Travis County Commissioners Court
July 12, 2005
Item 20
Number 20, consider and take appropriate action on report for f.y. '05 second quarter employee and hospital and insurance fund.
>> we'll make it very quick in seven minutes. On a quarterly basis we come to the court to report on our self-funded employee insurance and hospital fund. About three years ago the court decided to self-fund all of their health insurance for employees. And as part of that process, you wanted to make sure that the fund and your staff was kept accountable. So this report on a quarterly basis is part of that process of accountability to the court and to the employees and taxpayers of Travis County. Currently this report goes from October 1 of '04 through the end of March of '05. And we have about 6,700 participants. Out of those, about 38 -- 46 are employees and about 2,854 are dependents that are enrolled in our health insurance plan. Six months into the plan year, we have -- there are six claims that have exceeded $125,000. We always point those out to you because those are what we call the high claims and they bear a lot of the burden of illness. After $125,000, stop loss insurance kicks in and they are covered by our stop last with united health care. Covers everything over $125,000. We have also 25 as of the end of March, 25 claims that exceed $50,000. And since March to now, July the 12th, that has grown to 32. And we always watch those claims. We audit claims over 25,000. We monitor them over 50. And then after that we look at the claims very, very closely not only to identify the types of claims that are coming in, but to see if there is any trends with cost to particular services or providers and also to double-check the billings that are coming in and make sure that they are in accordance with the contracts that we have. We have a reserve. This particular fund has two reserves. One is the ibnr which is incurred but not paid. Is that -- reported. Incurred but not reported claims. And this -- the ibnr stays in the fund or becomes part of -- really it's off the books reserve and that will be there practically in perpetuity for any claim in the future that has perhaps been incurred but has not been reported. So that is a permanent reserve. And currently that's at about 3.5 million. 3,474, so approximately 3.5 million. You also have a reserve within the fund, and for the time period that we are reporting in terms of the first quarter, that reserve was a little bit over 2 million.
>> that's what it grew. 2.651 million in the first six months.
>> it is anticipated that it will be approximately in total over the three years about 11 million at the end of f.y. '05, which is a very healthy reserve and quite different than what we've seen in the past. The way that you get to that reserve is on an annual basis we have an actuary and also united health care estimate. Given the experience we've had in the past, the amount and number of claims that you will have. When you don't spend as much money as you thought because the projections are always have like a 5% margin or you've had a good year, you haven't had as many high claims, the reserve, the money that is not spent on claims expenditures, goes into a reserve. So that's what you see is the difference between the claims and the -- the actual claims and the amount of premiums that are paid in. As you know, the majority of the premiums are paid in by the county. The employees do pay premiums, especially for the e.p.o. And again, everything that is not spent goes into a reserve for the fund. This reserve is another one that you can't take -- you can put funds into the reserve, but you can't take them out. If you look at -- I知 sorry, I don't know that we numbered the pages. Travis County --
>> page 8.
>> 8. If you look at page 8, that's a very good indicator, and these are your financial statements that we always attach to the report. That's a good indicator of where we are at compared to the budget. Your first column you have actual expenditures, six months budget, then your total budget, and then the column to your right, far right, actual as percentage of f.y. '05 budget. That will tell you what we are spending compared to what we have budgeted. We should be mostly at 50% right about now. A lot of these numbers are lower. That's a good thing. That's a good thing.
>> [inaudible].
>> yes, that -- yes, we are. That was a pleasant surprise. We had estimated about $50,000 on interest and we have gotten 128,813.
>> in six months.
>> good investment.
>> good.
>> good investment. That money, again, if not used, will fall to the reserve. I知 going to turn it over to cindy unless you have any questions on the financials, over to cindy to talk about the claims and how the money is being spent. This gives you an idea not only of what is being spent but in what sort of services the money is going to.
>> thank you. Cindy perington, hrmd. I知 on page 13. I知 going to go through these charts and graphs quickly because these are the ones you are used to seeing every quarter. The first graph on page 13 basically just tells us the breakout of medical claims versus pharmacy claims. Managed pharmacy is 16% of the overall spend. Medical is 84%. If you go on to the next page, this is a little bit more indepth on the pharmacy program, and it tells you how much of the pharmacy is being done in retail, which is at the drugstore, and how much is being done mail order. It looks like we're doing about 20% of our pharmacy spend through the mail order, which is good. That number keeps going up, which is good. The more education we do and the more the employees get used to using the mail order drug program, the higher than number will go. On page 15, this is contrasting the overall spend between actives and retirees. It shows that the active medical portion of the plan is still 70% of the spend. Active pharmacy is 12% of the spend. The retirees are accounting for 11% of the medical and 4% of the pharmacy, and then you have a little bit on cobra. As you recall, we had some significant high cobra claimants. That number will probably not go that much higher for the remainder of the year though because those individuals are no longer on cobra. On page 16, this is a plan to plan comparison. This just kind of compares the plans to each other. And the big blue portion is your e.p.o. Medical. That is 61%. Contrasted to the wedgie that is the p.p.o. Medical. Again,p.p.o. And e.p.o. Are still our two biggest players with e.p.o. Still having the most claims. It does show the co-insured e. .o. Is gaining ground as far as the number of people therefore the spend is going up a little bit in the co-insured e.p.o. This will be interesting to look as we hold open enrollment as we're out there doing education on, you know, do the plan on what plan will be most pro rp appropriate for you. On page 17, the type of service. So what are we spending our money on. Again, the largest wedgie is facility inpatient and that is matched this time by physician services. Normally the facility inpatient, hospital bills are our largest portion. This is matched this time by the physician services. Facility outpatient running a close second. Along with managed pharmacy. Then your allied health or miscellaneous types of things such as chiropractors, mental nervous, physical therapy, that sort of thing. Then we have on page 18 the paid claims by plan in tier. This just shows who we're spending the money on within the actives. And if you look in the very first section where it shows e.p.o., notice kind of an anomaly that the family, we're spending on the family for the first six months of this plan year is a little bit exaggerated, more than we've seen in the past. Norm I it is the employees that is the largest spend and it still is on this, but the family got a good portion of the e.p.o. Dollar this time. And you'll notice as you go across that in most cases the family spend is not that very -- not very much. But on the p.p.o., you'll notice that it actually shows the spouse. We were spending on the spouses just a tad more than the employees. So this is very significant information as we look at our tier structure in that on the p.p.o., that could -- one person that was seriously ill could have accounted for making that go a little bit over. And then on 19 is the actual numbers per month of the plan. Are there any questions on the graph? I know I went through them fairly quickly, but it'sist standardized graph that you see every quarter.
>> one that's not there and I am getting more and more good reports as the number of folks who are going across the street to the wellness clinic. Is there some way we can start tracking and measuring i'll calling it cost avoidance by people going to an office visit across the street and --
>> I think those statistics are being kept and I believe there's a report coming to the court very shortly.
>> great. Super. Just in terms of what's the co-pay that the employee does not have to pay and the cost --
>> and that number for the co-pay, they are tracking that, and I just happen to get that number this week, as a matter of fact. I was researching for something and it's significant for our employees. It's -- I believe it's like 22,000 that they haven't had to spend on their co-pays since the clinic opened. That's good, plus we know what the savings is to the plan as well.
>> right. As one of those who was a doubter of -- that we would see it, I知 very pleased and was pleased to be proven it's working. We want to make sure that --
>> [inaudible].
>> yeah.
>> any idea when we may have the third quarter report?
>> a month. We have to wait for the report.
>> within a month. It usually takes a little bit longer because we have to wait for the reports from united health care also to match those up. So it ended in June. You should see it early August.
>> okay. Thank you all very much. Appreciate it. There's a motion to recess until 1:30.
>> second.
>> all in favor? That passes by unanimous vote.
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Last Modified:
Tuesday, July 12, 2005 3:46 PM