of the public that wish to comment on item four? >> seeing none, public comment is closed motion on item four. >> so move approval of item four. >> okay. >> and as a committee report, for december 13th. >> with positive recommendation. >> okay. >> we will do that without objection. >> all right, mr. clerk are there any other items before us today? >> no more items. >> thank you, this meeting is adjourned.

>> i call to order the health service board regular meeting december 8, 20 16. i ask everybody to stand for 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. >> madam secretary, can we have roll call. >> thank you. roll call, scott, excused. lim, present. breslin, here. farrell, present. ferrigno, expectedal.

follansbee, present. sass, present. we have a quorum. >> would you call item 1. >> item 1, action item. approval with possible modification of the minutes of meeting set borthd below regular meeting of september 8. special board forum held november 10, 2016. closed session member appeal november 10, 2016. >> are there any corrections from any of the minutes from the meeting? >> no. >> hearing none. >> i move to approve. >> second. >> moved and seconded to approve the regular minutes of the regular meeting of september 8 held on november 10 and closed session for member appeal held on november 10, 2016. are there any public comments? seeing none, we are

now ready to vote. those in favor say aye. >> aye. >> opposed. >> the minutes were approved. could you call item 2, >> general public comment on matters within the board jurisdiction not appearing on the agend meketa. >> any public comment on item 2? seeing none, let's go to item 3. >> item 3, discussion item, president report. vise president lim. >> i don't have any report president scott is out of town so i'm chairing this meeting. thank you. now let's go to item 4. >> thank you. item 4, discussion item. directors report. director daud. >> thank you, i apologize for being late. we haven't had a report for since august, since the end

of august, so it has been a busy time. i will just highlight and i will ask mitchell to get up and highlight operation information and at the thofends report i will give a update on what i have learned in the past-since november whatever it was the day after the election, there have been a lot of changes every day. personnel wise we are just finishing up the interviews for the communication manager and dan meketa lieu the graphic artist stepped up to the plate and done a wonderful job. subon o'connor is here today. tia bon is the new member services manager and stepped in in september when we began had open enrollment madness. we filled two 1209 positions those are benefit and analyst technicians as

temporary until the list can be certified. we were lucky enough to have two wonderful 1210's join us in open enrollment because as you will hear it is the busiest open enrollment in the last decade. and the overview of the employee engagement survey is share would the executive staff and will be meeting probably before the end of the year but definitely in january to both take our wellbeing dat meketa as well as from the engagement survey to put a plan into place. before i turn it over to mitchell, i'm going run through the other things. dat meketa analytics i hope you look at the attached slined decks. probably the greatest difficulty we continue to have

is satisfying the blue shield members who are retirees who are not medicare eligible yet but their spouse has been moved to the unit edhealthcare new city plan. that is required an incredible amount of programming so a shout out to the dat meketa analyting staff. there is also a we sent out over 73,000 open enrollment letters and all thoest most 75,000 conformation letters so all that is a process that involves communications, operations, and dat a analytics to get them out the door. we will hear from the chief financial officers but we'll hear later in todays presentation we got yet another completely clean audit from our external

kpmg audit. we paid out to blue shield for the health physicians collaboration because they met their cost targets which is exciting and part of the agreement. that money is already built into our premium so it isn't like we are taking it out of the coffers. we continue to pay the research fees so see whether they sur vive through 2019 and the transitional reinsurance fees. this years year end transitional reinsurance feeerize $50 thousand that will be paid in 2017. and as complicated as it is, the city has to

update their financial system so the people in the financial system continues to be updated. finns worked with the mekata group and you'll hear about that as we go on. we had a all staff meeting this morning and shared the plxment and have a average of 23 days from rfp to signing a contract which is probably the best in the city. we do a real good job on contracting and vendor management. i'm not going to read each one of these, but i think that finance and contracting have done a tremendous amount of work in the fast 3 months. we completed the brand guidelines and the website. the website skeleton so we have a rfp out now to select the web designer that will design the

website so we can easily drop it into content into it without having to find a programmer. in terms of wellness, again, please look at stephanie's extensive report, but we got fit on route 66. we did over 26 flu clinics and gave over 4100 shots. we of course partnered with kaiser and the number of clinics didn't increase, the number of shots increased by over 10 percent, which is really remarkable. we were able to colocate the flu shots and the open enrollment tabling so that people could come get their flu shot, learn about voluntary benefits, ask questions, turn in the open enrollment form. it took a tremendous amount of coordination and it was

incredibly successful. we of course had one that rccsf meeting that was also successful. so, 2 separate benefit fairs during open enrollment. it was quite a october and the flu shots went into november as well. 93 champions attended the september training so we now have over probably close to 150 campions throughout the city and county. on site events at departments increased in october and november largely due to healthy weight series pilot san francisco and at the port. those are exciting pilots and if they work we can perhaps expand them. eap also reworked the stress management material and are calling it making work work and they are

called upon to dothat throughout the city. and then two special life care planning presentations were held at the health service-wellness center that kaiser did. actually it was four different meetings so that people could come and learn about end of life care planning and come back the next week, fill out the forms and have a notary there to noteize them. so that was extremely successful and i'll draw your attention to this-if you are in blue shield you received this, it was a brochure about advanced directors and went through my notes and began meeting with blue shield in march of this year to work on this and they got it mailed out. that was one of our focuses on performance guarantees how to increase the number of advance care directives that are in members charts or in the electronic health

records, i still say charts. it was exciting to have that done. in terms of my highlights, i'll just say that it was a busy time between planning for unit edhealthcare. i ateneded 5 of the education session squz we did i think over 20 and every education session had myself, mitchell, marina and theresa staffed one of them, so there were always hss staff available to answer questions. we continue to meet weekly with unit edhealthcare by phone as we implement the new city plan adoption. again, after mitchell makes his presentation i'll go over what we know about healthcare reform. mitchell.

>> mitchell greg, chief operating officer of the health subs system and today we'llprint details digging down further the overview director dodge gave about open enrollment. this presentation is after the directors report and we will start with the second page which is the cause and office visit frz october 2016. as director daud mentioned- >> where is this on this report? >> it is the second page of the presentation. >> calls and office visits at the top. >> the directors report. >> it's under directors report. okay. >> page 13. >> got it. >> thank you. >> thanks. as director daud mentioned this certainly was a

very busy open enrollment certainly over the past 10 years or even ever with the health service system. and mainly that was because of the benefits that we implemented which was best doctors, the medical case review and advice vendor that we contracted with for 2017 and a voluntary brfts we offered to the first time to the entire city and county population and the sur gaes and adoption benefit and migrating the medicare plans into two plans for 2017. so, for the call and office visit for twnt 16, we had close to 10 thousand and that is the largest we have had. this is 30 percent increase from 2015. the speed of answer which is a service level goal of 30 seconds or less was right at 31, just one second over our

goal but considering the amount orphcalls that is excellent speed of answer. we abandon rate is less than 3 percent which was 2.2 percent. the in-person assistance these are non open enrollment people coming into ask questions face to face with our benefits analyst and so for 2016 that amount was $1560 and total four open enrollment in the off site is 5252 members which is 20 percent increase from 2015. so, the next slide is november 2016 and for a example that we increase from 2015 amount of calls and members visit jz this is probably continuation of people having questions about open enrollment. on the next slide

which is inhch inbounds calls year over year review this is a large open enrollment with about 10,000 calls. and then again the next on slide speed of answer, september through november is demonstrating the call speed of answer year over year for the past 3 years. so, we can go ahead and skip through several slides since we have not done operation report for three months this is a bit of a large presentation so i do want to skip over some of the ones that are more routine information that we provide. i will skin through the delinquency and terminations. and go to the slide for there retiree educational session participation. and knroe this

will be part of united heth cares presentation but i want to highlight a few things, and one of them is the reccsf information session which included our health fair and also flu shot clinic and at 575 we believe this was a very successful session and including all of that into one meeting and in talking to our wellness manager stephanie, it tripled the flu shot participation for this year. and so on the next slide, theope enrollment off sit participation, these are the off sites we do usually every year where benefit analyst 2 or 3 go to off site location in the city and speak to members and help with their enrollment process. so, again this year we tried to increase

our presence out in the city by adding several new event this year and that includes the first three pu c headquarters on october 3, mta october 4 and dpw health fair october 5. and then we also added the police headquarters and san francisco public library on october 14th and the largest one was is 1 south van ness where we had large participation. these numbererize the numbers members come in and sign in. a lot of them knh in and talk directly to the analyst or quick questions and answers, so these numbers are probably a little higher. >> in terms of-like the police headquarters and where healthcare is delivered there are shifts 24/7 so are these all day event like at

zucker burg and laguna honda and police eheadquarters. >> it is during the regular business hours. and then on the next slide for open enrollment and person assistance, these are the individual members that came directly into hss. what we usually do in october is open up our wellness center and have open enrollment tables down there, benefits analyst to answer questions and take enrollment applications, ect. this year was a pretty large one and the ones that sign in was about 2200 members. on the next slide which is open enrollment voluntary benefit enrollment, this slide is demonstrating we implemented voluntary benefits for 2017 for the first time. these are benefits like critical illness, accident insurance, pet insurance and

supplemental life and want to give a graph ic to let you know and see how successful that rft was this year. sox we enrolled about 4600 members. ebs handled this enrollment and out of the number of people eligible is about 14 percent enrollment rate and predict next year it will continue to be successful. on the next slide, the open enrollment application process. this year again we had record number phone call squz record number applications receive d and so you know that means 10, 700 pieces of paper coming in that a benefit analyst has to review compared to what we have on file and if there is a definite change there they are doing the dat meketa -dat a entry. this is

answering 10,000 calls and entering 10, 700 pieces of paper. >> i entering dat a based on those calls as well? >> yes, change of address and demo graphic information we can take over the phone. this specifically shows the amount that we received versing the amont we were able to process and typically how it goes. of course the last two days of open enrollment we receive the majority, if not all most 30 percent or so of the open enrollment application. this year we started receiving them a little early. we were actually very organized thank tooz implementing project management with one of our team members. we seem to get the benefit guides written qcd and printed earlier so people got the open

enrollmentic packet earlier and did this so the retirees can get the information as soon as possible chblt we finished up the 10, 700 applications on november 16. i want to just basically go next into the dat a analytics management report because i do want to talk about the migration from plans that we have been able to look at since we entered all this dat meketa and done the automatic transactions. i want to mention a few things. one of them is the active enrollment in city plan as you will see here increased by 271 subcribes and if you include early retirees, the total is 408. this is into city plan active and early retired

benefit, not the medicare plan. so, that came out to be about 544 lives. i believe there was concern earlier in the year about sustainability of the city plan ppo and this will demonstrate that due to this migration and underwriting the sustainability of the plan should be good in future plan years. another thing that we also want to mention, the overall enrollment in kaiser perm was large. the subcribers increased by 1700 and that is about 2200 lives into kaiser >> is that active? >> active and retirees. these are numbers compared from january 1, twnt 16 tojanuary 1, 2017 so

there is new hires and movement throughout the plan year but these are the numbers we'll demonstrate and the dem graphics probably in the february health service board meeting. in order to do some of these things we have done for the plan year twnt 2017 including migrating blue shield medicare plan and city plan medicare benefit into new kaiser, a lot of the calls needed a lot of configuration in the system, program because i believe we mentioned, if someone is in medicare and blue shield and have a family member who isn't medicare we allow them to remain in blue shield while the medicare member moved to city plan. that is something that we haven't done before is having one family member, one plan and one family member in another plan. i do want to ask marina to come up and will go over a little about the

quantity and complexly of the work that involved in a lot of these things we had to do for plan year twnt 17. >> tell me how many people remain in the city plan that are retirees that are not eligible to for this new plan? they have retirees who dont have medicare? >> the grandfathered ones, individuals that don't have medicare we kept in city plan if that is where they wanted to remain. since they would be treated like a early retirey if they were not eligible for medicare. jerk people that just have b and not a, do

they go- >> we do is a part b only plan with the new city plan so wie were able to go into the medicare advantage ppo with unit edhealthcare or go into kaiser senior advantage. we have part b only plan. >> the b only can go over to the new city plan? >> yes. >> i saw mention of a only. >> we don't have any new a only members, any of those that are still with us remained in the city plan. those are the ones we are talking about are grandfathered. so, there is a couple handfulls of those and others that are not eligible for medicare that we kept in city plan as a early retiree benefit. >> and they have a only? >> some of them do have a. >> why wouldn't they go to this plan then too? >> so, for the medicare advantage benefit they have to

have part b as well. or at least part b so medicare part a is not part of the medicare advantage type. >> i thought it would be the other way around actually. okay. >> i'll turn it over to marina. >> marina [inaudible] ddata analytics manager. vice president lim and commissioners thank you for a couple minute to talk about the work we have done from a technical system perspective because when we do our work right nobody knows we are doing anything and if we go into technical detail watt we do we put you to sleep but it is really hard for the audience to understand how heavy a lift we are performing our contributions from my team to make these things happen. every open enrollment, which we start very early in the process like yourselves are rates and benefit squz taking a look at risk score squz pulling data to

evaluate plan design and after the decisions are made we configure the system and as you know we use people soft and we have 44 different benefit programs and for those programs some employees may get vdt and some life and some ldt so all those componentss are configured in and have 4 different employ r jz 4 different plan type frz non medicare and a only, b only, ab and so then we have to configure the changes and it is significant work effort that is essentially done by one person on my team, alean meketa bumeenlog and it isn't a easy effort. we are helping getting the rates calculated and finance signing off and getting all those loaded and as our director mention would the oe letters and conformation letters we are extracting that and have to massage the ddata to get the

focused letters we want out to the populations so that doesn't happen automatically. when we try to mail those out we send address files out to the mail house to see if there are corrections to partner with the operations team to do a ddata clean up ahead of time. we run audit tooz make sure everything is entered correctly and run into calendar year end while we still configure the system and have to 1099 and box 12 bd and 1095 and there is interface style that changes. we converted the [inaudible] to pma so that was work for us. those are things in the regular work stream we have come to expect and as you know from this year we had a couple new vendsers and voluntary benefits so getting all those interface file squz specifications and configuration and testing and

best doctors and on top of all that we have what we call our split family across the split carrier e and this effected enrollment and eligibility, it effected the deduction files and payment and interface and report. it isn't just blue shield and unit edhealthcare and like to thank both of the vendor partners trying to get the files to work, but for example our vsp vision plan all the code for that derives from the codes from our medical plans, so there was a lot of downstream impacts that even our other employ ers wesent to the community college district and unified school district so all in all this effected about 40 programs. at the time i wrote this i said 16

had been completed and signed off another 3 since then and breathing a sigh of relief because one has taken over 2 and a hlf months to get it right. we are on deadlines and treauged everything. what did we need by open enrollment and what do we need done before we get the first file tooz theveneders so everyone has their id cards. it is a race, we have been scramling since may, but going full bore since september. people on my team and like to thank the emerge team for development resources have worked night jz weekends to make this happen. we had to add 39 new codes fl to the system to handle this splitcaria. that is based on the complexly of the system. added a plan type. we

did the work to migrate 12,000 people into the plan. that isn't just push the button, i wish it was. helping with the communication outreach so the phone call squz e-mails or station that have to go to plans, and pulling all the information so we know who belonged where so like to say thank you for the tunlt to try to give insight into the tremendous work effort going on in support of this. >> so just to wrap up and both of us have spoken marina and i and subon o'connor do the best we can to manage this type of workload but a huge thank you needs to go to staff, the business analyst and is business analyst and financial people and contract individuals and administrative staff are really doing the work and getting this done in time and meeting all the service level. goes. it was big

open enrollment and it went very well and successful and due mostly because they did their job and did it very well. again, thank you totia bon o'connor. and, >> we should acknowledge the operation staff put in lots of hours of ovtime as well. marina mentioned it staff. >> what director daud is mentioning is all most 11,000 application we came in on saturday and did overtime and evenings to get that ddata entry completed. subon o'connor and want to say thank you to her for coming in and hitting the ground running. thank you. >> i like to thank you for your hard work and i think we should get a day off for this. [laughter]. can we declare that? >> before you go, thank you for all your hard work and to all

the staff. we cant thank you enough for all the hard work that you have done and also to marina and the staff. thank you very much for the successful open enrollment and also to dr. dodd for her leadership. thank you. >> thank you. >> now i'll-you have before you a memo about promise and proposals based on the new presidency. we had [inaudible] control issue and sent a new version of it last night at 11:30 and you didn't get that version. i want to give you a introduction to this. you don't have what i'm about to read you, but you have part of this. promised and proposal for

helths insurance changes in 2016 election and attached is legislative action for appeal or defund or delay the affordable care act. as you know or may not know, on november 17 congress passed a continuing resolution which will continue funding the federal government at the current rates at the 15/16 rates through march 2017. prior to the deadline congress needs to pass legislation to fund the government through the rest of the fiscal year which ends september 30. one mechanism which congress is expected to repeal the affordable care act is through the budget reconciliation act. that was how the affordable care active passed. this is a opportunity to take an initial stab at

repealing parts the aca. budget reconciliation is considered a privileged piece of legislation because it requires only 50 plus 1 votes in the senate and it cant be stopped by the 60 votes required if the democrats attempt a fillo buster. budget reconciliation can include specific instructions to committees to make change tooz the law. the only rule that limits what budget reconciliation can do is call thd bird role which requires meaningful changes cannot be made in revenue or spending and they cannot cause increases to the deficit in future years. decisions on whether the bird rowel can be invoked and then the reconciliation act killed are made by the senate parliament arian who

reviews everything section of whatever is passed by the house and then the senate. this republic congress has tried to repeal the affordable care act several times in the last 4 years so they know exactly what will or will not invoke the bird rule. and they did successfully pass repeals 4 times vetoed by president obama. obviously will be no repeal with a republican president. repealing against discrimination based on preexisting conditions covering dependents up to 26 and independent advisory board violate the bird rule, which is likely why they have been aurfbed up as being part of the affordable care act president elect trump is willing to preserve because he knows he cant get them through the senate due to the

bird rule. congress is currently in a lame duck session likely to adjourn today i believe and yesterday they passed the cures bill which includes funding for disease research and leucines regulations on fda approval of new drugs, which has both good things and bad things. if anyone read the new york time article on cancer treatment over the weekend that was a example of one of the not so good things about eliminating regulations. it also includes much needed mental health fundsing and it includes funding for vice president joe bidens cancer moon shot recommendation so that was passed yesterday and anticipate it being signed into law. when congress adjourns, the new congress will come back ready to start work on the repealing the affordable care act and there is talk that they will begin on january 20

which is the day they all get sworn in. they'll also have a second bite at the apple because they have >> to pass a second budget resolution again requiring only 50 plus one votes between april and september for the 17-18 budget year so they will pass two budget reconciliation bills in the next 9 months. the challenges are financing whatever they want to replace with. the affordable care act included guaranteed covererage regardless of preexisting condition and that is something that is extremely popular. it also included subsidies and it required employers and individuals to either provide healthcare coverage or purchase themselves. in order to balance the finances, helthsy individuals which is why the employer mandate and individual

mandate are important, healthy individuals need to balance the risk pool with people who are not healthy with cancer or chronic illness, so if they eliminate that employer mandate they don't have a balance and won't be able to finance the replacement. so, lee hegy or research assistant he and i went through all the different things that are proposed so that gives you what we are looking at. we also looking at them introducing pieces of repeal and passing them but the repeal won't take effect until january of 2019 after the mid-term congressional elections. the repeal is piece by piece, but they don't want to lose any house seats so they leave the affordable care act in two years and repeal it all in 2019 and thatd also gives them time to

come up with what they will replace it with. some of the suggestions of what they replace it with are included in the overview and i'll just point out that president trump promised to complete repeal of the affordable care act. he promised promoting cross state health insurance plans. these already exist in 4 areas but there are 4 states the size of our bay area counties who all agreed to the same reguless and minimum benefits. that is harder to do when you have states that are as different as california and nevada or nevada and new mexico. they can already do cross state insurance arrangements it is just very differ cult to do. he promised tax rern deductions for helths insurance premiums paid by

individuals these are people self employ eooed. he promised promoting health savings accounts. now it is estimated 50 percent of people have a health savings account and high deductible insurance plan and those are not things people have chosen, those are things employers emposed or the only thing they as a individual and buy on the market. he promises price transparency requirements for healthcare providers, organizations and doctors. he promises promoting safe pharmaceutical drug implementation and that's supposed to reduce consumer drug prices and he want tooz establish high risk insurance pools for individuals without townious coverage. we had a high risk insurance pool in california before we created -for over 25 years and it had mixed reviews but it was better than nothing. he

wants to reform mental health program jz institutions. additional things were to reduce the eligibilities for medicaid and childrens helths insurance program and promised cutting healthcare for undocumented immigrants allows states to legalize medicare marijuana which is a state issue and not a federal issue, but there are federal things that block it. advancing research and pushing fda to stream line the drug approval process. so, i want to skip now so you heard what he wants to do to what his incoming secretary of health and human services, dr. price is proposing, which is on-because i don't want to read through this whole thing but that is on page 4 i believe. it is the restoring healthcare freedom and

reconciliation act. this passed the house and senate and vetoed by the president. and it does pleny of the things that trump had proposed i i think that is what we should watch for being introduced. it is very different then what speaker ryan is proposing, which is if you read just the introduction to house speaker ryans, a better way plan, which didn't meet the bird test or pass and get to the president's disk, desk, i read the introduction and said this is great, they want to increase choice and increase access, but they want to do it all in the private sector and want no government subsidy or regulation. we are anticipating the elimination of centers for medicare and medicaid innovation as one of the first actions taken, which created

pilot projects that saved money. actually they promulgate the aco's across the country and we anticipate the-we dont anticipate the elimination of the valia based proposition and reimbursement that you had a presentation on mac rabecause that was part of the compromise in how to pay physicians. it was called the sustainable growth rate that passed last year. macra want part the affordable care act. it was its own issue. a lot of physicians dont like macra so maybe they will find a way to put it in a bill. we dont know, but it was a separate piece of legislation. the other place we can see potential repeal changes is the cost subsidies

through the aca. they can limit how much money goes to subsidize that, but the house voted primarily along parbty lines to file a lawsuit challenging the president implementation of the aca and in may of 20 scen judge rose mary collier of the federal district court of dc decided the obama administration can not constitutionally reimburse insures for cost they incur in fulfilling the obligation in the aca. now, the anticipation we is we appeal that under demo gratic president but since we have that court ruling under a republic president it is likely the administration will accept the rulejug says we can't subsidize insurance payments. and it

will cease to be a issue. the other major thing that is happening are that you will hear about in the news are mergers they call them m & a, mergers and acquisitions and president trump talked a lot about competition and opposing that consolidation of power. right now in the u.s. department of justice with the support of many attorney generals including california former [inaudible] harris two antra trust case to block proposal helths insurance mergers are before the courts. opening arguments in these cases were heard in november and there hasn't been no decision yet at this poipt. points. those are two areas that will change what healthcare costs are. we can also see budget cuts in terms of the cost sharing subsidies. we could

see the state innovation and wavers and state grants that have been allowed to go away and we should anticipate the block granting of medicaid or med kale medi-cal in california and the last is budget reconciliation. what to watch out for is as things come across the new newspaper or television is if it is budget reconciliation act, when did the different things it repealed take effect. we are really anticipating at this point not repeal and replace, but repeal and delay. repeal the act and delay the implementation. the downside to that from the republican perspective is it giveathize democrats two years to organize and say look at all the bad things that will happen in 2019 and it gives them [inaudible] in an election. if they implemented

it in 2016 2018 [inaudible] 10 of the republican governors accept the medicare subsidies and they will have to draw back who gets coverage in their states. i don't anticipate it effecting-we are in complete compliance with the affordable care act and don't anticipate it effecting our benefits. i anticipate the uncertainty in the market itself anticipating our rate proposals-effecting our rate proposals. again, there is tones to read every day to stay on top of this. ia tendsed 4 webinars and read a lot and talked with leader pelosi's washington staff about how this will go forward and

it is really a parliamentary battle when it comes down to it but we lost our veto power for the affordable care act and will see a lot of change in the next 5 years. that concludes my report on-we will get you the part i read in the beginning, which didn't get in this particular version. um, the last thing is at the last meeting, which i watched on television with my leg up from my successful knee surgery, there was a question in the charter section about the adoption of plans for san francisco residents, so lee went ahead and prepared this memo on it and essentially it is a permissive-it doesn't say we have to, it says we can and it is not a part the charter we exercised but for your records you now have that and

should it come up again or should someone want to turn over healthy san francisco to us, which would be a major undertaking now you understand where that came from. sorry for those who couldn't hear me. are there any question on my report or mitchell's report or stephanie's? >> i have one question for mitchell. the depened onsf the medicare people going into the new plan, if they are not medicare eligible do they stay in theirprint prints plan? >> mitchell greg, if they were initially in blue shield and we moved them to a medicare member of the family into the new city plan, the non medicare member of the family could stay in blue shield if that was there choice. >> where else would they go? >> they could go fl to city

plan. >> my question is, can they go into the new plan? >> not if they are not medicare. >> somewhere along the line there was a session suggestion that maybe non medicare people would go to the new plan. >> the new city plan is medicare sponsored plan, so they would have to have medicare, but the dependent can go fl to city plan, the ppo. >> right. i understand that. thank you. >> okay. >> any other comments? thank you dr. dodd for that report and thank you for providing on the affordable care act and what we may expect updates in the future as it pertains to the empact for the health services system. thank you. >> catherine, thank you very much. i heard a number of very weak

presentations on what might happen to the affordable care act and got more information from you in this report than i heard to date and the implication of that are pretty dramatic. healthy san francisco is a good example where the population they serve declined dramatically as a result of the affordable care act and medicare expansion and change to federal poverty levels and all that the & the fact the employer required premiums. all that through covered california is certainly up in the air and can wind up rolling back and drupatically expand the nov uninsured presenting in emergency rooms and san francisco general with no funding other than in san francisco what comes from healthy san francisco. >> we'll see the cost shift fwack back to the employer premiums. >> yes.

>> can just point out i think a lot of the information predicated on dr. tom price as being the appointee, director of health and human services so a lot of the earlier webinars there was a lot of speculations because we were not sure who would lead the charge and dr. price has the rather immediate endorsement of american medical association and a surgical association, but not universal support from organized meds son. i suspect that there are other interest groups such as hospital jz pharmaceutical companies that may have concerns over some of the implication of the proposal. >> i was actually with the editor of the san francisco medical

society journal yesterday who said they are organizing state medical-local and state medical society and associations to oppose the ama's endorsement of dr. tom price so you are absolutely right on. and i apologize, i didn't want to skip over but i really do want you to look what wellness is doing for happy healthy holidays so look through your-it is a remarkable plan that we are just really fortunate to have the staff we have. everyone works at full capacity and is committed just committed to serve the members and i'm really-great staff and this morning we are proud of what we do and proud we take such good care of our members. >> thank you.

this is mailed to every blue shield member and not kaiser members. or city plan members. >> thank you. >> there are no comments from the board and welcome public comments. >> good afternoon commissioners [inaudible] president of reccsf. i like to remind you while uhave a lovely conversation up here we hear the blowers and can't always hear when you don't speak into the the micro phone. while i appreciate you speaking to each other remember you are also speaking to us especially for those that have to write reports after we leave here. first of all, i want to thank all of you and i especially want to thank all the staff in health subs service for the remarkable work. we all appreciate it so much. that was such a

incredible task to get through the open enrollment. mitchell has done a yeomans job helping coordinate all that and marina and everyone here, pamela, everyone working, it is just-you have a remarkable staff. they are dedicated. and it was nice, i had a number of people commenting they were haphy to see mona anduloy come back and work with them so our members know a lot the staff. i want to thank you for the opportunity to partner in the health fair event and look forward doing more of those in the future. the only dismay that i have is that i'm still being approached by a few members here and there who are saying their [inaudible] physicians are not interested in going and taking the medicare unit ed health plan and they are demanding that our members pay them 100 percent up front and deal with unit edhealthcare for reimbursement and said you need to call

united hlth care and get that worked out right away because i don't believe they have actually the ability to do that. there is a problem around that so it isn't a lot of complaint, but still getting a few and i just want to say i was at the orched club tuesday night and discovered how many members are retired city employees and seberal came forward with complaints and issues that their physicianwise brown and tol end are not willing to accept unit edhealthcare and finding this very distressing. other than that, that is my only real comment about it, but again big big big thanks to remarkable work on the staff. i think we are all so impressed and i wish we could give them a day off but maybe they will find other good asian in their stockings. thank you so much, it is a remarkable group that you have. >> thank you. gy comments for the public? if not, go to the

next item. >> item 5, action item. presentation of audited financial statements for fiscal year 2015-16 and 2015, pamela leaven and kpmg. vin and kpmg. >> pamela levin chief financial office, health service. in this presentation we will do two things, first, the audit

manager gee roth lee will give a presentation about the audit and then i will give a presentation about the results of the audit and where we are in terms of fund balance and receives and obligations. i want to turn this over. >> thank you, good afternoon everyone. so in front of everyone i hope you guys had a chance to look over the financial statement, the audit and financial statement as well as the powerpoint presentation. i will quickly go through the presentation and then highlight some of the important areas that we wanted to communicate to the board today. just on page 2, this is the agenda. we'll go over the scope of the audit, the responsibilities from the kpmg side and management including the risk assessment assess by

kpmg and financial statement highlights we wanted to communicate to the board as well as the auditors required communications. page 3 and page 4, this is the scope of the audit. essentially kpmg performed a audit in aperformance with government standard and general acceptance of government audit and standards so get the financial statement and perform audit procedure jz assess the presentation of the financial statements. page 4, this is just kind of summarizing the reports that we issued. there are two reports. the first one is the actual independent auditors report that contains our opinion. essentially we apine on the financial statement which is the result-unmodified, which

also means it is a clean audit opinion. there were no crecktded oruncorrected statements, no internal control deficiencies which leads to the second report that is report on internal control over financial reporting. this is just to make sure theentsty itself doesn't have incompliance with laws and regulation jz there is no reported defeshancy or incompliance so both reports are good. okay, starting on page 5 through maybe page 7, these list out are like the management responsibilities. they are standard responsibilities of which we just expect management to kind of follow and perform. making sure that you're adopt toog the account and policies, you make support available to the auditors to do our work. you prepare the

financial statements. so, nothing came to our attention that would warrant any significant address to you about the management responsibilities. and then just starting on page 8 and 9, these are kpmg responsibility ies and bullet point making sure we perform the audit with professional stapdards and make sure we get the financial statements, we look at it perform the audit procedures with the auditing stand. essentially if there is anything that come tooz our attention we communicate that to manage jment the board in a appropriate timely manner. page 10, this is what we call the risk

assessment slide. it is part of our professional or standards and due diligence we wanted to communicate sp of the significant risk areas to the board and essentially significant risks mean it is a particular area we as auditors want to pay attention to. maybe perform some extra audit procedures to make sure that that area is reasonable. so, there are two listed here. the first one is the management overrider control. so, here is not specific to hss, it is more assumed risk where if you have a entity with multiple people working on certain areas, there is always a risk around man nlment overrider controls so to address the risk we as the audit team perform the procedures and make sure the risk is

mitigated and didn't find anything that warrant communication to the board. the second risk here is reserve frz the claim specific to blue shield. because this is a estimate that is really based on actual reports. here we engage kpmg actuaries to look at the methodology that was effected by [inaudible] we do our own internal assessment. we look at claim payments so there are is particular list of audit procedures that we perform in order to get comfort over this reserve for claims procedures and as a result everything was in line with our understanding. >> can i ask a question because when i read the statement risk of management of overriding controls it did jump out and so from your

explanation which sounded quite encouraging, it was like a boiler plate that you find in management structure, not specific to hss, is that what i heard? >> yes. it isn't specific to hss, it is something during the audit we look to make sure there is no management override controls so therefore we look at entries and make sure the entries were prepared properly so it isn't spirfck to hss, it is just a audit assumed risk we need to address as part of our audit. >> okay, thank you. >> starting on page 11, these are the financial statements highlights so there is really nothing that we found to be kind of out of the ordinary so these are three areas we looked at specifically. the first one is reserve for claims. as you can see it is very consistent to prior

year so there is really no change in that area. the second one was the premiums payable. this account had decreased by about 53 percent mainly due to hss making a capitation payment in june opposed to july so it resulted in a like a $9 million decrease in the payable account. the third bullet point here is the cash and invesment account. you can see that it decreased by 20 percent mainly because in the fiscal year 20 kaen 16 hss returned money to stabilize some of their reserves. on page 12 and 13, these are our required auditors communications and this is kind of defined to what is our profezal standards to make

sure we follow the professional standards. going to page 13, as part of the financials there are what we call is the mdna and this is just information that is gives more information to readers as to see what are the changes that occurred in the year 2016. we [inaudible] read it over and get the support and do the cal culgdss to insure that is reasonable. in addition to the audit we look at account and policies and the one [inaudible] new this year was called the [inaudible] 72, which is fair value measurement. this was adopted in 2016 but it didn't have a big impact on hss because all investment in hss

was handled at the city controller office so there is no investment outside the pool so this is more of a fair value measurement diz closure. >> could i ask a question on that? >> yes. >> we are evaluating inveshment policy we approve here at the board and if we were to make a decision to invest some portion of our assets separately from the dreshiers those are subject to this is that correct? >> yes, that is correct. >> thank you. >> on page 14, this is manments judgment and accounting estimate. the estimate we looked at is reserve for claims for we involved kpmg acwaerns to look at the rument and as a result the

claims filed within the acceptable range and therefore we were okay with the claims payable. the last two slides, these are just continue our auditors required communications. as i noted earlier, there were no uncorrected misstatements and no control deficiencies, management were very cooperative, no disagreements with them. we didn't have any other [inaudible] with other account ant so it was a very clean audit. i thought that i [inaudible] pamela and cathlen and team on getting office support and they were very very cooperative. and that concludes my presentation. >> any questions from the board? thank you. >> thank you. >> thank you to [inaudible] and

the staff for a clean audit. >> pam pamela, chief financial officer. before i go through my presentation want to thank [inaudible] who led up the audit section for our team and all of our financial staff who are watching and know that we couldinate do the things without them. >> do we need to have a motion to approve this? it's listed as a action item. >> it is a action item. >> but is mine before it or after? >> when we are finished- >> after i do my report? okay.

so, as [inaudible] mentioned, the audit consisted of a examination of the financial status for 2015/16 which ended june 30, 2016 and they did a comparison of the changes between 2015/16 and 14/15 and then of course as you mentioned analysis of internal controls. the trust in the fiscal year 15/16 with a balance of 68.8 $68.8 million asset and net position. this is decrease of $12.9 million of $81.5 million as of june 30, 2015. the reason that explains the 12.9 $12.9 million

decrease is primarily due to $10.8 million decrease in city health plan, $7.3 million decrease in the blue shield flex funded plan, $3.8 million increase in the dental $2015. the reason that explains the $12.9 million decrease is primarily due to $10.8 million decrease in city health plan, $7.3 million decrease in the blue shield flex funded plan, $3.8 million increase in the dental plan,.2 million increase in the blue shield fully insured and kaiser for new enrollees members and members eligible for increase. $.2 million increase for healthcare sus painability fund which was called to 205 and as of january 1, will be called to $3. $.2 million decrease in flexible spending account contributions and $1.2 million increase in trust

fund interest income performance guarantee penalties and forfitsures. when looking at the $68 million fund balance one has to also look at what are the future obligations and reserves against that fund balance. we worked with ann and identified $54.0 million in future obligations and reserves and this consists of contingency reserves totaling $24.4 million, stabilization reserves toted totaling $26.2 million, the helths care sustainability fund tote aelg $2.2 million and aperform ance gar entease for adoption sur gaens bft 2.2 $2.2 million through 2020. for the stabilization

reserves based on the board policies gain squz losses are allocated over a three year period as of june 30th 2016 stabilization reserves totaled $18.6 million for plan year twnt 17 and beyond. the board authorized use of $10 million during the rates and benefits process for the 20s 17 year which leaves $8.5 million for rate stabilization in the future years. and will be reevaluating the reserves at the beginning of the 2017 rates and benefits process, which will be used in determination of the 2018 rates. kpmg issued our financial statements and the independent report on october

14th 2016. the comhensive annual financial report is city wide was used on november 18th which also contains a high low summary of the trust fund and copies of the trust financial statements can be obtained at 1145 market on the third floor. i'll be happy to respond to any questions. >> i think i believe we have [inaudible] item number 6. because that is related to finance reporting, so i like to go back to item 5- >> we are still on item 5. >> are we still on item 5 or on item 6? >> still on item 5, the report or memo from pamela on the audit. >> thank you for the correction. >> thank you. and again thanks to my staff and everyone who works

to help us including ddata analytics and throughout the year on preparing all our financial information for doing the postings of all the financial and then for helping out in the audit. >> under reserves and obligations, for the performance guarantees, adoption and surg gaens benefit you said 2 million, this says $2 million, this says $1.2 million. >> sorry. >> that is page 3. maybe i have a wrong report. >> you are correct, it is $1.2 million. >> on the next page you said 8.5 and it says $8.6 million. is that right or no? >> um, the report said $8.5

million, when we reviewed for the meeting today we realized that we had a typo and it was-it is-we mess up the numbers on the text, but the chart is correct. starting with 18.6 we used 10 million and ind end up with $8.6 million. >> so this is correct? >> this chart is correct. >> a second thing, kpmg audit they don't mention anything of the new unit edhealthcare plan, which - >> this is >> january on. it wasn't called that then but it is still one of our plans. >> it didn't exist june 30. of last year.

we hadn't considered rates and benefits and adopted the plan until the end- >> june this year so jan through june doesn't show that. >> the financial statement is july 1, 2015 so june 30, 2016 so we adoption of the new sit city plan- >> the half year last year was united helths care national ppo plan. that was our 4th option for med icare but that doesn't show on here. it was for 6 months. it would have been 6 months. >> i believe that you are speaking about the ppo which was the predsers to the new city plan implemented january 1, 2016. those

were also incorporated into the -any review that needed to be done onu hc was done and included the medicare portion. it a fully insured plan, but they dont get much visibility in fully insured plans. >> this is no different than kaiser or blue shield sh >> correct, and they dont do sampling in kaiser either. blee blue shield flex is self insuredfund and they do sampling into blue shield flex. sorry, did you have another question? >> anyway, this is not-i'll talk to you later about it. okay. >> the role of the auditors is to look and make sure that we are really posting things to the correct places that we are taking from the very beginning of the

charge and if the charge is accurate and then it goes through and making sthur sure we are posting and there isn't any missed allocations. the reason it says on the page we talk about the city health plan is that is a explanation of why there is a change because essentially what their auditing and working on is our financial statements are correct and one of the reasons it wasn't down- >> this is their financial statement which we are not discussing today i guess. yeah. >> we are discusing the financial statement. >> it is section not included in our forms here. >> i'm sorry, i hope- >> this was not included in our-- this is not for public-is that

correct? >> actually it is discussed this morning. it is public. it is over there and the reason it isn't on the i pad is because it could want be downloaded but it is included separately. >> that is what i was looking at on that report and that was page 3 on that report. >> talking about the management discussion. >> right. and they don't mention anything about unit unitedhealthcare national ppo plan. >> so, if you take a look on page 3 of- >> pamela--

>> i think you are right. i think this is management discussion is prepared by management. they prepare financials too but it does want get the level of auditors the actual published financials getd. they do review of it and mention that in their presentation, but thrai donts apply as much detail to that as they do to the traditional financial statement. the balance sheet. >> what they are saying is service plan 3 choices and there is a 4th plan >> there is a 4th plan. >> they didn't put it there at all, not sure why, and was a oversight on our part we didn't list it. we will make sure it is corrected in the future. >> thank you. >> thank you, commissioner

breslin. management and discussion and analysis for guidance to the public but it isn't all comprehensive. the report is procedurely on the financial statements. no, peerly purely on the financial statement not on the mdma. it is on the numbers in the [inaudible] >> basically starts on page 10. >> are there any other questions? this is a action item specifically for the financial statements for 2015 and 16, so is there any-do i hear a motion to approve the financial statements? >> i move to approve. >> it is moved and seconded to approve the audited financial statements for 2015 and 16. are there any public comments? seeing none, we are ready to approve

the audited financial statements. those in favor say aye. >> aye. >> opposed? the 2015 -16 audited financial statements is approve. thank you. now go to the next item. >> thank you. item 6, discussion item hss financial reporting as of october 31, 2016. pamela levin. >> pamela levin chief financial office r. this is the first report we issued for fiscal year 16-17 for the trust and general fund administrative budget and this is for expenditures through october 31. this is 4 months worth of expenditures and it really takes about 6 months of expenditures to get a really good estimate

of what we will end the year in, but we base it on what the current expenses are right now. in the benefit trust fund, the trust fund balances we just mentioned as of june 30, 2016 was $68.6 million based on act tivthry the fund balance is sknroketed to be $52 million as of june 30, 2017. the projected $16.6 million decree includes reserves for unpaid claims and the decrease is primarily a result of subsidizing the rates for city plan and active delta dental plan and unfavorable claims experiences for city plan and blue shield. we also watched the pharmacy rebates and in terms of

pharmacy rebates based on the actuals as of october 31, the year end projection is $4.2 million. in terms of thedantal fund administrative budget, we at this point are projecting end budget with no balance. any questions i'll be glad to answer them. >> any questions? any comments from the public? seeing none, we will move the next item, item 7. >> item 7, action item. presentation of hss strategic plan. director dodd. >> thank you. every year we bring to you any tweaks we make to the strategic blan and the next year we will work on the

strategic plan 2018-20. this is in place 2016 and 17. i can't seem to get my screen but we highlighted any substantive changes in yellow and the comments. obviously we increased the number of members. we increased how much money we are spending. um, we increased reporting on our call volume. we increased-a lot of this is just editorial. so, if you have read through it and looked at the

highlights if there is anything you disagree with or anything you want to change or add-- >> i just have one question i guess under summary of strategic goals- >> what page? >> page 9 of the report in the computer on the ajnds meketa it is page 90. you added new initiatives. these initiatives like under informed transapparent effective guv nrns and engage [inaudible] which we have done- >> that want in our strategic plan but the board director me to do it. >> you added it-okay. and then the new initiative under affordable

quality healthcare considered contracting arrangements with vendors hospital and medical group jz think it shows up later. i can't see the rest the statement. is this something you are starting-i didn't understand what contracting arrangements would be. >> it is kind of a pralewd to next year that we may be considering different contracting arrange. so rather adding it after the fact it is a heads up but will look at different ways to communicate with medical group jz hospitals. >> good catch. >> okay. >> i have one question doctor dodd, on page 4 when the operations. the highlighted paragraph that says from december 2015 throu december 2016, we haven't finished december 2016, so is

that answered of 51, 530 member calls? >> you are absolutely accurate. it is supposed to be november. thank you. good catch. >> do corrections for this? >> yeah. >> thank you. >> thank you, commissioner lim. >> are there corrections or changes or comments on the strategic plan? so, this is action item so now ready to entertain a motion to approve the strategic plan with corrections. >> so moved. >> seconded. >> moved and seconded to approve the strategic plan. are there comments from the public? seeing none, we are now ready to vote this in favor please say aye. >> aye. >> opposed? okay, strategic

plan is approved. >> and you should have all received the grid with the actual items broken down with we are and everything. that was notsent with the board of materials, that was a internal document. >> [inaudible] >> it was e-mailed with the board and director performance evaluation. >> oh, okay, yes i did see that. >> it is reflected in this as well. >> i like to call to the chair to have a 5 minutes break. i think we have been here all most two take their seats. we are ready to

resume the meeting. i like to take the privilege to the the chair to rearrange the number for discussion item. i think our consultant from mekata [inaudible] so we should now go to- >> it is item number 10. >> item number 10. >> do you know what page that will be on? >> item 10, discussion item. report on hss truts fund invetsment policy process to been dect, mekata investment group. >> 115. >> alright. good afternoon.

>> good afternoon. >> pamela levin, chief financial officer. i wanted to a continue to introduce him. in september 2016, hss entered into a contract with mekata investment group to develop and investment policy for the health service trust fund. the draft policy will be presented in january, however, at todays meeting mekata will provide update on the policy statement. i like to interdue ted benedict. he is a consultant with mekata. just as abackground, the mekata group is working with retiree healthcare trust fund board with city and county of san francisco. >> thank you, pamela. and good afternoon everybody. >> good afternoon. >> len into that mike ree

phone. >> i'll get a little closer. ted benedict, a consultant at mekata investment group so thank you for engaging the firm. i worked on the project with my colleagues larry white who many have talked to so i give kudos for larry for running the project for the most part up to this point. he had a conflict for today but i'm here. at the january meeting you will most likely meet larry. mekata was involved to perform a review of the oversight and performance and guv nrns of the hss trust fund and the investment of those assets. we have been through a series of- >> sfgovtv, we have a report. thank you.

>> perfect, i will move the slides along with my comments. as pamela mentioned we were engaged in september so throughout the month of october and november we have been going through a review process of seberal documents and interviewing key personnel and a lot of those document and personnel are outlined in the next couple slides. this slide shows a example of the folks we talked to to gather information about how the trust fund is managed and how the oversight process work squz what documents were in place. the next two slides show a number the documents we did review. and don't need to respond time reading name by name, you got the documents in front of you can see qulaut we have done and what we reviewed thus far. but i thipg the best use of your time is go forward to

the key findings of our review thus far. so, two months in we initially wanted to confirm that this trust fund is subject to the california code and we have determined that yes, it is. the california code is governs investment of public funds and stipulates three investment principles. the first is safety of principle, maintain adequate liquidity and third is return on the assets that is sufficient given prioritys one and two so we confirmed the trust fund is subject to california code and how it is managed today invested in the city treasurer pool is cisant with these goals so that is positive. it is invested appropriately given the goal squz and guv

nns. the california code stipulates the invesment is short term high quality fixed income ascelt with maturey under 5 years and single quality a rated or above and has diversification and other mu churty guidelines required and the city treasurer pool is managed to the guidelines so you are in compliance with the guide line tooz the california code as well. which is good to know. i think the important part is you have as a board a fiduciary duty to review and oversee and evaluate the appropriateinous of the pool on a regular basis. i understand there was a meeting with city treasure investment pool manager recently and that is a great. as a board you should have a regular meeting such as that on a annual basis or semy annual basis however

you determine appropriate to review the investment pool and bhake sure it is the right choice for you and can getd to the implication in a moment. we have provided a draft investment policy statement and a final investment policy statement will also be presented at the meeting in january but that is the document you want to get in place and approve that formalizes the oversight and pool of assets. i think on slide 8 of 9 we also make a statement there could be opportunity to earn additional yield above and beyond given what is earned in the city treasurer pool. however, any choice to invest assets outside the city pool does come with degree of complexity, decrease degree of cost and oversight responsibility that may not

make it wurkt it but that will be part of our analysis in january is taking a look at the city pool relative to industry benchmarks so you understand how their performance of that pool relative to standard industry index and peer squz a other option squz how the cost compares. the findings show the investment expense is 8 basis point so expect from a cost comparison it kill look faivable but it is something to evam wait in your oversight of this pool. so, the last slide shows next steps for us and one is continue to evaluate the luquidly needs of the trust fund. pamela mentioned a goodpiration of incurrent assets are reserve asset and held aside for reserves so maintaining

those priorities of stability of principle and liquidity are pairimate and the sur plus is rel tevly small which makes the likelihood of benefits investing outside of the city pool it may unch a little more. probably less attractive at the end of the day but will be part of the analysis. next step is compare the yield and return on the pool to other alternatives and the cost as well and to formalize that investment policy statement. so, that's i think a quick summary of the process we have gone through thus far and what we believe some oof the priorities for you as a governing board should be and you'll hear our final report in january. >> thank you. are there knee questions? >> one question and you may have addressed this already but want to be certain i understand it. when you look at our balance

sheet there is sizable fund balance but it is also a major portion is set aside to contingency reserve and stabilization reserves and variety of other rev reserves for specific purposes but i think the only item recorded on the audited financial is the incured but not reported liability for self insured claims. or unpaid liability for premiums that are payable at any point in time. it seems to me at least my impression is once you exclude all of these categories of obligations and reserves and so on, there is a relatively small remaining amount of cash that would be available for any kind of investment that would not be subject to the liquidity or preservation of capital requirements, is that correct?

>> that is correct. that is our understanding as well. the reserves that have been set aside or identified take opgood portion of the pool which means very little surplus to consider investing more aggressively. that be said, i think it is still important to review the city pool and determine that they are doing a sat isfactory job given the main objectives for the fund relative to other alternatives you might have but you are crecktd correct a major portion of the assets is set aside for reserves. >> thanks. >> this may be beyond the scope of your review. i think you set up a policy for us as a health service board over seeing the trust, but is there a indication whether the yield through the city's treasurer for our trust fund differs from yields from other trust fund that-is this all one big

pool that is managed or are there specific objectives they have for us that are maybe different from other trust fund in the city? >> that is a great question. my understanding is you part of the city pool which is a much broader pool and serves many different funds, sources of capital and account holders per se. you are just part of one big pool. the yield in the bool, pool is governed to california code which means very limited mu churty and high quality fixed income security so the goal is safety, liquidity and yield is last. i think it has a yield of north of 70 basis points and we are in low yield fixed income environment. we propose coming back with review how the pool compares with other california code like

investment vehicle jz clients that we are aware of and you can judge for yourself whether that pool is done well, great, poorly, average, relative to other investment options out there with similar stipulation. >> thank you very much. the question also include kind of-those are minimum goals, the three you mentioned. are there other goals that may be more specific for a health services trust opposed to a trust in requirement, department or something like that? are there other goals we should be thinking about? >> those are the primary goals. given this trustfund is set up as a repository for assets until they are distributesed i think the first two goalerize paramount relative to all other goals, safety and luquidly. you want to earn a return on the assets as good

as possible but invescing in the california code limits the investment options you have available. >> i want to clarification, was you question that is our money-is return on city's investment the same to other departments invested in that pool? >> that was part of it, yes. it is all one big pool and we have a certain proportion at the end of the year, the return is portioned out based on your proportion in the pool. >> correct, that pool intotal is roughly 8 to $9 billion in size so you are one investor in the city pool which operates on a dollar in dollar out basis and you get your portion of return allocated to your particular invesment. >> thank you for getting this. finance committee that got this

togethers? thank you. this was a long time coming. it was strictly about a policy. the board to my knowledge herfb never had a idea of doing it themselves, just part of our mission is to have a policy and we haven't had one since- >> this initial discussion and i think a final report will be presented next months meeting. >> january is when it is scheduled to come forward. >> that's correct. >> thank you. >> thank you. any other--pamela. >> i also wanted to let you know that we will be asking the treasurer tex clackter to come back in again. we want to do it on a yearly basis to review their investments and we hope to that in february. >> thank you. >> thank you. >> are there comments from the

public on this item? seeing none, we are now ready to move to the next item of the regular item. >> thank you. iletm 8, discussion item. follow hadf up on on blue shield financial and claims accuracy and issue to encountered during transition and facets. page sipes-metsler, aon hewitt. >> good afternoon. my name is page sipe s-metzler and aon hewitt and like to do a very brief which i'm not known for report, on the follow-up to the blue shield of california transition. if we could go to page two of my report, just a brief reminder of what we were looking at mpt this was a

preimp lment ation audit looking how the transition from one claim system to another went. the purpose of the new claim system for blue shield was to make sure that these services are provided in a state of the art system and want to make sure the quality and efficiency would be there for the members and we were looking at both customer service as well as claims payment and we wanted to make sure the capabilities met current needs and were able to expand to any future needs that may come along rchlt there were two particular areas if you go to page 3 thatimeer looking at. the first of which is enrollment issues. there is one that remains. it is not a large issue, it impacts 45 member jz that st. the issue of medicare b only, which you had spoken about earlier today. that is because the way the facet system for

blue shield is set up, the first time you mention medicare it goes automatically to medicare a which is hospital benefit. the second is medicare b. the third line you would have medicare is c or d and then f. what happens is the way people soft does it, it only reports out if there is medicare it reports out one line. it is agnostic to whether it is a, b, c, d or f. and so when it come tooz facets it is automatically read as medicare a. we are aware of that problem, i'm not sure there really is a resolving it unless people soft added a null line into it, otherwise it impacts 45 members and they aware and will be keeping track of it. the

other areas of enrollment issues primarily resulted as-because of termination dates and this has been resolved and this is when the member was loaded into the system or when they were transitioned to people soft for whatever reason the termination date was not added and so that resulted in a error report, there was two cases where the spouse want listed and several cases where the spouse turned a month before the member actually termed and that could have been because of becoming medicare eligible which would not have been on our system but all those issues have been resauvt resauvled and these were administrative issue and not a personal issue that would have been reflected to the member. as i said, they have

been resolved. the other area that we looked at which was unexpected and think this was really a communications issue, was that during the initial two months transition, there were multiple invoices coming from blue shield to hss. this was anticipated because there was not a merger of the legacy system requirements with the facets system. the old claims, the claims that came in before november 1 and processed with the legacy system, they invoiced those out as one issue and then they invoiced those claims that came in after the transition and those were invoiced as a second and now since there is a full transition, there is no longer multiple invoices, but again it was just a expectation the

single invoicing would occur and instead they received two invoices for the same time period, which they were not expecting. that concludes my report. are there any questions? >> any questions from the board? thank you. >> thank you. >> any comments from the public? seeing none, we are ready for the next item >>itep 9, discussion item. new city plan outreach for medicare retirees. shannon haas, unit edhealthcare. >> j thank you for gichcking me

a few minutes to recap on open enrollment and outreach efforts. the first two slides you have seen before at the august board meeting. slide two is the communication overview. we hit all our milestones and currently in the month of december we just received the open enrollment file from hss, so we are in the process getting those submitted to medicare and getting those approvals in followed by the conformation of enrollment with the id cards as well as welcome packicts so expected to by in home towards the end of this week into next week. the next slide is our targeted counties for the educational meeting and those were based on health services

system retirees and were the most populated areas were. the next slide is the atenedance at each of the meetings. we had quite a significant outcome for both the san francisco public library, that was the first meeting and at full capacity and reccsf meeting auth ing october 12. we want to thank the hss staff and kaiser team for helping support those meeting through september and october. the next slide is phone calls we received 2 date. 2534 call said in total from the time period of september 1 through november 27. we hit our average speed of answer goal-exceeded it, it is a goal of 30 seconds and throughout the

months we have exceeded that goal. we also seen that the call handle time of 16 to 18 minutes is typical for a new plan as we answer the retirees questions. the next slide we do have an extra level of support for any escalated calls that come into hss. hss is able to refer those calls to my team for special handling. so far we received 11 calls and handled those. those calls were focksed on prior authorizations, specific doctor outreaches our help locating a doctor. we are maintaining a log and starting next week we'll meet with hss on a weekly basis to review open escalated member

items. >> can i ask a question? >> sure. >> we heard a comment that you may be busy outreaching to physicians who dopet want to accept medicare. of the ones that you outreached, can you give us some early estimate of your success or dein my opinion nile rate? >> i did try to get some more-the next slide does show our outreach efts to date and i try to get specific results but was not able to do so. i'm told we can only get result ozthen phone calls made, not necessarily the letters that go out. and as providers like simen and claims we update the provider list so that is where the outreach will change we start submitting-the willing provider list will change as they submit claims in january.

>> you will be able to provide information on that in the future? >> yes, we can run the analysis and let you know if those numbers have changed. the provider outreach slide is-this is a illustration of the blue shield disruption analysis we did earlier in the year. based on that roughly 85 percent of those providers are accepting the plan so actively submitting claims to united helt care today. we don't expect that to change in 2017. the 15 percent is the outreach target, so with those we have made 56 calls to out of network facilities and sent 246 letters out to specific provider groups. so, the campaigns are targeted at the practice level versus the doctor level. and then additionally, we have

done outreach to nationally 85,000 providers just this year alone for other clients and that goes to the benefit hss retirees. they are accepting the plan for other employer groups than hss would benefit there. >> can i ask a question? it says providers will mostly likely treat nppo members. does that mean they will or may not? what does that mean? >> if they are not a network provider they have the option of not treating somebody. however, if they submit claims today, our expectations that they continue to accept the plan in twnt 17. there should be no reason to reverse that decision. >> so in the second thing is why-this is blue shield, where is the outreach for sit a plan people?

>> city plan we did to outreach there as well and there was 90 plus percent were accepting the plan and we did do separate analysis. >> why isn't that on here? >> i believe those results were shared previously. >> because those are the ones that i would have been more concerned about. >> we can bring that back at the next meeting if you like. >> yeah. >> with respect to where issues are coming up, does it tend to be more with primary care physicians or is tend with more specialist where you have issues around accepting assignment? >> i don't know it is either of those. what i'm hearing recently is that when providers hear it is medicare advantage plan they assume it is hmo and it is not. if we talk to the providers

office, explain how the plan work squz how to bill unit edhealthcare typically they will offer to accept the plan. >> the difference with a hmo plan is they don't need to bill. >> they do need to bill united helthd care but they want to bill medicare as primary or accustomed to building medicare as primary. >> right. but i guess with a hmo plan a primary care physician is typically capitated? >> right. >> therefore they dont bill for servicess they cleck copay and are done and that is true for maybe specialist that are a part of the provider group. now they have to actually bill which means they incur expense of billing. >> correct. >> we don't incur expense previously if they were in blue shield flex plan they were capitated, so therefore they didn't have to submit claim jz wait for collections and so on. i could see why they would be unhappy with the

idea having to submit a claim but i think it is really important for all of the former members, all the retirees formally part of blue shield have to a clear understanding whether or not their provide rs will accept assignment and incur the cost to billing because if the feedback is and this is feedback we heard earlier, some physicians are saying you need to bill yourself. you need to pay 100 percent and bill and collect whatever you can collect from medicare, is that something they are allowed to do? >> i'll answer that or make two comments on that. one is, if anybody is hearing that their doctor will not accept a plan, they should contact hss or unit edhealthcare. we'll do the outreach on their behamp half. kwrrks we haven't gotten fl to a year where that is happening yet so don't know yet. the first visit is

sometime after january 1 because they are not away we have-they won't discuss it and continue to work under the capitation plan until the end of december so they will be faced with this. the next time you is a annual physical or something goes wrong and when you hear about the problem. i just want to make sure that in advance of that, we got a better idea how this will work. i personally relied upon your data that 85 percent of the doctors providing over 90 percent of services accept assignment. but i also have heard on a couple occasions before we adopted this and now just today that that may not be the case. i think that is a real hardship for retirees to have to deal with billing and collecting on their own from the medicare program around

care from the primary care physician or specialist they see. >> so, with the outreach we can proactively outreach and have been doing that as we are hearing from retirees so we encouraged through all these meetings retirees call us to verify their doctors are saeptd accepting the plan and doing that since october and will continue to do that as we are made aware of certain issues. >> could you provide a list of blue shield for brown and tolend or fill physician that show accept assignment? is that something you can provide an assignment listing? >> we dont provide a physician list of people who accept assignment. again, we can try to rerun these numbers against the willing provider list to see if it increased and outreach has been made and bring that ddata back at a

fuper future meeting. if a provider at the end of the day is unwilling to bill yubted healthcare the retiree has the option to pay out of pocket and submit to unit edhealthcare and unit edhealthcare will reimburse. it isn't ideal. we prefer the provider bill unit edhealthcare and deal directly with the provider and not have the member in the middle of that. >> if i understand correctly, they could submit the bill to unit edhealthcare and you would then determine what is usual in your reimbursement. if the provider billed $100 and you pay 45, you will reimburse the $45. >> correct. we reimburse based on medicare allowable. >> correct. >> i had couple complaint from

people not getting paid for outpatient psychotherapy. these are people in from 2016. be billed and say or just continue to get billed even though they just couldn't get it straightened out. this is like-the only thing about the specialist seem to be the problems. i think they did contact hss but it seemed to be still going on. that's a issue. and then the physical- >> can we ask you to have them call us? >> they already have. >> i am aware of one psychotherapy escalation now and working through that with shoban. >> going on for about a year. >> there are reasons why the claims were denied but in the process of being repeat at this poipt. >> the physical therapy issue, it is $25 a visit mpt i

consider physical therapy preventive because i had a lot of experience with physical therapy and now they say and the benefits reduced from a hour to half hour session and the $25 copay. there were a lault of people who complained about this at a seshz session. some of these members i know going like a couple times a week sometimes for financial therapy. if it is serious energy that is understandable. through the hmo's they were paid so poorly the doctors seemed to keep them coming more than in the ppo is my experience too. if you go and get good instructions and do the work and you don't need to come that frequently sometimes. that

can run into a lot of money paying $25 a session so i think that benefit should be looked at more closely. the physical therapist, you need a referral for medicare? they did before. >> there is no referral to see a specialist. specialist themselves may require a referral and if that is the case then- >> okay. i think that physical therapy is very important and i just think it should be affordable for people. >> the benefits are negotiated with hss every year so if that is something we wanted to look at-- >> also complained about people on your list. >> there are network physical therapist but they can see any physical therapist who participates in the network.

>> they don't have to be in the network? >> no, that goes for any plan doctor. we have a network but dont have to see providers in the network. >> acpuncture and chio practor isn't covered. i was told and you were presenting. you did not have to go to a medicare act punkrist because they are not covered anyway. >> routine chirow practor are sup lltal so not covered by medicare and you don't need to see a provider that participates. >> if they go to this doctor and he requires fund payment and they snd to you. ? >> that is correct. they pay up front and subplit to united helt care and pay usual and customary.

>> i sent one in a few months ago. >> they should contact hss if it is on the med cairb advantage plan they work with me otherwise my counter part if it is regular city plan. >> i wonder fou it will work on this plan. that is the way it is, they don't have to see medicare? >> there is routine vision and hearing would not be required to see the medicare provider. >> and randy scott the chair the president said he would make sure sthra representative from u c at all meetings to answer the questions we think will come up. it is very helpful if we have the same person a lot because- >> i will plan to atened the future- >> because people get different answers. that would be very

helpful. thank you. >> you're welcome. just the last two slides are just for your reference but those are the most common queckzs we heard at the retiree educational meetings. and it addresses some the queshzs that came up today as well. >> how many members did you get totally coming from- >> we are still working through the file, but at my last count about 12, 938. >> that is blue shield and unit edhealthcare. probably not kaiser? >> i wouldn't know if they came from kaiser or not. any other questions i can answer? thank you. >> i'm look at our benefit guide and the copay for acupuncture and chirow is $15 and physical therapy is $25 so we negotiate td that? >> that too bad. thasat lot a person has to go twice a week.

it wouldn't be bad if you had to go once a month but that usually isn't the way especially in the beginning with physical therapy. >> we can look at that at negotiations for 2018. any other questions? >> thank you. any comment from the public? seeing none, ready to go to the next item. >> item 11, discussion item. aca and hipaa compliance status update. aon hewitt. >> okay, ao nrfx hewitt. the acoupt lead won anderson had a accident and unable to present today so i'm presenting in lieu of her and i have with me my colleagues page sipes when you heard many times. the first document is

the hipaa compliant overview the basic just of this document is give you a summary of the highlighted bullet point you must comply with under aca and whether at this point in time is the benefits offered through hss and other groups in compliance with the requirements of the law and also in compliance with the helt insurance accountability act. >> thank you. >> we go to page 3 and have several bullets are such thichck things as preexist ing condition. must not bow based on health conditions. we go through these and seen a lot of these and the initant of accountable care act and offer coverage to everybody and integrate the existing programs and expand coverage. it was deemed a case of civil roit rights and

now time to offer helthd care coverage to aevd under terms and conditions. what can we do with what we have which is based on insurance principles and eliminating risk to allow everybody to have coverage and create a giant healthcare pool and taking care of inneed of the population. all these items whether you believe them are not are a attempt to do this and the law says let's implement the rule jz there were concern about that and they have been implemented as we sit here today. unfochinately as dr. dodd said some may change. that is a-i'm supposed to be a economist but have a few opinions there. page 4 there are additional items that we look at that we talked about up to age 26. we were

adeptly addressed why that will stay and emergency coverage in and out of network so won't go through all of these in the case of time. what is the take away? here is our list of items. are you compliant and it says status caizer say yes, blue shield yes, unit edhealthcare yes, you can compliant and operate a efficient shop in compliance of the laws voted into action whether it is the state or the fraul government. that is the charter of had rks is rks s and worked for the charter 5 years and say it is privilege to say you are compliant and good so that is it, you are good. >> thank you. any questions from the board? >> thank you. glad to know we are in compliance. >> i got a buzz saying that was

fun. we got one more don't we? >> hold on. are there comments from the public? seeing none, let's muchb to the next item. >> item 12, discussion item. overview for industry implication for hss. >> 20 pages of exceptional information and sound bites about--there you go. you got it up? okay. so, here we are and so that we don't repeat what we heard, dr. dodd in the directors report pretty much addressed 85 percent of this material already. so, that is some most current information you have is what dr. dodd

presented with where we are and adoption of people for helths and human service and how nay approach this and what they may or may not do. some of this will be redundant but will go through and give my best interpretation of what additional information that may be sail iants and give more consciousness where we are today in healthcare world. in saying that i want to make a interjungz which is all this is pertinent to understand and appreciate and not a whole lot of it applies to the benefits offered to the pupulation who are covered through the helt services system. because we sort of have a very adep th direction and incredible staff and we have incredible relationship with the vendor community so what we are able to do is take this information, say does this apply and we will get to where i'm going

with that statement at the end of the report. yes, we rusportswear of these, yes we are compliant, does this matter a lot to us? actually, no. it is terrible what it could impact for those uninsured but for this population we are in great shape and offer exceptional benefits. if you ask the level of benefits in terms of the plans offered and exchanges we are very rich set of benefits determined to be more of the platinum offering that you would get out of the exchange . it goes on and talks about who won. we know who won. on page 5 everyone of the items was addressed by dr. dodd. so will not repeat all what she said. we go on to page 6, all of these items you have this minimal essential coverage, the employer mandate and individual mandate, the employer has to offer coverage and certain level of

coverage. dr. dodd eluded to that. the individual mandate which they don't like is that you have to have coverage or you get assess a tax penalty and it was very low and now it graduates to higher numbers so that more likely than not and correct me if i'm wrong will be repealable. then we had medicare expansion. we have by these budget acts stalled out slightly already with the exsize tax we have addressed in a correct fiduciary and pragmatic portion by the board and was delayed because it wasn't implemented and also stalled out the hit tax which would pay for expansion of coverage and isn't assess in 2017 for anybody. for us we may minimal hit tax and it is a wonderful thing. so, with that being

said, we can go through all these things. they want multistate pools in the new prez dent elect platform and it talks about quite a few other items that are sort of like what dr. dodd said. i'm all the way to page 13. page 13 there is several cases where they said there are lawsuits now and some merit to discuss at this point but all this being said is that when healthcare reform came out the republican led senate and house now filed every suit possible to try to do things to stall this out. some of the suits have been ovturned and some in a stalled basis but now with no veto moust of what they put forward may change everything. there is lots and lots of

information. then we go to the exchanges. the exchanges are very important exercise whether or not covered california will continue in the state of california, i am not allowed to vote but i believe in covered california personally. i'm not supposed to say that and hope it does stay as a solid and formitable basis for coverage for the people of the state of california. it is important to me and believe in it. sorry got emotional there. i think this state stands and will stands for all its people and so with that being said, i want to say i would like to respond a lot of time talking about this, but i want to go to to what is going on with hss. what has been happening in the last 5 years and please turn to page 26. i'm sorry i went fast but we heard all this so it is

redundant to go through it. it is a lot of information. okay, on page 26, is the chart. the green one is a national business group on health, the other is a internal entity reporting system for similar peer groups and then we look at helths service system. health service system is you guys, so over the last several years people have been running on a average [inaudible] 5 to 6 percent a year. under the national business group on health, hbi sees a similar set of numbers so you stanered trend rate is anywhere from 5 to 7 percent. the benchmarks in the industry. 5 percent times 5 percent, times 5 percent. goes up $130 . we paid all our tax

squz changed all our benefit squz and complaint and couple years we went up 2 percent one year as a whole we wnt down 2 percent. kaiser gave a decrease for 24 months so over the last 5 years we have gone up a average of 2 percent a year. in a environment where things have gone up 5 to 6 percent, we have gone up 2 percent. we have done a good job. why has this happened? yes. >> i may be the only one confused. is this premium or expenditures per member? what are we looking at? >> it is premium. >> for all enrollees across the board. >> on this you look at the

premium rate increase every year but if you were to draw a rate trend increase the green line would go foyer percent, 4 percent, 4 percent, 4 percent. our rate increase would go 2 percent, so what you are seeing is year over year, you are not seeing the trend, so when we went down that huge amount for 2 years that lowered the twend our rates increased so we are far below hbi and national business group on health? >> yes. >> like half. >> far below, half. why is this the case? it is good stewardship and direction. you are on the cutting edge of aco. you have a employer group and provider

panel discussing provider initiatives to clean up the delivery of medical care and give excellent care in the same steps. i dopet say that in the most eloquent way but you are at the table with the providers, the insures are behind you and they hear you and they take care of everything they can and you have a active director who sits and talks in great detail with the kaisers the blue shield about what they are doing and looks at utilization stats and have been part of that as the analytical person for these 5 year jz never seen such a dynamic process in my life. the numbers speak for themselves. at the end of the day, what was the question rapd randy scott asked? he said this is going way up and there is

number saying the rate increase for 1 year is 22. percent. it was 9 percent in california. does this impact us or need to worry go nothing to 2018? i'm saying clearly-i'm not suppose today say this but i wouldn't worry that much. we are in a great shape and we are doing all the things we feed need to do interacting with the provider communities and very agress rfb and analytling and dynamic fashion. i know what is going on out there and there is a lot of worries. i get it. am i worried about hss going forward? as long as i'm involved i'm confident we will do the same level of work per the fact that we have the excellent director and support staff in this whole process. that's my market trends versus hss trends. yes, sir?

>> i appreciate you clarifying this is the premium basically. so, just to make sure-it is suspicious to me the mbgh is flat at 5 percent. i come back to initiatives and future ways to conserve or help with cost escalation. do they just basically-are they big enough group to say we are only going spend 5 percent more per year and then all of the groups, the medical groups and insurance plans they contract with just- >> no. that's the number for the people that are in that collection that create that denominator and increase went up ochb average 5 percent a year. that is the result of rates action taken. >> the national business group on health ask a membership organization of employers. j

yes. >> when you look at all those employers they had a 5 percent increase. >> i want to object one poinlt. our benefits never changed in the last 5 years. several of those employers adopted high deductible health plan. are their medical trends going up and cost structure and relationship going up faster than ours because of our relationship with the provider groups and vendors behind me. most likely they are so that isn't saying if they had rich set of benefits in 2012 what would it have been? they reduced benefits and we that in it 10 counties. we have never changed benefits. a copay or something since i have been here. several counties introduced large hsa and high detucktable plans and changed

everything and when we look at year ovyear change that doesn't adjust. that is one think we said wasn't correct about the program. it went up this amount of money but they changed the benefits and i think dr. dodd would you concur that is a fair statement? it is very true. >> we saw that in the 10 county analysis that it isn't as accurate to once was because we dont caur u compare apples to apples. each county has high deductible plans or high copays but it is blunt instrument and what we have to use. >> the average of the average whatever they offer. >> this would include the employer and employee. if you think about the city we have a rich set of benefits so the total cost of benefits are probably just all things equal are a bit pore on the high side than other employers that offer a more limited scope

of benefit. if you look at aquil employer cost year over year with the trend line rather than percent grouth or showed employee costs that are quite low because our employer picks of the majority because of the average and other arrangements you may say we have a rich plan with somewhat higher cost but managing the grouth in the cost without reducing benefits and passing it to the employees. some oof the others if you look at total premiums you are not looking at the employer cost which could be a lower level and all this grouth 5 percent a year is shifted in large part to their employiees. there is a lot of subtlety and additional analysis thereat is very interesting to

see. we have a rich benefit, medical,dantal and vision and all the of the the things and our formularies qu everything else it is very rich. >> i say that. >> i think it is interest to see that too. we may see the cost is high but think we would see the employee cost is held study and scope of benefits is held steady or increased over the years and so there is lot of different ways to look at this. this is a very high level premeial only numbers so it really get to- >> we can look at-when we do our 10 county this rates and benefits cycle we will take that advise as action and we will give you more in depth analysis as to how to do that. that our privilege and justified at this poipt because

we are at the point where we need to go a step further with that work. excellent. yes, sir. >> je i think this is really critical and part of it is do we- are there measures for what-beyond premiums, the average healthcare expenditure of a family of 4 or single person in various demo graphics, across similar employers or whatever to look at that. we heard a complaint about possibly copays for physical therapy and for people who need physical therapy that is critical, but if in order to keep our premiums low we have to raise the copay for acupinkture to off set the premium for over wn doesn't go up then we need a sense how enrollees are spending the money beyond

the premium. are there measures of that? >> absolutely. since we have not changed benefits we haven't done this but when we adjust copay increes and [inaudible] when we do that we bench mark against all the plans in the area to give a state where they are versus where you are. yes. >> i don't think we did that this year with copays. >> no, we didn't do anything, we can. >> the prior year we did look where the city and county fall and private employers. our copays for physical therapy have not changed since our copays for physician visits have changed and it is at least 6 years and it not justz physical therapy. when i got chemo and go to kaiser three and 4 time-feel a copay. anyone with

a chronic illness who needs care is feeling the pirch of a copay which is why we haven't increased them in the last 5 years with the exception of increasing the copay for kaiser outpatient surgery which remains at 35 dollars which is a bargain. you can't have a plinter removed for $35 and i just had knee surgery for $35. blue shield copay for outpatient surgery i believe is $50. >> it is 50 $50 dlds >> we could propose to kaiser we change it next year. it won't make a difference in the ovrate because outpatient surgery isn't one of the most common treatments, but it is extremely

low. but we haven't changed the copays in 5 years. >> $25 twice a week is $400 a month. that is maybe fine for people making 6 figures but for people not it is a lot of money. so, just saying and curious why the acpuncture and chiro are $15 >> those are providing through ash network through a contractual relationship with the ash network. >> we can address that but in turchls of this presentation-

>> are there comments on the public? seeing none let's mover to the nextitism >> item 13, kis cushion item, report on network and helt plan issues if any. >> good afternoon. kate cesler, kaiser. i wanted to let you know we have been looking carefully at the issue of drug take backs so unused prescription drugs out there and obviously a big issue that everyone is trying to deal with and pleased to announce that this month we started installing drug take back kiosks open to kaiser and the public so they will be able to drop off unused prescription drugs safe secure place where the information is protected and also others are protected. we are started to install those this month more in january and wanted to make sure the board

know that. >> any questions? >> having been a practitioner this is a big deal. i forget if it was oakland tried to get drug companies to pay for these kiosks because obviously you may want to highlight what happens to those drugs once they are deposited they are not redisstrebted to members. >> absolutely, they are not redis#2rib9ed or shared. >> or not shared >> they are kept out of the water system and childrens hands and others they are not prescribed for so very important. it was difficult for a while because they need today be mailed in and that is a option. there is a option to be mailed in but this makes it easier to drop them off. andope open to public as well. >> we have communicated to the

members >> we rin the process knhunicating that and just starting to put them in this month so this is just starting now. >> thank you. that is a good program. >> thanks. >> paul brown, area vise president for account management at blue shield. i want to bring to the boards attention our ongoing negotiation with sutter health. our contract with sutter health ends at midnight december 31 of this year. blue shield and two other vendors are negotiating contracts so sutter is quite busy trying to close out these 3 contract negotiations. we have been negotiating since july as we get close toor the end of the year discussions intensify. both

sides are negotiating in good faith. i spoke with our contracting team earlier this week and they are actually expecting a counter proposal back from sutter tomorrow and this is very common where the counter proposal goes back and forth but we continue to negotiate very hard on rates and terms of the contract and we hope to have that done by december 31. in the event that we dont get it done by december 31, there is a provisionary period in the contract in the existing contract that the initant is take the member out of the middle so come january 1 wope dont want to negotiate over your members our members and suters patients. there is a provisionary period whereby members continue to be see sutter providers for a ongoing period of time.

i believe it is three months to april 1. the contract could terminate at any point before april 1, and it is important to note that blue shield has a obligation to the department of managed care to provide members with 60 day notice before we change the primary care physician to non sutter provider. as i speak right now that would not happen until mid-february so as of today about a mupth and a half into the provisionary period and we will continue to do that providing both side continue to negotiate in good faith. the other point i want to bring up and let me characterize this. this is approximately 6600 of your members primarily palo alto medical foundation and alt a bates. it doesn't include brown and tolend. they are not part the sutter

provider network so limited to 6600 members. in the event we go to termination there is a continuity of care provision that is required by the department of managed care and we had that in place with all our contract provisions state wide and it provides folks with chronic conditions pregnant mothers, people with scheduled surgery and a host of other servicess, behavioral health, children under age 3 to continue to see their sutter provider in the event the contract ultimately counsels with them. givethen magnitude of how big sutter is in the market, i thought it was porpt that we bring you up to date and happy to do that at the january meeting as we get closer to a deal with sutter. >> you will have a deal? by january? >> hopefully i won't have to

speak. >> say a provider schedules arthraus scaep after the potential-the end orphthe period and the contract is terminated, what happens to the procedure? is that still paid for? >> yes. if i can give a example. in the unlikely event we terminate our contract with them february 28, if a provider scheduled a surgery in february for a date into the future that becomes covered and it will continue to have that done by the sutter provider. >> okay. >> thank you and hope to give you a update next month. >> good luck with that. >> i understand how difficult it is to negotiate with sutter these days. it is kind of-the 800

pound guerilla in the city and there are not a lot of orebt alternatives and it is hard to offer a employer a plan that doesn't include brown and tolend. >> we have a pretty significant market share in the area, so the optimistic side says we both need each other which is why we negotiate in good faith. >> right. okay. thank you. >> any comments from the public? any other network reports? other than that--any comments from the public? seeing none, let's move to the next item. >> iletm 15 discussion item opportunity for the public to comment on matters within the board jurisdiction. i think i skipped one. item 14, opportunity to place items on future agendas.

>> any comment s on this 1 from the board? >> no. >> any comments from the public? seeing none, let's move to the next item. >> item 15, discussionitement. opportunity for the public to comment on matters within the boards jurisdiction. >> some of us always want the last word. i just want to say i want to wish you all very happy holidays from all our a accsf and those that attend and and wish happy holidays to the incredible helt surfacestaff. serves us well i get up set and thank you to the staff and wish them very happy

holidays and hope everyone will stay safe over the e holiday jz see you next year. thank you. >> any other public comment? so, i would like to say thank you to the staff for all the work that you have done especially on the successful open enrollment and happy holidays to everybody. stacy [inaudible] stay dry and stay healthy. thank you. >> likewise. >> okay. with that, this meeting is adjourned.