Does that include the administrative cost, Councilman Nutter?
I thought that that was the pure cost out the door to the providers; is that correct? 86 2/22/01 - LAW & GOVERNMENT - RES. 000476
What does it cost to administer these programs and how many people work on this?
The cost would be $300,000 a year. That includes benefits. $300,000 a year for what -- I'm just going to rip off a number for what anybody over in your shop might be making. I've never seen your payroll. I mean, what are we talking about, what are your folks making, like $40,000? That's less than 10 people, probably not including benefits. I mean, how many people work on this?
Is there an administrative unit for fringe benefits or health care for the City.
Yes. But they do not spend all of their time working on the City-administered health and welfare program. So what we did was take a look at what percentage of their time that they spend working on the City-administered programs.
So how many people work on this? 87 2/22/01 - LAW & GOVERNMENT - RES. 000476
Right. And there's a couple people who spend all of their time -- actually, let me correct that; nine. Some of people spend just 5 or 6 percent of their time, a couple people who spend a hundred percent of their time.
But you're saying that the salaries and benefits for these people who spend some or all of their time administering these plans for the non-reps is $300,000?
But Frank Rizzo just said to me, what about other departments? They spend time in the administration of these programs, don't they?
They've got to get the information to you so that -- we're trying to determine the cost. We have to see where all the 88 2/22/01 - LAW & GOVERNMENT - RES. 000476 administration comes from and how it's administered.
I understand your question. But you also have to take into consideration the fact that there are people in other departments also do administrative work for not just the City-administered plan, but also other union-administered plans as well. For example, in the Finance Department, the work that the Finance Department does in support of the City-administered plan, they also do in support of the union-administered plans as well.
Basically, they process the payments. And we don't charge the unions for that.
Your testimony is that for at $54 million that's spent for the 8700 non-rep employees -- that's non-rep employees and retirees? Retirees are in that number?
To the extent that the work is done in the Personnel Department.
I believe the Board of Pensions has one person who probably devotes most of 89 2/22/01 - LAW & GOVERNMENT - RES. 000476 her time to this.
At least for the moment, your testimony is that your administrative cost for the non-rep plans is $300,000 which represents all or a portion of the salary of people who work on this.
In the Personnel Department, okay. Let me move to one other thing. I know many of my colleagues have questions. Who negotiates health benefits for the union plans?
Well, that question, of course, is better directed to the union. You're talking about their plan, I mean, the FOP, for example, as Rich Costello testified, Tom Lamb negotiates with Blue Cross for LEHB. District Council 47 has somebody there --
Does the City have a role in any of the either the negotiations or what's ultimately agreed to? Does the City have representatives within some group that the unions utilize to determine what their benefits are? 90 2/22/01 - LAW & GOVERNMENT - RES. 000476
The City has some role in the administration of the union plans; is that correct.
The City has representation on the health and welfare funds for the unions, and that's basically me. And I don't in my role as a trustee, I would have the same level of involvement in negotiating the union plans as any other trustee. And it varies somewhat from union to union.
Who negotiates the health benefits on behalf of the non-reps?
The last couple of years it's been primarily me with some assistance from the Mayor's Office.
Yourself with some assistance from the Mayor's Office?
You go down to Blue Cross or when we had he had Aetna and you just go over to their office or they come to us or whatever 91 2/22/01 - LAW & GOVERNMENT - RES. 000476 and you just kind of sit down and hash it out as to what we're going to get or what you're putting on the table or what their response is? I mean, how does it work?
What we'll do is about three or four months prior to the end of the year -- this is standard with how Blue Cross operates with all of their clients. They send a renewal and we look at it and it may be more than what we want it to be; it's never less. And we negotiate with them. It's primarily me. I have people on my staff who assist me in terms of numbers crunching and such. We go back and forth, ask for different options, you know, to --
Do you get outside City support? Are there consultants? Are there brokers? It seems to have been the case in years gone by. Is that still the situation or are we pretty much on our own?
On the medical plans that's done in-house on the dental, optical, and prescription programs, the City is still using outside help. 92 2/22/01 - LAW & GOVERNMENT - RES. 000476
And that's because they help us negotiate a better rate, or do we not know how to do that part?
I think it's not a matter of knowing or not knowing. It's a matter of giving us some assistance. I have provided information to Council on this in the past.
There's a big chart to my right, to your left, that makes a comparison between the City-administered plan and the District Council 47, for instance, because that's been a topic of a lot of a lot of conversation. And there are a lot of yeses on one and noes on the other and a fair amount of disparity in some areas between the two. What's your reaction to that? Are there any things that are incorrect on the City side, or is it pretty much accurate?
I mean, is it true that there is no audit of the City's fund?
The City Controller is the City's auditor. To the extent that the City Controller audits all City money, the City 93 2/22/01 - LAW & GOVERNMENT - RES. 000476 Controller has been auditing the funds in the same way that he audits all City money. I believe --
Is it incorporated in some larger audit? Is there a separate one just on the health benefits for the City? I mean, sometimes he does separate ones in particular areas.
This money is appropriated to the Department of Finance, so to the extent that the controller has done audits in the past, it's been as part of his audit of the Finance Department. I think that I indicated or the City Controller indicated earlier this afternoon, he's certainly willing to move forward with this. We have talked recently. And I have certain indicated that we will cooperate with him in any way that he feels is appropriate.
Let me ask this last question about the chart. And there are many others. You and I have had a lot of discussion in the past about our prescription drug program and this document from a publication called Medical Benefits from January of this year, seems to indicate that we have PCS. PCS, is that a subsidiary of Rite Aid? 94 2/22/01 - LAW & GOVERNMENT - RES. 000476
Is it a part of Rite-Aid, associated with Rite Aid, work for Rite Aid?
PCS is a pharmacy benefit manager. They bought Eagle Managed Care.
Which was owned by Rite Aid. So Rite Aid and some number of independent pharmacies are the network that PCS manages.
What's your reaction to this publication, seemingly independent publication in this assessment that the PCS Health System was rated eighth which, unfortunately, in this case was last, and the MPA was rated No. 1?
It surprises me a little bit. PCS is not a nobody group. They are used by many companies. Quite frankly, I just saw this information the last day or so and I haven't had an 95 2/22/01 - LAW & GOVERNMENT - RES. 000476 opportunity to look into it. It surprises me. But at this point in time, I'm not really prepared to comment because I really haven't had an opportunity to investigate it.
I'm going to ask you to utilize the next two weeks because the Chairs intend to recess this hearing because of the weather conditions very shortly after Councilman Rizzo asks a burning question. I don't want to interrupt you, Councilman Nutter, but I know you're deep in the heart of it. I have a whole series of questions about advocacy, whether any of your figures, that 300,000 figure includes any cost for advocating on behalf of the City employee when there's a dispute between the carrier and the City employee. And if it does, I'll ask you how much. But you'll be better prepared to answer that two weeks from now. Could I interrupt you. I know Councilman Rizzo has been burning to ask a question.
Councilman, the two-week break will give me time to actually come up with some questions.
Councilman Rizzo. 96 2/22/01 - LAW & GOVERNMENT - RES. 000476
Thank you. Mr. Chairman. Have you had a chance to look at this chart.
Why would it be blank? That's a copy of a document that's blank. It's not a matter that the numbers were left out intentionally. The numbers aren't there.
I didn't put this piece together for the five-year plan, so I really don't have the answer.
You could fill in the numbers? You don't need to do it right now because I think it would take some time. But when you come back, could all the blanks be filled in?
Ms. Seyda, could we set the date for the next hearing so we can recess it to two weeks from today, Thursday March at 1:30 6 p.m. Could you put that in your calendar? And is 7 there a representative here of the Chief of Staff, 8 Joyce Wilkerson? Is the representative that was here before still here? Would you good enough to inform Ms. Wilkerson that we would be requesting her specific attendance and/or the Mayor's at the Thursday March 8th, 1:30 p.m. recessed hearing? I'm going to recess the hearing to that specific date. That serves as full notice to all parties that this hearing will resume that date to continue this matter until we get to a resolution of what has to be done and Council agrees to the action that has to be taken. Thank you all for being here. I want to expressly thank the members of the committee who cooperated so wonderfully in not any questions at the beginning to get all the facts before us. Thank you. And once more, thanks to all the employee organizations, the unions, the non-represented groups for their wonderful support. Thank you. 98 2/22/01 - LAW & GOVERNMENT - RES. 000476 (Applause.)
The Committee on Law and Government will stand in recess until Thursday March 8th at 1:30 p.m. to continue this hearing. Thank you. (Council adjourned at 4:05 p.m.) - - - 99 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of February 22, 2001, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON LAW AND GOVERNMENT ___________________________ Lisa C. Bradley, RPR and Notary Public