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HomeMy WebLinkAbout12-13-04 Health & Public Safety The Health and Public Safety Committee of the South Bend Common Council Minutes from Meeting of December 13,2004 The December 13, 2004 meeting of the Common Council's Health and Public Safety Committee was called to order by its Chairperson, Council Member Ann Puzzello, at 4:20 p.m. in the Council Informal Meeting Room. Persons in attendance included Council Members Coleman, Dieter, Kelly, Kirsits, Pfeifer, Puzzello,Varner and White; South Bend City Controller Rick 011ett;City Benefits Manager Susan Wallace; Economic Development Executive Director Sharon Kendall;Gibson Insurance Company representatives Mike Balsan and Margaret Hartsough; Gladys Kopala, and Aladean M. DeRose substituting for Council Attorney Kathleen Cekanski-Farrand. A full quorum of the Committee existed with all members present,namely Council members Puzzello,Dieter, Kelly, and Kirsits. Health Insurance Update City Controller Rick 011ett accompanied by Benefits Manager Susan Wallace and by Gibson Insurance Company representatives Mike Balsan and Margaret Hartsough,informed the Committee of the good news that for the first time in the past four years,the City's actual health care claims were less than budgeted,i.e.$8.95 Million budget and$6.87 Million claims. This is in contrast to the past three years of cost increases well in excess of projections. Mr. 011ett distributed a packet of information relating to the City's 2004 self-insured Group Health Plan. Susan Wallace noted that two reasons for the 2004 cost savings were that fewer special, catastrophic claims("spec claims") occurred in 2004 compared to 2003 (i.e.four claims contrasted with 11 such claims in 2003); a spec claim is a claim more than $125,000.00. She also said that since Memorial Hospital became a preferred provider,the City's group health plan receives a greater discount on its portion of payment. Member Puzzello questioned why the 2004 employee health care budget increased so much. Mr. 011ett responded that the 2004 health care budget was based on industry projections of nationwide health care cost increases. Also, because the 2003 number of spec claims was significant, the 2004 budget anticipated more such claims than actually occurred. Mr. 011ett also noted that the past three previous years of health claims had depleted the reserve account,and he did not want the 2004 budget to be in the red. He noted that the savings from the 2004 health care plan will be retained as reserves in 2005. Mr.011ett also noted that the three deficit years cost$5 Million in total more than what was budgeted; Mr. 011ett hopes to have a $5 Million reserve in case of unusual future health care costs. Member Puzzello asked for the meaning of"gross claims"as used in the hand-out materials. A gross claim is what the City pays after provider discounts. • Council members asked to know the average age of City employees which is 46. Council member Varner questioned whether City employees appeared to under use or over use medical services. Ms.Wallace stated that the average number of claims per employee is seven, of which employees pay roughly 10%. It was also noted that 91% of each health care dollar goes toward actual health care costs. Under a non-self funded plan,the administrative cost would be 20- 25%, rather than 9% under the City's plan. Mr. 011ett pointed out that while this year's results were positive in terms of budgeting, the health care plan is the second highest cost in the City's budget and that the City must promote wellness. The emphasis might cause short term cost increases,but would produce long term savings. He noted that most private health plans pay 75% of a participant's costs while the City plan covers roughly 90%. Council member Pfeifer questioned the amount of health plan costs attributable to conditions that are preventable,e.g. smoking, obesity,etc. Ms. Wallace said she didn't have this data with her but would get it later. Ms. Wallace also stated that one large claim in 2003-2004 was caused by obesity, a gastric surgery that didn't turn out. She also said that in 2005 there will be two possible liver transplants. Council member Kirsits asked whether emergency room visits were abused by participants. Ms. Wallace said that she was watching that statistic. She thought that by keeping the co-pays low ($15.00),participants were more inclined to use their primary physician. Margaret Hartsough added that the health budget component for emergency room visits is only 7% which is not significant. Mr.011ett concluded by saying that in 2005 the premium rates for employees will remain the same as in 2004. As this was the only agenda item,Committee Chair Puzzello adjourned the meeting at 4:47 p.m.