HomeMy WebLinkAboutJune 14, 2011 AgendaAGENDA
CITY OF DENTON CITY COUNCIL
June 14, 2011
After determining that a quorum is present, the City Council of the City of Denton, Texas will
convene in a Work Session on Tuesday, June 14, 2011 at 3:00 p.m. at Denton Regional
Professional Office Building, 3537 S. 1-3 5E, Suite 310B (3rd floor), Denton, Texas at which the
following item will be considered:
NOTE: A Work Session is used to explore matters of interest to one or more City Council
Members or the City Manager for the purpose of giving staff direction into whether or not such
matters should be placed on a future regular or special meeting of the Council for citizen input,
City Council deliberation and formal City action. At a Work Session, the City Council generally
receives informal and preliminary reports and information from City staff, officials, members of
City committees, and the individual or organization proposing council action, if invited by City
Council or City Manager to participate in the session. Participation by individuals and members
of organizations invited to speak ceases when the Mayor announces the session is being closed to
public input. Although Work Sessions are public meetings, and citizens have a legal right to
attend, they are not public hearings, so citizens are not allowed to participate in the session
unless invited to do so by the Mayor. Any citizen may supply to the City Council, prior to the
beginning of the session, a written report regarding the citizen's opinion on the matter being
explored. Should the Council direct the matter be placed on a regular meeting agenda, the staff
will generally prepare a final report defining the proposed action, which will be made available
to all citizens prior to the regular meeting at which citizen input is sought. The purpose of this
procedure is to allow citizens attending the regular meeting the opportunity to hear the views of
their fellow citizens without having to attend two meetings.
1. Receive a report, hold a discussion and give staff direction regarding the proposed City of
Denton Health and Wellness Center.
2. The Council will participate in a tour of the proposed City of Denton Health and
Wellness Center.
CERTIFICATE
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of 2011 at o'clock
(a.m.) (p.m.)
CITY SECRETARY
NOTE: DENTON REGIONAL PROFESSIONAL OFFICE BUILDING IS
ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT.
THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING
IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED
MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-
RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED
THROUGH THE CITY SECRETARY'S OFFICE.
AGENDA INFORMATION SHEET
AGENDA DATE: June 14, 2011 Questions regarding this
report may be directed to
DEPARTMENT: Human Resources/Risk Management Scott Payne at 349-7836
ACM: Jon Fortune
SUBJECT
Receive a report, hold a discussion and give staff direction regarding the proposed City of
Denton Health and Wellness Center.
BACKGROUND
Why an Emplovee Health Chyl e?
The increasing cost of providing health benefits to employees, retirees and their respective
dependents continues to be an ongoing challenge for most organizations. With the cost of
medical care and prescription drugs continuing to increase at a faster rate than inflation,
employers are faced with decisions to reduce benefits, increase premiums, or both, in order to
pay for the rising cost of health care.
One cost cutting measure that is being pursued by the City is the creation of a Health and
Wellness Center, or Clinic, for all employees, retirees and dependents (members) that are part of
the City's self-funded health program. The clinic would provide high quality, no cost, primary
medical care services for those that choose to access it.
The concept of employee clinics has been around for many years. Early on these "company
doctors" provided "sick call" examinations and focused more on occupational injuries. Over the
last ten years or so, the scope of these clinics has expanded to function much like a family
practice physician's office, providing primary medical care services to employees and their
dependents. The theory is that by turning a component of the costs associated with health care
into a fixed cost, employers can essentially provide the service more cost effectively than they
can provide the benefit. Every office visit that can be diverted from the medical community
generates hard dollar savings for the public entity.
Other areas where additional savings can occur include:
• Disease management - many family practices simply have too many patients to be
effective in the area of disease management. They do not have sufficient time to do
regular follow up with those patients that are trying to manage a chronic disease
condition like asthma, diabetes, obesity, high blood pressure/cholesterol, etc. Or if they
Agenda Information Sheet
June 14, 2011
Page 2
are able to follow up, it may require many repeated office visits at the cost of $20 or $30
per visit for the member and $100's to the plan. This ongoing cost can become a barrier
to being compliant with treatment programs. By removing the cost barrier, by making
care easier to access, by having a manageable patient case load that allows for follow-up
and developing a personal relationship with a physician, the clinic can have a major
impact on the costs associated with chronic care.
• Wellness initiatives - the clinic would provide for a mechanism to connect members to
wellness opportunities at the point in time where it is most meaningful. If a member
receives a new diagnosis of high blood pressure, high cholesterol, or diabetes the clinic
would be able to refer members directly to wellness and/or disease specific programs that
are available to the City through United Healthcare, the City's Recreation Department
and other partners/resources. One potential staffing model for the clinic may include a
designated Wellness Coach that could assist members with diet, nutrition, fitness and
exercise education as well as being a resource to the City's Wellness Committee for our
ongoing wellness outreach efforts.
• Medication prescribing patterns - the medical staff of the clinic only have to worry about
one prescription drug formulary instead of multiple formularies. This will allow them to
become intimately familiar with which drugs are covered on what tiers in order to
prescribe medications that have the best clinical outcomes while maximizing member and
plan savings. In situations where there are no generic equivalents available for a specific
drug, the clinic staff can prescribe a generic from within the same therapeutic class of
drugs. It also will allow the plan to implement "step therapy," a proven cost saving
strategy, without the need for intervention at the retail pharmacy level.
• Physician and facility referrals - the medical staff at the clinic will develop relationships
with providers and facilities in the medical community. While the clinic can deliver high
quality, basic medical care, the clinic will still need to make referrals out to orthopedics,
cardiologists, diagnostic testing facilities and laboratories. These referrals will be made
to those providers that also deliver high quality, cost effective services and will not be
influenced by other factors.
• Accessibility - for some employees, even the current $20 or $30 office visit copayment
can be a barrier to them accessing care when they are sick or following up with a
physician for regular blood tests to monitor a condition. Also, some members will not
seek out some basic care because they don't have a family physician or because they
don't want to wait for hours to see a doctor. By removing the cost barrier and by
committing to see members at their scheduled appointment time, we can improve the
access to basic medical care and thereby improve the overall health of our members.
• Absenteeism and presenteeism - by increasing accessibility as indicated above, we can
greatly reduce absenteeism and presenteeism related to illness. Additionally, by reducing
Agenda Information Sheet
June 14, 2011
Page 3
wait times to see a medical professional we can reduce the time away from work to attend
medical appointments.
• Resource for other medical related services - in the future, the clinic can potentially be
used for services like drug test specimen collection, pre-employment physicals, fire &
police physicals, basic laboratory and x-rays and other procedures that are currently being
contracted for.
• Establishment of a medical "home" for employees - many employees do not have a true
family physician and rely on facilities like Minor Emergency, CareNow or even the
Emergency Room for their basic health care needs. By offering no cost, accessible health
care services, the clinic has the opportunity to become a medical home for employees.
This will result in better outcomes through prevention measures based on early detection
and management of chronic conditions
Clinic Request for ,Sealed Proposal (RFSP) Process
While there are many facets of the clinic that will save the City money over the long term, the
immediate savings comes from diverting office visits from the health plan to the clinic and
turning those variable costs into fixed costs. Because of that, it is important to be able to spread
those costs over a sufficient number of patients in order to maximize savings. With
approximately 3,000 members, the City of Denton is large enough to support a clinic. However,
if the City could find another entity (or entities) to partner with, similar to what the City of
Mesquite and Mesquite ISD did, we would certainly be able to build a bigger clinic, with a larger
medical staff and deliver additional services such as lab, X-ray and pharmacy.
To that end, we had detailed discussions with Denton County and Denton ISD about partnering
on an employee clinic. While both entities liked the idea of a clinic and seemed to understand
the value in providing this benefit to their plan members, both entities declined to participate at
this time.
Although we would certainly have preferred to have another partner in the clinic, the City moved
forward on its own with the clinic development process. We prepared RFSP 44634 - Onsite
Medical Clinic Operations and Management Services and submitted it to approximately 30
potential bidders, including both Denton hospitals, in December of 2010. The City received 12
responses to our RFSP.
A review committee consisting of the Chief Financial Officer, the Director of Human Resources,
a representative from the Employee Insurance Committee (EIC), the Risk Manager, the Benefits
Administrator, and our benefits consultant evaluated the responses based on the detail and
thoroughness of the response (30%), the cost of the services being proposed (35%) and the
responders experience in providing similar services, especially for public entities (35%).
Agenda Information Sheet
June 14, 2011
Page 2
The review committee selected four companies to make formal presentations and answer
additional questions regarding their proposals. From that group of four, the review committee
chose two finalists and made site visits to current clinics operated by those companies in the
DFW area.
By visiting the clinics, the review committee was able to see firsthand an example of how each
company structured and operated their respective clinics. Additionally we were able to talk to
the clinic medical staff about the operation and their thoughts and opinions about each company.
Based on the clinic site visits and the information obtained during the reference check process,
the review committee recommends that the City enter into a contract with CareHere to manage
and operate our clinic. Staff will bring the contracts to the Council for approval at a subsequent
meeting.
0inic Model
CareHere will staff the City's clinic with a full time physician (MD or DO) and two Medical
Assistants on site. Clinic appointments will be scheduled on-line or through a call center staffed
with multi-lingual call takers. Both of these options allow patients to set appointments at their
convenience, not just when the clinic is open. This approach also minimizes the number of
onsite staff that is needed which in turn helps reduce the overall cost to operate the clinic.
CareHere will recruit and credential the physician for our clinic and will provide an opportunity
for the City to interview the potential physician in order to help determine the "fit" with our
organization. CareHere will also provide for a replacement physician in cases of illness,
scheduled vacations or continuing education training. Salaries for the medical staff will be a
straight "pass through" from CareHere to the City.
Although the hours of operation for the clinic have not been set, the clinic will be open to
patients for 40 hours per week. The exact hours of operation will be set after discussions with
staff and CareHere, but we would anticipate the hours to be from 7:00 AM until 4:00 PM, with
the possibility of different hours one or two days per week to allow for more flexibility.
Appointment times would be set to allow for both scheduled appointments as well as "walk-ins."
0inic Services
In addition to hiring and managing the on-site medical staff, CareHere also provides many other
services related to the operation and management of the clinic. CareHere will assist us in
securing the necessary equipment and supplies (both medical and office) for the clinic as well as
the electronic medical records system.
Another element that CareHere provides to maximize the effectiveness of the clinic, as well as
assist the City in analyzing health plan performance, benefit design, and wellness activities is
predictive modeling. The predictive modeling process takes in medical and prescription claims
data from our third-party administrator, United Healthcare (UHC), and combines that with lab
Agenda Information Sheet
June 14, 2011
Page 3
test results, on-line Health Risk Assessment (HRA) data, and medical history at the clinic to help
"predict" potential future large claims.
Additionally the predictive modeling program develops a Clinical Profile for each patient that
provides a prescription drug profile, an assessment of future health risks, and claim cost impact
potential, as well as identifying treatment gaps and prescription drug compliance.
By having this data at their disposal in the patient's electronic medical record, clinic medical
staff can more effectively manage the "whole person" of each patient that comes to the clinic. If
a patient comes into the clinic because of an acute condition (cold, flu, allergies, sprain, strain,
etc.) the physician will treat that condition and then be able to address other health risks such as
high blood pressure or cholesterol, diabetes, heart disease, obesity, etc.
CareHere will also provide aggregate health information (no individual identifiers) to the City in
an Employer Profile that will identify our top health risks and wellness needs to assist us in
better managing our overall health plan.
The predictive modeling data also feeds into CareHere's disease management and case
management programs. The disease management program identifies the risk of members in the
health plan population and stratifies them in categories of No/Low Risk, Moderate Risk, or High
Risk. The risk category determines the level of disease management they receive. Low Risk
individuals may only receive a letter congratulating them on their healthy lifestyle while higher
risk members may receive outreach phone calls from clinic staff and/or CareHere Coaches. The
outreach calls are designed to alert members of potential health risks and help them facilitate
making lifestyle changes or seeking medical assistance to help improve their conditions.
While disease management helps identify potential high risk individuals and get them the
medical assistance they need, case management is provided to help patients who have one or
more chronic health conditions to better manage their health. Registered Nurse Health Coaches
will make contact with those members who are identified for potential case management to
assess the member's willingness to work with the Health Coach on personal health concerns. If
the member is willing to participate, then the Health Coach will establish a plan of care based on
the physician's recommendations, the member's own personal goals, and evidence-based
medical protocols. Specific educational materials related to the member's health conditions are
provided in the format and learning style preferred by the member.
While CareHere will receive data from UHC for the predictive modeling and electronic medical
record programs, CareHere will also provide clinical data to UHC so that the patient's entire
medical story is captured by UHC for their disease management, wellness coaching, and other
health improvement programs. Additionally, by capturing clinic data in terms of offices visits
and procedures performed in the clinic, UHC will be better able to assist the City in quantifying
the medical cost savings from our clinic operation.
Agenda Information Sheet
June 14, 2011
Page 4
0inic Location
Denton Regional Medical Center (DRMC) has approached the City about leasing office space in
their professional building (adjacent to the hospital) for the clinic. The proposed space has 2,529
usable square feet with five exam rooms and three offices. DRMC has offered the space for one
dollar ($1) per year and includes an allowance for upgrades/updates to the carpet, paint, and tile.
The lease also includes general maintenance and janitorial services for the office space.
Staff believes this space would serve the City well as it is located in an existing medical area of
Denton that is less than 15 minutes from most City facilities and has ample parking to
accommodate our larger vehicles (dump tricks, solid waste tricks, etc.). The fact that the clinic
will be located in a professional medical building adds a level of credibility to the operation as
well as allowing for easy access and referral to other medical specialties and services should the
need arise. The DRMC professional building currently has an outpatient imaging center on the
first floor that can provide x-ray, sonogram, CT, MRI, and DEXA, and also offers nuclear
medicine and other diagnostic imaging services in the hospital itself. There is also an outpatient
lab located on the second floor of the building.
Patients would have access to outpatient therapies in the office building, including physical
therapy, occupational therapy, speech therapy, diabetes education, and cardiac rehabilitation.
Solis Women's Health is also located on the second floor of the office building and would be
available for patient's mammography needs.
Additionally, the City has an existing relationship with DRMC for the initial treatment of most of
our occupational injuries. If a patient is seen in the clinic for what turns out to be a work related
injury, the proximity of the clinic to the DRMC Occupational Medicine program will allow for a
quick and easy referral. Should there be a need for emergency medical services, the DRMC
Emergency Room is next door.
C'0gf1dentiality of Emplovee Medical Records
CareHere and the City are strictly bound to the privacy and security standards set forth under the
Health Insurance Portability and Accountability Act (HIPAA). The City is prohibited from using
medical information when making employment or benefits decisions and will not have access to
individual employee medical data. As a covered entity, the City has many responsibilities
concerning Protected Health Information (PHI), including but not limited to adopting PHI
privacy procedures, providing patients written notice of the City's privacy practices and access to
their medical records, and a chance to request alternative methods of communicating
information. The City will also establish a process for patients to use in filing complaints and for
dealing with complaints. In addition, CareHere has proposed to maintain all patient data in an
Electronic Medical Record. Usernames and passwords will be periodically changed, and the
sessions between browser and server will be encrypted using a secure socket layer (SSL)
certificate.
Agenda Information Sheet
June 14, 2011
Page 5
Estimated Clinic Cost
All operational costs for the clinic are passed directly through to the City. These costs include
staff salaries and benefits, medical supplies, lab tests, and other medical procedures conducted in
the clinic. In addition, the City will pay an administrative fee to CareHere for the oversight and
management of the clinic which includes the predictive modeling, HRA, case management,
disease management, and other related services.
The estimate first year operational costs are presented in the table below:
Table I - Estimated Year I Clinic Costs
Initial Supplies/Equipment Costs
Medical Supplies/Equipment
$20,000
Recurrin Costs
Staff Salaries
$360,000
Clinic Administrative Fee
$319,662
Insurance
$3,510
Total Recurring Costs
$679,662
ESTIMATED TOTAL YEAR I COSTS
$699,662
It is important to note that the start-up costs for medical supplies and equipment is an estimate
only and the actual costs for these items will be passed through to the City with no markup.
Additionally, the staff salaries are also an estimate based on the salary and benefits paid to other
CareHere clinic medical staff in the DFW area. Like the supplies and equipment, this is a pass
through cost, without markup, so expenses may be higher or lower depending on the medical
staff that is recruited for our clinic. The administrative fee is based on $21.50 per employee per
month.
The administrative fee, staff salaries, insurance, and ongoing medical/office supplies (estimated
total recurring costs) will be paid for out of the self-funded health claims budget. Since we will
be diverting physician office visits, and other related services, from the self-funded health plan
and turning them into fixed costs through the clinic, it is appropriate to fund the clinic operations
in this manner. Over time it is expected that the savings realized from the clinic will more than
offset the operational costs.
PRIOR ACTION/REVIEW
Information regarding the concept of a Health and Wellness Center was presented to the Council
on December 12, 2009. The clinic was also discussed with the City Council during the FY 2010-
2011 budget process. A budget of $600,000 was set up for start-up costs, which included
estimates for constricting a clinic site, or remodeling an existing stricture, and the initial
Agenda Information Sheet
June 14, 2011
Page 6
purchase of office/medical equipment and supplies. This amount is now greatly reduced due to
the Denton Regional Medical Center leasing proposal and it is anticipated that it will fall well
under $200,000.
FISCAL INFORMATION
Funds have been budgeted in 850500.7899 - Outside Contract Services for clinic start up costs.
Administrative costs and on-going medical supply costs will be paid for out of
850500.6705.0001 - Self-Insured Claims - Health.
EXHIBITS
Exhibit 1 - PowerPoint Presentation
Respectfully submitted:
Scott Payne
Risk Manager
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