Employee Clinic Could Cut County Insurance Costs

With an eye toward finding innovative ways to lower the cost of providing health insurance coverage for employees, Marinette County Board’s Finance Committee met Monday, May 7 with representatives of two firms hoping to serve the county as contracted health care consultants.

“I want to re-create our health care delivery,” County Administrator Ellen Sorensen told the committee. She spoke enthusiastically about a health risk assessment program that will improve care for employees and their families while creating tremendous savings for the county, and told the committee one of the reasons she accepted the job in Marinette County was the great employee-driven Wellness Program.

Long term, Sorensen suggested looking at other ways to keep the county’s health care coverage costs down. One of these could be establishing an onsite or near-site medical clinic for county employees and their families, possibly staffed with a nurse practitioner, or perhaps in conjunction with the county Health Department, and offer employees incentives for using that less costly service as well as reduced cost prescription drug programs that are available, particularly for long term medical problems.

She had worked with Jay Scott of Associated Financial Group (AFG) to develop the first such clinic in Wisconsin for Fond du Lac County and it worked very well, she said. She suggested they also could look at a public/private partnership with business entities that have the same insurance/consultant coverage. Committee members were given copies of a report on a similar clinic established in Sheboygan County in 2009 with the help of Scott and AFG.

When one of the consultant candidates suggested that generally finding space for such a clinic is a problem, Sorensen said that would not be the case here, as the old jail building adjoining the courthouse is mostly vacant.

Sorensen said bringing down employee health care costs is accomplished , “not as an edict from above, but by working together.”

The two firms chosen to present their proposals to the committee were Horton Finance, represented by RaeAnn Beaudry, and AFG, represented by Scott, Caroline Berghammer and Kelly Jagelski. Sorensen said the two firms were the best of five consultants that responded to her informal request for proposals. She and Human Resources Director Jennifer Holtger reviewed all the proposals and assigned points for various items covered, she said. One of the responders submitted a proposal that did not offer the services needed, and two had prices in the $65,000 range. The two consultants selected to make presentations offered comparable services that meet the needs of the county, Sorensen told the committee.

Horton offered a price of $42,000 a year for comprehensive health care consultant services, and $30,000 for just the core services. The AFG proposal, which the committee eventually voted to accept, will cost $25,800 for what appears to be basically the same services as the higher cost Horton plan. A major difference is that Horton has an underwriter on staff and AFG does not, but Scott assured the committee his firm has agreements with underwriters and will promptly supply whatever information is requested.

Beaudry promised excellent communications, and said Horton always has a real live person available by phone. She said answers to requests for information would be provided in 48 hours or less.

The current consultant contract costs the county $18,000 a year, and apparently they are not providing even the services needed for COBRA. Holtger said she is obligated to get the COBRA forms to retirees, be sure they are filled out, signed and returned, and the county therefore also retains liability should coverage lapse. She asks for information and may wait weeks for a response. Often the questions involved are what effect certain actions by the county would have on health insurance premiums, since the cost of coverage takes into account local average expenses as well as overall in the industry.

Sorensen said there are opportunities for huge savings in the county’s health care coverage costs. For example, when she accepted her new position here her physical exam included a blood workup that tests for 30 possible problems, at a cost of over $700 from a regular physician. That same test, for the same 30 problems, would be part of a Health Risk Assessment that costs a total of $135 each. Given the number of employees and family members covered by the county insurance programs, a saving of $500 each would be huge, Sorensen declared.

She praised the health risk assessment clinics and said they found people with such severe hypertension or diabetes problems that they were literally walked out of the room and taken for treatment immediately. Each employee assessed gets a 40-page individual report and the county gets a comprehensive report so they can decide how to best focus the wellness program.

She and Holtger also both spoke of the need to do a full coverage audit. Children under 26 by law must be allowed on their parents’ family plans, but those who are older should be off, and often that is not the case. In one of the counties she served, Sorensen said one man was covering both his current and his ex-wives. He said the judge told him he must continue insuring the ex-wife, so he did, at county expense. He added the new wife but didn’t take the old one off. No one caught that until the audit.

Sorensen said she prefers not to do a full request for proposals before hiring a consulting firm because it would take too long and she wants some answers before August and September, when the current policies need to be renewed.

She pointed out in the last round of negotiations, which was in progress just as she was hired as county administrator last fall, the county had been faced with a 23 percent increase in insurance premiums. That had been negotiated down to 18 percent, but the Finance Committee told them to come back with single digits and by agreeing to some changes Sorensen said they had managed to bring the increase down to 8 percent.

Beaudry said the county should have been warned in advance by their consultant to expect the 23 percent hike due to usage, “It should not have come as a surprise.”

In the recent past, Beaudry has worked with Holtger to resolve some issues and provide information without charge. Scott had worked with Sorensen on the Fond du Lac clinic project. Holtger said she had worked with both firms in the past and to questions from committee members felt she could work with either one at this point.

Supervisor Connie Seefeldt asked why they had been dismissed. Holtger said the former county administrator (Steve Corbeille) had dismissed the Horton Group after they had been the county’s consultants for two to three years. AFG worked for two to three months and they too were dismissed by the former administrator. Holtger said she found Beaudry very helpful in the current situation, and had problems with AFG in the past, but she felt Scott was a different person in a different division of the company, and they could work with him.

Finance Director Pat Kass said he too had not liked working with their last AFG program. “I didn’t work with them that much, but we didn’t seem to get our questions answered,” Kass declared.

Noting that employee cooperation is an important component in health care cost reductions, Seefeldt, who chairs the Personnel Committee, said she regretted not making this a joint meeting. Sorensen said if they do accept a health care consultant project they should ask for reports at least quarterly and suggested they be given at joint meetings of Finance and Personnel committees.

After presentations by each of the firms, followed by question and answer sessions the committee decided they could work with either of the firms. Holtger and Sorensen said they also could work with either.

Supervisor Don Pazynski said he has a background in communications and his first job was with the state Medical Society in Madison. He had spoken with others familiar with the Horton group and heard nothing but praise, but he felt comfortable with either group.

Schroeder felt a consultant might be needed now, but that eventually they could wean themselves off. Sorensen and Holtger doubted that would be a good idea.

“That sounds good, but it won’t work,” Holtger declared. “I have the expertise to do the calculations, but to work without consultants is impossible. They are the middle men. They have access to the information and we do not. They have it locked down.” She spoke of a nightmare trying to get information needed to negotiate the insurance contracts in fall of 2011, of asking questions and waiting and waiting for answers. Later in the meeting she repeated, “I have the skills...We can’t get the information.”

Sorensen declared the whole field of health care changes too rapidly for county personnel to know everything.

Holtger said it appears either of the two finalist firms could provide the information needed to make educated decisions.

Kathy Just felt it would not be right to approve the higher price offer unless there were some major differences to justify spending an extra $20,000.

Seefeldt insisted on an escape clause, so they would not again be in a position of paying for service they did not receive, and the rest of the committee agreed.

“I know what we expect from a consultant and we will get it,” Sorensen declared.

Finally the committee voted unanimously to accept the AFG proposal and save the $20,000 but only on a 1-year trial basis, and with an escape clause if they do not work out. Motion was made by Just and seconded by Melissa Christiansen to forward the proposal to County Board with a recommendation for approval, pending review of the contract by Corporation Counsel Gale Mattison.

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