Travis County Commssioners Court
January 6, 2004
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Item 3
3 b is to receive status report on actual and projected expenditures for employee health insurance through December 31, 2003. I put this on because I think we ought to be kept up to date as much as possible on employee health insurance expenditures this year. It ties into our employee wellness program and our serious consideration of pay increases for employees next year.
>> good morning, I'm alicia perez executive manager for administrative operations. You have here an estimated report for the first quarter of the hospital and insurance fund for county employees. Usually the information really doesn't get to us, final information, until about the 15th of the last month of the quarter and then we are ready with it by the end of -- of January. So what you have here is indeed an estimate of the first three months. I will appear -- I will point you to the page that says estimate. And that gives you the information on the total operating revenues and that means revenues from the county and also from employees who pay premiums. And that is the actual, then you have the three months budget. As you can see, our actual revenues were just slightly under our three-month budget.
>> I'm not sure that I see that. Okay, I'm looking at the top sheet that has an estimate in the upper right-hand corner.
>> yes.
>> what number should I look at?
>> okay. Under total operating renues, the -- the first block to your left,.
>> okay.
>> the last total operate revenue, 7,386,572. Then the budget would have been 7,844 ...
>> which would have been -- which would have been under a quarter, we are a little bit under.
>> yes. A little bit under.
>> okay.
>> you go then to the operating expenses, and what you have in the operating expense block is the health claims, those are the actual health claims that we have received and the -- and the estimate.
>> six and a half million.
>> through December.
>> six and a half million?
>> that's the budget, the 5.8 million, I'm starting with health claims, third party administration, total operating expenses, yes, sir, it's six and a half million.
>> okay. Our budget for those three months of operating expenses was 7.3 million. So we were under in terms of claims. And other expenses, but the big one was really claim ifs you look at the first line on that operating intentions on health care claims.
>> alicia is this generally how we do this, where we look at it at this time. Is there any history that shows that -- that you are fine for the first quarter, but things ratchet up, should you always be expected to be under a couple -- obviously you like to have a little bit of a bump, we do have a little bit there with 3%.
>> we submit a quarterly report to the court that's -- that's more comprehensive. This is, I think, just a preliminary review of what the numbers are, that will tell you how much we are spending on prescription drugs, how much we are spending on office visits, on hospital. It will break it all out for you, it will compare it then to last year. Which the second page does a little bit of that, too. It's a comparison of what we spent the first quarter in '03 and what we are spending the first quarter in '04. As you can see, the operating revenues are more in fy '04 and the operating expenses are also a little bit more. But overall, the -- the change in assets was 877,000. So we are below what our budget is and we are below what our budget is. One of the things dan mentioned to me yesterday is to keep in mind that October, November, December, a lot of times we will not get those claims until January, February or even March. Because of the holidays and, you know, those sorts of issues going on. So that we usually see a lower first quarter than we do than the second or the third because of the delay in getting the billing.
>> we definitely wanted to emphasize that we have financials for October, November but we December we estimated. The books are still open for December, those figures are subject to change when we bring back the quarterly report to you at the end of January, first parted of February.
>> we projected for the entire month of December?
>> yes.
>> so we don't have any invoices in December?
>> we have some, but it's not complete. We will won't have the complete December date until mid January.
>> well, in October do we receive invoices from August and September.
>> some were paid in October from August, September, 45 day -- average 45 day lag between services render and billing coming in.
>> we picked up all of the actual claims in October, November, we looked at all of the information that we had for December as well, but there was some projection done in -- for December's numbers because those weren't complete.
>> I understand. But had we look at the invoices for 12 months in say '03, we have some late '02 invoice, then we have some outstanding invoices for '03 that aren't paid, paid in '04.
>> that's right. Then you have some, also, that's part of what you build up your [indiscernible] for incurred but not reported, you have some that may not have been reported from previous years. So, yes, sir, there's always a lag time as a standard and then there's some that are out there that you won't get it until maybe a year fm now.
>> so when we compare the numbers for this time in '04 to this time in '03, we have lag this year, we had lag last year, they rarely are fairly comparable aren't they?
>> yes, we are doing better than we were at the same time last year in materials of the revenues that we have. In terms of the revenues that we have.
>> how will this information help our Travis County wellness committee formulate additional recommendations to help us control employee health insurance.
>> we will again go back and look where we are incurring these claims, what specific diagnostic classes, the expenses are falling into. If it's -- if it's cardio vascular, if it's cancer, whatever it is and those areas that we can approach from a disease management program is what the wellness committee is looking at and we have been able to identify certain areas. I think when we come back to you next week, pardon me, you will see that there are some specific targeted diseases that we are going to be looking at for programs.
>> that makes sense to me.
>> yes, sir.
>> some time ago, when we first brought a lot of this to the court, when we were trying to get some kind of direction on how we are going to proceed, especially when it came to the budget and [indiscernible] not have as many surprises during the budget process, but we can kind of propose ourselves for the next budget, there was a request, I guess, made to look at the quarterly reporting to make sure that we try to stay ahead of this. My question is at what stage of this process, which we are going now, tied into the wellness program, tying into the quarterly reports, can we be safe to look at a proper jennings where we feel comfortable that this will actually be the -- the cost to the contribution that we need to have during this time frame. Where can we reach a comfort level to tie these two together. This is really, in my mind, the crux of the matter. How to tie what we are doing here as far as looking at the cost.
>> we have set up a plan to have on a quarterly basis to have our actuary review the data so we have an understanding of where the plan is and as you say not be surpred. It will be later in the plan year when we really see what the wellness program impact has. And those are measurements that we need to start capturing when we have our wellness program in place.
>> and those may not be directly -- you may nosee that impact directly in your health care significantly. Okay? Because it takes I think a number of years in order to get to bring an organization this size to a point of -- of wellness. It's a continuous effort.
>> but I guess as far as experience is concerned, I don't know what the actuaries are going to say about that, there has to be some trend as far as the good years and the bad years or whatever as far as expenditures is concerned. So I'm kind of concerned about where that trend is.
>> there's a couple of things that we did, the first one at your specific request, is to have the actuary take a look at the numbers every quarter. You asked that. That is different than what we did last year. We asked them, I think, to take a look at it twice during the year. So every quarter we are sending him the numbers, at which time he can give us a trend projection. And so we do that the first quarter, the second quarter. I think six months into the year, we will have a pretty good idea of where we are going to land. The other thing is that this year, in fy '04, the court contributed significantly to the fund at which time we will have a reserve that you won't have to refund like you did last year.
>> last year.
>> that's what I was basically trying to get to was that --
>> trying to build up that reserve.
>> right. Okay. Thank you.
>> can anyone answer this. Do we have the ability legally to identify whatever, for example, on our health claims, can we track that so that we can see, okay, here is a person or a family or something that has a lot of claims. And perhaps, you know, that person or that family needs some help. I mean union when we --, you know, when we get into all of this wellness stuff, some of this stuff is not very easy to approach people with. I mean, you know, let's face it, people don't want to get on the scale in front of people. They don't want to do that. But somehow I mean if we are really going to really try to make this wellness program work, and I think we are moving in the right direction because it will help somebody if you can get enough people to participate. Can we legally do that? Can we go to somebody, somebody -- I guess someone, dan, looks at the claims sheet and says okay well Gerald Daugherty had $8,000 worth of claims in the first three months, something is going on with Gerald Daugherty, can we even legally do that or is that something that -- how would we deal with that?
>> you want to answer --
>> I will.
>> with hipaa, you have to be very, very careful how we do that if we are going to. We certainly could not do anything that would -- [indiscernible] who these people are specifically and what their medical issues are specifically. There are people within the plan who have the right to access that kind of information. I am not certain whether we could ask those very limited number of people to make the kinds of contacts that would have to be made. I think that it would be a very difficult thing to do. I would want to look at the law real closely before we went ahead and did it. But there is a possibility that if we limited the number of people who were doing that to people who already had the right to access the information for other purposes of the plan, we might not fall -- but it's not something that I have specifically addressed. The main gist of the hipaa stuff is that you can't reveal a person's medical history to other persons. One of the difficulties that you are going to have when you talk about a family, though, is that you don't have the right to reveal what's happening with spouse a to spouse b. You don't even have the right to reveal stuff that's happening to children who are -- did a non-custodial spouse who doesn't have the right to medical information. So, you know, it would be one of those things like all good lawyers I would say might be able to get there, but very hazardous and treacherous path so don't advise it sort of thing. Because it would be real easy to get your foot caught in a bear trap.
>> toe the line.
>> it's very narrow parameters that we can work with. The practice that we do now through our audits, we audit claims that come in. If we see a trend within an individual having a large being trong disease with large claims. We go through health care that has a disease management ram that's very good and will ask them if they are initiated their disease management on this individual.
>> that answers my question, that's exactly what I'm after. There is a mechanism there that we can look at. Because I do understand the legalities of stepping over the line with -- with those sensitive issues.
>> do we do that at this time.
>> yes, sir.
>> let's say we see a person with a certain illness using a brand name and we believe that there is a generic drug that does the same thing. We meaning united health care. Say we identify 11 county employees. Are we able to notify that 11 and say, please ask your doctor if this medication is as good as --
>> no.
>> we don't do that. Med-co, the pharmacy benefit manager does that. If they see --
>> my question, though, is are we legally authorized to do that?
>> well, I think dan answered it with the last part of that when he said we don't. He meant county staff.
>> county staff doesn't.
>> but our uhc contractor --
>> he's saying we don't, you are saying we can't.
>> no I'm saying that --
>> we should not.
>> I'm not even saying that. I'm saying that our agent does it. Because --
>> are we legally authorized to do that. If our agent does it for us, that's us doing it, isn't it?
>> yes, it is.
>> are we legally authorized to do it?
>> we have -- we have agreed with our benefit manager, the pharmacy benefit management company that they should look at this. And that's about the extent that we have initiated it. We don't particularly call and say this individual is getting brand name drugs, would you like to see if it's generic. It's just a blanket if you see a possibility of using generic and can be recommended, then go ahead and do it. But we don't initiate it from the county staff standpoint.
>> but if we take that particular case, one of the things that we do in terms of plan design, if there's a generic drug and you take the brand name, you pay more for it. So that was a way of, that caution if you want to take brand, brand name when there's generic, then you end up paying for that.
>> the employee co-pay is the same thing whether it's generic.
>> no, sir, it's not, no. Generic is one thing, I think that it's -- you have the numbers --
>> 25 and 35 and --
>> 35. It's 35. $35 if there's a generic and you go brand name. It's 25 if there's for generic and it's 15 if you use the generic.
>> what's the cost to the county, though?
>> well, the cost to the county depends on the drug.
>> the difference between 50 and $150.
>> anyway -- [multiple voices] you can do it legally, we don't do it, there are reasons not to.
>> yes, I would say there were medical reasons.
>> this is a subject matter that I know we can get into a lot more detail, but just from the information that we have gotten from p.b.o. And from some of the other offices with regards to -- to, you know, you can get this drug at cost-co for this, get it at all greens for this, probably has everybody in court abuzz over this. We are obviously trying to find out are there way that's he we can legally see to it that we try to do as much as we can with people recognizing this.
>> I think that report was a little misleading in terms of it took probably someone off the street and not someone who was on insurance where there it's indeed agreements for the cost of certain medication. Again, to answer the judge's question, if you go in, there is generic, you buy generic, it is $10. 25 for brand name only. Name brand if generic is available is 45. $45. Then --
>> but are we actually making that determination?
>> no, sir. We are not making the determination.
>> united health care.
>> I doubt that determination is being made is what I'm saying.
>> what the pharmacist will usually do or if you do the mail order is that they will say, there's a generic and that -- we fill it generic. Sometimes they fill it generic even without asking you. But the doctors also because they are part of the network will for the most part prescribe the generic. A lot of times there is not generic.
>> I think we ought to do some fact finding on that. Now, I am -- I am left with the impression that the general invitations to do this, do that, are well received immediately after heard. But life takes over two or three minutes later. In my view, if we have an expert on diabetes coming here, we ought to go through our record and find out who the diabetics are, including Sam Biscoe, and give us a special invitation and a notice that on this date, we will be there, ask die bekts diabetics to attend. We don't care if you do that for us, right? That way we never know whoots. Okay. Who it is.
>> let me check that.
>> there are three or four other specific things that I think -- holiday brainstorming, it dawned on me that if we are serious about this, I think that we need to give employees more specifics to respond to rather than if you generally invite all county employees to a -- to a free consultation with an expert on a certain day here in the courtroom, my get is that the response will be [indiscernible] but if you invite all of the county employees plus united health care pulls the employees who really ought to benefit from that presentation, and give a sort of special invitation. Then I'm thinking that the response will be a whole lot better. I'm thinking that if our goal really is to manage health care costs, to use those savings to benefit employees, then we can proactively do a few more things that we are not doing. I just think that we ought to think in that direction. We don't want to do anything illegal. We certainly don't want to do anything that puts the employees in a bad light. But if we impact -- if the impact will be positive, then I would think that --
>> after I got thinking just a moment, I know that I personally have received notes, post card type notes from uhc relating to regular annual tests that I have let go for 15 months instead of doing them right at the 12 month period. If they can send reminders about things like that, I would think that they could also send -- specifically two people who need to do something about it, then I think that they wouldments be able to send invitations to presentations like diabetes --
>> uhc probably ought to have history about that, yes, we have been asked to do that, we can do it. Being that you have already received something, it's some indication that you can do that to a degree anyway. I think the judge is right, we need to identify people, however we legally can promote the things that we are trying to promote. I mean I'm all for that.
>> let us take a look at it.
>> can we have this back on next week or a week after.
>> we have a wellness report next week, we can cover it.
>> okay, thank you all very much, appreciate it.
>> happy new year to you.
Last Modified: TUesday, January 6, 2004 6:25 PM