Wilmington Health Care Task Force Findings Released

WILMINGTON, Del., April 10 -- Wilmington Mayor Mike Purzycki issued the following news:

The City of Wilmington today released the findings of a Health Care Task Force which has recommended sweeping changes in Wilmington's health benefits program. The changes are intended to improve the health of City employees and retirees, and help the City save millions of dollars annually in health care costs. The group was appointed by former Mayor Dennis P. Williams in July of 2015. The report was completed earlier this year and delivered to current Mayor Mike Purzycki, who expressed his appreciation today to former Mayor Williams for assembling the Task Force and to the members for serving.

* Visit this link to read the City of Wilmington Heathcare Task Force Report (http://www.ci.wilmington.de.us/home/showdocument?id=3116).

Mayor Purzycki said the City will determine which of the recommendations can be adopted with the understanding that some can be implemented as policy and others must be negotiated with the City's labor unions.

The City provides health care benefits to 1,080 full-time employees, 94 retirees under the age of 65, and 225 post-65 retirees, but the rising costs of healthcare, coupled with an aging employee population, make it impossible for the City to sustain current coverage levels going forward.

Mayor Purzycki referenced parts of the Task Force in his State of the City Address last week when he talked about the escalating cost of health benefits. The Mayor said the cost of employee and retiree medical care and prescription drugs is growing at three times that of general inflation with health care costing $27.5 million in FY 2018. He said health care is costing the City an additional $4.9 million this fiscal year and will cost the City an additional $1.9 million more next fiscal year. Mayor Purzycki said the city has in the past unwisely continued to absorb all health care cost increases for a plan that is too generous and too expensive.

Mayor Purzycki said the State of Delaware has one of the most generous health benefit plans in the region. But, for the City plan in which 82% of city employees are enrolled, state employees would pay 13% of costs, while city employees are paying as little as 6%. The Mayor said state co-pays are two to six times higher than Wilmington's which are as low as $5 with state emergency room visit co-pays set at $150 while City employees pay only $50. He said removing these disparities alone would save the city nearly $1.5 million.

Chaired by Charlotte B. Barnes, the City's Human Resources Director, the Task Force reviewed the City's health care administration, usage and costs, and performed an analysis of the funding structure of the healthcare program. The Task Force also conducted a review of the findings of the State of Delaware's Employees Health Plan Task Force.

Barnes said the group's research and review of alternate funding structures for the City's healthcare plans, led to the adoption of recommendations for potential cost savings, as well as ways to correct inefficiencies within the healthcare program that could be reduced or eliminated through benefit re-structuring.

The recommendations adopted by the health Care Task Force include the following:

* Add a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) as part of a comprehensive program, enabling employees to make informed decisions on the fiscal impact of where they access medical care.

* Fill the newly created Employee Benefits Director position (added to the HR Department in FY'17 budget) as soon as possible. The new Director's priorities will include helping to implement the approved recommendations and conducting a Strengths, Weaknesses, Opportunity and Threat (SWOT) Analysis of the City's overall health and welfare program.

* Lobby the State's General Assembly to remove healthcare coverage as a mandatory negotiable item for municipal union employees. Typically, Self-Insured programs offer a high level of freedom in plan design. However, the State's requirements for municipal union negotiations severely limit the City's flexibility in designing its own plan.

* Adopt a Defined Contribution Model to fund retiree health from a tax-advantaged fund.

* Adopt a Defined Payment Plan for retirees 65 and older to fund their purchase of Medicare Supplement and prescription drug (Part D) insurance.

* Research and remedy any commingling of healthcare funds for active employees versus retiree healthcare.

* Move retiree healthcare programs to the Pension Division of the City Treasurer's Office.

* Review and update city contribution levels to retiree healthcare plans.

* Implement an incentivized physician engagement requirement.

* Implement a mandatory generic prescription requirement.

* Implement a prescription mail-order option.

* Implement differential co-pays for hospital-owned vs. non-hospital-owned imaging.

* Implement the use of Telemedicine, allowing employees to interact with physicians online and by phone.

* Increase Emergency Department co-pay from $50 to $250 to discourage unnecessary Emergency Department visits.

* Transition the POS Plans to PPO Plans with larger networks.

* Encourage employees, retirees, and dependents to maintain regular contact with their Primary Care Physician (PCP) for care management, physicals, preventive screening, diagnostic tests, and guidance on healthy living.

* Educate and encourage members of the health plan to make healthy choices, including proper nutrition, refraining from tobacco use, engaging in regular exercise, and pursuing healthy lifestyles in general.

* Implement employer-sponsored Health Enhancement Programs, such as wellness programs, preventive screenings, and disease counseling and education programs.

* Encourage employees to access healthcare delivery at the most appropriate and effective location and cost level for the service needed. Options such as PCP Office, Urgent Care, and telemedicine should be prioritized when appropriate to minimize unnecessary use of high-cost hospital emergency departments for non-emergency care.

* Emphasize care management by providers rather than the employer or insurance carrier. The role of the employer is to support and encourage health and wellness, while the role of the insurance carrier is to optimize access to care management services.

* Consider engaging employees in an Accountable Care Organization-type structure similar to those being used for Medicare patients currently, and with similar models in Delaware.

* Implement an optional Defined Contribution Retiree health plan for those employees who plan to retire prior to age 65 and were hired after 7/1/11, as these employees are not eligible for City healthcare coverage until they reach 65. This option would allow these employees to accrue tax-advantage funds while still working, and then use these funds toward paying for post-retirement healthcare coverage. This plan may or may not be matched by City funds.

* Offer City retirees age 65 and older a Defined Payment Plan that would provide a fixed monthly payment to use toward the purchase of an approved Medicare Supplement and Medicare Part D Prescription Plans.

* Propose legislation increasing subsidy caps on retiree health insurance to address rising costs of healthcare.

* Initiate a comprehensive review of employer contribution limits.

* Consider formal establishment of a limited financial incentive program to encourage employees to participate in specific behavioral/wellness activities. These incentives should be tied to specific outcomes, not just rewarding participation.

* Consider implementing an effective communications plan for both employee/retirees and potential hires to create awareness of and encourage participation in currently available wellness and incentive opportunities.

* Engage the highest levels of City leadership in the City, as well as union leaders and front line managers, in the creation/promotion/reinforcement of a "Culture of Wellness."

* Assess the internal and external resources available to implement a communications and education strategy, based on the nationally recognized Orange County, Florida model.

* Engage Mayor Purzycki as the City's Chief Wellness Ambassador, serving as a role model for city employees and residents, and signaling his personal commitment to the overall health and wellbeing of the workforce. (The Mayor will begin in April to distribute a monthly health care reminder on a particular medical need or condition directly to all employees.)

* Implement employee/retiree education initiatives specific to how to choose and best ways to use healthcare plans and benefits. Examples of topics include understanding the differences between POS, PPO, and EPO plans, and determining when a Medical Aid Unit or Urgent Care Center might be a better choice for service than a hospital emergency room.

* Implement employee/retiree education initiatives specific to causes related to high-care, high-cost medical issues and chronic diseases (e.g. diabetes, heart disease, and stroke). Everyone should understand how the expenses associated with the care of these conditions affects costs to the employee and employer.

* Establish a Benefits Committee comprising representatives of each of the City's collective bargaining units, the Department of Human Resources, the Office of Management and Budget, and the Mayor's Office. The Committee will meet quarterly to review healthcare costs and cost drivers and, with the assistance of the City's healthcare broker, and make recommendations for plan design modifications.

Click here to view the task force members were: http://www.ci.wilmington.de.us/Home/Components/News/News/414/225