okay. >> there is also -- it's not -- some of the activities that you can do for the improvement activities section include things like improving the way that your practice is using health i.t.. so if you still need support to improve the systems that usering to capture that kind of data, there is -- you can get credit for that kind of work in the first few years.

>> do you expect doctors to drop out of medicare entirely? >> i do not expect many doctors to drop out of medicare entirely. i think there are historically every time we have seen cms make a substantial change to the way doctors are paid in medicare, we see a lot of unhappiness from doctors. i think there are lots of concerns about burnout, and there is lots of concerns about whether people feel overburdened by the government reporting requirements. and so far history has not actually borne out most of those problems. we do, dr. burnett is a real problem, but not seeing dramatic exits from the workforce. we have not yet seen any major problems with beneficiaries not being able to find a doctor who will accept them and history has not shown that the threat is real. >> commissioner follansbee. >> it's an excellent

presentation and you have summarized a lot of challenge actually. just a couple of things. one is that i think it's a good question about doctor burnout. i think that clearly these models work for physicians who are part of provider organizations. and so the individual practitioner, the individual subspecialist may not accept medicare only because of the burdens -- they are so specialized and the burdens. so there will be some and a lot of that has already happened. i want to applaud. i participated in the update on wednesday, one day after the election. and i want to really applaud pbgh and that on a federal

basis may be pulling back on some of their impetus drive, but clearly, the industry is not going to pull back and i think that the pacific business group is leading the way in terms of seeing that these goals and all that move forward. maybe without so much pressure from cms to lead the way, but also that you have already invested in this and see that. the other thing i was impressed there was some speculation there will be more transparencyin this. as a physician, i can tell you that the medical -- the professional organizations have been very concerned about too much transparency. i don't want my infection rates published. i don't want my success rates with hypertension published. but that it seemed like the prediction that the new administration may be, in fact, more interested in transparency and

consumer-driven, and we may see these changes which have all been kind of hidden from the consumer, may actually become more evident. and i think that the opportunities to show that the programs really are value-based and valuable, that they are not just made up numbers. i remember one hospital in the city, which i was an infectious disease doctor and published that they had zero infections over the course of a year. i knew what that meant that they weren't really tracking infections as opposed to no infections. >> yes. >> so we need to make sure that the data in is good, in order to be able to have true transparency. >> that is absolutely right and to your point, there is a huge pile of money for small and rural practices to help them figure out how they can succeed in this type of scenario? because there are meaningful infrastructure requirements to be able to move into a

technology-supportive environment. where you can start tracking and reporting that kind of information. >> well, the other face of this, and commissioner follansbee highlighted it is that it will be through coalition support on the employer-front to help to continue to kind of push at that and that is what your organization recommends and you have been a regional and national leader in a lot of these issues over the years. we thank you for coming today. >> thank you for having me. >> and providing a point of enlightenment about a question i had never heard of until commissioner breslin brought it up. i thought she was talking about macaroni. >> [laughter ]. >> macra. >> it's profoundly helpful and as we move forward with our partners, these issues will come to the floor and

your education today has been profoundly helpful. thank you thank you for having me. >> all right, we're at a point in time where we have a profound agenda choice. and because i happen to know the presenter in this area, i'm going to ask their indulgence? i think the last presentation would take longer than five minutes. in fact, i know it would, just to clear your throat takes longer than that sometimes. but this will be a presentation that we'll carry over to the next meeting. i feel that it's critically important to put a framework around it. i also know that aon hewitt is going to have a webinar on this topic and the implications of the political changes and what they might mean? and so the presentation might even get refreshed by some of those understandings as well. we would hope.

so my apologies to my good friend, our actuary. [ inaudible ] and won andersen, we thank you. we know you are local and you can come back. and we thank you for that. we wish that there were more time, but again, i know that we have to do this member appeal. so i am going to adjourn this session and then we have to reconvene. >> yes. >> so with that, the special educational forum for the health service board for the city and county of san francisco stands adjourned. [ gavel ] [ gavel ] -

>> good morning welcome and thank you for being here bright and early on a post halloween morning and i hope everybody had their fill of candy happy to be joined by my chef deputy and city attorney bother working diligently on the case we'll discuss this morning and filed documents this morning as you may know a natural civil rights equal justice under the law filed a federal claishgs

illuminate again san francisco amending the state money balances was unconstitutional it unfairly allows the wealthy to go free and the poor remain in jail it was filed two the city and city and sheriff hennessey oversees the city and county of san francisco jails was added and, of course, dismisses the claims against the state and city my office represents the sheriff's as legal counsel up until now in my office harnt taken a position since this was filed we worked diligently to look at the argument and what they're seeking in the value it of the bail law and hard work to protect the taxpayers from enforcing the law we successfully done those things and now the heart of issue the state failed system is

unzuckerberg san francisco general constitutional people andrew's on suspension of a crime are held in jail unless at the pay money as collateral those amounts are a bail schedule and state law requires the supreme court judges in each certificate of occupancy and the sheriff enforce if you can pay you, get out of jail if you cannot you don't get out of jail that is a reflex to the community whether you can pay for your freedom a two tier stop one with money and one without not right and in keeping with the constitution it is time for it to stop to echo u.s. attorney general loretta relinquish no price tag on justice i believe the states