consider spending money on what is considered a laughable idea. lastly, we really do need some kind of public oversight, besides a an to appoint a board if to have a system like this. that was mentioned before. i want to back up supervisor haney that we want to see governance change. . >> supervisor peskin: thank you, next speaker, please. >> first of all, you're not going to get first dibs on becoming an owner of equipment of pg&e. pg&e owns their insurance companies multi- quadruple billions of dollars, is that clear? >> that is why they might want our money? >> no, the persons in the insurance companies get first dibs at the property. the best way to take care of this problem, y'all ready -- you all are ready on the right

track, you have to build your own system to distribute your own electricity to the city and county of san francisco. get rid of pg&e altogether. how many more examples do you need to demonstrate that pg&e is not dealing in good faith, and by the same response never had intentions of reaching a legal agreement on this matter. about this contract agreement that you referred to, in may, if that contract was signed by pg&e and they made a deal with the city, that is a breach of contract. if they pulled out and did not keep up their end of the bargain, understand me. that is an additional lawsuit that should be filed against pg&e. pg&e has been busted by investigator that showed that well over several years ago they were told about their defective equipment and the electrical wires, and the electrical poles could cause a fire hazard. they did not do a damn thing about it. that is further proof. a minimum of 89 people have lost their lives in that fire, that

took place, on the other side of the bay. it's disgusting. about you, talking about you want to take over their system, and their defaulted equipment is a waste of money. you can start by going and gathering god damn new semi get that $21 billion that he put in, and stop rebuilding and build your own system to distribute electricity that you already didn't -- it demonstrated that you can generate on your own behalf. also, -- >> sorry. your time is up. next speaker, please. >> hello supervisors, i am a resident of district one. i am also an electrical engineer, retired, a graduate of davis and berkeley. i think i am probably the only engineer, graduate engineer in this room, of the presenters we

saw today. i appreciate, mr. peskin, you are a person with with attention to detail. that is what engineers do. . >> supervisor peskin: i think the general manager of our puc is an engineer, but go ahead. >> many people who talk about being an engineer, there are many with different flavors. my degree is in electrical engineering specifically. i wanted to speak to the risks, and challenges, little bit and say am probably in favor of the option that nobody wants. one of the things pg&e has now is what they call a scale. the city will lose some of that. it costs that the city won't increase almost certain because of that. i'm not going to go into details, but i think you understand what the scale is. things like distribution facilities, maintenance facilities, all of the things that needed for infrastructure to support the operation are distributed along its territory and can be shared within the territory.

we will lose out in san francisco. . >> supervisor peskin: we have some of that upcountry. >> may be some, not all. not to the extent that pg&e in terms of responding to large-scale things like how many power lines down. i'm not going to get enough time to speak. in terms of the cost, we just talked about the park escalator canopies, and the unexpected high cost, and that is typical. it is a very common thing. i'm not going to go into that any further. finally, about the employees, it has been reported the employees already saying if they're only in san francisco they will lose the ability to transfer out. they will be competing with tech employees for their salaries. . >> supervisor peskin: thank you. no, sir. are there any other members of the public who would like to testify on this informational hearing?

seeing none. public comment is closed. ms. hale, general manager kelly, godspeed. any additional comments from committee members? we will be hearing from you quarterly about the red, yellow and green lights of which i think around that long list you last furnished us which was pages long. everything else was predominantly red, little bit yellow. if anybody out there, from pg&e is watching and they have legions of lobbyists, governmental affairs people, would you at least be decent to the city on that issue. this is amounting to extortion. this has nothing to do with the rest of the conversation we are having. why don't you stop that nonsense with that. we are adjourned. . >> clerk: is there a motion on the item? we will continue the item.

>> working with kids, they keep you young. they keep you on your tones -- on your toes. >> teaching them, at the same time, us learning from them, everything is fulfilling. >> ready? go. [♪] >> we really wanted to find a

way to support women entrepreneurs in particular in san francisco. it was very important for the mayor, as well as the safety support the dreams that people want to realize, and provide them with an opportunity to receive funding to support improvements for their business so they could grow and thrive in their neighborhoods and in their industry. >> three, two, one! >> because i am one of the consultants for two nonprofits here for entrepreneurship, i knew about the grand through the renaissance entrepreneur center, and through the small business development center. i thought they were going to be perfect candidate because of their strong values in the community. they really give back to the neighborhood. they are from this neighborhood, and they care about the kids in the community here. >> when molly -- molly first told us about the grant because she works with small businesses. she has been a tremendous help for us here. she brought us to the attention of the grand just because a lot

of things here were outdated, and need to be up-to-date and redone totally. >> hands in front. recite the creed. >> my oldest is jt, he is seven, and my youngest is ryan, he is almost six. it instills discipline and the boys, but they show a lot of care. we think it is great. the moves are fantastic. the women both are great teachers. >> what is the next one? >> my son goes to fd k. he has been attending for about two years now. they also have a summer program, and last summer was our first year participating in it. they took the kids everywhere around san francisco. this year, owner talking about placing them in summer camps, all he wanted to do was spend the entire summer with them.

>> he has strong women in his life, so he really appreciates it. i think that carries through and i appreciate the fact that there are more strong women in the world like that. >> i met d'andrea 25 years ago, and we met through our interest in karate. our professor started on cortland years ago, so we grew up here at this location, we out -- he outgrew the space and he moved ten years later. he decided to reopen this location after he moved. initially, i came back to say, hey, because it might have been 15 years since i even put on a uniform. my business partner was here basically by herself, and the person she was supposed to run the studio with said great, you are here, i started new -- nursing school so you can take over. and she said wait, that is not what i am here for i was by myself before -- for a month

before she came through. she was technically here as a secretary, but we insisted, just put on the uniform, and help her teach. i was struggling a little bit. and she has been here. one thing led to another and now we are co-owners. you think a lot more about safety after having children and i wanted to not live in fear so much, and so i just took advantage of the opportunity, and i found it very powerful to hit something, to get some relief, but also having the knowledge one you might be in a situation of how to take care of yourself. >> the self-defence class is a new thing that we are doing. we started with a group of women last year as a trial run to see how it felt. there's a difference between self-defence and doing a karate class. we didn't want them to do an actual karate class.

we wanted to learn the fundamentals of how to defend yourself versus, you know, going through all the forms and techniques that we teaching a karate class and how to break that down. then i was approached by my old high school. one -- once a semester, the kids get to pick an extra curricular activity to take outside of the school walls. my old biology teacher is now the principle. she approached us into doing a self-defence class. the girls have been really proactive and really sweet. they step out of of the comfort zone, but they have been willing to step out and that hasn't been any pushback. it is really great. >> it is respect. you have to learn it. when we first came in, they knew us as those girls. they didn't know who we were. finally, we came enough for them to realize, okay, they are in the business now. it took a while for us to gain that respect from our peers, our male peers. >> since receiving the grant, it

has ignited us even more, and put a fire underneath our butts even more. >> we were doing our summer camp and we are in a movie theatre, and we just finished watching a film and she stepped out to receive a phone call. she came in and she screamed, hey, we got the grant. and i said what? >> martial arts is a passion for us. it is passion driven. there are days where we are dead tired and the kids come and they have the biggest smiles on their faces and it is contagious. >> we have been operating this program for a little over a year all women entrepreneurs. it is an extraordinary benefit for us. we have had the mayor's office investing in our program so we can continue doing this work. it has been so impactful across a diversity of communities throughout the city. >> we hope that we are making some type of impact in these kids' lives outside of just learning karate. having self-confidence, having

discipline, learning to know when it's okay to stand up for yourself versus you just being a bully in school. these are the values we want the kids to take away from this. not just, i learned how to kick and i learned how to punch. we want the kids to have more values when they walk outside of these doors. [♪]

>> i will turn it over to abby first had thanks. good afternoon commissioners. thank you so much for finding the time following your usual vacation month of july to have this meeting i want to set context for where we are both for the commission and those that are attending or watching. we are looking at the design of the services provided for our members by the health services

system. what, i mean, by that, what it looks like to all of us that go through open enrollment and select our plans and our products to make those decisio decisions. that is what it looks like, right? at the end of the day. what carriers do we contract with? what services do they provide? in the contributions by the members as well as the employers. we have many questions about how the future of healthcare, which is very dynamic right now is influencing how we think about the delivery of the systems. in order, we went on the road this past year for a few month considering how we might can start the system so it continues to serve all of our members and the very robust way that it does. and improve the services that we

have in this very volatile market. when we talk about that in healthcare jargon. we talk about doing an rs -- rfp. request for proposal. a legal term about how we go for contracting with services that we engage. it's a provision of our services. i want to be clear with everybody, what this discussion at the end of the day will yie yield, it will inform the very detailed ask that we put in a proposal that we send out to the different carriers that are eligible to bid. and it informs their response to us in how they would propose they deliver those services. that is what an rfp is.

that is the administrative talk for what the health service system will do and we intend on issuing the request for these proposals in the first of the next calendar year. that is where we are at. what we are kicking off today is a conversation. a conversation about how this is all working for us today. what are all of these changes that i am talking about. how does it impact members? what is important to us? we all have very different perspectives on what is important to us and values and reasons why. our job is both educational and listening to with our membership to talk about the way the models are constructed today. what the possibilities are of doing things different in the future, and really listen to

what is important. keep the process very communicative i really have a robust dialogue. that is the intention and again it will inform the decision on how they will construct the request for proposal coming the first of the year. today's agenda, we have a very packed presentation. we are trading off between thompson and clark with aon who have put this together with a lot of other input. we could go deep on any one of these topics and spend, you know, a lot of time. we will never be able to do that justice.

we are talking about the industry activities, the major players and opportunities, the spectrum of the design and contracting strategies. some of the factors affecting market assessments today. we have drafted health system models that are current possible alternatives to scenarios for health service systems. we will then conclude with a recap of the discussions and the next steps. you can go ahead and pull up the slides, because i'm moving to slide three now. the goals of today's discussion, as i said are to focus on the plans available to early retiree employees. this process will not impact the existing medicare plans that we have in place.

we are not tackling the whole enchilada. we are doing part of it. we also are talking about what that must haves are for current and future carrier partners. our initial list of that is full acceptance and immersion of the strategic goals in all aspects of administrations from administrative to clinical. a deep understanding of the health, and varied health needs of the population. i think the fact that we have employees that spend their entire career, with the city, and then into retirement and are maintaining health benefits through the health services system pretty much for a lifetime, is rather unique and special in that we can focus on how we help people maintain their health as long as possible. the ability to ensure quality

and high-value care. how can we do that? what is the strength in numbers that we have? we've talked a lot here at the board level about the modernization and inclusivity of solutions that continue to proliferate and how we manage those and whether that is the responsibility or best done with direct contact either hss or working with the plan or the health service systems to ensure the digital solutions that have been deemed available to our members. our emphasis on the integration of data amongst partners. ultimately accessible to each of us, as members. that health record belongs to

me, to you, and so having those records consolidated in such a way that we can actually be a partner in managing our health is an ultimate goal we all working towards. i'm going to turn the presentation over to anne thompson. we have put in a couple of clauses in the presentation -- pauses in the presentation, because i suspect the board will have some really good questions for us to hear, consider, and perhaps respond today or at another time. and then at the conclusion i know we have a number of members of the public who are very interested and have come today. we of course would be listening to their questions and concerns, as well. without further ado, i will turn it over to anne thompson. >> before you begin. there are a couple of questions that i have on some of these

must haves that i would like -- like to at least articulate. the third bullet.under this it says the ability to assure quality and high-value care. i am wondering if that is a substitute for the work cost effective or is that another dimension to be included? we don't have endless buckets of money at the end of the day. to be able to do whatever we want. >> i think it is a shifting of the terminology. i think it is more common in today's world to talk about value -based care rather than cost-effective. they are similar. there certainly are a number of center of excellence concepts in different ways of going about ensuring the payment is on value and not necessarily on services and quantity.

>> alright. that that is helpful. the last one, the emphasis on interoperability. i wanted to know what that mea meant? >> i had to check my spelling on that. what it is, i think the big push of high tech money following the aca. there was a lot of money that came out to help systems to modernize electronic health records. there was a vision, i think that all of these records would communicate, and they do not. today what is happening is that electronic health record, as well as you have all of these data points, if you're going through labs, if you have health system data through a health system.

you have pharmacy data through another source. the concept of interoperability is one that virtually, everyone i just mentioned is working toward -- towards. to have the data operate in away that you would have a personal health record. all of those things could come into your record. the other way they are consolidating is around creating these big data sources so that predictive analytics and other discoveries can be made by large volumes of data. we can do presentations on interoperability. it is one of the biggest drivers and prove the delivery of healthcare today. >> that is helpful. i saw that term throughout this presentation, i don't have a clue. i understand integration and i

understand interfaces between systems. but i did not understand what this meant. so thank you. >> any other questions? >> no. >> please do stop me as we go through this if there something you don't understand. i will try to take positive and explain. just stop me if need be. on page four, continuation of the goals today. we are looking to gather your input on how to further define success metrics as well. part of this is to set up this rfp, then how do we measure ourselves throughout the proce process? how do we measure success. that is something that is very important to us to make sure we are tracking out as we go through. additionally we put up some

statement about the carrier partners that we are looking f for, really focused around having a will articulated population health strategy, including a whole slew of things that i will not read to you. a lot tie into the prior slide that abby spoke to. the bottom line is, we are looking for partners that will work with sfhss for the strategic goals that we set last summer. with that, our framework for today, we will dive into the industry and market review. beginning on page six, we wanted to take a broad perspective bringing it down to the san francisco market. nationally we have seen significant vertical integration as health plans have allied with a pharmacy benefit manager.

the major national players listed here, at the and cvs health, i just looked out of this morning, it is in process still. signal with expressed scripts will be completed in december last year. and united healthcare and optima are. many of these pbm's will partner outside of these relationships. for example blue shield partners with cvs. we are seeing this alignment of plans coming together and the different components instead of having your medical claims here in your pdm here, and mental health here in these buckets and create the full spectrum. of note, kaiser is a fully integrated system, it has been that way since inception. they own their own pbm.

focused on the relationship with the pbm. two other noteworthy deals, walmart and humana to bring some retail clinics to walmart locations. amazon of course being one of the largest logistics firms in the world, purchasing pill packs for the future of delivering pharmaceuticals to the home. >> the integration is a great opportunity. it's a very positive word, i think what we, as a board, have to be alert to. it increases complexity and also concerns for monitoring. and we see that daily, even today in terms of vertical integration and aon's.

the opportunity doesn't quite capture in my mind what is actually the challenge? opportunity challenges, whatever you want to use, let's make sure we are clear that we have to pay attention beyond the opportunities. that is our response ability. >> there is one perspective that seems like a positive thing that it is creating, hopefully less complexity. the opposite side of that, is it really managing care, lots of research studies out there, which we could do a whole different presentation on. that is something that we are keeping in mind as well. >> getting back to commissioner scott comment, it is not clear if it improves quality. at the expense of cost.

as this happens, we see cost, artificially driven up. potentially. not all of the time, but potentially. it comes back to value. >> thank you. moving on to page seven. we want to take a look specifically at the san francisco bay area. i will copy out that these are a snapshot of data. looking at the largest hospital by bed capacity and occupancy you can see, there is quite a few players in this space with large organizations for this position group, you can see those listed here as well. i did get a comment from kaiser before the meeting that they have 600 providers in the san

francisco area. as far as largest carriers you can see that information here as well. kaiser being the dominant player in the bay area followed by blue shield and united group. there are three partners. >> can you clarify where is sutter in all of this? >> they did not come through in the list. >> you added all of the campuses, the number would be larger than what we see here is the bottom line. when we start talking down the line about the impact of cost. one should pay attention to

these numbers. kaiser doesn't even show up as a large hospital in that. what may be the impact on cost drivers, as well? >> mike clark, anne thompson and ir tag teaming a little bit. i want to talk about impact we are seeing with hospitals physicians and insurers. you will note at the bottom of the page here that we have captured information on market concentration that is taking place not only in san francisco but across the bay area over the course of a decade. there is information in the appendix that backs up the information i will share today. please refer to that at some .1 the appendix. from a hospital standpoint, we continue to see activities.

we talked about this late last year in our education presentation. hospitals employing more physicians directly. i for one i'm a member of the health system that i have my own primary care physician go from an independent practice to a hospital group. i am sure many of us have expansive same thing. there is a definite expansion of the largest hospital systems by merger and acquisitions. as that expansion occurs, you have the consolidation that brings the ability for the largest hospital systems to enact more leverage over insurance organizations and their contracting tragedies. all the more so, because as we have continued to see this proliferation of hospital mergers happening in healthcare, from two pages prior, it is interesting to see, vertical

integration is where things appear to be going. in some sense that is only because some very large health plan proposed mergers ended up not being approved by the federal government. two examples, of names that were on the page, cigna and anthem were proposing a merger. it went through the court, he went through the department of justice review, at the end of the day they were told they cannot come together. humana and aetna proposed a merger. the same thing happen. out there all of the review of competition concerns destroy that merger opportunity. each one of them has a new integration partner as you saw on the slide two pages ago. from a hospital perspective, you have all the more leverage because they are able to continue to consolidate even as the health plans into very high profile instances were prevented

from coming together in i consolidation. what we are seeing with the hospitals on this left side of the page is that the larger market presence does help protect from price concessions and excluded from narrow networks. we see more emphasis on networks that may be smaller to try to drive greater levels of discounts or pricing. that does prevent a wider swath of narrow networks in industry. what we are seeing with hospitals in that last bullet there, facing near requirements around transparency. there is a lot of information out there around hospitals needing to disclose their pricing what is called a charge master. what it basically is is a list of charges that a facility would charge to a retail patient

coming in, no insurance before any insurance discounts apply. there is no consistent strategy, no consistent approach out there for how hospitals set their base retail charge if you were just some buddy walking in off the street with absolutely no insurance. from a positions standpoint, we continue to see more and more physicians join these groups whether they are integrating from their own practices, their small practices, the larger practices are hot alone physician practices, physician groups. we continue to see more of that, especially as the complexity of administration, the complexity of doing your job separate from just treating patients continues to increase. we say not ready for the coming shift of value.

in some sense that is continuing to happen, perhaps happening more slowly than say employers would like to see insurance organizations would like to see. definitely a shortage. we have talked about this from time to time in primary care providers. more likely to see an increased emphasis on virtual care. we hear a lot about telemedicine, as an example. or use of physician or nurse roles. it is creating higher rates of burnout across specialties. a lot of dynamic change going on on the physician side and then we talked about the failed mergers, how now the focus is vertical integration, especially with with pharmacy benefit managers but also with provider groups. a good example is united healthcare's arm purchasing the

medical group, very prominent in southern california. narrow networks not being talked over with employers and plan sponsors because it limits choice. among panels of physicians and other healthcare practitioners and insurers archons only having to fund off startups across various product lines. lots of organizations, many which are venture capital funded. in delivering care programs to patients. >> can i just comment on this? under hospitals employing more physicians. unless i misunderstand, the set up foundations, the physician foundations they're not pulling them directly necessarily.

the physician belongs to foundation that was set up by whatever hospital system that is out there. we should be clear about that. it does give one potential level of separation from the hospital itself. i remember the days when hospitals had red lights and green lights. the red light says we are full, no more patients. green light says we are empty, please have patience. in order to help us all understand, what is going on, we should be clear of that. under physicians continuing to flock to groups. i think that.should probably be made that these groups are not exclusive. many times when they have attempted exclusivity, they have

not withstood court challenges. you may want to at least comment, so members are clear. we ran into this through some of our contracting. we see physicians with overlapping group affiliations when we look to partner with our carriers. you may want to include that in your bullet point. >> would also comment, i guess it doesn't affect this particular discussion. this foundation model is a result of california's prohibition on hospitals being able to contact her directly. we are one of four states in the united states that has that prohibition. it is foztwo abhorrent practice and it does create challenges, or opportunities, depending on how you look at it. there is definitely some redundancy, i know with our two big iba's.

there are physicians in both groups, probably less so today than there were in the past. yeah, counting physicians and figuring out where their loyalty is is an ongoing challenge. >> i would just like clarification. you have talked about this charge master. there is not a consistent methodology. is there any regulatory or legal guidance that hospitals have to follow in building their retail price list? not to my knowledge. it's more about, i guess framing a price for competitive purposes. the reality is very few patients pay the charge master. for instance if the claimant gets high enough and cost, then you can start to achieve charge master pricing. for the most part, very few

individuals actually pay the charge mastery. >> a dust up the floor what they are going to be discounting fr from? >> correct. >> that is my question. is there some sort of regulatory guidance on what they ought to be doing, or is it just whatever they think the market will bear? >> i do not believe there is regulatory guidance. >> my understanding is that these charges may vary from plan to plan. there individually negotiated. every hospital system with every insurance plan so that one plan may pay for a procedure, or a diagnostic test and may not be replicated across the board. >> okay. >> our next page, page nine. i will try to chunk it in what

we see as, you know, when we refer to opportunities earlier. we talk about each of these players, opportunities in the health what we call ecosystems area let's talk about the upper left. from the insurer standpoint. certainly there is a lot of challenge on a part of the insurers to deliver value, those who are purchasing. in other words employers and other members like that as well as members of other organizations. it really has to be a transformation to balancing population level risks. really it is all members whether they are actively engaging in the health system and they are

seeking care or not. enhancing coordination strategies is a very important part of how they can differentiate themselves and their marketplaces. certainly to improve health and that was stressed earlier in the key criteria of how we will measure different organizations in the rfp. and then the data owned by the consumers. the data that the plants collect can drive so much of their targeted strategies, working with a particular population. because, certainly each individual has their own healthcare needs as a collective to the organization, the needs of the sfhss may look different, and shall look different than those of other customers that an insurance organization might serve. >> can i just stop here.

this bullet point to remember those members of the board, who were here, at the time, there's a problem with one of our carriers who automatically enrollees into a data system where the members data was available in other practice sites such as emergency rooms, but not available to the member. the member did not have access to what diagnosis had been done by the provider may show up in the emergency room. we focus on the consumer, i think that is the driving principle. this is not been necessarily the behavior that we have seen. this is an optimistic category that we have two continue to watch carefully. >> i think you are exactly right. it points back to the bullet.on the bottom of page three that commissioner scott raised where

we really didn't want to say at the end of that bullet., the interoperability, ultimately with the member. that has to be central to what you are looking to strive here. >> from a member standpoint, a good segue into members. absolutely a diverse range of socioeconomic features with the varied health care needs. all of the survey data that we collect from organizations who survey individuals on what they seek in their healthcare providers and their insurers. everything else is personal, caring, effective affordable care. i think without question we all know in the back of our minds that we can perform better from our own health behaviors. at the end of the day, you know seeking the guidance, continui continuity, crosses care

connection points. that is what the opportunities are from a member standpoint. from an employer plan sponsor standpoint, those who are funding this, looking to keep employees and retirees healthy, not only for cost needs but also to certainly keep people actively involved in the businesses. that continues to be a big issue that employers and sponsors struggle with. everybody has long passed the point that plan design, cost shifting and contribution cost shifting is not the answer, and has not been the answer for quite a while. all of the survey data we have done to employers over the past years has indicated we need to find new ways to help manage cost increases.

it cannot just be done through cost shifting. helping people decide, you know, how to make those better choices in their health behaviors, and you know, as a baby boomer population ages. about halfway through now is medicare eligible. we certainly know what happened to cost of healthcare as you age is an individual. needs increase. you know being challenged by the continued progression of an aging workforce. average health risk of workforces that continues to grow. consolidation, clinical immigration, trying to drive the primary care physician as an influencer of care, even recognizing the shortage.

that continues to proliferate with primary care physicians or pcps and then lots of competing forces for physicians, hospitals, other healthcare practitioners. and then finally the disruptors in the space. they are numerous. there is an enormous amounts of venture capital backing visa disruptors. they are trying to, you know, fill gaps in the system. so much leverage advance technology and encourages that member engagement support with their health behavior improvement, healthcare journey. you have all of these organizations who, you know, theoretically you want to work collaboratively to integrate across all of these spaces. but certainly, you know, as you sit here as a board, and as sfhss sits there as an

organization contracting with organizations to help deliver on these promises, you know, this is the environment. these are the perspectives of the different players in the space that have to be brought into consideration during the process. >> there is only one point that i see in this ecosystem is you are describing. you come to a summary view, collaboration and integration is amongst these parties will become critical to changing the healthcare delivery. what is the incentive to cause these entities to do that. that the whole thing gets nationalized for medicare for all, or, what do you see? >> for me -- so, each of these organizations has these -- their

own interest. at the end of the day, insurers have certainly the goal of helping to control cost, optimize population of health. at the end of the day they are also in business, right? i would also save that for the disruptors. the members are absolutely seeking to help bring this very complex world of healthcare to something that is more understandable to them. when needs happen i want them addressed immediately. i'm not feeling well. i want my diagnosis. i need my surgery, i want to get it done as soon as possible. there is so much that the members are seeking to improve in this very complex system. i think employers and plan sponsors, you know, i guess the irony of hours them in america

is it only exists the way it does right now because of world war ii wage freezes. when companies cannot pay people more during world war ii. that is when he saw an increase in employee benefits. here we are almost 80 years later, with employer sponsored health care. yes there are government programs for the ages over 65 and others through medicare. you have low income programs like medicaid, and state children programs. we sit here today, sfhss representing over 120,000 members because employer-sponsored healthcare's is the way it is delivered. in the united states. and even though there is so much conversation about alternatives that could take place into the future, it would take a huge paradigm shift to get us away from an employer-sponsored

system. and then, certainly from hospitals and providers. i would say they would have similar aspirations as insurers and disruptors. help people in need. help aggregate health of the population. certainly hospitals make money when people are coming through their system. but there's also the desire to help improve the broader population health. so, from a hospital and provider standpoint, you are trying to deliver optimum care to patients in need but also bring awareness to how populations can remain healthy. that is where i would see everything tying together, at the end of the day, the ideal state is we lessen our demand for services and can all be

healthier as a population. when the need for healthcare happens that we have a system that works effectively, for that member bucket. >> who can you point to is a disruptor for us? >> some examples of disruptors. i meet with these organizations often on behalf of trying to understand the marketplace. you have companies for instance who are focused on diabetic improvement, diabetic care improvement or even diabetic reversal. you have organizations out there providing virtual means for physical therapy. instead of going to a physical therapist office you're actually using your phone with equipment that is mailed to you to perform physical therapy exercises virtually. that is a very high level view

of what disruptor may be. essentially there are organizations that are trying to promote delivery of services to individuals in a very targeted way. finding the opportunity, because the feeling that that doesn't necessarily exist well in the marketplace today. >> can i follow up with that. i actually find the word disruptors -- is it an industry term. it has a different connotation. when i read this, private or for-profit, entities trying to provide, you know, other services that you alluded to in your opening remarks disruptors is a weird word. disruption to me is kind of like a bomb, you know? this is not what they are. >> it is the tech industry.

the tech industry is very comfortable with creating disruption. that is what they intend to do in order to shift the marketplace in some significant way. >> is the disruption of an integrated healthcare interoperable system. we have dealt with these several times. the question is, how do they integrate with the rest of what we are contracting for? the answer generally is; they don't. where is disruption? >> on lots of examples, we can walk outside the healthcare industry and look at the cars in san francisco and the various companies the lift foz and the uber how they have disrupted the rideshare service which is to be taxis, right? now they came in and it disrupted.

there is a lot of conversation around that. it is the same approach to trying to solve a problem with something that is radically different, taking the care, wraparound care for a diabetic and having that all with home delivery devices and monitoring service, meals, there are dozens of these companies that are just targeting people that have diabetes or may be prediabetic. congestive heart failure, the list goes on and on. i think where we are watching this happen now is it has raised the interest of the establishment to say, shouldn't that be part of what we do, right? so, it is disrupted thanks to the degree that i think these things are falling into place and they are an adjunct tool.

we do not know exactly how these are going to get fully integrated. we do know there is a lot of one offs everywhere. there seems to be a magic number of everybody gets 30% of the population. i do not know how true that is but that is what you hear all the time. we can get 30% of your diabetics to use this. we can get 30% of your congestive heart failure patients to do this. it is something out there that is real. the consumers know about it and we need to stay on top of it and see where it goes. >> they are disrupting our traditional methods of delivering something in the system? they are disrupting, in my opinion, both sides to the left in the right of disruptors. they are disrupting the notion of all in integrated program for, delivered by an insurance company.