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HomeMy WebLinkAboutCouncil Actions 02-03-97 JtMtgSWAIN 33250 ROANOKE CITY COUNCIL VINTON TOWN COUNCIL JOINT MEETING CAMPBELL COURT 17 CAMPBELL AVENUE, S. W. Monday, February 3, 1997 -- 12:00 Noon AGENDA CALL TO ORDER AND WELCOME: David A. Bowers, Mayor, City of Roanoke. INVOCATION AND LUNCH. ROLI~ CALL: Roanoke City: Council Member Harris was absent. Town of Vinton e w OPENING REMARKS: Mayor Bowers Mayor Hill REQUESTS TO ADD AGENDA ITEMS OR CHANGE THE ORDER OF THE AGENDA: DISCUSSION OF AGENDA ITEMS: a. Update on the Greenways Project. City of Roanoke. b. Proposed Roanoke City Subdivision located off private access road known as Gates Lane. Town of Vinton. c. Habitat for Humanity in the Roanoke Valley. City of Roanoke. d. Discussion with regard to regional approach to study cost of recycling. Town of Vinton. e. Update on Metropolitan Transportation District. City of Roanoke. f. Update on Higher Education Center. City of Roanoke. g. Update on regional health care. City of Roanoke and Town of Vinton. h. Update on improvements to entrances and exits between the City of Roanoke and the Town of Vinten. City of Roanoke and Town of Vinton. REMARKS BY MEMBERS OF ROANOKE CITY COUNCIL AND VINTON TOWN COUNCIL: ROANOKE CITY: At 1:35 p.m., the meeting was declared in recess. TOWN OF VINTON: Adjourn. 2 ?o: Carolyn Ross, Clerk of Council, Town of Vinton ~ax: 983-0621 From: Mary F. Parker Date: January 30, 1997 Pages: 4, induding cover sheet. I am faxing copy of the agenda for the joint luncheon meeting of the Roanoke City Council and the Vinton Town Council on Monday, February 3 at 12:00 noon, Campbell Court Transportation Center, 17 Campbell Avenue, S. W. Complimentary parking will be provided in the Campbell Court Parking Garage. Please park on the third level deck, entering by way of Salem Avenue, iust past the Greyhound Bus Terminal. There is an entrance from the third floor level of the parking garage leading directly to the meeting room. Signs will be posted for your convenience. I am also faxing copy of the attendees from the City of Roanoke. If you have questions, please feel free to call me. Mary From the desk of,.. I~ F. Parker City Clerk City Clerk's Office 215 Church Avenue, S. W. Roanoke, Virginia 24011-1536 (540) 853-254 I Fax: (540) 853- I 145 Joint Luncheon Meeting Roanoke City Council and the Vinton Town Council Monday, February 3, 1997 12:00 noon Campbell Court Transportation Center Attendees - City_ of Roanol~-. Mayor David A. Bowers Vice-Mayor Linda F.Wyatt Council Member John H. Parrott Council Member Carroll E. Swain Council Member James O. Trout Council Member William White, Sr. W. Robert Herbert, City Manager James D. Ritchie, Sr., Assistant City Manager Wilbum C. Dibling, Jr., City Attorney James D. Grisso, Director of Finance Robert H. Bird, Municipal Auditor Willard N. Claytor, Director of Real Estate Valuation Mary F. Parker, City Clerk George C. Snead, Jr., Director, Public Safety William F. Clark, Director, Public Works Glenn D. Radcliffe, Director, Human Development Kit B. Kiser, Director, Utilities and Operations Kenneth S. Cronin, Manager, Personnel Department TOe! OF ?~.X ~ ~0. ?. 1 TOWN OF VINTON VINTON. VII~iNIA 24179 Jaauary 31, 1997 CAROLYN S. TO: Mary F. Parlor City Cl~k City of ~ (540) 853-1145 FROM: Carolyn S. Ro~ JOINT LUNCHEON MEETING MONDAY, FEBRUARY 3, 199/ 12:00 NOON Town of Vlnt~n. Atlzmdm Mayor Charles IL Vice Mayor C. i~Cord Barton Council Member Robert R. Alfc~ Council Meanbe~ los~ph L. Bush, Jr. Council M _ember llrflliam B. (7oen~, Jr. B. Clayton Goodman, HI, Town Manager Keith L. Holland, Assistant Town Manag~ William (Buck) L. Heanwell, HI, Town Attorney Carolyn $. Ross, Town Clerk Anita $. McMillan, Plannin~ Director JAN-31-1997 10:18 540+98~+0621 P.O1 Roanoke Valley Consortium Joint Health Insurance Feasibility Study November, 19913 & A s t e s MORGAN s o c i a Executive Summary A study to evaluate the feasibility of establishing a regional joint health care plan has been completed. Representatives of City of Roanoke, City of Roanoke Schools, County of Roanoke, County of Roanoke Schools, Roanoke Redevelopment and Housing Authority, Roanoke Regional Airport Commission, City of Salem and City of Salem Schools and Town of Vinton (by proxy) and consultants from Slabaugh Morgan White & Associates (SMV~ conducted this review. With a total enrollment of over 6,500 employees or almost 13,000 members the Roanoke Valley Consortium has significant negotiating power. The unanimous recommendation of the committee and the conclusion of our study is to pursue a joint purchasing of health care coverage through a competitive negotiation process. This summary will highlight the reasons and considerations evaluated in determining this recommendation. Based on our analysis and precedent set in two other joint pumhasing consortiums by public entities in Virginia, a joint t~ealth care program has the ability to leverage the combined size of each employer to enable: · Enhanced benefit choices for employees to select what best meets their individual needs. Increased negotiating power of members to achieve cost savings through reduced administrative, retention and reinsurance expenses, more effective cost and utilization management programs and increased savings in mana,]ed care. · Negotiations of more aggressive multi-year financial and serwce guarantees. · Shared resources between members such as commumca~on material, wellness promotion programs or consulting ser~.:es Slabaugh Morgan White & Associates has experience in consulting with two other consortiums involving Virginia public entities. Both programs were very successful and generated significant savings to members. A brief summary of these consortiums is as follows: Prince William County Consortium includes 5 entities with a combined employment base of 5,200. Through a competitive negotiations process over $6 million in first year savings was achieved along with enhanced benefit options. The joint plan was effective July 1, 1995 and involves three year rate and performance guarantees. The SAW consortium project involves the Cities and Schools of Staunton, Augusta and Waynesboro and Augusta Medical Center and represents 4,300 employees. The consortium plan will be effective January 1, 1997 and is projected to save over' $2 million in the first year. These groups also received three year rate and performance guarantees. Based on these two examples of success and the information gathered in a Request for Information (RFI) survey of 11 carriers doing business in the Roanoke Valley we determined that considerable interest exists in a joint plan and favOrable results can reasonably be anticipated. The RFI analysis also indicated that the next twelve months appears to be an optimal time to conduct a market study as managed care companies are developing their provider networks and trying to gain marketshare. The potential disadvantages to joint health care purchasing are limited. We identified three concerns: Each entity will no longer be autonomous in all aspects of healthcare purchasing. Some decisions are no longer independent, for example plan design options will be umform for all entities. Considerable up front work is involved in establishing a joint plan. The process is time consuming and requires planning. organizing and consensus building. · Transition issues related to the conversion of the ~old" plans to the new joint plan. To address these issues the committee identified decisions that required consensus and those that could remain independent for each member. Joint decisions include: · Plan design · Request for Proposal (RFP) document · Selection and evaluation criteria of finalists · Funding arrangement and cost allocation formula · Reporting requirements - consortium-wide · Performance guarantees · Consortium policies and procedures The indeoendent decisions include: · Eligibility criteria (ie. who is eligible for coverage?) · Employee and employer contribution rates (strategy will remain independent and be based on entities utilization and budget requirements) · Rate structure (membership tiers) · Billing/payment procedures · Employee communications · Specific member reporting requirements These independent decisions will minimize the transition issues and allow each member to meet their individual financial and human resource objectives. We advise the joint health care purchasing market study be structured to allow the ultimate flexibility for consortium members. The RFP will request a three year contract with a two year option to renew for medical, dental and vision coverages for each entity. The proposal will require all potential offerors to quote: "Status quo" benefits and funding for each entity on a stand alone basis - this will allow each entity to measure the competitiveness of their current plan The new consortium benefit design and status quo funding for each entity on a stand alone basis - this will show the impact of changing from current benefits to the consortium proposed benefit plan, while still purchasing on a stand alone basis under the current funding arrangement The consortium benefit design including all entities under both a fully insured and a shared-risk funding arrangement - this will show the impact of changing to the consortium benefits and collective purchasing Decisions to enact a consortium health plan would be made once RFPs are evaluated to determine the advantages for each entity over status-quo and stand-alone options. The RFP will also require that offerors price the impact of one or more entities opting out of the consortium. This approach minimizes the member's risk by not committing to an unknown arrangement in advance of the competitive negotiation process. Additionally, procurement requirements on each member's plan will be met. At this point the decision is to commit to the process. Commitment for a joint health plan purchase is not required. Based on our recommendations to pursue a joint health plan RFP we anticipate the following time line: 315-345 days · Collect Data · RFP Development · Selection Criteria · RFP E~ aluation · ~election of Finalists · Final Recommendations · Board Presentations · Approval 30-6O days · Relea-e · Finalists Interviews · Negotiations · Communication · Open Enrollm'ent · hnplementation Day 1 -- Decision to Proceed with RFP Assuming the decision to proceed is reached by the end of 1996 and the project consultant is selected, an effective date of January 1, 1998 has been targeted. ROANOKE VALLEY CONSORTIUM Feasibility Study Roanoke Valley Consortium members hired Slabaugh Morgan White & Associates (SMW) to evaluate the feasibility of establishing a joint health care plan. This study included discussions and meetings with representatives of each entity and Juliet D. White and Diane V. Monaco of SMW. This report summarizes the discussions and decisions of this committee and their consultants. At the onset of the project the potential advantages of joint purchasing was reviewed. Present enrollment in the medical programs was used to determine the size of the combined group and the potential bargaining power. Approximate enrollment in each plan is: Number of Roanoke Redevelopment & Housing Authority 90 County of Roanoke 710 Roanoke County Schools 1,140 City of Roanoke 1,800 Roanoke City Schools 1,690 Town of Vinton 23 City of Salem and Salem Schools 1,060 Roanoke Airport Commission Total Employees 6,553 With a total enrollment of 6,553 employees or almost 13,000 members the Roanoke Valley Consortium has significant negotiating power. This size account has the opportunity to enable members to negotiate: · multi-year financial guarantees · aggressive service guarantees · impact on provider network development and managed care protocol under development by carriers/vendors Additionally; the combined size will enable the members with smaller enrollment (Roanoke Redevelopment and Housing, Town of Vinton and Roanoke Airport Commission) access to products presently not available through direct purchasing. In summary it was concluded that a jo~n! health care approach means: · Enhanced benefit choices for employees to select what best meets their individual needs. 6 Feasibility $~d_y continued... · Increased negotiating power to members to gain cost savings through reduced administrative, retention and reinsurance expenses. · Opportunity for members with enrollment below 100 employees to purchase products not available on a direct basis. · Ability to influence managed care protocol and provider network development, · Opportunity to share resources between members. The potential disadvantages of joint purchasing identified are: · Members are no longer completely autonomous in all aspects of health care purchasing. For example, plan design options will be uniform for all entities. · Extra work is involved in the forming of a joint plan. The process is time consuming and requires planning, organizing and consensus building. · Transition issues related to the conversion of the "old" plans to the new joint plan. These concerns or possible issues were addressed by the Committee by determining the decisions that will require consensus or uniform policy and those that remain independent. The following is the conclusion of the classification of the major items impacting health plans: Joint or Conaonaua Decisions · Plan Design · Request for Proposal Document · Consistent Policies/Procedures · Selection/Evaluation Criteria of Bidders Carrier Selection · Funding and Cost Allocation Formula · Reporting · Employee Communications * · Performance Guarantees · Consortium Policies/Guidelines 7 Feasibili St~/_~.con~nued... Indenendent Decisions Include; · Eligibility Criteria · Contribution Rates · Rate Structure (membership tiers) · Billing/Payment Arrangements · Enrollment Process · Reporting · Employee Communications * *th/s can be a jo/nt or/ndependent effor~ Two case studies of consortium projects conducted by Slabaugh Morgan White & Associates were reviewed and discussed at the committee meeting. Highlights of the project process and results of these consortium efforts are: 'Case Study #1: Prince William County Consortium Who: Process: RFP Results: · 5 entities (plus 2 joined prior to effective date) · Each entity had different plan designs, renewal dates and funding arrangements · 5,200 employees in total or 10,000 members · Slabaugh Morgan White & Associates was hired to conduct a competitive market study · Uniform plan design was determined · Selection criteria established · Request for Proposal format: - Quote status quo - New plan design on stand-alone basis - Consortium quote Trigon selected as finalist Three-year rate guarantee and performance guarantees Over $6 million in first year savings - Fully-insured, elected common rates for each entity, underwriting gain sharing arrangement with carrier 8 Fe=__~!bility Study continued... Case Study #1: Prince William County Consortium continued... · All entities agreed to participate (minimum of three years) · SMW retained to: - Develop Consortium policies and procedures - Provide ongoing plan management support · Two additional entities joined ~ Effective Date · July 1, 1995 Case Study #2: SAW Consortium (Staunton, Augusta, Waynesboro) 0 Who: Process: RFP Results: Effective Date · 7 entities (one private - Augusta Medical Center) · Each entity with different plan designs, renewal dates and funding arrangements · 4,200 employees in total or 7,000 members · SMW hired to conduct feasibility study - Request for Information survey released and evaluated to determine potential carriers/vendors - Determined status of managed care development · Determined market conditions favorable and approved proceeding with RFP · Similar RFP process as Prince William Consortium · QualChoice of Virginia selected as finalist · Three-year rata guarantee and performance guarantees · First year savings astimated at over $2 million - Fully-insured program with different rates for each entity · SMW retained to: - Develop consortium policies and procedures - Provide ongoing plan management support · Consortium plan effective January 1, 1997 9 Feasibility Study continued... Based on SMW's experience on these and other similar joint purchasing projects we believe several keys to the overall success of the arrangement are: · Commitment to Process [Commitment tojoinilTg Consort~urn forpurpose of jo/nt health care purcha$/ng nor requ/redJ · Decide how to vote throughout the process · Decide how to allocate project costs At the August meeting the committee decided to pursue a Request for Information survey to potential bidders. The goal of the RFI was to gain information to determine the level of interest of carriers/vendors and to provide advance notification to all bidders of possible RFP process so that provider network development would continue. The results of the RFI are included in this report. The survey determined that a great deal of interest exists and that serious competition among carriers would be generated by a RFP process. The next meeting of the full committee and SMW as held on October 15, 1996. The purpose of this meeting was to review the results of the RFI evaluation conducted by SMW; to make decisions related to the RFP process for the joint health plan; to discuss issues and concerns identified about Consortium purchasing and to finalize the feasibility study recommendation. The first important decision required for this process was voting rules. The committee established the following guidelines: One vote per member - each entity has it's own vote - Salem has 2. votes; one for City and one for Schools -~._Town of Vinton has no vote since they instructed the committee that they could support the consensus vote and are not able to -'. participate in meetings · The goal of the committee is to gain the consensus of each member so that everyone supports the decisions · The established quorum is 6 out of 8 members · 6 out of 8 members will be required for approval 10 Feasibility Study continued... The second issue discussed was the anticipated effective date of the Consortium program since a uniform renewal timing is required. Presently, renewal dates are as follows: Member Renewal Data Roanoke Redevelopment & Housing Authority January 1st County of Roanoke July 1st County of Roanoke Schools July 1st City of Roanoke January 1st Roanoke City Schools October 1st City of Salem and Salem Schools October 1st Roanoke Airport Commission January 1st Town of Vinton July 1st The time line of the project was reviewed and the committee agreed that competitive negotiations, evaluation of responses, negotiation with finalists and implementation process would realistically take 315 to 345 days. The anticipated beginning date is no later than January 1, 1997 (assuming necessary approvals and consulting services are obtained). SMW advises keeping the January 1, 1997 target date for approval so that maximum participation in the competitive negotiation process can be achieved. The various tasks for a market study and the estimated time requirements are: [ 315-345days I · Collect Dam · Final Recommendations · R~P · RFP Dm-elopmtat Evaluation · Beard presen~flom CHter~ F'~nuli~l~ · Approvld · Communication · Open Enrollment · Impiementafiofl ' Day I = Decision to Proceed with RFP 11 Feasibili_ty Study continued... Considering the needed time for the process, the committee voted to set a January 1, 1998 effective date for the joint plan. This decision assumed no new groups would be allowed to join this Consortium during this planning, preparation period or the competitive negotiation process and implementation. This effective date will require several members to "bridge the gap" between their existing plan and the Consortium plan. This can be achieved by negotiating an extension of the existing contract or a short plan year. Given Trigon's interest to maintain the business and our experience in similar negotiations, we do not anticipate problems associated with this issue. For the RFP, the committee also decided to request a three year contract with a 2 year option to renew. A summary of other decisions are: · Proposals will be requested for medical, dental and voluntary vision coverages. · Consortium plan design for medical will consist of 3 options: Comprehensive, Point-of-Service and HMO. May consider 2 HMOs. Funding arrangements will be current for "stand-alone" proposal for each entity. Consortium funding will request two arrangements: fully-insured and minimum premium. · Proposal format will be: - Stand-alone quote - current plan design and funding - Stand-alone quote - Consortium plan design and current funding - Consortium quote - Consortium plan design and two funding arrangements (fully-insured and minimum premium) · Only~current members of the joint health care purchasing project will be included in RFP. · No new members will be accepted prior to effective date and the initial term of the contract. · If Consortium arrangement is selected and approved members will stay with the plan through the term of the.contract. 12 The unanimous decision of the committee was to recommend the pursuit of a joint health care plan. The advantages of a Consortium program can be significant, and based on the RFP procedures recommended, the risk to members is minimal, i.e., if the joint plan does not achieve the desired results, stand-alone quotations can be accepted.. It has been our pleasure to work with the Roanoke Valley Consortium members in evaluating the feasibility of a joint health plan. Respectfully submitted Principal Slabaugh Morgan White & Associates Consultant Slabaugh Morgan White & Associates 13