maybe i'm not getting it. >> that's a great question. i know we have notes about the screening rates are doing. we'll take that back. i'm also excited -- there's only two other municipalities -- you see from the statewide perspective or also from large private organizations and companies. i'm in process of initiating contact with one of these

municipalities that happens to be on the west coast. i'm looking forward -- a i'm excited to open the dialogue and what do they see with their population. thank you very much for that commissioner follansbee. our top ten episode summary groups on slide 7 and in the lower left corner, this is where you get your risk band profile. that is pretty static. you tend to know that our top

37% of cost is driven by 1.8% of our population. we've got healthy and stable, about 72.8% of our membership now in this group. that's fairly consistent with 72.5% last time we came and reported that here. that's our challenge keeping it over in the healthy and stable longer. as far as the chronic conditions, diabetes continue to be our costliest chronic condition. that's fairly consistent with what we continue to see. slight 8 is where you look at the drugs and no surprise there. most all of those tend to be specialty drugs.

as previously reported, eight out of those are hiv related medications. those account for 18% of the total drug spend. those hiv drugs account for about 55% of the top 15 drugs spent. just final look at where we're at with brand generics on page 9, specialties trending up. you see there are change about 10.1%. we don't like that number. that number shouldn't be a surprise to anybody here. in terms of the all of the reporting that's coming to you. looking at the medicare dashboard and to get back to your question commissioner sco on page 2, there's a scrips per

thousand rx. for the united healthcare medicare advantage group. you'll see a robust number 24,918. which is an incredible number. you see kaiser, there's 18.3 scripps per thousand. to your question about impact to dollars it's just a reporting. there's no impact to dollars. these are all medicaid population. they had access to their medications. thit looked at a dollar amount d allowed amount field. we don't have the financials on the kaiser data. that field itself was zero. the true algorithm was dropping those records and not counting them in the report.

>> thank you nar clarification. >> the other thing to note with the medicare population, you look on the first page and you have the risk score, the bottom line of that top table and these risk scores are scaled to a hundred. year ago united healthcare risk was lower. we'll be bringing the risk score for the most up to date. not surprisingly, we did think that the initial risk score and

it was low because where we were with the data capture population. here your chronic for our medicare retirees is hypertension and diabetes and lower back. in our screening rates here as you look at your comments earlier, here are the screening rates. there's not a u.s. norm available medicare population. you'll see some of these look higher in terms of who are the people, who should be getting a rate screening in our day. your risk band profiles are found on page 5 for our pled care population. here, not surprising. much lower percentages in the healthy instabl -- and stable

population. are there any questions? thank you very much for your time today. bresli >> president breslin: any public comment on this last item? please come forward. >> there was a question about the allocation of the projected three years of savings for the implementation of the medicare advantage program from 2017 to 2019. i quoted a figure just over

$30 million and there was a question about the allocation of that savings between the employers and the retired members. going back looking at our calculations it's approximately a 90% of that $30 million figure or $27 million attributable to the employers. the remaining 10% or approximately $3 million for the retired members who participate in family coverage either retiree plus one or retiree plus two or more. there's to contribution in the medicare coverage. if you translate the $30 million savings it's 90% employer, 10% for the dependent cost contributions for the retiree members.

>> president breslin: public comment? is there anything else of the director's report? >> i want to make verification about the audit it applies to president breslin's question about divorce and court order. all the members dropped during the dependent verification audit, they are eligible for 36 months of cobra coverage. cobra coverage as you may know is 100% of the premiums. there's no employer contribution plus 2% administration fee. those dependents are eligible for 36 months of coverage after they are dropped due to divorce or legal separation.

the court order itself does not provide coverage. >> president breslin: the divorced spouse will be eligible 36 months for cobra? >> provided notified time. then we drop the dependent. all employer group coverage is subject to cobra and compliance with the federal government. they would get 36 month coverage >> president breslin: thank you for clarifying that. >> clerk: item eight, san francisco health services financial report as of november 30, 2018. presentation by pamela levin. >> pamela levin chief financial officer. it provides projection for the full fiscal year ending in

june 30, 2019. as i reported before the trust fund balance on june 30, 2018 was $77.4 million based on that activity through november 2018 the balance is projected to be $79.6 million or $2.2 million increase. we're still seeing favorable claims for city plan and unfavorable claims for blue shield access plus and trio. there continues to be favorable claims experience for the dental plan. we did not receive any pharmacy rebeats -- rebates in november. year to date on the pharmacy rebates is 1.8 million and year end projection is 7.9 million. year end balance $1.3 million is

projected in the sustainability fund which is $3 budget we'll be bringing forward that budget to you for approval in february. no performance guarantees have been received thus far this year. a total of $47,000 is paid out this year under the adoption assistance plan. we have had three claims that reimbursements that have occurred in this last month. based on the financials for november 2018 we project year end balance $188,000. that is actually going to go up

when do the six months because we looked at for budget process, we look at six-month period makes are the most sense in terms of doing projections. we will have additional savings primarily in fringes because of the delays we've had in being able to fill positions. we are working on that to get them filled. it shows salary savings over and above what was originally anticipated. i know director charismatic yand about the audit. as of two days ago. when the -- i'll give you the background so you understand the caveats on whether what i think

is know is what will happen. we get and work closely with kpmg and all the data that is put in and all the writeup and everybody that's put -- everything that's put in our financial statement and not just the numbers. including the dating, the two letters that consist on the front end and the back-end of audit. they had me change the date to january xxx it looks like it's going to be some time by the end of this month. it will be issued. when i do these reports ellett you know exactly what is going to be in there at this point. we are going to have -- will be reflected in our financial

statement that we have $77.4 million in our fund balance. as of the latest draft that's provided to me, it's unqualified audit. we did discover a few things that we're going to change in terms of our processes to make the audits go smoother. my staff will be working on that for next year. overall, -- they will be coming because it's a requirement that kpmg comes to what is consider board of directors to present the audit based on -- i would assume it's generally accepted accounting principles they use. they have rules that say they have to come here and report.

i will hopefully have that scheduled in february along with the presentation by myself. i'll be happy to entertain any questions. >> i i like to comment pam to you and your team. i know this was walk through hell quite frankly this year with the changes in the financial system with the city and you led on that process and we've talked about that earlier. now to have to go back arealign the old and new and get the reporting correct is remarkable effort. >> thank you. there have been new announcements that affect thecye city as a whole and not us. we do our own independent financials which take up significant portion of marina's

time, mitchell's time and my folks and myself time. unfortunately that's continuing. there's a couple of pronouncementmentsments that arg down the pike for next year. we don't know the full ram addition -- ramifications on the time required. it is getting more difficult. i appreciate your comment. thank you. any public comment on this item? >> clerk: number 9 is discussion time. mayor's budget instructions for the san francisco health service system for the fiscal year 2019-20 and fiscal year 2020-21 general fund administrative budget. presentation by pamela levin.

>> in december, the the mayor's office issued the budget instructions for fy 19-20 and 21. it only applies for general fund budget. both budgets will be brought forward to you next month. one of the first steps in the budget formlations the budget instructions is the 5-year financial plan. they issued one for 1920, 23 and 24. the@ç deficit in 19-20 is projected to be $107.4 million and 2021, $183.4 million. these are up from what has

happened in this last year but they are significantly down when everything went sour in 2008. in those ranges they were $300 million and more. when the local tax revenues are projected to grow in the short term, we are still seeing increases in expenditures that outpace revenue growth. that's primarily due to increase in employee costs and pension is the biggest factor. voter mandated compliments were set aside and requires contributions to supporting entitlement services. the reason i mentioned this is because is all our administration budget is recovered from other departments

to the extent that we have constraints and we have constraints. as you usual, the areas of uncertainty are the collective bargaining negotiations. all but maybe a handful of those are up. they are currently in negotiations. those will be completed in may. it's still roll of the dice. there's financial obligations for those causing authority. we are looking at a risk of an economic recession. everyone has heard that why the city is preparing for that, it's unclear just how much that's going to affect us. i want to quickly touch on the

mayor's priorities. the first priority is to get things done. what the mayor is looking at building more housing, reducing homelessness, addressing behavioral health needs, cleaning the city streets and making them safer, creating equitable opportunities for everyone and making government more accountable. in the terms of the fiscal policy is continue to build reserves, limit ongoing cost growth, fund strategic one-time investment and make every dollar count. the reason i say those, because that is a specific statement that the mayor has said. rest of this presentation, eye will be focusing on how not only just what the budget instruction say but how they fit within our strategic plan.

concepts are very tied to what we have in our strategic plan and frankly what we've been trying to do every year. at least that i know of. this first is focusing on equitable outcomes. this includes using metrics, using information and then achieving outcomes based on $é-l(qq&iverable;xeip &c @&oject strategic goals within our performance -- gosh, strategic goals within our strategic plan. the other is prioritizing those with the greatest need we ensure

the highest and best use of the current funding and then identify funds that can be spent more effectively and efficiently. budget instructions are as follows. equal to 2% of the general fund growth. we are reducing in 1920 must be on going. what this results in the first year is $67,000 and the second year is another $67,000 for total of $134,000. then departments must propose contingency saving 1% in 2019.

20 in additional 1% in 2021. this is@ç due to the uncertainty of labor negotiations and ongoing city revenues. the way this works, we proposed contingency. they look at what is occurring then they make it a decision with us on what contingency or if contingency reductions will be made. the contingency proposals must total $34,000 in 2021 and another $34,000 in -- i'm sorry,

1920 is $33,000 and 2021 is an additional $33,000 on top of the original 33. the instructions are department shall not add new positions in their budget. this is verbatim per the instructions. once the budget proposals are submitted to the mayor's office, they will discuss with us any new positions if they align with the mayor's priorities. we are closely working with the mayor's office to ensure that the positions associated with the strategic plan are reflected in the annual salary ordinance. the next is department must clearly define goals within the

program. this is throughout the strategic plan. we are using data-driven to measure effectiveness in programs and services. it fits in very well with the direction. the department's mission should be particularly reflective of goal cleaver -- achieving equitable outcomes for residents throughout the city. our constituents are our members and our goal to reduce equitable outcomes are based on who we serve and the impact of economic and social inequities. the strategic plan goal is to

reduce fragmentation. it's to understand the impacts. >> president breslin: in interest of time, you can condense this and point out that's most effective. >> i plan to do that. thank you very much. we're also supposed to see community engagement on developing the budget. this came up last year to gather information and gather responses. we have always provided opportunity for members to talk to us during the budget process or talk to the board. with are adding an additional way that our members or the public can assess our budget documents to increase member engagement and ensure

transparency. we're supposed to look at long term savings and cost avoidance. we to consider participating in the city program. we are also supposed to consider independent review and audits and develop budget missions. i like to know there are no current reviews and audits by the comptrollers's office. kpmg, external audit, is very good. we are developing an internal audit plan to ensure compliance with rules and regulations and ensure best practices are followed. as i mentioned in february, we will bring the 1920 and 2021 budget to the finance and budget committee and health service board for final approval. at that time we'll be bringing

in the stability fund. are there any other questions? >> commissioner lim: general comment on the mayor's budget, every year they come up with a projected deficit, the following year, 2021 is and 83. for last 10 years, in 2008, every year the city comes up with a positive surplus every year. [please stand by]

salaries and benefits. the issue in the pensions is that they had projected and put into their accuwearial calculations a better return on investments than they are getting so therefore since they are not getting it, they have to charge more, you know, they collect more in the pension rates go up. as you know, we also have the issue where all of us are living longer, and that has to be taken into account over and other. >> thank you. any public comment on this one? >> one more. >> with all of the deficits projected, this is a small

department. 2% around 6 to $7,000. the only person not taking into consideration the savings for the city in terms of we have saved more than $10 million for the last three or four years. they don't take that into consideration. yet they want to cut 6 to $7,000, not taking into consideration the millions they saved the city. in. >> in the end we have been successful in getting them not to make a lot of the cuts we propose, and based on exactly what you are saying, we remind them at every possible time that we bring in savings. >> thank you. >> there wasn't any public comment. item number 10, please. excuse me. go ahead. >> herbert weaner, city retiree.

commissioner lin brought up a significant point. the surpluses seem to materialize. i think there is a real deficit on financial analysis on the part of the city. that is a deficit we have to address. maybe what should happen is when the report is submitted to the mayor, possibly alternative statistics should be shown in addition to the report that is requested. i think to sending information is in order here, and this should be pointed out to the mayor, basically this is an old story. i think it happened in the last eight years. i agree with commissioner lim. the negative result is the

employees will be negatively impacted. i realize the position that administrators of the health service system are in. they have to comply with requests and advocate for us. it is a tricky tightrope to walk. i want to express my consent. what we are dealing with is a deficit in financial analysis and also the aim of the city is fiscal retentions, and those are my thoughts as a retiree. thank you. >> no other public comment. public comment is closed. item 10. >> item 10 is an action item. approve resolution orders the health service board election for two expiring terms. presenter aviant.

>> abbie yant. today we are kicking off the health season for the health service board. we have a number of items in the packet to include resolution for your approval regarding the election. there is a copy of the department elections notice to be sent to the department of elections tomorrow morning. there is an exhibit on the member notice. there is the member notice itself. there is an election schedule. the nomination form with the sponsor pages. next slider, please. on the important dates moving to the election. assuming your approval today, tomorrow january 11th members can start nominating. the forms are due back no later than february 14th.

those come to the health service system. once those are reviewed. the nominees will be notified directly of their status. on february 21st. on the 28th candidates notified of the nomination have an orientation session in the department of elections. this is currently scheduled on that date from 2:00 to 4:00 p.m. march 27th is the deadline for candidates to submit election statements to the department of elections by the close of business. on april 30th ballots are mailed to eligible sfhss members. may 9 to 29, voting can take place. those ballots go to the department of elections, we will not accept them at hss. ballots are counted on may 30th.

winner announced. new elected members begin the term at the meeting on jun june 13th. i think that is really it. natalie will be steering the ship from the hss perspective. we have set up an elections e-mail for that purpose so she can answer questions that she is permitted to respond to and is in close correspondence with the department of elections. there is the resolution in your packet. i don't know that i need to read that unless you wish me to, and that is what is before you for approval today. >> just for my information. this is a five-year term. is there some history why two of the elected members are elected the same year?

proxy? >> any other comments? >> all right. i need a motion. >> i would like to move to approve. >> second. >> any public comment on this item? all those in favor. all those opposed. unanimous. all right. it is time for a break. i think everybody would like that. excuse me. the calendar before you break. >> okay. >> can we do the raise and

benefits first before the break? >> please, yes. >> item 11 is the presentation of the 2019 rates benefits for the plan year 2020. presentation by abbie yant. >> good afternoon, commissioners. you have in your packet the rates and benefits calendar for plan year 2020, and i think i don't need to read it to you. we tried to group it in a fairly logical order. we will do our best to stay in that logic. things fall off the calendar at times. we also in anticipating that we might possibly need additional meeting times, we did put a hold out on each of your calendars for extra meetings in those crucial months of march, april and may. i don't at this point needing

them. we wanted to have them on the calendar in case the need should arise. we will wrap up, obviously, in june as medicare products will be brought before you in june in order to meet the timelines to go to the board of supervisors through the budget process. are there any questions? >> i would like to say that if we are short of time, it is more convenient for board members and probably everyone to be able to start the board an hour early if possible rather than have the full meeting where you have to set up everything. >> we will poll the group to find that out as well. >> most board members would prefer that. it is not a whole new day or you don't have to set up this room. it is simpler if it can be done in an hour. a lot of times we have added a meeting at the end.

>> i have to start the discussion with the transbay authority board secretary who has the meeting before and the human rights meeting before us. we may want to start earlier. >> what time does the meeting after start? >> they come until 4:30 p.m. we have the room until 4:00 p.m. i asked if we stay until 4:30 p.m. if we communicate with her. >> they start setting up at 4:30 p.m. >> thank you. any other comments? thank you. did you vote on that? >> i move we adopt the calendar for the 2019 rates and benefiters cycle. >> i second the motion. >> all those in favor, aye. any opposed? no. >> i don't remember ever

adopting a calendar. >> it was a discussion item. i'm sure she will take it under advisement. >> thank you, council. >> now we will have a break. 10 minutes.

>> we are back in session.

item 11. item 12 is review incurred but not reported and the contingency reserve fund status by aon mike clark. >> this is the report of two of the theory serves we keep for the self funded benefit programs. what i would like you to go on page three which explains the theory serves. i will -- reserves. first are the estimate of unpaid claim liability for any claims we call run-out claims where services were rendered on or before a given date. those claims have not yet been paid. if you see your primary care physician on june 30th that is not going to paid by your health

plan on june 30th. it would be paid probably in july. we calculate june 30 of each plan year. that is the last day of the fiscal year. that is the first. second is ton continuing genesee. it is -- contingency to help protect us against potential for funding estimate short fulls over and above what we capture with ibnr. this could occur if the claims in the plan year exceed the projected claims when we develop the equivalents. like the ibnr, we calculate as of the last day of the fiscal year, june 30th. the third, which we will talk through in coming months, are the stabilization reserves or rate stabilization reserves.

these are an annual determination of gain and loss. we calculate this based on plan year experience, as of december 31st. we will review that with you in coming months. page 4. listing our calculation for the ibnr reserves june 30, 2018. you can see three major plan buckets we do this for. blue shield of california, flex funded plans. we combined access plus and trio for this illustration. second be is united healthcare city plan. you can see for both those active and early retirees are captured. third is delta dental of california active employee ppo plan. as you look at the change from

our prior calculations as of june 30, 2017 to june 30, 2018, for instance you will see decrease on the blue shield plans. that is primarily driven by a change of administrative possessing that took place actually in february 2018 by blue shield on how they process pharmacy claims. they used to have a couple week claim lag. with the administrative change that eliminated the claim lag. pharmacy claims are add used indicated and played instantaneously. that is for the blue shield plan. for united healthcare city we saw substantial increase in the population between 2017 and 2018 so that is the primary driver of the city plan increase. then continued favorable

experiences as pamela commented earlier was a key driver behind the slight reduction in delta dental plan. in total, the reserve recommendation for june 30, 2018 is almost identical to where it is at for all three plans as of june 30, 2017. >> one question for the chair. this has been reviewed and audited as presented? >> cape has thoroughly reviewed the calculations so i believe that when the audit report is issued. for instance they haven't come to me or palawith -- palawith any specific questions in several months. it makes me think whatever is

happening in the audit process they have reconciled to these calculations. >> thank you. >> the last page of my report is the contingency reserves. you can see for blue shield of california and united health care city plan generally increases of 5.5 to 6 percent. very favorable on the dental plan leading to rededuction in total projected increase 4.4% in the contingency reserves june 30, 2018. then i note the very bottom statement on page 5, the change in contingency reserves does become a component of claim stabilization reserves for each

of the plans in the coming months. >> any questions? any comments? thank you. any public comment on this item? seeing none, thank you very much. >> thank you. >> moving right along here. now we will go into our governance committee matters. i will have item number 13, please. >> item 13 an action item. start fiscal year 2017-2018 health service board annual selfie valuation process. presenters include the chair and randy scott and indicate howard and the managing deputy director from the department of human resources. >> if you would come and introduce yourself and provide background about your role in relationship to this process, and i will make a