COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LAW AND GOVERNMENT - - - Room 401, City Hall Philadelphia, Pennsylvania March 8, 2001 1:40 p.m. - - - RESOLUTION 000476 - Resolution authorizing the Committee on Law and Government to investigate whether the city-administered health plan currently and in the past has provided the most comprehensive and cost-efficient coverage to City employees for the premiums paid, and whether the City could provide more comprehensive and less costly coverage to the approximately 8000 employees and retirees currently covered by this plan, if other options were pursued. - - - PRESENT: COUNCILMAN DAVID COHEN, Chairman COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN FRANK J. DI CICCO COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 (215) 561-2220 I N D E X RESOLUTION 00476 PAGE LINDA SEYDA, Personnel Director ............ JOYCE WILKERSON, Chief of Staff ............ 8 THOMAS PAINE CRONIN, Pres., DC 47 ........... 32 BOB MCALLISTER, Benefits Administrator DC 47 33 RICHARD COSTELLO, President Local 22 ........ 37 GEORGE CASEY, President Local 22 ............ 38 DAVID VILLELA, President ACMPE .............. 39 3 P R O C E E D I N G S
May we have everyone's attention, please. Good afternoon, ladies and gentlemen. This is a second recessed hearing on Resolution 000476 which raises inquiries about the health care provided by the City for its employees which raises a number of issues. We've already had two hearings. One was back in June of last year and then it was a continued hearing in the middle of snowstorm on February 22, and I want to congratulate those of you who survived that snowstorm and are here again for your courage in attending that day. You may remember, while the flakes were falling that we were getting partial answers, sometimes no answers and occasionally, rare occasion, a real answer to questions that were being asked. We've got lots of questions and we're going to be joined today by the Personnel Director of the City Linda Seyda and the Chief of Staff Joyce Wilkerson. The Mayor was unable to make it today, but he's indicated his general availability to discuss the things at various times, and we may see about that at a later time. But today we have opened all the 4 3/8/01 - LAW AND GOVERNMENT - RES. 000476 questions we did before. We kind of want to know why it seems that the City's plan is the most extensive and offers the least benefits to the people it covers, and they are generally the 8700 non-represented employees. We want to know why is it that the City insists on the auditing of funds that go to the health and welfare plans of the four City unions but that the City itself does not have any audit. In fact, from what we're getting, and this may be advanced notice to Ms. Wilkerson and to Ms. Seyda of some of the questions, we want to know how the City plan gets decided upon. Is there a negotiation? Does the City rely on outside experts that most of the employee unions do? Who does the negotiating? Who makes the decision? To what extent are employees involved because we're concerned that most employees of the City, the so-called non-represented employees, seem to have nothing to say about the plans that the City decides upon. We'd like to know how that decision is made. We also don't understand why it is that if an employee in the City among the non-represented groups have a bad decision, as they see it, made by insurance company, why that employee has no employee 5 3/8/01 - LAW AND GOVERNMENT - RES. 000476 advocate among the non-represented employees. Most of the union plans seem to give protection to their people. These are just some of the issues. There will be others. For example, the issue that came after these hearings started about retirees suddenly being dumped by the City because it was too expensive for the City to pay for their prescription drugs. And we want to know if it's too expensive to the City how does the City expect the retirees to manage to pay? These are some questions that I think are legitimate questions. There are questions raised about should not employees and retirees be involved in the decision-making, at least have some input. These are the kinds of questions last time and we're going to begin to the best of our ability with where we left off last time and that is the questioning of witnesses. We're pleased that Ms. Wilkerson, the Chief of Staff -- and Ms. Wilkerson, we'd like to welcome you here to the hearing and we'd like you to come forward with Linda Seyda, the Personnel Director and so it will been the first panel. When the two of you come, I'm going to open the 6 3/8/01 - LAW AND GOVERNMENT - RES. 000476 questioning of witnesses to the Councilmembers. Incidentally, for those who are standing, there is room on the balcony. I see some folks are going there. Standing may get tiresome, so feel free to go up to the balcony. (Witnesses come forward.)
We welcome you and I just wanted to ask one question and I'm recognize members who wish to ask questions. At the last hearing, Ms. Seyda, I understood that you said you were going to furnish City Council with information as to what the savings might be or the cost might be if the retirees who were being dumped from the City plan were incorporated with the 8700 other employees and what that cost would be. And we have not been able to get any information from that. I understand you may have some information today. Could you give us whatever information you have? We understand that Blue Cross has given to you several proposals for consideration by the Administration, but no one seems to have any information other than perhaps you and maybe Joyce Wilkerson, maybe the Mayor; I don't know. Ms. Seyda, could you respond to that? 7 3/8/01 - LAW AND GOVERNMENT - RES. 000476
Yes, I can. For the record, my name is Linda Seyda and I am the Personnel Director for the City of Philadelphia.
Could you maybe pull it closer. We're having difficulty up here hearing, and we want everybody in the audience to be able to hear, too.
We have been working with Blue Cross and I believe we are at the point now where we will be able to formally offer some options for the post four-year retirees, and I am able to review those options with you this afternoon. Blue Cross has agreed to add riders to the three Medicare plans that we offer for the retirees. These are plans that will supplement the Medicare program, and there are three options. One is the Keystone 65 option. One is the AmeriHealth 65 option which is available for retirees who live in New Jersey, and the other is the Security 65 plan. The Keystone 65 plan will be changed so that it will increase the prescription coverage by eliminating the $1600 cap and providing an unlimited prescription program for those who elect the 65 8 3/8/01 - LAW AND GOVERNMENT - RES. 000476 special. The same is true for the AmeriHealth option which is for those people who live in New Jersey. And we will also be able to offer a Security 65 plan, what they call a Plan H as opposed to a Plan C, and that provides a prescription coverage after a $250 deductible. It will pay for 50 percent of the cost of both brand and generic drugs up to a maximum of $1250 per year. For those retirees who are under 65, Blue Cross is offering a rider to the Keystone program. The Keystone program that's currently being offered as the Keystone 10, they are willing with the Keystone option to offer the 15 prescription rider. And that rider, for an additional sum of money, will include unlimited prescription coverage. They are also for those of our retirees who opt for a Personal Choice option that the Personal Choice high option which they normally offer to subscribers on a non-group basis will be available to our retirees through the pension program.
Let the record note that although there is no need for a quorum for this committee in view of the fact that it's a continuing 9 3/8/01 - LAW AND GOVERNMENT - RES. 000476 quorum since this is a recessed hearing, nonetheless, Councilman Rizzo on my left and on my right our majority leader Councilwoman Blackwell and Councilman Nutter are present, and I'm the chairman David Cohen. So there's also -- (Applause.)
And I believe that a good number of Councilmembers who are not members of the committee are in their offices listening intently to this testimony because this is a matter of tremendous interest. Just one follow-up question. Do you have any analysis of how this would compare with what the retirees had available to them before the abrupt termination by the City of their participation in the present plan? How would this affect them, one, as to the cost first?
As to the cost for the Blue Cross Security 65 plan by moving from the Security Plan C to Plan H, the monthly cost increase will be $45.41 per individual. For the Keystone 65 plan, the increase is $45.02.
Is that an increase per month? 10 3/8/01 - LAW AND GOVERNMENT - RES. 000476
That is correct. For the Personal Choice high option non-group plan, the increase is $33.38 per month. And for the Keystone HMO plan, the increase is $45.52 per month per person.
That strikes me that the minimum increase in cost would be well over $600 per year for those who have already been retired?
On an annual basis, that would be approximately close to $600, that's correct.
My immediate question on that we'll leave alone for a moment. Has the City Controller notified you, Ms. Seyda, of the audit that's being undertaken by that office of the costs to the City of its provision for health care needs of its non-represented employees?
I did receive communication from the City Controller's Office within the last couple of days. We will be meeting with the 11 3/8/01 - LAW AND GOVERNMENT - RES. 000476 Controller very soon.
And you're going to be cooperating with the Controller?
I believe that when I was here two weeks ago that I did testify that I had talked with the Controller and that we agreed that we would be working together to do this audit.
Very good. I want to recognize those from the employee groups, the heads of the organizations that are currently here. I see Thomas Cronin, the President of District Council 47 is here. (Applause.)
I also see Richard Costello, the head of the Fraternal Order of Police. (Applause.)
I was told yesterday by George Joyce, the president of the Fireman Union that he would be here as soon as the City's continuing lawsuit against the fire fighters case is over today. There's a hearing ongoing beginning at o'clock, I believe, in Room 275. He said he would join us and I'm sure there are members of the firemen's union who are here. He said they would be 12 3/8/01 - LAW AND GOVERNMENT - RES. 000476 split between that courtroom and here today and he will join us as soon as he's available. And Peter Matthews, President of District Council 33 who is out of town said he would have representatives present at this meeting because one of the issues is the issue raised by the City Administration in which the City says it wants to have a single consolidated plan for the current four employee groups and the non-represented people on the theory that there might be an economy of scale savings to the City and all of the evidence to date -- before I introduce Joyce Wilkerson to testify -- all the evidence to date that we've been able to get was that the employee plans are run more efficiently, provide greater service -- (Applause.)
And do it all at lower cost than the City does. So if anything, maybe the plan ought to be reversed and maybe the non-represented employees ought to be represented by the union plan. (Applause.)
Ms. Wilkerson, please assume that some of that applause is for your 13 3/8/01 - LAW AND GOVERNMENT - RES. 000476 presence here today. Since you have not had an opportunity to make an opening statement, we would be pleased if you would go ahead and proceed. We welcome you here as an alumni of the City Council.
Thank you very much. I don't have a comprehensive statement. I read over the testimony that was offered by the --
Could you speak more directly into the microphone, please?
I don't have a prepared statement. I've read over the testimony that has been offered at the previous hearings and I think it adequately reflects the position of the Administration. We're concerned about the quality of the benefits, the health and welfare benefits offered to current employees and also our retirees and at the same time are concerned about the cost of delivering those benefits. As we move forward in the coming months, the Administration will be studying and considering a host of alternatives as it attempts to provide better quality benefits to the work force and retirees and also manage the cost of those benefits. I believe it was testified at one of the earlier 14 3/8/01 - LAW AND GOVERNMENT - RES. 000476 hearings that we would be looking at the option you mentioned, bringing everybody under the same program, but that's just one of the alternatives that we'll be studying in the coming time period. We appreciate the investigation. I think, as you know, the cost associated with health and welfare benefits are some of largest single costs that the City confronts annually and it's important to everyone that we get quality benefits but also manage those costs.
Let me ask you. Do you think it's a fair request of the employee groups that if their plans are being audited by outside accountants that the City's costs for the health plan also ought to be audited?
I think that's why the City will be cooperating with the Controller in his conduct of the audit. It's important to everyone that those kinds of ancillary costs be managed and managed effectively, and so we will participate constructively in the audit and take to heart what it is that we learn from that process.
From what information we have to date, the City has always maintained that 15 3/8/01 - LAW AND GOVERNMENT - RES. 000476 there are no administrative costs that the City bears with respect to the provision of health care for the non-represented employees. Does that mean that the City has had no brokers, has had no 6 advocates on behalf of the employees? Or does it mean that somehow or other there have been costs that have not been included officially in the record of costs by the City?
I think the City is -- and Linda can testify more fully. I think the City has always had some administrative cost. As you know, there are members of the Personnel Department. Ms. Seyda testified at the last hearing about the budget for her department and has gotten additional information about the kind of overhead associated with administering the health and welfare programs. The City does retain some consultants in helping it put together health and welfare packages and solicit proposals from the various providers. And I believe Ms. Seyda can testify to that. We are monitoring on an ongoing basis those relationships as well. And as we begin putting together alternative proposals, the Administration will be considering those consulting 16 3/8/01 - LAW AND GOVERNMENT - RES. 000476 relationships in addition to the kinds of products that we buy from the various health care providers.
Well, there are many issues we have to discuss, but let me raise the most urgent and immediate one because it involves the retirees who were abruptly terminated from prescription coverage at the time when it appeared that most of them needed it more than before. Could you tell me what the City is did doing to resolve that situation? Or do we tell the retirees, "Thanks for your work. We're the City that loves you back, but we've forgotten all about you." (Applause.)
In a telephone conversation I had as recently as this morning with the executive director of the Pension Board, it is their intention to send out a mailing next week for a second open enrollment for that group of post four-year retirees that will begin effective March the 19th and the open enrollment will go through April the 2nd and the new coverages will be effective May the 1st. So the prescription coverages that I enumerated just a few minutes ago will be in place by the 1st of May and the pensioners can expect to receive a mailing 17 3/8/01 - LAW AND GOVERNMENT - RES. 000476 next week.
Have the retirees, any of them been contacted as to their thoughts about the options? Who decided what they needed and whether these offers were the best offers that could be made?
The options that we will be able to offer were options that we had been working with Blue Cross over the last couple of months. We did meet, as you know, with representatives of City Council at the beginning of this process. There were representatives, retirees who were there. We have taken into consideration the testimony of retirees in the course of these hearings and Blue Cross has been -- is very well aware of what the needs and interest of the employees are concerned, and I think the package that we have to put on the table now is one which does take into consideration the needs of the employees within the parameters of that --
Ms. Wilkerson, who made the decision terminating the retirees' prescription benefits?
I believe the 18 3/8/01 - LAW AND GOVERNMENT - RES. 000476 Administration receives input from the Personnel Director when the entire package is put together and, you know, so I'm involved in the decision-making process as one of the individuals who decides what it is that the City offers, what it is that the City can afford to offer. We solicit information from a number of sources. We're concerned about the cost, we're concerned about the quality of what it is that is being proposed. All of those considerations are taken into account.
What does it say about an employer who says to employees who have labored hard during their working career when you're in retirement and need us most, need the benefits, need the rewards of a long hard service most, we cut you off cold? (Applause.)
Doesn't the Mayor have to have responsibility for that kind of decision?
I think it's important to note that this has been an ongoing process and that at the end of the last calendar year, the options that we have available to us now were simply not 19 3/8/01 - LAW AND GOVERNMENT - RES. 000476 available because we didn't have the same understanding with our providers that we have now. The IBC or Independence Blue Cross has been very helpful in terms of working with us over the course of the last several months and has put options on the table for us that were simply not available several months ago.
Let me acknowledge the presence -- I know Councilman Mariano has been here; I'm sure he'll be back. Councilman Ortiz --
You're here; very good. I want to commend them both for joining us this afternoon and I want to announce the presence of David Villela, the President of the Association of Professional and Management City Employees. (Applause.)
So as far as I know, every group of employees of the City are fully represented. Councilman Rizzo.
Thank you. Ms. Seyda, from what I just heard about 20 3/8/01 - LAW AND GOVERNMENT - RES. 000476 the renewed working relationship with the carrier, it sounds to me like the carrier is driving the vote. (Applause.)
Why would we be put in a position where we would have to basically accept what the provider suggests? There's more than one provider in this world, and I just can't imagine why we would have allowed -- and again, I don't want to keep beating that to death -- to just cut these folks off because the provider wasn't providing the coverage that you deemed acceptable. What was your B Plan? When you knew that the provider and these folks were going to be cut off, what did you do to try to keep them with the coverage that they vitally need?
Before you answer the question, I want to announce that George Casey, the President of the Fire Fighters has joined us. (Applause.)
And we hope your battle with the City over fair medical benefits is successful, Mr. Casey. (Applause.) 21 3/8/01 - LAW AND GOVERNMENT - RES. 000476
The question has been asked by Councilman Rizzo; please proceed to answer.
I think the Councilman is aware that for many years the City has made every effort and has worked with the carriers to provide as much choice as we possibly can with the plans that we have and we've worked with multiple providers over the course of the last several years. There have been a number of health care providers that have offered benefits to our employees and we have taken into consideration cost issues as well as issues of choice. We have had to make decisions in terms of what are the best packages that we can offer to our employees within the monetary constraints that the City has to live with.
Ms. Seyda, one of our concerns is that while we find that the employee unions have used at various times professionals to help negotiate for them, the City has apparently never had anybody trained in the field to negotiate for them except representatives of the companies they were negotiating with, which is the issue that Councilman Rizzo is raising. (Applause.) 22 3/8/01 - LAW AND GOVERNMENT - RES. 000476
So we're very concerned as to whose interests were being protected when the insurance policies were handed out to the various groups.
Just to further comment, it's hard for me to believe that in the area of competition that no one would step forward. I'd be curious myself maybe to call around to some of these folks in the big leagues in providing this kind of coverage to see if they were seriously considered or contacted when in fact you were having difficulty coming up with an alternative. So what you're saying today for the record is that an effort was made to come up with an alternative before these folks were cut off? Because I'm going to check, you know I'm going to check. (Applause.)
Could we have an answer to Councilman Rizzo's question?
One of the options that we did look at last year when we were evaluating just what our options were was to offer prescription discount program for the employees who would be 23 3/8/01 - LAW AND GOVERNMENT - RES. 000476 affected by this change. And because the cost and the utilization of the benefit was approaching an almost -- was up to the level of the cost of the benefit itself, it was subsequent to that based upon some decisions that the Administration made in terms of looking at the overall medical program for employees that enabled us to get some very competitive quotes for adding prescription coverage for this group of employees.
Will you identify for the record the companies that were approached?
Last year in our negotiations, we dealt with US Health Care and we dealt with Blue Cross; and on the prescription drug issue, also with PCS.
So there was communication with these folks. Could you provide the Chair those letters of communication because I'd like to see what exactly was asked of those providers. Could you do that, please?
Before this year when 24 3/8/01 - LAW AND GOVERNMENT - RES. 000476 the City went all blue, that is dealt with Blue Cross for all of its employees, there was another company which represented some people. Do you remember that company's name?
Could you tell us what was the basis for the division of people into each of those companies? Was there a comparison between the rates? Were they the sure, were they different? Why were the two offered when the evidence was clear that by having one company, at least Blue Cross, it would have been cheaper from the City's point of view? What was the basis for the decision to go with both?
As I think we've indicated at this table today and in the past, I mean, it's been important to the City and we felt to our employees to offer as much choice as we possibly could for our employees so that they would have the option to elect from or select a medical program from a multitude of options. And so over the course 25 3/8/01 - LAW AND GOVERNMENT - RES. 000476 of the last number of years, that has been our policy, to provide a multitude of options for our employees.
Was that a decision made by a Mayor, by an administrative board, by the personnel director? Do you know who made that decision?
Prior to this Administration, I worked with the previous Administration, with the Mayor's Office in looking at options and making recommendations much in the same way we work with the Street Administration.
Thank you. Thank you, Mr. Chairman. Good afternoon, Ms. Wilkerson and Ms. Seyda. I have just a few questions that I'd like to ask. Some may overlap or make reference to the last time we were together. I'm just trying to keep all my materials together and the keep a sense of continuity of these hearings. So let me go back a little bit to a few weeks ago. Now, Ms. Seyda, who actually negotiates the benefits plans for the non-represented 3/8/01 - LAW AND GOVERNMENT - RES. 000476 employees? Because all the other employees are represented by their respective unions; is that correct?
The retirees of the various unions, their benefits are negotiated as a part of the collective bargaining process, is that correct? Or did they get whatever the non-represented people get? How does that work?
Under the terms of the City's agreements with the various employee organizations, the City funds retirement benefits, retire, health and welfare benefits, for up to a maximum of four years. That changed during the last round of negotiations and was increased from four to five years.
So let's go back to the original question. Tell us a little bit about this negotiation process; who does it, who is it with, who is involved? 27 3/8/01 - LAW AND GOVERNMENT - RES. 000476
A variety of different participants in the process. The City has used outside consultants to work with on some of our programs. When we have gone out with RFPs we've had a committee to review them. That included representation from a number of City departments and, in fact, also including City Council.
For the purpose of my question, why don't we look at what took place in, I guess, in the last six-month period before and leading up to the open enrollment period that I guess for us takes place in he is December. Don't tell me so much about maybe what we were doing in '92 or '96, but in the most recent round, what was done, who was involved, if we hired people what did they hire them for; who were they negotiating with, if we hired other people to deal with people, just walk me through all of the steps and components that results in the document that we get in December that tells us basically what the plans are and what the deal is.
In this past year, what we did was to go to our -- I'm going to have separate the medical providers from the dental and 28 3/8/01 - LAW AND GOVERNMENT - RES. 000476 prescription providers.
For the medical providers we went to the providers that we had been working with, the major providers in this area, US Health Care and Blue Cross, and asked them to provide us with rate information, renewal information for all of our employees. That process starts in the late summer, early fall.
I'm sorry. I don't mean to interrupt you. Now, when you're going to do this, when you start making these contacts or solicitations or calls or whatever the process is, you were doing that on behalf of whom?
All right. I got that part. What group of employees are you doing this on behalf of?
For non-represented Civil Service employees, exempt employees in the government, employees of Common Pleas Court -- the non-represented employees in Common Pleas Court which is most of them, and also for those employees 29 3/8/01 - LAW AND GOVERNMENT - RES. 000476 who are represented by District Council 33 but for whatever reason are not members and therefore their medical coverage is provided through the City-administered plan. So it's a total of about 8,000 people.
Well, I'm sure it was nervousness or oversight. I'm sure as a part of that group you're also talking about the entire complement of Councilmembers and Council staff.
And that would also be the -- are there non-represented retirees who get whatever happens out of that process as well? Would they be in that group?
So to some extent they round out the entire universe of people that -- and when does this process start?
Generally, it's late summer, early fall -- I'm sorry. Yeah, late summer.
So late summer comes 30 3/8/01 - LAW AND GOVERNMENT - RES. 000476 around and do you send a letter to these providers? Do you just call them because you've known them for a while and you've worked with them? Who starts this process?
Generally, I would call them and ask them for their renewal for the next year.
So you call them up and say, "Give me your rate next year. We have approximately 8,000 some odd people." They tell you what the rate is, and is that pretty much it? You kind of take it back to the shop and talk to whoever you have to talk to and that's pretty much the end of it?
No. What generally happens is that the rate is generally higher than we would like it to be or that can afford, quite frankly, and so we often go back and ask for different alternatives.
Councilman, if I may. When you have these contacts or when you began these contacts, do you write each one of these providers a letter stating what it is that you were looking for? And if so, can you give copies of those letters that you wrote to them and communications? 31 3/8/01 - LAW AND GOVERNMENT - RES. 000476
Generally, what we've done in the last couple of years, I've simply called them and asked them for their renewal.
No written communication stating what it is, an example, the population we have, the needs that we have? You stated all of that over the phone?
Generally, unless they would ask for some more specific information.
Thank you, Councilman. Now, in the course of this most recent process, was it only yourself involved in this? Were there other parties outside the government that had the need to assist us in this effort?
For the medical coverages, that's basically handled through the Personnel Department and staff within the Personnel Department who would assist in putting data together and 32 3/8/01 - LAW AND GOVERNMENT - RES. 000476 analyzing data and running various scenarios in terms of what the implications are of one plan over another.
The groups that you mentioned, there were at least a half dozen of them, where are they in this whole process? Again, I start from a very small base of knowledge, but I would tend to think that the union negotiation with the various providers is -- and I don't know whether they pick up the phone, send a letter, fax machine or what, but they have some kind of contact. I don't know what it is. A counter-offer is made or they start with an offer and don't necessarily ask them what the current rates are, but this is what we're willing to pay, this is our population -- I'm not absolutely certainly about that, but they're negotiating on behalf of their members or their retirees with a very clear interest. What's the level of -- go ahead.
I think that the interest that the employee organizations has is very similar to the interest that the City has in that they, like the City, want to offer their employees the best benefit that they can with the dollars that they 33 3/8/01 - LAW AND GOVERNMENT - RES. 000476 have available.
Right. But within that, there's also an assumption, if not a belief, that they talk to those employees or they work through some hierarchy of person X has certain information, they share it with numerous Ys and then it eventually gets to Z and kind of start back around. Out of the groups that you mentioned that you're calling these organization on behalf of, what was the level of contact between your office or the people negotiating on behalf of these employees and the ultimate recipient of these benefits in terms of what's available, what's being offered what are some of the prices, what's the scope of service that's available? Or is there any contact with those half dozen constituencies that you mentioned?
Well, I think we take into -- we certainly take into consideration the feedback that we get from our employees over the course of the year because we are dealing with our employees on an ongoing basis. And so when we deal with the health care providers, we make it known that our employees are -- what they're happy with and what they're not happy with. 34 3/8/01 - LAW AND GOVERNMENT - RES. 000476
I understand that. Let me be a little more specific or direct. Sometime in the late summer, early fall, for instance, with our shop, does somebody call here and say, "We're about to go into negotiations on health benefits. What do people in City Council think about what's going on with the plan, with the coverage, with your access to the system, whatever the issue may be?" And do you get any kind of formal response or reaction to the prospect of the upcoming open enrollment period that's going to be another four months from now? And then if you are or are not doing that with City Council, is that happening with some representative group of the court employees, the exempt employees, other Civil Service non-represented employees, the court people, or just this kind of unrepresented population that's out there? Again, in the realm of advocacy, who is looking out for the interest and concerns from a health care perspective for the 8,000 non-represented employees? 35 3/8/01 - LAW AND GOVERNMENT - RES. 000476
I think the work that we do in the Personnel Department, I truly believe that we do everything we can to reflect the interest of our employees in our discussions with the Finance Department. We certainly make that known as well. I think the Mayor's Office is sensitive to those issues as well. Overall, it's -- quite frankly, it's a balancing act.
Ms. Seyda, I'm not questioning your sensitivity or your sense of humanitarian nature. What I'm asking you is from an operations standpoint, is anyone in touch with -- I'm not asking you necessarily to be in touch with 8,000 individual people and kind of serve them something on a silver platter, but, I mean, you wouldn't have to do that for the 200 or so people that work on the third, fourth, and fifth floor. That's kind of that group, and you've got a court group and you've got all of these groups. All I'm asking is -- because I know a little bit of what happens on the union side -- who is talking to this group and sharing information with them or explaining different things to them? I mean, at some point in time a decision 36 3/8/01 - LAW AND GOVERNMENT - RES. 000476 was made. I'm not griping about it. It was a decision I'm sure was for good reasons. But at some point in time someone made a decision, for instance, to drop Aetna US Health Care. I've read about their little situation. Maybe that was a good decision. But that was mentioned somewhere in the book that I got in December. Now, maybe I'm wrong, but I have to assume that sometime before December 12th or so last year that a decision may have been made to drop that company. All I'm saying is, in the realm sharing information and being in touch with this group of 8,000 people, some one of those folks may have wanted to know that that kind of decision was either being considered or was being made for whatever reason. It's in the realm of representing people and sharing information. All I'm asking you, is that kind of process either in place or has anyone thought about that?
I would say that the process is an informal process. If your question is, is there a formal process, I would have to admit there is not a real formal process, but there is certainly an informal process.
Ms. Seyda, we've 37 3/8/01 - LAW AND GOVERNMENT - RES. 000476 known each other for too long; I mean, health care is not an informal kind of thing. I mean, you know that. (Applause.)
Okay. The Chief the Staff looks like she wants to say something.
I think Ms. Seyda is correct, there is no formal process. We don't use any survey instruments or questionnaires or have focus groups as a way of soliciting input from employees. I think we do pay a considerable amount of attention to looking at what it is that people opt to do when they are given an array of choices. And so we look at the utilization for Personal Choice versus an HMO program. We look at whether people have migrated to Blue Cross as opposed to participated in the Aetna programs. That ends up being an important part of the decision-making. The decision is not always to go with the cheapest provider in large part because when you survey the pattern that's been established over time, employees within the City have shown a clear preference for 38 3/8/01 - LAW AND GOVERNMENT - RES. 000476 certain programs and that plays a substantial role into the decision-making process, but we don't have a more formal instrument.
I guess I would only say, while it's good data and information, I mean, it really is kind of more the horse already out of the barn kind of stuff. It is always reactionary as opposed to participatory or anticipatory of what we may do going forward as opposed to reviewing data a year or two later to see what people have done. There are reasons why people do what they do, either consciously or it's like, you know, I'll just switch to this. So I think a part of this is who's sitting down with folks and talking to them about what it is that's available to them? Is anyone trying to encourage folks to go a particular way, not for monetary reasons but for, quite honestly, good health care management purposes? And that's the component of this that I'm trying to figure out and understand, because I think that then leads you in a number of directions about quality of care, cost of care, how you drive costs down, and where people are going and getting information and in an environment where you kind of get a package -- I mean, I'm not 39 3/8/01 - LAW AND GOVERNMENT - RES. 000476 necessarily ashamed about it and fortunately nothing bad has happen. I have never read one of those big propaganda pieces from any of the health care companies. And fortunately so far I haven't needed to. But, I mean, I almost need another job to go through all of their stuff and really try to understand it. What I know is I'm in a plan, I got a card, I show up, I pay my money, I get service, good-bye. I mean, I don't need another thing to chase after, and certainly not in the health care environment. But in other places, it is someone's job to make sure that people understand what's available to them. They are driving the train in the process, not only to get to low cost, but high quality. And when we see some of the charts and the comparisons around, it does raise a whole host of questions, so that's why I go back to who's looking out for the 8,000 people. And if they were represented I guess with the same -- I want to zeal, but I don't want to say that you're not trying to do a good job over there. If it was the same, I guess, focus on this as we assume goes on in other places that people might have a lot more information and would be 40 3/8/01 - LAW AND GOVERNMENT - RES. 000476 participating in different ways. I have a bunch more questions, but this is more of an operational question so let me go on. Let's go back. Were there any consultants the last round? You said personnel took care of the medical side.
The dental, optical, and prescription programs are the other pieces of that.
They represent about 16 percent of the cost of the programs. And the City 17 does use a consultant to assist us with those 18 programs, that is correct. 19
Currently, the consultant 21 that the City is using is Emmanuel Stamatakis. 22
You know I don't do 23 this for a living, so we negotiate 75 percent of the 24 benefits ourselves on the health side and then we 25 use a consultant for -- I guess what's generally 41 3/8/01 - LAW AND GOVERNMENT - RES. 000476 called the DOP part?
Not to trying to take any money out of anybody's pocket, but why? We can't do the deal -- I mean, you've been at this for a while. I know you know how to do your job.
At the time that Mr. Stamatakis was brought into this process was several years ago, and the City was looking at some very potentially serious problems, particularly from a cost point of view, and at that point in time the Administration thought that it was appropriate to bring somebody else in to help us take a look at those programs and to look at ways that we could maximize our --
That would be -- I believe that's when the current consultant came on board, that's correct.
So what's been going on since that time? What all is involved? And again, if you're able to deal with US Health Care and Blue Cross and whoever else is involved in the 42 3/8/01 - LAW AND GOVERNMENT - RES. 000476 75 percent of operation, I mean, is there something tremendously unique or unusual about dental, optical, prescription?
Excuse me. Didn't that same individual also work for the other companies? Didn't he represent -- wasn't he a broker for some of the providers also? UNIDENTIFIED SPEAKER: (Inaudible.) (Applause.)
Wasn't he also representative of providers, prescription providers and so on?
Could I just ask you to provide the Chair if you know the number? This consultant has been with the Administration since 1992?
Could you provide the Chair how much money we've paid that consultant? (Applause.)
Or I understand that the company may have paid the commission for the 43 3/8/01 - LAW AND GOVERNMENT - RES. 000476 consultant. That's a strange arrangement. I never heard of a -- how does it work where a consultant, we hire a consultant and then the provider pays the consultant? Who's he working for? (Applause.)
I have provided information concerning our consultant to City Council in the past and I will be pleased to resubmit that information and to update it.
I'm curious on the arrangement. Is that a norm where a consultant is hired by the Administration and then -- Ford will be buy Crown Victorias pays the consultant? Would you comment on that arrangement? Maybe it's just lack of knowledge. I just don't understand it.
Well, there are a number of different ways that consultants can be compensated. I wasn't involved in the original negotiation on this. So exactly how this arrangement was set up, I don't know. I cannot comment on.
Do you believe you get the best representation when you hire a consultant and the consultant gets paid by the person who gets the business? It's hard for me, 44 3/8/01 - LAW AND GOVERNMENT - RES. 000476 again, to understand. (Applause.)
We have looked at this issue in the past, and we have found that the arrangement that we have had has worked well for the City over the years. Our consultant has saved us many millions of dollars and so -- (Audience reacts.)
Do you have an idea what we've spent? Not that that's important, it might not be a lot, it might be only a few thousand dollars.
I think I would prefer to provide the information directly to Council. (Audience reacts.)
Thank you, Councilman Nutter. 45 3/8/01 - LAW AND GOVERNMENT - RES. 000476
Sure. Ms. Seyda, with regard to the health care providers, whether on the medical side or DOP side, what's the length of the contract? I assume we have a contract with these various companies.
So is the current situation -- are they usually concurrent kind of the general cycle of our union negotiations? What's the current? The contract that we're in now, did it start July 1, 2000.
Well, tell me when it started and what kind of renewals are there.
I believe that we will be going out with -- we should be going out for an RFP for medical coverage in the course of the next year.
Will that start 46 3/8/01 - LAW AND GOVERNMENT - RES. 000476 July 1, 2001?
And I also expect that we will be going out with a dental RFP as well.
Now, when you negotiate these contracts, I guess, one, why do you just do one year contracts with two or three -- what's the maximum number of renewals that has usually been a case?
If I could back up for a minute. For example, on our prescription program, we had an arrangement where it was for one year with 47 3/8/01 - LAW AND GOVERNMENT - RES. 000476 caps on the succeeding years.
With the medical programs, that is an option that we have considered.
So the current situation is we have a one-year contract with three one-year renewals which is in essence a four-year contract.
Councilman, that's one way of getting around coming to City Council for approval so that you don't have to scrutinize it every year. (Applause.)
I do appreciate my colleague pointing that out to me. I actually wasn't aware of that. So it's a four-year contract, one year with three one-year renewals, but when you make that call in the late summer, in essence you are essentially subject to whatever the provider is 48 3/8/01 - LAW AND GOVERNMENT - RES. 000476 offering at that particular time, not that you necessarily have to take it and not that you can't negotiate about it, versus an environment where if you had longer term contract -- and I'm not saying that the Rite Aid contract is necessarily the model of contracts. But conceptionally, if you negotiated a longer term contract with caps in it, wouldn't you in fact not only cap but know what your limits were going to be for a four-year period of time as opposed to every year trying to negotiate and renegotiate with the providers?
You are assuming that the providers would be willing to enter into that kind of agreement, and that's not necessarily the case.
Do the providers, are all of their contracts with all of the various companies around the City, they're all only one year?
I mean, do you think a company might have any interest in trying to lock down in essence about 8,000 people for more than one year, guaranteed? 49 3/8/01 - LAW AND GOVERNMENT - RES. 000476
I know they have a lot of business with a lot of different companies, but 8,000 people is big business.
I think one reason that the City also opted not to renew long-term was because we were interesting in taking a look at the kind of benefit package we were offering, you know, we want to take a look at whether or not opportunities available if we try to have more people into the pool, if we have greater leverage. We were migrating away from having multiple providers to just one and, you know, before committing long-term and possibly completely driving somebody out of the market, we wanted to do a more careful analysis.
At least for today's discussion, I guess these things can always go either way, would you reject out of hand the concept or the notion that depending on how you do it and depending maybe how you negotiate, if not who's negotiating, is it possible that the City could in 50 3/8/01 - LAW AND GOVERNMENT - RES. 000476 fact drive a fairly hard bargain for about 8,000 people in a multi-year contract environment versus an every year contract negotiation even though we've given someone a one-year contract with three one-year renewals at our option? I mean, is it viable, is it legitimate, or is it just so bizarre and absurd to not even merit consideration?
I think that the City is open to a variety of options. I think the City should be open to that option. As a matter of fact, at this point in time I think it would be very desirable for the City to be able to predict its increases over the years.
Predict its increases and also attempt to limit them. I'll probably have to relinquish the microphone because the Chairman has come back and I've taken tremendous advantage of his absence. Councilman, if I could ask one last question and then I will relinquish.
Ms. Seyda, we've had an opportunity now -- there's a very large chart to my right, your left. It's been here for both 51 3/8/01 - LAW AND GOVERNMENT - RES. 000476 hearings. There's a smaller document around. I'd like to get your comments, your reaction to the chart that has about 10, categories, maybe a 5 dozen different categories of benefit service 6 offered in a comparison between the DC 47 7 administered plan and the City-administered plan. I 8 guess in the perfect world, all the answers would be 9 the same for both. But there are some -- most of 10 them, it's yes one, no for the other, and for some 11 of the others there's still some level of discrepancy. I guess I have two questions. One, between the last time and today -- I'm just going to assume you had some opportunity to review this. So is the chart correct?
Well, it's certainly a chart that I guess would be developed by District Council 47.
If I could make a few comments. In terms of administrative charges, I do I think that -- I did testify or the City has testified in various proceedings with the labor unions in terms of administrative charges, I believe that I did testified at this hearing last week on 52 3/8/01 - LAW AND GOVERNMENT - RES. 000476 the Personnel Department's administrative charges. In terms of employee assistance --
So we can keep all the components together, my recollection -- I know I have it written down here somewhere, but I think my recollection was your testimony was that from the Personnel Department the administrative cost $300,000 based on the salaries of however many people are over there doing that work. I think the number was 9 to 10 range. That's my recollection.
We also had some discussion, I think, back at that time about other parts of the government. I mean, seemingly, virtually every department seems to have their own smaller personnel complement. And I think one of the questions last time was whether or not those costs were being accounted for across the various sectors of the government, just kind of taking the 10 operating departments and going from there. There's obviously more components to the government. Now, has that figure been calculated in any way, shape, or form?
I believe that the number 53 3/8/01 - LAW AND GOVERNMENT - RES. 000476 that I testified to when I was here earlier was the Personnel Department. The other department in the City government where there is, I think, some significant staff time devoted to the health and welfare programs would be the Board of Pensions, and their costs are approximately $130,000 a year and those costs could very appropriately be added onto the Personnel Department's costs as well.
I mean, we've got at least a couple folks in the big room over here, our historically known big room, just on the side they do personnel stuff. Are they accounted for anywhere in this?
So there are probably other people like those folks in other parts of the government that do what they do even on a small scale basis?
I would say that in the departments the work that is done is basically handing out material and channeling it through the various City offices and that work that's done in the department that they do for non-represented 54 3/8/01 - LAW AND GOVERNMENT - RES. 000476 employees and exempt employees they also do similar -- maybe not identical, but similar processing work for other employees as well.
The Councilman's going to yank the mike from me in a second, so why don't we agree at least for the moment that we absolutely agree that there are $300,000 in cost out of Personnel. Why don't we agree that there is some unaccounted amount of dollars in other parts of the government that may be not only have we not figured out yet, but we don't even have an agreement about how we want to do that calculation for the moment, because I'd like to get through the chart. It's kind of a yes or no -- I mean, you either agree that the chart is mostly right or you're going say the chart is mostly wrong and you're going to tell me where those items are. Certified audit, is that a disputed item?
Well, I believe we've indicated that even though the Controller's Office does do their regular audit every year that we've agreed to work with the Controller on another audit.
Let me ask this 55 3/8/01 - LAW AND GOVERNMENT - RES. 000476 question. If I called anywhere today and said, "Can you give me a document, pages, 50 pages, 500 4 pages, that represents the audit of the City's 5 health plan," could you pull it off the shelf somewhere and hand it to me? (Audience reacts.)
Ms. Seyda, we have much more painful questions going down the chart.
I don't think we have the kind of audit you're referring to. (Applause.)
We talked about the administrative charges; we don't need to go back down there. Employee assistance program, do we have one?
Actually, until very recently we did. The vendor we were using is no 20 longer in this business and we are in the process of looking for a replacement vendor.
So today the answer is no? Next week the answer could be yes?
Yes, but for the past number of years it's been yes. 56 3/8/01 - LAW AND GOVERNMENT - RES. 000476
It was yes, presently it's no, and it will soon be yes?
The only difference is that the division plan and the dental plan that is offered for the active employees has not been authorized for the five-year retirees, has never been.
I think that that is one of the roles the staff in the Personnel Department plays in terms of working with individuals who have problems. That's also the role that the staff people over the Board of Pensions has as well.
I think we talked about this item. The input on the plan design. I think we had our earlier philosophical discussion about input versus reactionary and all that. I mean, we don't really have non-represented people involved in designing the new plan for the upcoming year, right? 57 3/8/01 - LAW AND GOVERNMENT - RES. 000476
This drug benefit, there's at least one chart that indicates that PCS, some outside entity was out of 8, 47 PCS was 7 No. 1 -- I'm sorry, MPA, in a customer satisfaction 8 survey. That's a document. Do you have any reason to dispute that?
Well, there are a number of surveys that are done concerning pharmacy benefit managers. PCS has been ranked at different levels within the same survey.
Actually, I can provide to Council a summary of an independent survey that was done which shows that PCS ranked very high as compared to other pharmacy benefits.
If you could forward that to the Chair, I'd appreciate it.
No dispute about the co-pays? I was just at the doctor two days ago. 58 3/8/01 - LAW AND GOVERNMENT - RES. 000476 I know about the $10. The 10-20-70 versus 15-25-70, those co-pays and the in-patient deductible.
Right. I would also add that the City has a Personal Choice 210 plan as well.
For any of the items that are not crystal clear yeses or noes, if you could provide us with additional information. But based on our kind of back and forth, I don't get the impression that you find anything radically out of sorts in terms of this particular comparison, maybe notwithstanding the PCS MPA issue.
No, although actually we're in the process of taking a look at the 47 versus the City-administered plan and I expect to have some information available to share with the Administration and with Council in the near future.
At this point, Ms. Seyda, may I ask you to sit on the other side of Ms. Wilkerson because I'm going to call up two people who I think need to sit next to each other. Ms. 59 3/8/01 - LAW AND GOVERNMENT - RES. 000476 Wilkerson, you stay where you are because we only need one change. On many occasions, we've used District 47 as a model. The other union health plans are also excellent. But I'd like to call up Tom Cronin and Bob McAllister. (Applause.)
And if the other union representatives want to add those personal notes, I'm going to ask them for statements with respect to the testimony that you've heard. If the other groups are interested in making statements, I will be calling on them, too. But before I do, I'd like to recognize Councilman Rizzo. He had the question of either Ms. Wilkerson or Ms. Seyda. Go ahead, Councilman.
Councilman Nutter covered part of my question on how we could accept a prescription drug pharmacy manager that comes in No. 8 versus No. 1 and even why we would agree. When that recommendation was made, was there any questioning the choice. Did you agree? When you saw these lists where it was all over the chart from one end to the other, didn't that cause some concern 60 3/8/01 - LAW AND GOVERNMENT - RES. 000476 that you were picking a PCS when it was potentially -- did you conduct an internal investigation before agreeing to that recommendation?
That was one of the questions that was included in the RFP. We asked for that kind of information, and I will be please to share it with Council.
But how could you as essential personnel see that an organization is so badly rated probably in a majority of the surveys and go with that? How do you explain that?
Actually, I don't know that the survey that 47 had was one that we had seen. I know that this survey is done on a, I guess, fairly regular basis. It's my understand that PCS has been evaluated very well in the survey. There are also some concerns in terms of the methodology that is utilized by that survey.
Maybe that was one that the consultant didn't want you to see. (Applause.)
I'd like to point out that I've learned that we were earlier talking about 61 3/8/01 - LAW AND GOVERNMENT - RES. 000476 the communication with members, with employees, and I understand that District Council 47 and Mr. Cronin might be able to comment on this. You indicated that there's very little communication, there's very little input, it's informal. I don't believe it's as an informal at District 47 as it is with the City-administered. Mr. Cronin could you comment on the communication?
That's one of the course issues that we have with the City. We've heard the testimony today that there's really no focus groups, very little input, occasionally maybe someone from City personnel will make a comment to one of the providers. Contrast that with 47's direction which is to have focus groups, to bring in members, to let the members make the decisions, to have an open dialog where all of these meetings are open. We go out and we solicit from all three locals, whether it's the court local or whether it's 2186 or 2187. And then further, we go to every single job site that we're invited to all over the City and every single City department, commission, agency, and 62 3/8/01 - LAW AND GOVERNMENT - RES. 000476 board and meet with the members and make a presentation and answer their questions and have stuff on the web, information on the web, invite discussions, invite debate to have that to get a feedback. The City doesn't do that and we do. (Applause.)
And that's got to be said, I think, loudly and clearly to the City because that's one of the things that we're worried about. When a member has a problem, has a serious problem with the health care provider, they know that they can go to that steward, that they can go to a trustee, that they go to the president of the local or the president of the council and get an answer and get action quick. They can't do that with the City of Philadelphia. (Applause.)
My final question, and I think I know the answer. I believe you took notes or you remember, Ms. Seyda, at the last hearing that this chart was an exhibit and the last column was left blank and I believe we asked you come back with a chart that had that last column filled in. Are you prepared to fill in this column 63 3/8/01 - LAW AND GOVERNMENT - RES. 000476 today or do you need more time? What is the situation here?
I believe that at the time that that chart was put together, I think that's the chart in the five-year plan, I don't believe that the information was available at that point in time. But if I was going to do this today, I would say that the number would be about $6100.
I'd be interested in knowing what that number would compare active employee benefits between the City-represented group and active employee benefits for the union group and not mesh in the retiree benefits. Again, for the record, my name is Bob McAllister, I'm the benefits administrator of District Council 47. The City has stated that it does not provide the dental and optical benefits for its five-year retirees but yet they blend that dollar figure in when they give you the overall cost. Let's compare apples to apples; active employee benefits for the union and active employee benefits 64 3/8/01 - LAW AND GOVERNMENT - RES. 000476 for the non-represented -- (Applause.)
Ms. Seyda, could you provide that document to the Chair on exactly how you arrived, what's in, what's out so we can really see how you got to this number of 6100?
As I indicated, I think I indicated to the Chair that we were still working on this and we would continue to work on it. However, I think it's important to add that over the course of the last couple of years, District Council 47 has drawn down on their reserves in order to provide the benefits they provide and that's not included in the number that's on that chart.
Thank God we did have a reserve there to draw down on because of the continued underfunding from the City for health benefits for union members. (Applause.)
When this is all said and done, you're going to see that there's a disparity in the health care dollars and how they are distributed between non-represented employees and union employees. 65 3/8/01 - LAW AND GOVERNMENT - RES. 000476 (Applause.)
Now, Mr. Cronin, you and Bob McAllister came in in the middle of the question. Are there any other comments you wish to make about the testimony that was offered?
I have a few that I would like to make. I want to go back to the opening statement about the City finally providing a prescription drug benefit for those retirees after four or five years. I am very glad that the City is now going to provide them an unlimited prescription drug benefit, something that District Council 47 has been doing for over 10 years. (Applause.)
For our folks who are on the Security 65 plan, they will have and still do have an unlimited prescription drug plan. Unfortunately, I think the City's plan is going to be a $250 deductible and a 50 percent of the cost. So those folks who are on the City-administered Security 65 plan are going to be going deep into their pockets to pay for prescription drugs.
I'm confused when at various times, Ms. Seyda, you stated the City would 66 3/8/01 - LAW AND GOVERNMENT - RES. 000476 be amenable to such and such or not amenable. It seems to me that currently the decision is being made by a single person; am I right?
Is it a fact that the Mayor is the one that makes the ultimate decision on the health plan or is it you? Tell us who it is. Ms. Wilkerson, I think it needs the Chief of Staff for an answer.
The Mayor in consultation with others. We advise the Mayor on the decision. Ms. Seyda doesn't have the sole authority to commit the Administration unilaterally on all these issues. I am provided with backup information. There's a lot of discussion about this.
I raise that because I think it very important -- I'm very pleased that you're here today because we were getting a sense 67 3/8/01 - LAW AND GOVERNMENT - RES. 000476 that while the decision was being made by the Mayor's Office we didn't know on what basis. But the fact that you are here today enables you to know of the discontent that exist, the basis of that discontent, and we certainly hope you're going to convey to the Mayor and to convey to him -- because in a phone conversation just before the hearing when I renewed the invitation for the Mayor to appear here, he said he was agreeable to a meeting. He preferred not to be at this meeting, but agreed to be at a meeting with the Law and Government Committee to discuss the role of the City's plans. And we're hoping that you're going to convey to him the deep concern all the people have about a plan that affects their lives deeply but about which they seem to play no role in, about how it looks to the world when the City abruptly cuts off retirees. We'd like to know how the City feels about how do people manage to get health care if at a time when their income is at the lowest point and cost are highest the City says to them "That's your problem, not ours." We need answers to that and we need answers as how the feelings of the employees are going to be represented. 68 3/8/01 - LAW AND GOVERNMENT - RES. 000476 We think the Mayor ought to be concerned about the fact that employee unions have apparently through diligence been able to offer greater benefits often for longer periods of time at less costs than the City. One would think the reverse would be true because except in the case of District Council 33, the numbers are really in the City's advantage. The City among its non-represented group represents more employees than District Council 47 and it's retirees. Probably the same may be true of the FOP and the Firemen's Union. And what we all would think would be an economy of scale seems to work in reverse and we're very concerned about that. (Applause.)
We think it has to be -- for the non-represented plans, I think the City has to study the union plans. It has to agree to submit itself to the same stringent tests that the City imposes upon the employee health plans. (Applause.)
And I think instead of insisting on trying to dissolve all the good plans and substitute the one plan that seem weakest and most expensive and least useful to employees, 69 3/8/01 - LAW AND GOVERNMENT - RES. 000476 that what you ought to do is seek to strengthen each of the employees' plans to enabling them to continue their fine service instead of -- (Applause.)
The final thing is somehow I think, as I see it, based on the testimony, that in some way the plan has to be opened up so the City can get some input from the non-represented employees rather than just imposing plans on them. (Applause.)
Now, are there any other matters District 47 wishes to raise today?
Just one quick point and the other thing is a hope. The quick point is when we talk about administrative cost to a health plan, we've heard the City's testimony of what they believe it is. But it's interesting to me, and again, I hope as Bob McAllister said, we're comparing apples and apples and oranges and oranges because if the City uses a computer, if the City uses the telephone, that's got to be factored into these administrative costs. It is with us; it should be with them. So there's all kinds of hidden 70 3/8/01 - LAW AND GOVERNMENT - RES. 000476 expenses that I would hope, Councilman, that your committee will take a look at and figure into that administrative cost. Let's put it all out on the table. Let's rip the curtains back, let's open the doors, open the windows, and let the sunshine and the air come through and have all this information laid out here. We're required to do that in the labor contract that we have now. We're supposed to be sitting down with the City of Philadelphia and doing that in terms of getting everybody into one plan. Well, we can't very well do it or be honest if we're putting our cards on the table and the other side is not. (Applause.)
Let me just say one other thing. There have been a number of things that have been said here by the representatives of the City that I'm sure at some point both the fire fighters and FOP would like to have a shot at or at least a rebuttal or a response to some of things that have been said. In arbitration hearings I hope they get that opportunity. But let me add my comments by saying that over the next four years, there is not an issue, and I include the stadium issue in this 71 3/8/01 - LAW AND GOVERNMENT - RES. 000476 package, that's as important to the people of Philadelphia as what these health care cost. In every single labor agreement, whether it's with the fire fighters, with the FOP, with District Council 33, with 47, with SEPTA workers, with PGW workers, and more, and when you begin to add all of them up and their families, how many people are we talking about and how significant is it in terms of health care? Because, Mr. Chairman, I am telling you right now, if you put pencil to paper and you take a look at what is happening with these collective agreements and the cost of health care, that what workers are being asked to do today, not even two years from now, four years from now, is that they're being asked to choose do you want benefits or do you want wages because you're not getting both. And I would say to you just put it down there and let people see and you'll be able to see for yourself. And I say this to the committee, I say this to City, and I say this to my brothers and sisters. Two years from now and four years from now if we don't start raising more hell than you can imagine, that's the choice you're going to have because you're not 72 3/8/01 - LAW AND GOVERNMENT - RES. 000476 going to be able to get wages and health care, let me tell you. And if we take the plans that we have which are good plans run by honest people where we spend a lot of time and we go out and make it democratic and ask the people what they think and say that we're going scrap that for secrecy, for political contributions, for whatever it is, let me just say what the State of Israel said, "Never, never, never." (Applause.)
Thank you. Mr. McAllister, is there any final comment you wish to make? I agree it's pretty difficult after that last address by Tom Cronin.
Well, I just suggest you stay there. I'd like to hear from the other union groups if they wish to be heard. Is Mr. Costello still here? Please come forward. Mr. Casey, too, if you wanted to bring anybody up with you, you could. Mr. Costello, why don't you begin.
Without belaboring the 73 3/8/01 - LAW AND GOVERNMENT - RES. 000476 point, Mr. Chairman, thank you for asking us back, but we did have a chance to make a statement at the last hearing. I do want to reiterate one point of that statement, and that is something Mr. Cronin referred to is that to a certain extent we are all victims in the medical care crisis facing us because unlike some of the other benefits that employees have or employers distribute, you can't sit down and make a deliberate choice and conscious election not to get ill and not to use your medical benefits. That necessity is imposed on you. And when we continue to use the tool of wages or benefits as a weapon against employees, we are beating them with something that they are every bit of helpless with as anyone else. And it's not only unfair, it borders on very cruel. So we are looking to this committee and this Council to take a serious look at the issue, particularly when it involves our retirees because under labor law it's very difficult for bargaining units to bargain for those who are no 22 longer in the bargaining unit. The only place the retirees can go for relief is to a body such as this. So there is a lot riding on the outcome of these hearings. 74 3/8/01 - LAW AND GOVERNMENT - RES. 000476 (Applause.)
I would just like to say that out of the top 30 cities in the country, Philadelphia is the only one that doesn't give its retirees health benefits. That's a complete disgrace. I just went to a seminar in health care. I can see why the City always fights us about going seminars, because they don't want us to be educated. What they're doing is they have to form a trust. If they do not have a trust, they have to form a trust. And if they do have a trust, people should sue them because they're not holding up to thier fiducial responsibility for the people who retire and the people who are in their health plan. So if they do have a trust, take a look at it; you might be able to sue them. If they don't have a trust, they have to. Because if they were following (inaudible) like our brothers in the trades, they'd be in jail. (Applause.)
I ask Mr. Villela do you have statement you'd like to make?
I would just like to ask a 75 3/8/01 - LAW AND GOVERNMENT - RES. 000476 question. What is MPA on that drug list?
What is MPA on that drug list for the drug company on the list that Councilman Rizzo was talking about?
That's the one we have. I can't understand why the City doesn't have that because they have representatives on our board and also on the FOP board.
Thank you, Mr. Chairman. It has been put very eloquently here by the union brothers and sisters who represent their employees. I think most of the things I wanted to say have been said except for one thing. Non-represented 76 3/8/01 - LAW AND GOVERNMENT - RES. 000476 employees are essentially second-class citizens. We do not have the ability to communicate with the City. We don't have the ability to negotiate. We don't have the options except when the unions decide to go on strike, we are the ones cover on their behalf, not because we want to, because we have to. So I hope that these hearings also bring an opportunity to for us to dialog. At the beginning of this Administration, the group of ACMPE, Association of Civic Management and Professional Employees along with the Board of Directors requested a hearing and a meeting with the Mayor's Office and we provided information. We opened our hands and said we were willing to help you, we can work together. And we never heard from them, ever. This was almost a year ago. So I don't really have much to say other than we want to treated fairly and equitable. We are not second-class. We are the same employees as Union 47, as 33, as the court employees, and as the exempts. And as you know, we don't have any ability to negotiate anything other than accept whatever they want to hand us out. That's all. Thank you very much. 77 3/8/01 - LAW AND GOVERNMENT - RES. 000476 (Applause.)
Seems to me, Ms. Wilkerson, if you have any questions -- we usually don't ask witnesses if they have questions, but I'm going to say that to you because it's my intention to in the next few minutes recess this hearing until Thursday afternoon April 5th at 1:30. It is our hope that there will be the meeting I referred to with the Mayor beforehand. We hope by that time to be able on April 5th to begin reaching resolutions. We're hoping that the retirees will have an opportunity to be heard on these options plans before they're finally placed before them. We're hoping that the City's policy will become clear so that what we can talk before the revised, revamped plan presented by the City to its unrepresented employees that begins to compete somewhat with the City plans. And perhaps the City will be ready at that time to announce that it is not going to waste anymore time in trying to plan how to destroy four good City plans. (Applause.)
And instead look for ways to strengthen it. We hope the City will be 78 3/8/01 - LAW AND GOVERNMENT - RES. 000476 forward in having a full audit so that we can have the real facts before us in City Council upon which we can base our independent judgment. If that's satisfactory to all parties, the hearing will stand in recess until Thursday, April the 5th at 1:30. (Council adjourned at 3:30 p.m.) - - - 79 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 March 8, 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