OF­FI­CIALS IN MAYOR BILL DE BLA­SIO’S

The Bond Buyer - - Front Page - By Paul Bur­ton

ad­min­is­tra­tion have trum­peted New York City’s health­care sav­ings pro­gram. Bud­get watch­dogs pass it off a se­ries of ac­count­ing tricks. on­day that Rep. Steve Stivers of Ohio will serve as Repub­li­can co-chair of the bi­par­ti­san Mu­nic­i­pal Fi­nance Cau­cus in the next Congress, re­plac­ing Rep. Randy Hult­gren of Illi­nois who lost in the Novem­ber elec­tion

Of­fi­cials in Mayor Bill de Bla­sio’s ad­min­is­tra­tion have trum­peted New York City’s health­care sav­ings pro­gram.

Bud­get watch­dogs pass it off a se­ries of ac­count­ing tricks.

The In­de­pen­dent Bud­get Of­fice and Ci­ti­zens Bud­get Com­mis­sion raised red flags to the de Bla­sio ini­tia­tive at a re­cent joint meet­ing of the City Coun­cil’s com­mit­tees on fi­nance, and civil ser­vice and la­bor.

In June, the ad­min­is­tra­tion and the Mu­nic­i­pal La­bor Com­mit­tee, an um­brella group of city la­bor unions, an­nounced a com­mit­ment to gen­er­ate $1.1 bil­lion in em­ployee health­care cost sav­ings over fis­cal 2019 through 2021, sup­ple­ment­ing $1.3 bil­lion in re­cur­ring sav­ings gen­er­ated un­der a $3.4 bil­lion sav­ings agree­ment for 2014 through 2018.

“We’ve ac­com­plished some sub­stan­tial, ma­jor, in­no­va­tive changes,” said city la­bor re­la­tions Com­mis­sioner Robert Linn. “This es­tab­lishes new la­bor-man­age­ment goals.”

Jonathan Rosen­berg, di­rec­tor of bud­get re­view at the New York City In­de­pen­dent Bud­get Of­fice, was less en­thused.

“It is dis­ap­point­ing that the vast ma­jor­ity of sav­ings re­al­ized to date have come in the form of pa­per gains from lower-than-ex­pected premium in­creases and other ac­count­ing ma­neu­vers,” he said.

The June 28 agree­ment tar­gets sav­ings of $200 mil­lion in 2019, $300 mil­lion in 2020 and $600 mil­lion in 2021. At least $600 mil­lion of the to­tal sav­ings must be re­cur­ring. These sav­ings are in­tended to de­fray some of the cost of wage in­creases in the cur­rent round of col­lec­tive bar­gain­ing.

“These sav­ings goals, an av­er­age of $367 mil­lion per year, are less am­bi­tious than the $850 mil­lion-per-year re­quire­ments of the pre­vi­ous agree­ment, al­though with more re­al­is­tic health­care cost growth pro­jec­tions, the ini­tia­tive should re­sult in mea­sur­able progress in con­trol­ling health in­sur­ance costs,” Rosen­berg said.

Ac­cord­ing to CBC vice pres­i­dent Maria Doulis, sav­ings against high pro­jec­tions should be used for gen­eral op­er­at­ing needs, rather than claimed as a sav­ings against la­bor costs. “At­tribut­ing these sav­ings to the health agree­ment es­sen­tially is claim­ing credit for work not done,” she said.

The new agree­ment, said Doulis, “loses the mo­men­tum of the last and pro­vides min­i­mal im­pe­tus to tackle the chal­lenges that re­main, in­clud­ing the frag­mented and in­ef­fi­cient pro­vi­sion of pre­scrip­tion drug, vi­sion, and den­tal care via wel­fare funds; the an­ti­quated and waste­ful Health In­sur­ance Sta­bi­liza­tion Fund; and the costly pro­vi­sion of health in­sur­ance to re­tirees with no con­tri­bu­tion to the cost of care.”

City health in­sur­ance costs have sky­rock­eted in re­cent years. In 2000, it spent over $1.6 bil­lion on health in­sur­ance for em­ploy­ees. By 2017, it soared to $6.3 bil­lion be­fore a slight dip to $6.2 bil­lion in FY18. Even ad­just­ing for in­fla­tion, health in­sur­ance ex­penses have soared 163% since FY2000.

The city of­fers three in­sur­ance plans to all em­ploy­ees and re­tirees at no cost for ba­sic cov­er­age. The plans are Group Health In­sur­ance – Com­pre­hen­sive Ben­e­fits Plan, a pre­ferred provider plan; Health In­sur­ance Pro­gram of New York, a health main­te­nance or­ga­ni­za­tion; and most re­cently MetroPlus Gold, a health main­te­nance or­ga­ni­za­tion.

Mean­ing­ful changes, ac­cord­ing to Doulis, in­cluded switch­ing the fund­ing struc­ture of the GHI plan and ad­just­ments to provider net­works and co-pay struc­tures to in­cen­tivize greater use of pri­mary care while re­duc­ing over­re­liance on emer­gency rooms, ur­gent care cen­ters, and spe­cial­ists.

The lat­est agree­ment calls for a new Tri­par­tite Health In­sur­ance Pol­icy Com­mit­tee to de­bate fur­ther tweaks to in­sur­ance plans. “The stated top­ics of dis­cus­sion for the com­mit­tee are largely com­mon-sense re­forms with tan­gi­ble fi­nan­cial con­se­quences,” Rosen­berg said. ◽

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