Throughout the entire rushed process of ratifying this contract deal, the UFT leadership has insisted that there are no givebacks and that the process is transparent and open.
However, the contract MOA clearly states that the raises are contingent on the union’s acceptance of an agreement between the city and the Municipal Labor Committee (MLC), an umbrella group of public employee unions, on $1.1 billion dollars of health care savings. Where is this money coming from? It’s completely unclear, whether from the city Office of Labor Relations, the UFT information, or the letter of agreement between the MLC and city.
However, we have obtained a detailed list of the proposed savings areas and the cost of each, which for the first time is publicly detailed below. Take a look and ask yourself if this is really a giveback free contract.
Some highlights for a memo summarizing the June 18th meeting of the MLC Steering Committee:
Year 1: $200 Million
1) $131 million in residual savings from the 2014 City and MLC health savings agreement
2) $40 million in savings from changes to the Empire health plan that include three basic components:
- Site of Service Redirection – Empire will implement a program to shift outpatient services from hospital based sites (which charge higher rates) to office based sites (which charge less); the program will not be obligatory, but will encourage members to use lower cost office based services when they are available and appropriate;
- Engaging the “WinFertility” care management company to reduce the costs associated with multiple premature births that require high cost neonatal ICU stays. WinFertility provides intensive genetic screenings and counseling to reduce the incidence of these outcomes for parents who are receiving fertility treatments;
- Tighter control of length-of-stay standards for hospital providers, including aggressive review and claw-backs of unnecessary or excessive expenses charged by hospital providers;
- None of these programs to generate services would entail any added costs to members in the form of increased co-pays or out-of-pocket costs, though more details about the Site of Service Redirection are needed.
3) $25 million in savings from changes to the Emblem Rx Formulary list and emphasis on “Smart 90” program to expand the mail order of medications in 90 day batches; the formulary changes are mostly related to shifting to more generics, but more details need to be provided.
4) $10 million in savings by implementing various Emblem Health Plan HMO updates to generate cost reductions of a technical nature with no impact on members;
Year 2: $300 Million
1) $40 million in recurring savings from the 2014 health care agreement;
2) $50 million in savings from the various Empire Plan changes discussed above, including site of service, WinFertility and length of stay claw backs from provider hospitals. In the first year, these savings were prorated at $40 million because they would not be in place for a full year;
3) $40 million in savings on the basic GHI CPB plan, stemming from implementation of a Centers of Excellence Plan under which the plan will contract with high quality and low cost providers for certain specified services; this will begin with oncology and orthopedic hospital centers and expand to other services over time;
4) $31 million in Emblem Rx formulary savings; this is the full year cost savings discussed above;
5) $213 million in Emblem HMO savings; this savings is being generated entirely by a written commitment by Emblem HMO to limit its increased charges to the City to 3.5% in FY2020; Emblem was budgeted for a 6.5% increase in FY2020; Emblem is thus passing 3% in savings to the City and assuming the costs out of its pocket by guaranteeing the savings to the city regardless of actual costs that it incurs;
6) Emblem health expects to generate the savings it has guaranteed to the city from the implementation of a Wellness Program which will provide incentives (not mandatory) for employees to sign up and participate in care management programs involving screenings to diagnose nascent health issues and assignment of nurses to engage members in care management; Sites of Service plans; Centers of Excellence for orthopedic and oncology, expanding to cardiology and other areas; Rx savings (formulary and Smart90).
7) In addition, in exchange for the commitment to cap its increase in premium costs to the city at 3.5%, Emblem is asking for an agreement that all new hires will have to enroll in the HMO plan for the first year of employment; this requirement would be only for the first year, after which employees will be free to switch to any plan they wish; this requirement would not apply to existing employees or employees who transfer from one agency to another or who receive promotions to a higher title.
Year 3: $600 million
1) $40 million in recurring savings from the last healthcare agreement;
2) $50 million in ongoing savings from the Empire plan (discussed above);
3) $45 million in ongoing GHI CPB savings (discussed above);
4) $31 million in ongoing Rx savings (discussed above);
5) $435 million in Emblem HMO savings with Emblem agreeing to cap the increase in its premium charges to the city at 3% (versus the budgeted increase in premiums for FY2021 of 6%); again, Emblem will guarantee these savings out of its own pocket and if the target is not met, it will eat the loss;
6) To help offset its lost revenue, Emblem health is again asking that the agreement require new hires to enroll in the HMO plan for the first year of their employment for the second year.