>> good afternoon, i would like to call the regular meeting of the health services system board, city of a county of san francisco to order. would you please stand and

recite the pledge of allegiance. >> i pledge allegiance to the flag of the united states of america. and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. >> secretary please call the roll. [roll call taken] >> clerk: we have a quorum. >> president scott: action item one. >> clerk: approval with possible

modifications of the minutes of the meeting below, april 12, 2018. >> president scott: you have the draft minutes of the regular meeting before you. what is your pleasure? >> i move to approve. >> president scott: a second? properly moved and seconded that we approve the minutes of the regular meeting of april 12, 2018. are there any questions by members of the board? is there any public comment? hearing and seeing no public comment, we are now ready to vote, all those in favor signify by saying aye, anyone opposed, it carries unanimously. we'll go to discussion item two, secretary. >> item two, general public comment on matters in the board's jurisdiction not appearing on today's agenda.

>> president scott: are there any matters that members of the public wish to comment on that are not referenced in the materials attributed with the board material. i'm pausing deliberately, because i know visiting with the executive director, that there have, that there have been some concerns regarding the dependent audit. so, if there are those members of the public that want to make comments about that, certainly invited to come forward at this time. and we thought we would do it this way so that people who might want to get on with other things during the course of the afternoon would be able to come, make their comments, and then leave if they chose to do so. but seeing that the first person coming to the public comment will be with us for the balance of the meeting, please.

>> sorry, thank you for jogging my memory. i knew there was something i was supposed to talk to you about. good afternoon, commissioners. i have heard from a number of my members, i've also -->>president scott: and you are? >> if i recall correctly, claire savonski, from the retired employees from the city and county. and heard from our members and some of the other retiree groups they understood and did not have a problem with this, but learned the retirement system is getting ready to do their dependent audit and one of the problems that everyone has had and director yant and i have already had discussions about this, but it wasn't very clear that this audit request came from health service and if there's any way to make sure that people

understood it wasn't a scam, and it wasn't something that they should have just thrown out and ignored, and i hope that there will be some attention given to the responses so that if there are people who didn't respond that we find out why, because they saw this midwest address, they saw a company. there was health service on there, but it wasn't that prominent. it looked as if someone could have just taken it right off of any of our materials and pasted it on some other materials to make it look legitimate. and so a number of people have commented about it, and others have not understood exactly what they need to submit. they are trying to dig out the marriage certificate that probably is 50 or 60 years old at this point, and they don't know where it is. and so they might need some assistance from some of the staff to say well, if you have a joint tax filing, redact all

this information and let us know. but it has been a problem and we are trying to send out e blasts to tell our members this is a legitimate audit and they need to participate. but bear in mind, retirement is about ready to do theirs and so it's hitting all the retirees all at once and i think it will be more confusing. >> president scott: thank you for your comment and director yant will give us more update later in the meeting. any other public comments, hearing and seeing none, a committee of the whole in rates and benefits. and so with that, we are now down to an action item three. >> item three, action item, approve best doctors 2019 renewal aon.

>> good afternoon, anne thompson with aon. >> president scott: good afternoon. >> the right one up front. >> president scott: our first technical test of the afternoon to see that we will have presentation projected on the screen. there it is. we are working well. >> so, we spoke last month, correct, about, or maybe perhaps the month before, actually, about the best doctors renewal and that we had a three-year rate guarantee in place with them when they implemented in 2017, so 2019 renewal the last year of that three-year rate guarantee at the 1.40 per employee or retiree per month. asked by the board to go back and speak with them about the pricing either the structure or a concession on that fee going into the 2019 renewal. and through conversations with

the director and with aon, we did have a concession that came back, 1.15 per employee or retiree per month for the 2019 plan year. so that was the response from best doctors, that's on the table currently, and our recommendation for 2019 is to renew best doctors for 2019 at the 1.15 per employee or retiree per month. >> president scott: you have heard the recommendation, members of the board. any questions that you have, comments regarding this recommendation. >> i have a problem with this, because, what i really had a problem, i saw the statement that was to avoid malpractice, direct conversations be between the client and physician, providing the expert review are

discouraged. so, you know, a regular physician, you know, has the problem with being sued and so these, they can basically say whatever they want to, and will not be exposed to a lawsuit. i have a big problem with that, actually. >> president scott: so you are citing what portion? where does that reference come from? >> i guess when -- when dr. follansbee came back with different references about clarification and things, that that was something that i was kind of surprised about. >> president scott: dr. follansbee, do you have a point -- >> commissioner follansbee, m.d.: i think it's probably a very standard protocol and the -- in order to avoid, since there wasn't a face-to-face meeting, to avoid a sort of patient/provider contract which

would be open to litigation. the name of the consulting physician who has reviewed the case in detail and written the report summarized by the best doctors staff is made available to our members and they can, on their own, establish contact to establish a patient-doctor relationship. if the patient is in san francisco, there are 1 or 2 in that field that would not involve any travel expenses. but otherwise, they would be making their own arrangements on their own, not only for payment and transportation, but also to establish that relationship. i find this to be actually pretty standard. and don't have a problem with it. >> president scott: thank you. any other comments -- i guess i want to go on the record

regarding this particular benefit program. when we approved it a year ago, or two years ago now, 17, 18, 1 of the steps that was supposed to be taken was to get a very clear and documented statement from each of our major health plan providers as to what do they do and what is their process around second opinions or expert review or what have you. and given the transitions that have happened with our executive director over the past year and so forth, we never quite, and the overwhelming amount of stuff that had to be prepared for for a prior open enrollment, as well as this one, and the great leadership of mitch and the rest of the h.r. h.s.s. staff, we were not able to say ok, let's do that also. we just did not get to it. so, it is my strong

recommendation and request that if this is approved, this we undertake, and i have talked with director yant about this, is to get a very clear defined statement from each health plan provider as to what kinds of services and procedures and processes they have in place that would be similar to what best doctors does. we know about appeal systems and all the rest of that. we know they all have that. but in the typical patient relationship, occasionally people say, or would like to have "a second opinion." and when that's done, how is it being done in the health plans, or how, is it just an internal review, or outside consultation and so forth, so we want to have a robust defined statement about

these processes. because a year from now the question is going to be on the table, do we renew our continuing partnership with best doctors or do we try to reconfigure some subset of services or do we say our health plans are providing all that is needed? so, we need to begin that process now. i've had the conversation with director yant, but i did not want to make that statement public because we collectively as a board suggest we want to do this, but at the same time, do the internal review to figure out kind of how much of this do we really need from best doctors or any other vendor like best doctors. so, i put that on the table with whatever assent i may give to the upcoming motion. any public comments or other questions from the board. >> just a question. obviously 1.15 is less than

1.40, still over a million dollars a year. my recollection from the last meeting, 788 people availed themself of second opinions in the last year that was sort of analyzed. it works out to be quite a bit of money per second opinion, in my opinion, a very large amount of money per second opinion, and while i think it's wonderful people can get that, i don't believe that in any instance any person wanting a second opinion would be incurring that amount of cost to get one, and so i find this kind of exorbitant and easy to say it's only $1.15 on each, per member per month, but it's still a tremendous amount of money. so, i still have difficulty with this. i'm not sure this is their bottom line, i don't know if it's their bottom line. you know, i -- i think i would like to see something far less expensive for a service like

this, specifically, particularly given i think the comment that they don't take responsibility for any liability for the opinions that they express and that bottom line, if they don't take responsibility for it, it seems like a tremendous amount of money to pay for someone not taking responsibility for their judgment. i'm not certain what i'm going to do about this. >> president scott: other comments? >> yeah, i'm going to support the recommended action for a couple of reasons. one is number one, i think that we had individual testimony, both in the presentation but also in this meeting from members who availed themselves of the service, and so i think it's still not clear what, to our members, what are their options. and we do need to delineate that better and make sure the staff understands and knows how to

advise the members. number two is that i just want to remind us that we pay this 1. 1.40 for retirees, and not dependents, the range, 650 lives, do the math. this does reduce the cost and not our entire subscriber base, i would say. and so, number three, at least some of their, when i reviewed the consultations and all that, i found them, you know, from the information provided actually quality, and useful information, how different that was from what the member could have received, i don't understand necessarily and i think that's part of the mandate that we are asking, and so i am going to support this as we gather more information, but i think that our continued evaluation is critical to address future recommendations. >> president scott: any other

questions or comments from the board? >> support the recommendations understanding that the 2017 was the first year we i am mplements doctors, and not all the members know about the doctor. if all they go to the doctor is just preventive care and does not go to the hospitals or not, certain critical decisions, they would not know what best doctors offers. but it's there, if needed. and testimony that we got from all those people, all very positive. so, it's there when the members or retirees needs it. so, i would fully support the recommendation. >> president scott: commissioner ferrigno. >> commissioner ferrigno: what is the onous of the insurance companies to support whatever

best doctors said? like in-care providers and a lot of times insurance companies say no. so -- >> president scott: what -- >> commissioner ferrigno: we go to best doctors and they say it's a better protocol and the insurance company says it's not an in-care provider, too bad, we don't care. how does that work? wondering for insurance companies often decline services for special things like out of care providers and things of that nature. so, if we pay for this and best doctors makes a recommendation, is there, you know, a responsibility or do we hold the insurance companies responsible for following up on that, or is it just, you know -- more information but you can't do anything with it? >> president scott: director yant. do you have any insights? and commissioner follansbee had a lot of interaction, so -- >> my understanding the best

doctors are offering an expert opinion for you to take to your current physician. if you choose to have a relationship with a doctor, with one of those doctors, or someone else that is not on your plan, then you would be out of network. so, gs yeah, there's no direct relationship. >> it's not a mandate. best doctors opinions cannot be mandated -- >> i think my question is more that the insurance companies, do we have a conversation with the insurance companies to say we have a best doctors program and we would like you to take a look and consider treatment options. for certain insurance companies, whatever code is, if you are out, doesn't work? >> if i could -- i can only project how i would react if someone came in with recommendations in my area of expertise, and at least through

my conversations and my review of the cases, a, i think that the reviews and all that were serious and well founded. i had asked, i think at the three-month review, if some of the reviews actually were referenced because some of their corrections were still in the standard of care from national societies and they said yes they were. and my thought is that if there were obviously all of our enrollees have contracts for co-pays for services, and so there will be no test, that if the provider and the member decided together, the local provider and the member decided together the number, i think the contractural obligation would be as that contract, co-pay for a special scan might be quite a bit more than a plain x-ray or no scan. but i don't see there would be any particular barrier, but

again, it would have to be a discussion between the member and that provider who, if he or she strongly disagreed, would probably say well, we have another specialist in our system, i would like them to see you, that would be covered by malpractice. and review not only my recommendations and notes, but also this, and you get another opinion because you can't seem to come to some agreement, and that is certainly i suspect within every health plan's standards. >> director yant. >> i would just comment that these types of services are relatively new in the marketplace, and there are a number of other programs that are similar to this that are being offered across the country. i learned earlier this week at a workshop that there is some new ways of working with these types of organizations, too. there was a situation with one company who had all of their vendors working together in

consultation on particularly challenging cases, and the vendors, the plans themselves worked with the expert opinions where it was deemed appropriate. and so i think that it's kind of an open question now, there's a sensibility among many that there's a place for this type of service. i don't know that any of us have clearly defined how best to utilize it. i share the concern that our members are not knowledgeable and are not accessing it to the degree that we projected. so i think we could look at this as entering a third year of discovery with this type of vendor service and work with our other plans to see what is appropriate, and how it could work optimally to serve our members. i don't know that we really know yet how this can optimally work. it does seem clear there is a

place for it, especially with some of of the more complex diagnosis, people are having high levels of anxiety, perhaps interfering with the recovery or wellness. so, i would recommend we continue to go into it with the eyes wide open and think collectively with others, not just this vendor, but similar services and find out what they have discovered as well. >> president scott: thank you. any other commissioner comments, observations? is there any -- what is your pleasure? >> make a motion. >> president scott: i'm ready to accept a motion. >> i move that we continue to offer best doctors for plan year 2019 and rate for 2019 plan year. for best doctors. >> president scott: you've heard the motion. a second? properly moved and seconded we

accept the recommendation that we continue to offer the best doctors for 2019 plan year for s.f. h.s.s. members, and that we recommend further that that relationship be defined and contracted for 1.15 per member retiree per month for that plan year. is there any further discussion by members of the board? >> i really have a tough time supporting this, but if -- if you do really explore, which i think we should be doing, why our present vendors, what are they doing for a second opinion, we need to know that. and my, and that's a face-to-face opinion. and dr. follansbee has said before they do. so, why would we need this if they do, and especially if the second opinion is not in that separate group. so, i don't know why we need

this, if that's the case. >> president scott: and to add commissioner breslin, i am in absolute concurrence, we were supposed to have done that step before this year, we all know we went through a transition. so, that's what is on the table as far as i'm concerned, that would be a priority that we get a very clear, we all have public presenttations and so forth from the plans around what they do in this area, how they communicated to the members, is it one of these things that you have to sacrifice your firstborn in order to get the second opinion, or is there more routine process and how does that work, what do we do, so so on and so on. and that's the working mandate if we should endorse it this year. we should not be paying for redundant services, that's why i'm saying if we should

discover, all right, here's the range of services that we are getting for the dollar and $0.15, the health plans are providing 80%, it's the other 20% that could be useful and maybe that's the services we contract for, and if best doctors can't provide it, may be provided by another vendor. so, that's the kind of rigor and review that i'm suggesting if we proceed with this in the affirmative. all right. any other comments from the board? >> i think it was foolish to go ahead and add a million plus to the rates without knowing anything about this sort of thing. >> president scott: i understand. thank you for that comment. all right. any public comments regarding this item? before we take our vote? >> good afternoon, commissioner, retired employees of the city and county. we had several, not very many, members that took advantage of

this. in one case, there had been a second or even third opinion within the health plan and the two alternate opinions didn't -- they differed, and the employee, or the member was very confused and not understanding what to do. and when they used the best doctors service, they discovered that there was one more prevailing recommendation with regard to treatment and some additional tests, and it gave them a great deal of confidence and the outcome was very positive. the other cases involved surgeries and some pretty drastic cancers, and they found that utilizing the best doctor services gave them some additional alternatives which they found again helped them make the kinds of decisions they felt were right for them and so they appreciated it, and i

didn't solicit any comments but they came up to me at meetings and said god, i've used this service and what is that doctors thing again, and it was really great, and we are really grateful for it, so please keep it and they were grateful. it's not a lot of members, i understand, but i think what happens is at least in the population that i'm representing, as we get older we have more conditions and we need a little more reassurance, even in using a second opinion. but we are more likely to have more issues and problems, and i think we also have a number of employees that work in areas where they are more likely exposed to materials that may create some other conditions and i'm going to mention again all of my people who live in an area, certain kinds of materials and conditions they work under that do have the opportunity to bring about very bizarre

conditions, i think for a small population they have a remarkable cancer rate and things like that that deserve investigating. this kind of service helps them very much with alternate treatments, or at least to feel the advice they are getting is adequate or is the best that they can get. so, i would strongly support you renew it for another year and i appreciate all the discussion, thank you. >> president scott: thank you. other public comment? yes. >> my name is diane erlick, and several of our members have also used it and found it useful. i used it last year and i've just opened a new case this year about another condition i was diagnosed with. and i would like to say that both the intake interviews i had last year and the one i just had were far more comprehensive than anyone ever did for me at

kaiser, and the closing interview i had the first time i used it, the doctor from the cleaveland clinic, a cardiologist, spent more time with me explaining things than anyone at kaiser ever did, so i would strongly recommend you keep it. and if you do not keep it, if the kaiser members have an opportunity to go at kaiser's expense for a second opinion outside of kaiser, i think it's really important to get another opinion from an insurance company that is not your own, a dr. representing an insurance company not your own, where they may have a party line. >> president scott: thank you for your comment. any other public comment? hearing and seeing no, we are ready to vote and ask for a roll call vote on this. [roll call vote taken]

>> president scott: thank you, the vote is unanimous. with the very clear condition that we conduct the analysis that was described during the course of the discussion. all right. thank you, madam secretary. now at action item four. >> item four, action item, approve delta dental stablization reserve, aon. >> tom ricks, consultant with aon, and i will keep my remarks brief. don't hesitate to stop me with questions. the first item for the dental program is the stablization review that we do it annually, once we get the claims experience from 2017, per policy. we apply the stablization reserve before moving on to discuss the rating action for 2019. so, this deck is focussed on the

stablization reserve for the active dental p.p.o., your only self-funded or flex-funded dental plan. slide two, our recommendation is to apply the stablization policy in this case, would result in $4.2 million amount to be applied to the 2019 rates, to reduce the 2019 budget for the dental program. as all see in a moment, based on the 2017 claims experience, about $6.3 million of surplus is generated in plan year 2017, to be added to the stablization reserve which helps generate that $4.2 million reserve release plan for 2019. the breakdown of the 2017 year, or the reconciliation is found on the following slide. here when the 2017 rates were set, we were expecting about

4. or $48 million in program costs for the plan, so including administration fees and claims. wa we experienced was $44.9 million, so a surplus. and enrollment increase, resulted in increase in the total contributions collected shown on line four. so, the difference between the increase contributions, as well as the reduction in claims, resulted in a planned surplus, where we had originally forecasted for the stablization release for plan year 2017, $2.4 million shortfall. we were planning to spend money for the stablization policy, what happened, enrollment went up, claims came down and generated a surplus, so if you compare the real life surplus to the planned stablization reserve

release, $5.7 million addition to the balance of stablization reserve. additionally, line six, increase in the contingency reserve, adds to the overall surplus, $6.3 million surplus for plan year 2017 and the active dental p.p.o. on slide four, you'll see the reserve balance. so, the balance as of december 31, 2016, $9.5 million per policy. one-third of that was allocated to the 2018 plan year rates, $3.1 million. leaving a carry forward balance of $6.4 million. as we discussed 2017 generated

surplus, 6,292,000, total stablization of 12,681,000, per stablesation policy, one-third on the 2019 plan year dental rates, or $4.2 million, which will leave $8.4 million to be used in future years per policy. aon's recommendation is that the board applies the $4.2 million to the 2019 rates per policy. >> all right. you've heard the recommendation, are there questions? >> i guess i have just -- a couple of questions. >> commissioner sass: seems over the years we are increasing the stablization reserve by more than the amount each year we are decreasing using the one-third policy, so the balance keeps growing. in looking at the financial report from pam levin that comes up later, she mentions another

$5.4 million increase in the fund balance due to favorable claim experiences, in 2018. so, we are already looking at a larger surplus going into 18 than you are proposing taking out of it. so, if i'm reading this correctly, it sounds as if this stablization reserve will continue to grow year after year by more than we decremented. and does it make sense -- i know we have departed from the one-third each year with respect to the city plan, but seems like a situation departing from the one-third per year would make more sense than perhaps even for the city plan. so, raise that i want. >> commissioner sass, do you have response to the assertion or assumption that he's making? >> i do.

we recognize while we have been planning to spend, overbudget the plan, we have been year after year creating a surplus. we are going to dive more into that, the next deck, the 2019 rating and we have recommendations to both get more aggressive on the budgeting for this plan and effort to reduce this surplus, as well as possible plan enhancements that will benefit members to also spend down the reserves which have grown to be, i think, higher than otherwise we would have. one caution i would say on the extra spend down in one given year is just to be cognizant of the rebound. so, if you spend a lot of money and you don't have as much the next year, there's going to be a big -- you can cause the rates to fluctuate a lot. so yes, certainly our opinion as well it's spent down to a more reasonable level. >> are there other comments or questions from members of the board? plan enhancements in my

experience, also tend to drive up utilization, particularly when they are favorable. so, something to be put in this calculus as well. any other comments from the board? what is your pleasure? ready to entertain a motion. >> i move that 4,227,000, 2017, applied for the delta dental active employee p.p.o. plan for plan year 2019. >> you have heard the motion. is there a second? >> second. >> president scott: properly moved and seconded we accept the recommendation to approve the rate stablization policy funding of 4.2 million, applied toward a buy-down across all tiers for the next plan year for active employees.

any other comments or questions from the board? is there any public comment regarding this item? hearing and seeing no public comment, ready to vote. all those in favor, sig any at this by aye, all those opposed? ayes have it, unanimous. next item, please. >> item five, approve delta dental rates and contributions, aon. >> hi. tom ricks with aon. >> president scott: tom, give your title. >> assistant vice president and the actuarial team. one of your actuaries for the past several years now. >> president scott: is the title of vice president recent? >> last year. >> president scott: i thought so. congratulation, belatedly. >> thank you.

so, this presentation, we are going to walk through all of the dental renewals, not just delta. we will spend a significant amount of time talking about the delta dental active p.p.o., as mentioned in the previous presentation we have several recommendations for plan changes for that plan, and in general, the fully insured plans and retiree plan, fewer items for discussion. if we are going to start on slide three with the active plan, and as we review the 2017 experience, as we discussed, 2017 generated a significant amount of surplus, added to the prior stablization balance, and before applying any balance to the 2019 rates, stablization had ballooned up to 28% of the 2017

plan costs, fairly large amount of reserve. so, suggesting methodology changes how the rates are set and potential benefit enhancements to benefit the members going into 2019. the next slide has a table of the actual experience for that plan, a lot here, but starting on the left we start with enrollment by month, and what you are going to see is subscribers and total dependents increasing slightly throughout the year, about 31,000 total employees on this plan, with additional 40,000 members. we then show the rates, the monthly premium budget about $48 million for 2017. and administrative fees,

$1.6 million. you paid $43 million in paid claims, which resulted in a 93% paid loss ratio, on an incurred basis, the claims that were incurred and attributed to that plan year, you paid $42.8 million, resulting in 92% loss ratio. so with the stablization balance, we would have planned for a loss ratio in excess of 100%, and what came in was 92, 93. the next slides, slide five, after he shows this is not new to 2017, in fact, 91 to 94% loss ratio for the past several years, and this has generated the stablization reserve. the stablization reserve actually was only established in 2014 for delta dental, so this plan has been generating surplus for quite some time, and the

policy put in place to formally amortize that surplus back into the rates. six shows the history of the reserve build-up, so this will show you the starting point of the reserve as of the end of a specific plan year, so in 2013 there was none, the policy did not exist. and then by the end of 2017, the carry forward would be going into the next rating cycle, $8.4 million as we discussed, and if you look in column d, the last row with the value, what you just approved, $4.2 million to spend in plan year 2019. >> all right. >> i'm going to move on, unless we have questions. but the -- so the surplus is really generated and slide seven by very favorable claims experience. so, over the course of those years, 2013 to 2017, market trend rates are about, between

2.5 and 3.5%. so, much lower than medical, we expect dental to trend closer to normal inflation and you can see on the graph the dark blue line at the top is what was used in forecasting, and the black line below is what you actually saw from an experience perspective per employee per month. so, you can see that you have trended significantly below and even negative trend from 15 to 16, and 16 to 17. so on average cost per member are going down during those years when we would expect at the very least inflationary. >> president scott: should we construe that people are not using the benefit from this? >> i think we have seen some shift in utilization. i think there's been a lot of efforts to control inflationary price on the dental side. and then we have also seen a population shift, so we have seen between plan 2017 and

actual 2017, we saw over 1,000 member increase and that can cause -- >> president scott: are these younger people, older people? >> different utilization patterns. i don't have the exact numbers here for you, but we can bring them back at a future date. we certainly do encourage people to seek appropriate dental care, the message here. >> could i -- yeah, i also am curious about maybe understand this a little better. certainly one option is that i don't know what share of the dental insurance market delta dental has in the country, but one possibility is that their provider reimbursement is as a control the marketplace and many communities, that they have also maybe are not reimbursing providers at an inflationary, you know, increase or something, and that would show up as well, i would think.

if their provider reimbursement has either diminished or not increased. curious to know a little more about why this has happened and how, you know, not because equipment or devices are cheaper in the dental offices, i don't think. fancier x-rays, etc.>> yep. so, we can certainly do more research and bring that back to you. i'm sure there's many factors, but we will seek to isolate them. >> i have a question, too. the employee rate, 64-51, where did that figure come from. actually, the employee, pays -- >> that's the total budget premium, not what employees are charged in terms of contributions, but the budget rate. so that, is what we set and you approve in these presentations. >> i'm looking at what the book says for 2018, what they were charging. so, total employee and employer

rate, 5358, plus $4.62, the employees' share. that would not add up to $64.61. >> focussed on 17, so if you compare the 18 rates, i believe we had reduction. >> this is 2017? >> reviewing the 2017 experience. >> sorry, i didn't hear you say that. >> the rates in the book of biweekly, tom is reviewing monthly rates. >> right, right, i'm reading off monthly rates. >> have we clarified the question, commissioner breslin? >> i'm sorry, i looked at the wrong year. >> ok, i want to be sure we are on the same page. please proceed. >> so, recognizing that we have a significant stablization balance built and that trends have historically been below ex peck addition, going into 2019, mike and i feel strongly that we

should be a bit more aggressive with the budgeting, recognizing if things do rebound, we have the stablization to fall back on. and with that in mind, the annual trend down from 3% to 2%, so we want to recognize lower trends but still expect some reversion to the norm at some point. as well as eliminating pricing margin. so, in the past, some pricing margin has been used to absorb adverse deviations from plan, what we are seeing is favorable deviation, so the margin compounds the favorable deviation, if you will. so -- >> so that element of risk in th calculation could be backed up, if you had some significant deviation, formally attributed to pricing margin or adverse to the plan, we could take it out of the stablization.

>> come out of stablization. but in general, there is a lot less risk on the dental than on the medical, the benefit is capped. >> right. >> wouldn't hit the benefit cap, that's it. those are our recommended changes to the methodology of the budget setting, in order to help spend down the stablization while maintaining a, you know, smooth budget process. >> and you are now on page nine? >> moving to page nine, where we are going to go through, our recommend -- same active delta p.p.o. in the course of the reviewing, reviewing of the plan as well as the renewal with delta dental, discussions with the staff, we want to recommend several programs. the first of which is called the smile way program. this ahouse members with specific chronic conditions such

as diabetes, heart disease, rheumatoid arthritis, stroke, hiv, to receive additional services and so the goal is to make sure the plan is providing adequate oral health for these folks where they condition may require additional services. >> and how would that benefit the access by the member? would it be their doctor recommending to the dentist, is that -- how with it work? >> my understanding that they would self-enroll into the benefit and then they would receive access. we can have our -- >> self-enroll, if it's an automatic benefit, you wouldn't have to enroll. >> wouldn't have to enroll. automatically a part of their coverage. >> they would have to identify that i have one of these conditions, which would make me eligible to receive the additional benefit enhancement. so, if there are maximums in

place, you can get screenings, limited number of times a year, and the smile way program will give you additional screenings if you have one of these conditions, delta dental would need to know that you have that condition so that they can provide you additional screenings. >> all right. commissioner -- >> limited to these conditions? >> yes. >> you can understand how we can come up with some design changes, but the program, i'm just curious to know, was that something proposed to you from delta dental because there is evidence that people with these conditions need annual scaling and number two, this is more frequent teeth cleaning, three times a year, i think the plan covers twice in general. or does it mean four or whatever

the provider recommends, can you -- is there a specific number? >> yep. i'm going to call a representative from delta dental, i think they can do a better job. >> talking about the smile way program. thank you, tom. please come forward. >> good afternoon, sharon stanic low, national account manager from delta dental. and tom was doing a great job. yes, to answer your two specific questions, the first is it would -- these types of conditions do require additional care in the mouth, and it would allow for a 3 or 4 cleaning or a three -- additional also and 100% paid through this, and exam, so, let's say that the

need for diabetes, you know, having a further exam, a check again throughout the year, so it's pulling that exam out of your just standard exam. >> and we also know that prescription medications can also contribute to a condition called dry mouth, that can be aggravated when you have some of these chronic conditions. so, all of that would be taken into account, i guess, in determining whether a person getting three cleanings or four cleanings or additional scaling or what have you, correct? >> correct. and the dentist is recommending, we are not stepping in and saying only three or only four. it's truly the need of the patient and the dentist recommendation and then we are just going ahead and approving that claim. >> all right. are there other questions? >> just to clarify, speaking from personal experience, i've

been recommended to get three cleanings a year. my delta dental, which is not covered through the city, pays two, so i cover the third. so this would say that if the provider said you need four, that all four are covered. if the provider says -- and are your preferred providers fee for service based or just a monthly stipend per enrollee. the fee for service benefit. >> right. so, to answer your question, this is -- this is going to be added possibly based on this recommendation just to your active p.p.o., self-funded plan, so your p.p.o., in-network p.p.o., contracted dentist, not your delta care plan. >> not for retirees? >> no, it's not. >> ok, all right.

just want to be sure. commissioner sass. >> commissioner sass: we started out talking about how there's been a build-up in the stablization reserves, but reading it correctly, smile way, estimate benefit, all these are reflected in a claim in a premium increase on the very next slide, is that in fact what's happening, so that it actually, although you are increasing benefits, it's also increasing the premium costs. is that correct, therefore, it's not actually having any, necessarily having any impact at all upon the, you know, the build-up of stablization reserves or anything else. when i'm looking at slide ten, it's important to look at that in conjunction with slide nine, each of these carries with it a premium cost. >> president scott: we heard the question, we will have the actuary answer that, not the plan representative. >> yes, looking ahead, each of

the programs we will go through have an associated estimated claim impact. so, when the pricing is done for this year, especially getting more aggressive, we recommended a rate decrease. with that in mind, we also thought that based on review, recommendations from the staff and from delta dental, several enhancements that could be made, which would have an increasing claim to cost, and so we wouldn't -- we are still planning to decrease the rates, not as big of a decrease as we otherwise would have, but recognize that utilization in the programs will go up, that the claims estimates here may not be appropriate, and that while we would be impacting a one-year budget, right, if we could have decreased it, by say ten, and now only decreasing by four, to your point you are right. we are still making an appropriate budget adjustment. but in future years, it will

also add costs that i think we will plan to spend down the stablization to help cover the costs of future years. that answer your question, commissioner sass? >> commissioner sass: i'm not exactly sure. i think the answer to the question is yes, cost of premiums will increase, related to these benefits that you are listing on this page. >> so, yes. the cost of these benefits. >> commissioner sass: that answers my question. >> president scott: all right. >> $0.10 per member for month. >> the cost is the following page, $0.10 per member or per employee, per system member, per month, for the administration, and then we also have estimated that it will increase overall claims by 1.5%. that will be the bigger costs. >> commissioner breslin: do you have any idea how many members would be in this -- that would

need this benefit? seems if you add something on like this, there should be a lot of members that can use it. if there's only a limited few, you know, i don't think it's fair to everyone whose premium has been higher or whatever. but -- i would like to see anything new to be able to apply to a lot of members. >> by nature i think the program is selective because it's targeting a certain population with very specific needs, and so -- >> i have also heard of a lot of people who need, who have told me they need three cleanings a year because they have dental problems or gum problems. which doesn't really fit into any of these, necessarily. >> yes. if it's outside the needs of the program in general, with we are

not proposing to raise -- >> some people have bad gums. >> if i may -- reference to earlier the evidence, strong evidence of periodontal disease with chronic conditions, and this is preventive, you can get increased oral care to prevent yourself from getting severe gum disease and all the consequences that come from that. so, that's my understanding of the uniqueness of this program. i mean -- that -- also i think, because we are concerned about the dip in utilization in general and active population that's not seeing the dentist, or not using it, so if there's funds available for those at highest risk to be getting improved dental care, this seemed like a pretty reasonable way to go about doing it, and will have to be some education and campaign and i believe staff

help me, we had some conversation about how we could use our data to target the promotion of this smile way program to people with chronic conditions, so that we are getting the right people, but it's -- it's really great. sometimes your dentist will pick up on you developing the disease early on and refer you to a medical provider, may be a sign of a chronic condition you are not aware you are developing. >> i understand. but the people that already have it, and didn't have access to this prior, and so let things go, it would seem to me, if they have this type of a gum problem now, existing, they should all be included in this, too. >> it seems to me like -- >> commissioner -- >> kind of a narrow set of conditions. i mean, there are going to be people that fall through the cracks. >> could you speak a little louder. >> other conditionshe