Travis County Commissioners Court
March 9, 2010,
Item 20
>> 20 is to consider and take appropriate action on Travis County health care fund reports and employee wellness and health clinic goals.
a, review annual health fund report for fiscal year 2009.
b, status report on health fund for fiscal year 2010.
and c, status report on wellness program goals.
>> thank you, judge.
again, we're here to talk about the status of our health plan, both in plan year 2009 and 2010.
Travis County is in its 10th year of self funding for health insurance and we have experienced 16 quarters the last four years of extraordinary control on our health plan, our health insurance costs, our trends have been below that of other entities, and we've had a tremendous experience with our health plan.
we've been able to build a substantial reserve, which we'll talk about again in a few minutes.
our health plan in the last 16 quarters has been just phenomenal and until the first quarter of 2010 plan year we started seeing an increase in our claims.
it's like el nino coming on shore with all the rain.
we had a perfect storm in the first quarter of this plan year.
eight back surgeries in the quarter compared to one in all of last year.
four or five premature babies in the first quarter of this year compared with one of all last year.
you can see the perfect storm has come doag and shown an increase in our claim experience.
over the last couple of weeks we've seen a leveling off in not just large increases, but we are monitoring what those increases are, where they're coming from, and we have some ideas on how to address the increases to bring this back under control.
we want to be measured in the approaches that we take and the recommendations that we make to you.
it's not -- it wasn't a das truss quarter, but it was not a disas truss plan year.
we expect to see a leveling off in some of the recommendations we're making are short and long-term and we'll talk about those in just a moment.
i'm going to ask matt nolte, our executive account manager with united health care, to talk about one aspect of a program that we had last week on our 2010 health plan and the successes and improvements that we should make.
and one chart that he had in the presentation I think is informative, so matt, would you --
>> yes, thank you.
good afternoon.
i'm matt nolte with united health care.
as you may recall from past years, what we do is we visit with Travis County's risk management area, benefits committee and take a deep dive into the claim data.
we've seen from prior years what we do is look at past experience and compare it to the most recent experience we see.
but also compare that to what we see as a norm or average in the health care industry.
and one thing I would point you to in the presentation I believe in attachment 4 is a slide --
>> page 35.
>> thank you.
>> is a slide that we put together to compare Travis County's average spend per member per month and compare that over a four-year period and also compare that to what we would see -- what we would expect based upon those industry norms.
and what we see is that over that period, Travis County's performed very well.
out of three out of the four years, we actually saw trend levels that were significantly below what we would see in the industry.
we had a bad year in 2008.
that's still not -- I wouldn't say it was a bad year, but higher than what we normally see.
that was largely due to more large claims than what we saw in the prior years.
when we compare all that data together, what we see is that the average annual increase in spend on per member, per month basis, increased 5.3% for Travis County, compared to an average of 6.9% for other united health care customers in the public sector arena within Texas.
and when you add -- if you compare what we would have expected to what we actually achieved through the health plan, over that four-year period Travis County actually paid almost $4.5 million less than what we would have expected.
>> some of the cost drivers, the specific areas that we did see increases, some of the provider costs.
and I'm going to ask cindy to go through and briefly cover some of the more important areas that -- where we saw cost increases.
>> yes.
we saw -- well, one of the basics is we increased our membership by six percent, which was nearly 500 members, 483 members.
and we are seeing more dependents being covered.
as we thought about the more dependents being covered, we came to the realization that in the economic times that we just went through, a lot of people lost their jobs, therefore their coverage.
we were busy all year long bringing dependents on to the plan that lost their coverage elsewhere.
so being a stable employer, we maintained our coverage where our people weren't as fortunate and lost theirs, so their dependents came on.
>> what was the increase, six percent?
>> six percent increase, yes.
and the claims costs per employee, retiree per month has increase the.
just in the first quarter of 2010, it's increased 15% compared to the same first quarter period last year.
and the per member per month cost is up 13 percent.
we monitor, as you know, because you get the weekly check runs, but we monitor this very closely and we give you a graph every week of where we are in relation to the budget.
so as we saw the weekly reimbursements starting to increase in amounts, we started monitoring even closer.
so just so you know, we're looking at this on a weekly basis.
we have an older membership --
>> we are basically -- excuse me.
that increase with our retirees, what do we attribute that to as far as the increases --
>> we're having more people retire than we have, the trend of retirement is a little more.
but our retiree membership stays pretty constant during the year.
we are seeing more retire probably this first quarter of this year than we did last year.
again, the economic times are getting a little bit better, okay?
and the costs for the under 65 retirees remain high.
that's always been a really high cost driver group for us.
and that hasn't changed.
there's still -- it's very expensive to ensure the under 65 retirees for a variety of reasons.
>> I'm sorry to make you back up again.
would you give me -- you gave the six percent increase in enrollment, 15 percent increase in --
>> the claims cost per employee per month has increased 15 percent for the first five months of fy '10 compared to the same period last year.
and then the per member per month cost is up 13 percent.
both are a little bit above the national trend of about 12 percent.
we have an older membership which means our employees, the median age of our employees that are on the plan is 44.5 years.
and we also have more chroniclely ill members on our plan than the peer group.
we just had our annual meeting with united health care and again -- this is something that's been -- it's nothing new.
every since we've had united health care they've told us that we have more colon chronically ill employees than the norm.
probably part of that is being a governmental agency, but our peer group is governmental agencies.
our inpatient hospital costs, this is the one concerning us.
it's spiked 46% in the first quarter of fy '10.
so we're trying to determine exactly what the reason for the hospital costs are.
people are staying less -- we've had fewer admissions, people are staying less time than they have in the past, but the costs are increased.
so we're looking to see if it's contracting issues or if the things that they're having done are more complex, therefore more expensive or just the cost of providing the care has just risen that much.
so we're trying to narrow it down a little bit more.
our cost drivers continue to include cancer, cardiac, must cue low skeletal and injuries.
as dan mentioned in the first five months of fy '10 we've had eight spinal fusions where we only had one last year.
so we're also looking at that to see if maybe some worker's comp stuff is rolling over on to the plan when it should be worker's comp.
we're trying to define these things a little bit more and see the reasons for these spikes.
we have had several premature babies so far this -- the first five months of this plan year, we've probably had five premature babies.
and one really interesting thing is we had a spike of the office visits in the first quarter.
just a real spike that we wouldn't normally see.
and we got to thinking about it and we think it was the h1n1.
as you know, we had a pretty good flu epidemic going on and people went to the doctor where they may not have gone in an ordinary year.
we'll see if that trend continues.
and that really brings us down to the last thing, is we're beginning to see -- for the last few years our pharmacy costs have been fairly level.
we're begin to go see a slight increase on the pharmacy costs.
again, part of that is attributable to h1n1.
everyone going to the doctor and getting what they could for the flu.
but wire going to monitor it -- we're going to monitor it because it's not a sharp increase, but it's an increase that seems to be pretty steady.
so we need to look at our pharmacy program and see if there's anything that we can tighten up on.
>> there are a couple of ideas that we're going to present to the court in a moment.
the next steps, our concern is with regard to the inpatient confinement and the increase in costs is if we're seeing the bio tech type of treatments becoming more common.
they're very expensive.
bio medical and bio pharmacy is all very expensive.
we've known that these are coming, and we're thinking that we're just starting to see the door open for more of the costly biotech type of treatments.
and I think one or two of the surgeries we're talking about, artificial disk replacement, and in years past the surgery would have been a fusion.
now with this device you don't have the fusion, you have the artificial disk.
so we expect to see more of those come about and we're going to talk about how we think we can control some of that in a second.
the next steps are presented in both short and long-term.
in the short-term we're going to -- as cindy said, we'll continue to monitor the health plan and the expenditures and drill down to what those expenditures are actually for.
we'll benchmark against premiums, deductible, co-insurance and other point of service costs and cost sharing that our employees pay.
one thing that should be mentioned, the folks at this table, and with all due respect to the court, we're not going to control the cost of health care.
it's going to be the members and how much they're willing to invest in time and energy to become -- lead healthier lifestyles and learn more about wellance and behavior.
they're the ones that will influence what happens to this benefit that we have in our health plan.
with that said, mr.
travis?
>> I'm a committee member of the health benefits committee and the wellness committee.
and one idea we've talked about informally that we discussed also with united health care is three of our biggest cost drivers on our pharmacy plan, the top three, three of the top four, depending on the year.
number one is nextium which is a protopump inhibitor which works for acid reflux.
two of the next three are lipitor, which is a cholesterol lowering drug and nextor.
in 2009 the county spent I believe $270,000 for nextium.
on an average preparation to avn cost was $23.
speaking with united held care, 75% of self funded government plans could not cover nextium.
instead they offer alternatives, which is a generic form of prilosec or over the counter remedies.
one thing we want to explore is developing programs of no longer covering nextium and asking employees to use the generic equivalent f they did we would save $49,000 in co-pays.
in addition to that we would like to work with dr.
dear and the clinic develop some long-term programs to help people no longer use those drugs.
either through diet choices or life-style changes to see if that can be managed without any drugs.
in addition to that lipitor is our np two cost driver.
in 2011 it's anticipated that drug will be available in a generic form.
so just like these programs we're thinking about for nextium, we want to explore those for color troll lowering -- cholesterol lowering drugs as well.
in addition to that, united health care made recommendations for co-pay changes that would have people use co-pay changes.
that would save about 600,000 a year.
those two pharmacy proposals we wanted to discuss with the committee members to see if we had their support and bring this back to you.
i know there are some other options.
one thing I would like to briefly mention too, when dan mentioned about benchmarking is united health care mentioned our plans about four percent richer compared to other government funded Texas plans.
and we're about four percent richer on the epo and about four percent richer -- we're probably comparable on the cpo, but comparable to other plans, the ppo, which is about 66% of our membership is by far richer than most -- most comparable ppo plans.
so we wanted -- currently that's the base plan.
and meaning the employee only plan is paid 100% by the county, just like the cepo.
one thing we want to explore is if it's time to charge a premium to employees to have that coverage.
it's a pretty big benefit.
those are some of the things that we'll beblying to the committee members to talk about.
i know there are some other steps both short-term around long-term that we want to discuss with you.
>> there are cost savings that may be realized are the prescription type program where you get your prescription via mail, mailed to you, and it's supposed to have cost savings associated with it.
do we know basically how the level of involvement by our employees and retirees of the county as far as involving that program.
do you have an answer?
i can get it later.
>> participation like percentage, getting mail order drugs?
do you know that?
>> I don't know the number off the top of my head.
i know it's fairly low.
it's consistent with what we see from our customers, other public sector customers.
>> ours is lower?
>> gosh.
i can bring back exact numbers for you, but again, it's a relatively low number that actually take part, but it's -- the usage is consistent with what we see with other groups.
so just in general people don't use that benefit as much probably as they should.
>> okay.
thank you.
>> and a couple of other things that we're looking at is the emergency room.
if you recall last year we raised the emergency room co-pay from fist dollars to $100.
because our emergency room utilization was too high.
what we're seeing is that the number of visits to the emergency room went down and so that part worked just the way that we wanted it to.
but what we're seeing is that the cost for the emergency room visits that are happening is too high.
we use the emergency room, was it 26% more, than our peer group.
so it sounds to me like there's an education opportunity here to, again, educate our employees when it's appropriate to go to the emergency room.
we want them to go when it's appropriate, but we don't want them to go for the sniffles or something that could be taken care of --
>> [one moment, please, for change in captioners]
>> to make sure all of the independents on the plan are eligible dependents because other entities can have up to 11% dependents of the plan that are truly not eligible, so it is a bigger effort for the wording of the document and the planned document we are working on but we are almost ready to bring that back to court as well.
>> my name is dr.
hairy dale and I am the Travis County medical director and also part of the benefits and wellness committee.
we have had a lot of discussions in the wellness and benefit committee and have discussed various options and we would like to structure the wellness plans and programs so that we promote positive health behaviors in the Travis County employees, which at a later day may impact health premiums an other things like that and as united healthcare mentioned in one of the meetings, make good behavior health choices easily and make bad behavior choices hard and so our programs will be focusing on those some short-term things we are looking at encourage our employees to have completely a health risk assessment which will provide us with biometric and other data which we can use to evaluate our program efficacy, the programs that we are developing are outcome based so we need to know whether what we are doing has an impact on behaviors and risk factors and cost drivers for the county.
the other thing we are focusing on is increasing the same day and next day visits for our three clinics, so that employees have a chance to come to the clinic rather than go to the emergency room if they have got a cold or a sniffle.
as cindy mentioned earlier it is important they do go to the emergency room if they have a serious condition like chest pain.
we are also increasing availability in the clinics so del valley will be open on more days than it has done previously.
>> how -- how do we know the part that our employees know the availability of the clinic and then we have them in different locations, of course, but the -- the employee out here said, well, I am looking at the emergency room versus clinic, and of courses the emergency go to the emergency room but for the sniffles and things like that, they can go -- come to the clinic.
how would an employee -- retiree of Travis County know the hours of the clinic and the location to go when you are open?
how do they have that information?
>> well, there are various avenues for that.
they can call the clinic and get information.
we are also -- we are updating our website.
>> okay.
>> which will have the clinic location addresses, availability.
>> right.
>> and, also, on the wellness website, we will be promoting small educational classes on different things.
for example, you know, when you should go to the emergency room and what -- things that can be treated treat over the counter medications and when you need to come to the clinic.
>> okay.
>> so some of the long-term things that we are looking at or exploring is the
>> [indiscernible] workplace and the study has shone that is advantageous to -- in increasing smoking cessation, and populations -- in populations and oh long-term things that we are exploring are mobile screenings and this may include screening mammograms or biometric screenings.
basically, we find that what we want do is to modify the health risks and most of these are precursors to chronic diseases we are the high cost drivers such as heart disease and the other things that are being produced, and the risks are -- the health risks are driven by behaviors and our programs, we are hoping they will modify these behaviors, and we would like to encourage employees to participate in these programs and reboard them with shared savings and we have developed -- if you look on page 36, we have developed different tiers of participation.
tier 1 programs are the wellness education classes and these are just -- these will just be classes that we inform -- they will be informative and interactive and they will give employees information of various aspects and basically the purpose of these classes will be to improve -- get -- create a better informed health consumer to who makes healthy choices.
care to include taxes in the wellness and health program.
these would be -- these would contain knowledge base but they would also contain more behavioral strategies and provide employees with tools that they can use to improve their health, so that they can change their health permanently in the long term.
and the tier 3 participation will be in the clinic programs.
we have -- including myself.
we have three doctors and we try to detect the early risk factors early on to prevent chronic diseases before they occur and also manage chronic diseases to prevent future complications, so those are them.
>> in the interest of time we will be glad to go over the long-term objectives, if you'd like, or they are in the backup.
we can move on to the financial report.
>> I have two questions about the goals.
with regard to smoking cessation programs, I have heard that the american cancer society had one that they were particularly keen on showing us and I was wondering where we were with smoking cessation programs in the wellness paradigm?
>> yeah, we -- we have -- we have developed a smoking cessation program based on guidelines, cdc guidelines on what works and what doesn't and we have looked at different programs, and we do have access to the state quit line smoking cessation quit line and we have a lot of other resources and we are also working with the tobacco coalition to see how we can integrate all of the programs into smoke-free workplace.
>> that is great.
and also I understand that the city of Austin had expressed some interest in having a city employee, county employee smack down on some health care matrix like weight loss, quitting smoking, a couple of other things, so if that will be helpful to get people engaged.
>> for members of the -- we are members of the mayor's fitness council and much of the reporting and participation in smoking cessation and weight management, they are comparable programs and we are becoming more involved with that council.
>> I thought a little competition sometimes is okay.
>> long-term goals we plan to go to the employee wellness committee?
>> yes.
>> then bring specific recommendations to the court?
>> that's correct.
yes, sir.
>> okay.
>> all right.
>> good afternoon,
>> [indiscernible] hr, about the financials for 2009, and financial 2010 for December 31st attached and I am not going to bore you to death by going through all of those line item by line item or anything like that, but suffice it to say I know there is concern about how much we have budgeted for this year, and I always work closely with travis on the budget side of the health side so if there are any problems with the budget, bewill just blame travis over here.
just kidding.
we think we have enough budget and health claims this year to cover the costs, the first quarter is about 26% of claims versus 25% of course of the budget so we will -- we will be looking at that throughout the rest of year.
we certainly have enough funding in our fund itself to cover any claims that we will encounter this year and as far as '09, I think one good thing to look at is on page 6, which has the -- on page -- not on page 6 but page 28, sorry, 28, which is really a summary of the reserves at the start of the self-funded plan.
as you can see, as we start out, if you look at the claims increase in 2003 we had 27.5 increase in the cost of the claims which I think really created an issue.
we hadn't originally came up with a good estimate and so that caused the actuary and the county to possibly overreact a little bit.
anyway, from that point, we really grew our reserves up to a healthy level.
the last few years we have been trying to get those down a little bit and we -- we did reduce about $800,000 this last year and so far in 2010 the first quarter, it is down about $2 million.
some of that is related to returns on investments and things like that but we think that at the end of 2010, that the reserve will be around $20 million, which we think would be not excessive and in the appropriate reserve for the fund at that point in time.
but if you have any questions about the financials, I will be glad to answer them now or later or whatever you would like.
>> those are
>> [indiscernible]
>> well, what -- the process is that we will give the financial information to the actuary and then we get with the actuary and the benefit committee and we come up with proposals on how we can reduce costs and things like that and then we bring recommendations to the court and y'all make a decision on what the rates would be next year but we are aways from that perspective, but I know there has been concern about the large claim so far this year but we are still within our -- you know, what we anticipated in the 2010 budget.
>> is there a common thread here of increased hospital costs that are beyond our control and we keep hearing that in the news as well.
have we considered any worst case scenarios, for our reserves in anticipation that that might be a trend that we continue stop in the near future?
>> it is one good reason to have reserve, for the years we have a bad year.
we don't want to overreact but that's where we have to listen to the actuaries and they are the one who is are the experts on this and they will meet with the benefit committee and those recommendations will be forthcoming.
>> one of the changes that they recommended would be priced out by the actuary.
they would be able to tell us how much value each of those changes would be, and so the committee would look at that before bringing it to the court for approval.
>> I want to -- the thing, though, is not just to save money for the money, for the reserve's vehicle, but also to save moneys and improve the employees' health and the long-term result, and I think the -- the diet certainly but the exercise seems to play a huge role in trying to control our sugar levels, blood levels, aside from weight and then you hear the stories of people being able to get off of medicines that due to the increase in exercise and indicating that we truly are very sedentary, you know, not only here but in home.
and so I think we need to work those together.
>> I like what
>> [indiscernible] cindy said is number one, some cases -- some situations are beyond our control.
people are going to get sick and have an unlucky year.
>> sure they are.
>> and that has been the case this year, but as far as the costs we can control, the wellness programs and those kinds of opportunities, we want to make available to employees as well as to encourage certain health behavior either through copays an deductibles or --
>> sure.
>> hra, or however we want encourage or discourage certain behavior so employees are healthier in the long run, and it will help our bottom line.
>> we are still working with runtex on the walking and preparing for the April run.
>> good.
>> I forgotten what it's called -- round up, and of course our 5k, and there is some competitions and competitiveness that the wellness committee is organized.
so we -- that is a factor and you are correct.
it is a big point that we need to engage our employees in.
>> great.
>> we look forward to another opportunity to visit with you.
we will have long-term goals recommended, sometimes soon.
sometimes soon is three weeks from now or four?
>> probably about four weeks according to our calendar.
>> we can hardly wait.
but we must.
>> one final point, we would like to introduce jennifer brindley, our united health care rep who resolves problems and takes on the establishment, as it were to claim get the claims paid so she is a valuable asset to our office and certainly to me because I don't -- I just pass on the problems to jennifer.
>> [laughter]
>> good to see you again.
>> good afternoon.
>> we met you once before in court, didn't we?
>> we sure have and I saw you at lunch at the benefit committee presentation.
>> let's not tell everything now.
>> [laughter]
>> this is wellness.
i was exercising that day.
>> [laughter]
>> thank you.
>> thank you.
i appreciate your hard work.
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Last Modified:
Tuesday, March 9, 2010 2:53 PM
