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as well as the projection for the year ending june 30, 2019. in terms of the trust, the balance on june 30, 2018 was $77.4 million, and based on the activity through the end much february, it is projected to be $83.9 million, which is an

increase of $6.5 million. we are seeing unfavorable claims for the blue shield access plus plan for blue shield trio and delta dental self funded the claims experience is favorable. we received $300,000 in pharmacy rebates, and the year-to-date amount is $2.1 million. the projected year end as of june 30, 2019 is $6.9 million. the healthcare sustainability is projected to have a year end balance of $1.3 million. $500,000 performance guarantee has been received february 28: today $105,000 is paid out this

fiscal year for the adoption and service plan. there is a different number. we updated it today. the today expended since it was first offered is $178,000. the amount of forfeit durs for unused flexible spending will not be known until june 2019. we continue with th thegraph. the goal of setting the rates is for the actual cumulative expenses to be equal to total revenues including stabilization reserve buy up or down plus the value of the buyout over the course of the year so in looking at that in summarizing where we are, the cumulative expenses are tracking higher for the uhcppo plan and cumulative expenses are

lower which is good for blue shield access and trio and delta dental. then in terms of general fund administration budget through february 28, we are projecting year end balance $300,000. that is mostly due to salary savings associated with delays in hiring. that is the conclusion of my prentation. are there any questions? any comments or questions? >> any public comment on this item? seeing none, we will move onto our rates benefit section now. first item is number nine please. >> item nine rates and benefits for the plan year 2020 presented

by the executive director. >> i have the calendars in your packet. once again, we are at the point where things are moving along very smoothly and we can make the decision to not have the april 25th meeting. we held that in a that in abaya. >> any public comment on this item? >> item number 10, please. review delta dental active employee ppo, experience and approve rate stabilization reserve recommendation presented by mike clark am. >> good afternoon. i am here today to talk through

the delta dental active ppo plan experience and suggest our recommendation for the rate stabilization handling into 2020 rates. if you look at page one, just bottom line on top we will recommend today that one half of the available reserve be applied. i will walk you through the rationale for that recommendation. as you see in the first paragraph there has been a continued pattern of lower actual claims and fees relative to premiums that is a consistent theme within pamela's financial report. thus we are recommending a higher level of rate stabilization reserve buy down be applied than what would be typical as the per policy through allocation. we view this as fiscally responsible approach to reduce what you will see as a rate

stabilization balance on this plan that is built-up substantially over the last five years. you will see our recommendation to apply one-half of that available stabilization reserve or $7.16 million which will preserve the other half with rounding 7 million and 15,000 for use in 2021 beyond rating. for comparison if you are curious. it will be at the bottom of page one. page 2 provides general background on stabilization policy itself. noting that it is important to recognize that we talk about the dental plan, we talk about active employee ppo only because every other dental plan offered by us to active employees and

all retirees are fully insured. this is the only self funded plan out there so that is why we talk about the claims for this plan rate stabilization reserve because every other dental plan including all retiree plans are fully insured. so page 3. you will see the experience for this plan over the last six years in the table at the bottom of the page. for this particular year, the claim and fee costs were 5% lower than the actual premium in the plan. as you will see in my call out boxes to the right, the actual experiences represented by the grey bars and it is averaged pretty close to $120 per employee per month for each of the last six years. we have not seen cost inflation

in this plan. it has been pretty consistent in terms of the actual cost of the plan and i will talk through reasons for that in just a bit. we also focus on loss ratio. in actureterm. that is taking the total claim and fee dollars divided by the premiums so anytime you have a loss ratio that is less than 100% that means you have lower claims and fees than the premiums in the plan, and as you can see with the bars representing the actual claims and fees, the line presenting the premiums, you can see why we have loss ratios below 100% each of the six years. so on page 4, i list three key reasons why we had ongoing favorable experience in this

active dental ppo plan. one is the experience. it has been constant claims and fees on employee per month basis. we have an underlying issue on the plan which is under utilization of preventative care. we would like to see more members tap the coverage and use preventative care benefits. out of every person employee or dependent enrolled in this plan and keep in mind every employee in this plan is paying some contribution to be in the plan, one out of three aren't seeking preventative services. that is a concern of ours and something we continue to brainstorm ideas with delta dental to encourage members to seek preventative cleanings and preventative services within the framework of the dental plan. third, from a premium

calculation standpoint, we have been using a higher annual claim increase factor in the past years. you may not recall last year we suggested using a lower trend factor in the 2019 rating. we will start to see that play out in the 2019 experience versus premium calculation difference, but that doesn't reflect in this data because this takes us through the end of 2018. as i note in the paragraph below the three items, we do expect claims and fees close to premiums as a result of some of the changes for 2019. >> excuse me. if you are encouraging preventative cleanings and so forth, would that, is there some sense if that were to spike and people acted on what you are recommending, would that have

impact here? >> yes, terrific question. i expect if we start to see a significant increase in the preventative care utilization, i could see a short term increase in claims. presumably some of those individuals shoe have not been seeking periling ventive services could be diagnosed with cavities and gum disease, as an example, so that does have potential to create what i might see a short term spike in claims, although still again preventing much more serious procedures that might have to occur just by nature of being in so much pain you finally are compelled to see a dentist. >> thank you. >> just an observation here. an employee pays $5 per month. >> for single coverage, that's correct.

>> employee plus one pays about $9 per month. i can see where it isn't significant. they think i am paying a lot for is this. i didn't know it until i looked how much the premium was the delta dental. you know, definitely it is kind of surprising only one of three have cleaning. that is not a good thing at all. if the premiums are consistently more than the cost, then why don't you reduce premiums? are you doing that? >> the overall cost of the plan is much more than just the employee contributions. you are correct. single employee pays $5 and employee plus 1:15 the total --

15 the total rates are much more than those figures. >> i know that. >> can i follow up on commissioner scott's question. when you look back. you have analyzed for 2018. we have been sort of under utilizing it for several years, and is that the case? do we have preventative screening ratings back to 2013? >> i have seen the data going back a couple years. i personally have not seen it back to 2013. we could work with delta dental to gather that experience over the last six years. the average of one out of three not using the plan is consistent. >> i think i assume we all believe in preventative dental care, number one, the reason is that the one doesn't when you start to have symptoms and need care, you will not only be in

pain but also reach -- this plan as a cap, does it not? >> there is a $2,500 annual maximum for each person in this plan. >> do we have any idea what the trend is in that in terms of are we seeing more and more of the lag? this can happen not much on an annual basis but over years we might see the few people reaching the cap. i am curious to know if we can demonstrate the consequences of this under utilization of prevention. >> we are happy to pull together a summary of six years of information on utilization to have available for you. i will do that as a take away to work with delta dental to affirm that. >> your challenge to the health service system is appropriate. we have responsibility to make

sure these kinds of services are being utilized. in addition to healthy diet and exercise and get out of the chair 30 minutes. we need to focus on this. it looks good because we save money. it is not good. >> i want to say especially here. you the ppo dentist get the preventative services, paid by the plan, and every member represented here is paying something out of their paycheck in the contribution to be in this plan. >> aside would the well-being program or any of that cover dental or recommend people get dental when you discuss it? >> it is very much part of the discussions we have been having with delta dental. i understand it is not a typical to have a third of the population that doesn't go to the dentist for a variety of

reasons. i think we need to find out why our population is choosing not to go to the dentist and really go out on it for the obvious reasons. oral health is a huge indicator. we put in place the smile away benefit to help those can chronic disease. we do need to step it up to find a way to help the membership make use of dental services so we work with them to create a better campaign, work with well-being, but it is a struggle to get people to go to the dentist that choose not to go. >> flyers come out in the mail. >> yeah, yeah, there is a lot of information out there. i know in general in health information education doesn't change behavior. we have to figure out and we we

will look at partners to find best practices to change behavior. i don't think it is that people don't know to go to the dentist. there are other things. i have a spouse who won't go to a dentist that won't anesthetize him. he has to pay extra. his wife makes sure he goes. i am sure there are many stories that occur. we will have to dig into the issue to understand what will change behavior. >> thank you. page 5. now, i want to talk specifically about the rate stabilization reserve and provide background on our ultimate recommendation for today. the delta dental rate stabilization reserve started in 2014, and over the course of time because of the favorable

experience you have seen in the prior exhibit we have seen significant surpluses build-up to the point where we have about $14 million as of december 31, 2018. noted at the bottom of the page you can see how much the rating benefited through the buy down year-over-year and how that has grown from 2.8% in 2016 up to 8.4% for 2019. we made some changes in our forecasting and our rating method but we also are looking for, you know, ways to spend that $14 million greater than policy. page 6. very detailed page. bottom line shows approximately $5.6 million was the adjustment to stabilization carried forward. the amount by which the plan kind of exceeded or was better

than forecast from an actual cost perspective versus expectation. that leads to the chart on page 7. when we do the math of starting point, stabilization balances at the end of 2017. look at the offset in 2019 rating. add back increase based on 2018 experience, you can see the $14 million calculation. we are recommending that we use half. you may ask why do i suggest half? the policy is one heard. i want to make sure that there is adequate reserve present for future years so let's say if we do encourage and a lot of people start using the plan beyond today and we start to see upticks in experience. there is a contingency reserve on this plan.

we don't talk about it here. the rate stabilization is a third line every serve after the i.b.m. p and contingency reserve. i feel that still having $7 million available for use in 2021 and beyond is adequate but also feel the fiscally responsible action to take is to apply for than one-third per policy. that gets to my recommendation on slide 8. what i would ask you to consider today two approval actions. number one, suspend self underred stabilization reserve on one time bases for del deltal and approve $7 million to be applied towards the buy down across the active employee ppo

plan for plan year 2020. >> i move that we accept the recommendation as outlined on page 8. >> second the motion. >> any public comment? >> i have a question. >> go ahead. the net effect will be to reduce everybody's rates is that correct. >> rates will reduce from 2019 to 2020. we will present those next month. >> for active population? >> for the active population. >> active employees ppo plan. >> we also have dental dental ppo for retirees that is self insured. >> correct those rates are locked in to the end of 2021 daysed on a three year lock in delta dental provided last year for the retiree ppo plan. >> thank you.

any public comment on this item? all those in favor of approving the staff recommendations say aye. opposed. all right. it is unanimous. >> thank you. item 11, please. presentation of dxcg risk scores. presentation of aggregate diagnosis cost group per scores which correlate costs to the underlying illness burden of the sfhss population presented by the enterprise systems analytics manager. >> good afternoon, commissione commissioners.

we do have a presentation. first of all, i would like to acknowledge the assistance of the analyst on my team who has prepared the report i am presenting to you today. she may or may not be joining us. she is held up at the office. we are presenting the diagnostic cost group or risk scores. there were late breaking updates. if you haven't been to the website lately, you might want to go there for the latest version of this. the risk scores, as you know, are the healthcare measures which measures the illness

burden. the group level results help predict future cost of care, measure efficiencies and assess the disease burden of the sfhss population. within the deck, the current period that is defined as october 2017 through september 2018 and previous period will be october 2016 to september 2017, we had that as a rolling period instead of full calendar year to make sure the risk scores are calculated in time for the risk and benefits cycle. pmpm, medical claims are based on full calendar year. we do make adjustments for that. you will see the concurrent and perspective risk scores. those concurrent risk scores are retrospective looking at the utilization in that time period

and our perspective risk scores to predict the future conditions and therefore, the costs of our population because it is hard to know what condition somebody will have at a future point in time, age and gender weight more heavily in terms of calculating perspective risk scores. moving on on page 2 and our executive summary, certainly the big change since we presented the risk scores in the previous year were the introduction of blue shield trio plan which resulted in access plus risk scores increasing so healthier individuals have migrated to trio. the active cco city plan population we see improvements there, very slight, but in the risk scores as you know from the demographics report we have been

seeing increasing population in that plan. that helped. driving risk scores with musculoskeletal positions are number one. we have seen this on the dashboard. diabetes is one of the top three drivers in what is contributing to the risk score. it is the most costly ma man age condition we have in our condition. the other summary is say the risk scores are increasing. the scores increased for active and early retirees and medicare tire res. they have improves due to younger age. we have seen that with the city hiring. with the demographic report you see the average age down

slightly and early retirees have higher scores. we have taken a look at the early retirees 55 to 64 knowing the early retirees really have a higher risk score and there is the cost driver when we look at blended active and early retiree population seeing what is happening with the age group comparing actives to early retirees. we see those early retirees in the age group have almost two times their pmpm claims and much higher risk score than same age people still actively working. let me say i am your enterprise systems and analytics manager. >> just to make sure.

we talk aboutmu about diabetes d muscle scores. the cost is manageable. can you break down where the cost comes from? is it hospitalization, surgery, complications, coronary artery disease, renal failure, these kinds of things? so we have some sense about what we might be able to look at. muscle skeletal for the future, for example? >> we can and it is part of all of our strategic plan to really get the data driven and focus on the population of health. sanity check. what are the conditions to dive into and look at the various programs and go deeper to see what makes sense.

all things i am excited to move in that direction and busy doing that analytical work. thank you. moving on page 3. here is just a trend view of your concurrent risk scores for our four plans we have. of course, blue shield access and trio, kaiser and uhc. medicare and advantage ppo and trending with the active, early retiree and medicare tire res. again early retiree population the risk scores are upwards. for trio when you look at the data. it is based on limited data. it is a baseline, not pulling too many insights off that as yet.

also, just to note when we see the medicare scores we present in this report, they are also a lot higher than you would think. that is because we have the commercial model for genir rating the risk scores so we are using a commercial model on the medicare population. having checked against the medicare model and the watson market scan database for benchmarks. from the u.s. norm our medicare risk scores are lower. working to see if we can get to western or california norm to get a sense how we are looking there. i wasn't able to have that for the board meeting today. we will bring that back. on page 4 you see the same sort of trend. here we are looking at perspective risk scores. this is a predictive score. again, based on the summary

statements this is where we see slight reductions with our city plan score and we have got kaiser having much lower active and early retiree risk scores than in comparison to our other plans. >> i am going to keep asking questions. when you look, for example, at compare populations across the health plans. is it the feeling that it is because certain members choose certain health plans because they have more conditions compared to the average person at age 45 or few error is it something to do with the way that health plans code some of the encounters or even encourage services or discourage services or even encourage certain medications? in terms of the cost breakdown?

is it member driven that differentiates kaiser from blue shield trio? >> i think it is a little of both. we are trying to get to the data. we are trying to analyze people we see moving plans in a given plan year. what are we seeing in terms of utilization and services and procedures. that is the member driven. they want it taken care of with a different provider. that is sort of what people think is one of the drivers. we would like to really look at the data to assess that. also, talking to our members with surveys and outreaches to understand that. there is a coding issue, certainly. some plans are much better and coding than other plans. my mentor has been that i have the data wait to talk about what

we see in trends, what is happening with the population for everything to be perfect or leveled playing field, that is up to the plans to continue to work on inputs to our all payer claims database. it is a claims data base. not everything is in the claims data. maybe some are on the electron cal medical record. we are trying to make sure we understand the drivers. these are great questions, thank you. >> that is very helpful. hypothetical situation. when i was in practice at kaiser i saw a woman who joined was getting an annual colonnos copy in another health plan. when we talked about the utility of that, it was clear she didn't need the annual o colon os could

be. if you were tracking the risk score from one health plan to another. would the risk score, you know, change the individual therefore make the change of the aggregate from health plan a if they all get the test at one year compared to plan b where they are not. >> my senses in thattic case although i think what you bring up could be other cases. it is diagnosis driven. just because they have ordered the procedure if the diagnosis comes up there is no there there that shouldn't affect the risk score, and if it is showing up as preventative it is not impacting medical claims. in terms of correlating the risk

score to financial spin. i will take that back to confirm. that doesn't mean there aren't some level of those occurring which are based on different provider practices how those impact the risk score. >> i would just add i think you are aware that practice patterns vary among the physicians regardless of systems. the kaiser medical group has more control over the practice patterns of the physicians part of that group than hill. there is a wide variation of practice patterns of physicians. some of that is picked up by the claims dated take base. it is not a measure of the practice patterns or protocols. when you look at utilization, there are so many variables that contribute to the comparison

across the plans. i think it is more to your earlier point that it is somewhat over driven why they go to certain plans. we do see a higher risk population choosing other than kaiser. >> continuing on page 5. here is a new presentation of information from what we have brought in previous reports. this is now available to us where we can look at that risk contribution and identify the conditions to driving that risk score. that is the muscle skeletal disorders rating hig highly and diabetes. for older car cardio vascular. moving on on page 6. here is a look at -- we have

taken the risk score and overlaid on the medical pmpm. i would like to be clear that pmpm is very specific to medical and rx claims if you are crosswalking to other data, it doesn't include some nonclaims related data that drives your total spend such as other costs. as we trend this i would like to call out an issue we are addressing is that looking at the medical and rx claims. our blue shield data we have in the claims database is showing larger spend than what we are showing was actual spend in our inchoices. all of that data originates from blue shield we are working with them to understand what is driving those variances.

this is reporting off what is in the data base. we did see a reduction in the blue shield per member per month from the previous period. we have trio on here but baseline. kaiser and city plan pretty consistent year-over-year. dollars dropped off final chart on city plan. 2016 year pmpm was 870, 872 in 2017 and 886 i in 2018. online you will have the proper chart with the data labels. the next page is the same pmpm with living score overlays. looking at early retirees. higher risk scorin'dicates

greater illness building. the pmpm decreased for access plus. some of the trio migration of people is influencing some of that. the next slide is just a different supplies. i will move forward on that. it takes all of the plans you have seen on the previous page and puts them all on one page. to slide 9. this is a view of the risk score by plan and also as a combined risk pool. this is for the nonkaiser plans. top left active and right is early retiree blended at the bottom is how we rate the plans that are blended. overall effect to combine these is that you will see slight increases in the access plus and trio population but from where your city plan risk score is a

dramatic decrease. the bottom your combined risk pooling for concurrent score would be 1.17. perspective a 1.1. then as we talk about not only predicting future costs but we like t to be able to assess performance and measure efficiencies. what we are able to do is take the risk scores and do dynamic justments to act for who has a sicker population potentially driving those costs. these adjustments take into account the risk scores for the population and we are able to do it based on various meted tricks. the way to read this is look at the pmpm spend on outpatient and blue shield access plus, for example, actual pmpm $472.28.

if adieus for the risk score of 1.015, then the algorithm indicates the spend should 443.96 in the active portion. not as efficient. that is 1.1 ratio whereas conversely if you look at the kaiser plan, the spend there was $331.82. their population has the risk score .792 on actives. adjusting for where the risk is. the spend should have been $346. moephish efficient when adjusting for risk. that is how to read the reports. there are a few in here. i won't speak to all of them

unless there is a particular question. >> i have a fact question on te dynamic adjustment created by what set of assumptions? >> it is using the risk score and scaling all of our plans. our plans total they are looking at that in terms of risk. they are accounting for spend in relation to the risk score. those are the main assumptions and more specifics i will have to bring back to you how the calculation works. >> it is like putting your thumb on the scale in a way it seems to me at first blush, and i recognize you could draw a broader conclusion, yes, one plan is more efficient in some ways than another. i think it would be useful to

outline what is embedded in this factor. this is our own calculation here. based on it we are driving to a broader conclusion. i think it would be useful to at least know what that is. >> we will look into that and bring that back to you as well. >> if i could follow up. going back to the discussion on delta dental. if the efficient plans are efficient because access is more difficult or something, wouldn't that possibly show up as efficiency if the members weren't utilizing the health plan for the same condition in one scenario compared to another or am i off base? >> i don't think it would. it is looked at claims utilization. only those that got the services. it does not speak to who is not

getting the services. what is the spend and the risk of those people spending it? i don't think it helps in that scenario. >> we have a diabetic who is utilizing -- same, you know, same score in the two different systems. will this calculation of pmpm would be independent whether they saw their provider three or four times because of differences in practice habits? never if one set of providers says you need to see me every three months and the other one says every four months, this would not show up as efficiency? that is what i am trying to understand about practice

habits. our members willingness to use resources when they should use resourcresource such as diabete. >> i will look into that further. i think we can further. i don't know 23 we will ever get to the specific with provider practice. we can overlay like visits per patient to other things to put it more into context. >> to follow up, i am nervous about the use of the word eyeficiency. it divided health plans into a couple plants. is that what we are saying there is a difference between the health plans. i would like to have a better understanding before we use terms that look, you know, per

jourtive. >> i think we are limited in that since this is based on utilization. it is a fascinating question we cawecan delve into. there are originalsis in the database to get to your question. i don't know that the risk score is the place for that. >> should we use the word efficiency. why. >> is there another word we could use to describe what we are seeing without the analysis? are we making a leap. >> thank you. moving to slide 12. i think you know we don't have the financials for the medicare population. you didn't see medicare tire res

mentioned on the other couple of pages. we can dynamically adjust based on utilization metric. this one is looking at a comparison based on admits per thousand. then just moving to slide 14. you will see in the appendix where we have a lot more detail by all of the age groups and the risk scores and genders. if you would like to see that, that is available. we have summarized it to show per each plan the average age and risk score. as you can see so far the males in kaiser has the lowest and females in the city plan have highest. females in trio lowest and males

in the city plan have highest risk score. that is a quick look on page 15 where we analyze risk scores by relationship. h.h.s. subscriber versus dependents and within the active population the spouses have a higher risk in concurrent and perspective. for the early retiree population. we have a temperature higher risk score. >> this is the finalnal assist on page 16 where we looked at 55 to 64. of course, this was our summary point that the illness burden for those 55 to 64 who are early retirees, much higher than for the active population. you see in if concurrent risk

score a 1.538 is your concurrent risk score versus 2.287. in perspective risk score the active population has 1.665 and early retiree 2.193. earlier with the pmpm to spend on early retiree population was twice as high. that brings the presentation to a conclusion. are there any additional questions? >> once we have completed our analysis, how does this flow back to the plans and negotiations with the plans and working with the actuai the act? >> as we go through the renewal process a big component of the

renewals is experience in previous periods and various trends and risk assumptions. this gives us our viewpoint in terms of where we see the future of the population and the current cost implications. beyond that i invite the actuairrito speak. it gives us the perspective to what is going on. >> i ask that as educational and process question. we have a number of the presentations that come not that they are not valuable, and they are. the question is why do we do all of this if the health plan is over here doing the same thing? i believe the original investment effort here with your arrival and your team analysis was to validate or find out where there was variance in terms of these broad-based

suggestions t