we do that based on the actual cost of the region. i was illustrating the premium for a single party under blue shield axis-plus of the bay area is $675, compared to the same product via los angeles at $428. as the sub costs rolls up to actual premium differentials in terms of how we set premiums for our contract agencies. the state requires a single statewide rate, so you will not see the same phenomenon when we purchased for state assets. we also narrowed our physician networks to 2008. we did that for both the blue shield product as well as the p po. we added blue shield net value and first select. again, we were purchasing physician services based on this cost to quality and have allowed us to said in-house plans with in this product. for the net value product, as long as the networked -- it is a similar design, we have not yet done anything in which we are moving any members. they voluntarily go into those plans. one of the reasons our members have difficulty going into the plan is they like to maintain the ability to pick a spec

they represent probably the fastest growing component of cost. o hospital wages have grown at a growth rate of almost 8% over this 2002-2008 period of time, compared to the other factors like supplies, purchased services, depreciation, and interest. i do think we are going to see greater increase. the first speaker talked about external factors. i cannot emphasize enough the impact that the price of oil has on hospitals. you would not think that it would, but hospitals are a very plastic-based industry. when oil goes up, the cost of plastics and plastic supplies go up. we predict significant increases in the price of supplies. supervisor campos: that wage comparison you are looking at, that includes health benefits that are given to the employees? >> yes, salaries, wages, and benefits. supervisor campos: to the extent that things like hospital consolidation, the practice that hospitals are increasing costs, then the hospitals themselves are implicated, if they are concluding that cost as part of the wage increase that they are citing as the regior

and then 10% of the population is about 80% of the cost. and that's a huge opportunity because if we can focus on the 10% and intervene in an appropriate way to keep them from moving down the care continuum down that 1% category, we can save a lot of money. we need to think systematically and strategically and not just consume and spend money in the same way and delivering care in the same way. we need to focus on better care. we also need to look at prices in health care in america. >> this is the world health care forum. we have overwhelmly higher than any place else by a factor or two or three. we pay more for each piece of care than anybody in the world. if you have an office visit in canada, the doctor gets paid $40. and if they charge $41, they lose their license to practice in canada. in the u.s. an office visit is anywhere from $60 to $150. if you look at physician fees for a nor nal delivery. a domtor in -- doctor gets paid $503 but in the u.s.a. itself quadruple. >> one of the bizarre things in this country is that we're talking ab

the cost would be shifted to americans. as a matter of fact in this country over the last five years, more than half, almost half of the increase in health care costs to employers has been shifted to employees through both the reduction of benefits and the increase in the premium out-of-pocket that they pay. the employee trends are currently running at 31% year over year for the health care costs in the united states. so more of that will continue unless we get the quality and affordability. so, we believe that the affordable care act must now focus on the quality of portability and we believe the action forcing event is its bringing insurers and providers together in unique ways to create whatever version you want to call with of the accountable care organization. now if you have seen one aco, you might have seen one aco. they are very loosely defined as you know the rates were released last week we are still poring through them. if you want to see some interesting video go out on youtube and look at the avatar videos aroun

cost than kaiser. it was interesting to me to hear the professor from usc talk about that cost differential because the percentage is kind of balance . but that applies to hospital costs as well. the cost per day is about the same. but that means that 22% is driven by the hospital admissions, so blue shield has a lot more hospital admissions. kaiser members, as you can see, how will grow wings of state -- have long berlin's -- have longer lengths of stay. blue shield figures include an estimated 25% cost related to professional services. staff model has fewer hospitalizations but longer length of stay. whether that has an impact, which is something i would like us to collect more data on, every admissions is questionable. when you discharge people earlier, they often get readmitted. it is something health care reform is looking at. perhaps we can begin to collect data on that as well. our top hospitals in terms of how much we spend, are in order california pacific, with 145 days per thousand, 33.5 admissions per 1000 enrollees, and an average stay up 4.1. you see staff, and we tell you how much was spe

we cover the cost of public health. there are environmental impacts to the health care services master plan. it will provide leverage to collect and analyze data and make -- help us make informed and healthy choices about how we use those levers. there should have been a few other things. supervisor campos: welcome to the world of the city's technology. >> i'm going to grab my printed slides and tell you what i have to say. could you mind waiting for me for just a minute? thank you. supervisor campos: no problem. >> we will do it this way. this is just another example, to speak to the question that you asked. this, and again, we could write books and volumes, and you could have sat here who are very knowledgeable about this who could tell you more. this is just in the impact of the distribution of services that we have. it is looking at the percentage of time that ambulances are on that version. the big bar in the middle shows the amount of time the san francisco general hospital is not able to a said ambulances for pati

has grown tremendously. 10 years ago, the city was subsidizing employees' health care costs at the level of $176 million during the fiscal year. today, during this fiscal year, fiscal year 2011-2012, the city projects to spend about 500 million -- exactly $491 million -- to subsidize the city health inch -- the health insurance of city employees. as we face a deficit that at this point exceeds $300 million, it is really important for us as city government to understand why health care costs are escalating. we cannot put our fiscal house in order unless we have a better grasp of that issue. in thinking about that issue and talking to a number of experts and people who are involved in this issue, it became clear that health care costs in san francisco do not happen in a vacuum. for us to understand why it is that health care costs have increased in san francisco, we have to have a better understanding of what is happening in the region, what is happening in the state. it is in that context that we are having this discussion. the fact is that san francisco residents and employe

the rest is based on non-cost items. those include looking at their commitment to comply with city goals for the human rights commission, complying with local hiring requirements, quality of staff, purged to deliver savings that might offer as part of the project. because we are working on an extremely aggressive deadline to deliver this project i and i'm for the america's cup, we wanted to highlight the provisions of the contract. they contain a certain level of financial risk. immediately after selecting the contractor, we would direct the contractor to provide construction services. as mentioned earlier, this is when the contractor oversees a portion of the document coordination. costs estimated to make sure we are tracking the fixed construction budget limit. they also became a process of qualified trade contractors. every single one is pre- qualified, enabling us as they know how to perform the work. all of this work does not require pre-construction work. this is prior to port clearance. if the port were to cancel t

so if the cost goes higher and higher, how are they supposed to seek medical care? even though they have some hospitals in san francisco, do they use care of our residents? the government controls the cost in the future. supervisor campos: let me read more names. [reading names] >> i am disabled and i have a question. currently, they provide preventive care and coverage for me. i don't know under the new regime is healthy san francisco will be reduced or seven -- discontinued. most of them are working with low wages, retirees, low wages. women of color and people with language barriers. the list goes on. not only do these individuals require ha affordable health care, but what about services that will treat these people through rehabilitation and physical memory? will that be covered as well? will that be available to all of the groups we have mentioned? supervisor campos: next speaker, please. if you could bring the microphone closer to you, thank you very much. >> i of the member of the associate community center. i live in the social district. supervisor campos: o

the cost of that alone, the mean cost of that alone, is about $72,000. once we admit the patient to the hospital, it becomes even more expensive. at least one patient paid out of pocket $505,000 for having been hit by a car. if we look at this health care in general, when people are injured, a lot of those people tend to go into bankruptcy, so it has a huge impact on the economic stability of our residents in san francisco. if you are admitted, generally, on average, you will stay in the hospital one week to two weeks before you are released back home. so again, it is a very unfortunate thing that can happen. in terms of overall cost, over the five years, we send -- spend $75 million. about 76% of that was charged public funds. 45% charged to metical and medicare. 24% charge to private insurance. the rest was charged to people out of pocket. these people are getting bills in the mail for an injury that could have been prevented. the severe injuries are really important. i want to emphasize that, in terms of the executive directive, and we are supportive o

given the cost of the revenue increase, as well as the high cost of administration, we recommend that if you approve the other proposed ordinance, file 110103, we recommend that it be amended to replace the date of march 17, 2011, with the effective date of the ordinance. we also recommend that in the ordinance to reduce the requested appropriation. as i stated, it is the estimated amount needed to keep the budget in balance. of course, we consider the approval of the growth ordnances to be a policy decision for the board. in this particular case because it would use general fund monies to be allocated to the department and replacing that with the existing feed. i would be happy to respond to any questions. >> supervisors? let's thank you, madame chair. -- supervisor mirkarimi: thank you, madame chair. thank you to everyone on all sides of this issue. this is not an unfamiliar story, struggling departments and chronic deficits for years in sentences go. department staff is tasked with doing the best they possibly can with a limited amount of dollars. this plays itself out in the kinds

they won't do them well and they will do the matter high-cost. they focused on delivering team care to the right patients, partner so that you help the percentage of people who need care. >> i think we have time for one last question. do you see what will have to happen with bending the cost curve as antithetical to a continuing innovation and in clinically that the united states has been for the past four years? >> i think it is the opposite. if we start focusing on rewarding better outcomes, we will see an explosion of creativity. i don't think it will back off on innovation. i think it will become better. >> i agree with that. this is a great opportunity to invest in one of the best areas of the united states. the pressures will lead to innovation and mechanisms to meeting the challenges of the environment in terms of organization but also in terms of technology. this is so that a patient gets the right diagnosis the first time. there will be molecular fingerprinting. this is so cancer is matched to the care. in the case of blood pressure, it d

secondly, the assertion that labor costs are largely responsible for the higher cost of health care are quite frankly preposterous. the only grain of truth to that assertion can be found in the salaries. as an example, and the ceo is now the highest paid and ceo of the sacramento valley. that is because after a wage increase of 43%, there are over two dozen corporate officials just in the sacramento area that earned over a million dollars apiece. here in san francisco, the wage increases for officials have surged dramatically in the past several years. the latest available data shows that the corporate salaries jumped from anywhere from 40% to 50% a year. i want to make it very clear that no registered nurse, housekeeper, a nurse's aide, a dietary worker, or any other management hospital employee has ever nor will ever in the future have their salaries of words in the same manner. supervisor campos: next speaker. mr. smith, thank you for waiting to speak. >> thank you for this very interesting hearing. we take it as a very sincere question of how we can cut costs. one way that we can te

just a gauge of the cost of the commissions. -- the cost of admissions. the rise in the teagarden and attendance, was that a rise in the cost of admission or a rise in people? >> both. >> we increased the nonresident rate from $5 to $7. again, we -- in

that is where the real cost of cutting benefits of this. the fee paid to the port or city is very minor compared to the actual cost. >> then, do we refer people to better companies? >> no, we would not do that. they are responsible for finding their own. >> hopefully, you can come back with the fee. >> rent. levy >> on banner content, under the design criteria, will there be any kind of prohibition or review? i guess that goes down a slippery slope. >> these criteria state that they encourage a clear display of the message, which i do not think is quite addressing what your comment is about. on our to do list, when it comes back in its final form, is that add a little bit of language, particularly if we charge read, that would limit the content to limit alcohol and tobacco advertising and some other things as such. you do not see that in here today. >> and then, there is intent to allow a listing of corporate or commercial sponsorship. >> the sponsor is allowed to occupy 15% of the better area, and that is consistent with the city's public w

there's no question, the cost of doing business has been increasing at many firms. after all, on top of energy, the prices of many agricultural and industrial raw materials have also surged. so it may surprise you that profit margins for the s&p 500 are close to record levels. earnings expert mike thompson explains one reason why. >> the consumer is basically absorbing the costs. so, corporations are being able to pass on their higher increases to the consumer and continue to, you know, make good profits. >> reporter: in addition, rising commodity prices are a reflection of an improving global economy. so, in many cases sales are rising at a faster rate than costs. plus, u.b.s. analyst david lefkowitz points out raw materials are only a small portion of total business expenses. >> we think it's somewhere between 7% and 9% of the cost structure of the s&p 500 is comprised of the commodity costs. so we are seeing high increases in those commodities that businesses use, but it's a pretty small portion of their overall cost structure. >> reporter: one wildcard for earnin

just a gauge of the cost of the commissions. -- the cost of

the cost of running it. the same hospital from los angeles, move it here, same staff, everything, 23% more. so there is a cost of living difference reflected in those prices. but as you will see, the bottom half of this slide, we are looking at commercial prices. what do health plans pay? los angeles, commercial plans on average $4135,0035,000. that is before you adjust for cost differences. the next slide takes into account that if the mover hospital from los angeles to san francisco, it costs more. again, looking at the right hand side, that difference of 170% to 140% drops, but not to 0. it is still 38% higher in sacramento and san francisco. supervisor campos: even after adjusting. >> right, for those input costs. this gives you some order of magnitude of the difference in prices after you have adjusted for input costs. so hospital market power and consolidation. providers can use market power to stifle innovation and competition. one of the practices is prohibiting contract thing for narrow networks. one

visits to the emergency room cost about $6,400. the patient is then treated or well enough to go home the same day or is further admitted for more care. if they are admitted, the average for that is about $72,000. so a great deal of this cost is incurred during a mission in the hospital. we used our hospital diagnostic codes to identify patients who came in with pedestrian injuries related to automobiles. particularly, for residents of san francisco, excluding a small number of intentional injuries. this is just about 3600 cases in the years that we look at data. and there is a large cost difference between patients that were treated and released and those who were admitted. the overall population study was over 1000 patients who were treated. as has been highlighted, it is an injury pattern that we see in all walks of life. everyone from children to the elderly. unlike other patterns of traumatic injury, this is something we see in everybody. everybody walks in the city at some point. just to highlight the overall costs to the city

will go up as a result of the fukushima said the fuel costs here of the fuel cost is a very small element of the cost of a kilowatt hour of nuclear electricity it's about five percent of those you know two thirds of the cost is the cost of actually building the plant and that's why finance is so important because two thirds of the cost is building it so the rate at which you borrow money is crucial because if it. if it's a loan guaranteed loan as is trying to take place in america then you can borrow money at the same rate as the american government two or three percent that's very cheap money if that's money that's a risk if the company building the plant goes bankrupt and the bank doesn't get repaid. the interest rate is going to be several times that five six times that and that will kill the economics and. thank you thank you very much for being with us and just a reminder that my guest in the studio head today was steve thomas professor of energy's teles adam university of st and that's if and our help all of us here if you have your skills floodlight we have somebody in whil

just a gauge of the cost of the commissions. -- the cost of admissions. the rise in the teagarden and attendance, was that a rise in the cost of admission or a rise in people? >> both. >> we increased the nonresident rate from $5 to $7. again, we -- in 2010-11 alone, we will probably benefit from to -- we will benefit from $200,000. >> do you have the power to set rates and raise them? >> no, since the 1996 charter, the board of supervisors through the park code sets all of our rates and fees. every time you want to change a fee or rate, it requires approval and we have to go to the board of supervisors. >> one of the issues that i read from some of those that our opponents of the admission fee is what we do about folks that don't have id or who are undocumented. how do we address that? >> with respect to answer the undocumented, we don't require any specific form of identification. we don't require a driver's license, proof of citizenship. and the san francisco address will do. for people who did not bring any identification to the garden, the policy has

how much in reality is the actual cost of what you are buying? >> we have the infrastructure plan approved by the board. to give you an example -- by the way, this is a new financing mechanism and you are all aware of that. this situation is different than treasure island where you have a huge area that represents the bond. what we don't know yet is the interest rate. the interest on that mortgage that a private bond buyer will pay. for most of our calculations, we have assumed an 8% interest rate. we have assumed that because we wanted to be conservative and not assume the better rate. part of the purpose of the partnership is to get some bond sales out there so that other investors can see that this is not that the novel of a concept. this is like a bee development bond. essentially, and investors can be like sheep. they want to see if someone else has done it. part of the partnership is to try to facilitate those early on sales so essentially the borrowing costs go down over time. the estimates we have for this financing district, this is assum

i am concerned about the cost and the money. but many of the facilities have not changed since i worked for the department 20 years ago, and it is time. commissioner moran is right. what i would ask, given the sensitivity about spending money, is that you keep commissioner torres. provide a simple explanation to the public so they can understand why this is necessary now. the employees need efficient, safe places to work. safety is a concern, just like the seismic condition was a concern. that is easy to get behind. we have been to budget cuts. everyone has been to budget cuts. i was not here for your budget hearings. it is hard to justify in these times. to the extent we can make this simple for people to understand, that would be very appreciated. president vietor: i think with this communication strategy project that if we can come up with a series of explanations that are easily accessible and simple for the public to understand on the special financial pieces, but also the effect it might have on the rate payer or the user,

they look at the celery and on salary costs. the difference is if you are about filling 50 positions that are vacant, in you have already got that salary build in. with $5 million in class, in covering, the salary is going to be the big issue. it is not seven weeks or seven months. if you were to give me funding today to hire two or three academy classes, you would not see those officers until 2012. supervisor mirkarimi: i understand that. but if you 0 n, with a truncated, we could look at it. it seems a little fuzzy, that is all. >> we will get better. chair chu: i believe the cost of the academy class is about $5 million, which includes salary for a 50-person sized glass, and then 1 million. >> correct. chair chu: ok. >> we will go back to the expenditures. when you look at the fiscal 2011, to of the " expenditures, you can see is broke down, other departments, materials, supplies, capital, and when you look at the salaries in french, it costs that to put them on the police department. the largest proportion in salary and fring

for options 1 and two, you identified the cost roughly. second option, $100 million to $200 million. with the last one, $21 compared to $8. who would pay for that? >> ratepayers. supervisors chu: meaning households, commercial. >> households, commercial, residential. one of these avenues was selected, in the next rate review process, we expect the cost to be passed on to ratepayers in some way. supervisors chu: if we did not pursue any of these options, we would not incur the additional cost. >> that is right. we would not incur any of those costs. supervisors chu: you talk about possible amendments, which i believe is the sheet all of us were given to really talk about the commitment to exploring different transportation opsins, good faith negotiations and what infrastructure, etc. it is not necessarily something we would do it here. it would have to be done to the underlying facilitation agreement. is that correct? >> if i could ask the city attorney to answer that. >> tom owens, a city attorney's office. the new language would be inserte

our concern is the cost to rate payers may increase if the agreement is not maintained. the second reason is this city does not currently have landfill capacity to deal with a natural disaster or unforeseen event that produces large amounts of debris. we're in a situation where if one of those events occurs in our city, the current landfill capacity that we have could be quickly filled up in a day. we do not have a contingency plan. we need a long-term plan for our waste and what it would cost the city in the possibility of an event. the third reason is -- as of november 2010, the city is now out of compliance with the state law that requires a 15-year disposal plan. this is the california public resources code that asks all cities and counties of california to have a 15-year disposal plan for its waste. that's a concern, as well. finally, there's not adequate time to redo the process before we reach a contracted capacity at altamont. when we started this process in 2003, we do not see a way to restart this process and complete it in the next couple of years considering

the cost is not in the material. the cost is not in the paint. the cost is not in the hardware. the cost is in the time, the prep, the installation and all that work. so, i always say, buy the best equipment, buy the best paint can. the paint is cheap compared with the cost of the painting job. don't you think? >> don't buy the cheap caulking, bite expensive one. >> another common problem which homeowners can deal with, this is a little flour bed that goes right up to the -- flower bed that goes right up toth

the industry has a variety of initiatives to contain costs some of them very good, but in the end, they and their government and equivalents in medicare and medicare to be a commodity or financial intermediaries. higher costs don't fundamentally threaten their business. they are just something that has to be accurately assessed and passed on to their customers. the affordable care act has made that financial intermediary role even clearer their job makes it very clear is not to manage it is to pass on 85% of the premiums to the medical industry as efficiently as possible when you brush with the confusion the picture isn't all that complicated. what we've done with health care in america with the best of intentions is to carefully build a highly in the economic system one where the volume doesn't depend very much on the price. when he took economics 101 in college, you learned that there is a scientifically correct strategy for a seller in a highly system and that is to keep on raising the price. there is no rocket science here. we've created a economic system and health care by insulati

>> keep in mind that the costs are fixed but revenues will grow over time. if you look at the slide that we have where they outlined the staffing, we are not overstaffing this function. we have two dates. we have a very modestly -- ticket takers. we have a supervisor and we have an accounting function. the garden right now is open seven days a week. this is open seven hours a day during the winter. we are staffing on average 8 hours a day, seven days a week. i and a stand the budget analysts point but i think that if we had had a full 12 months, that ratio would have slid. the data shows based on next year's projections, the cost of operating the garden would be 37% of the total gross. that leaves us netting 63% of the revenue that comes in and that is not insignificant. i think it is worth noting that given some of the challenges we have had come on the san francisco recreation and parks department will that $250,000. >> as the budget analyst report points out, this was probably lacking in a number of areas that we want to see button to down. do you agree wi