Little Rock is deciding between two options for insuring city employees in 2020 -- a fully insured plan it has used in the past, or a self-insured plan that an adviser said Tuesday will allow the city to do a better job managing employees' care.
The city is insured with United Healthcare. Tom Kane, senior vice president of Stephens LLC, presented an alternative, self-funded plan with a set of providers that comprises a "clinically integrated network" of 800 physicians. It includes CHI St. Vincent, UAMS and Arkansas Children's Hospital.
The network includes people such as nurses and social workers who will work with city employees and their families to make sure "they're getting the appropriate care at the appropriate time," Kane told the city board.
"Right now in the system we're in, we're relying on employees and their family members ... it does add another layer of higher touch to encourage people to do the right thing," he said.
At-large City Director Dean Kumpuris, a gastroenterologist at CHI St. Vincent and part of the network of physicians, said the city's previous insurance plans have not done a good job of ensuring that employees receive care. He said being proactive about employees' care would cut costs in the long run.
"This is not the way we should be taking care of the people who work for us," Kumpuris said. "Here's the problem: The office doesn't have any way of getting patients to come back. You go and you get your first visit, but after you get your first visit, you're gone. ... When you have a network that's saying 'we're going to cut costs because we're going to be on you all the time,' then that's the way it works."
Vice Mayor B.J. Wyrick agreed.
"It sounds like it's a good thing," she said. "It sounds like we could maybe save people a lot of serious health conditions and maybe save some costs on the insurance."
Kane added that the city likely will continue a program that requires employees to undergo annual physicals or pay an extra $50 each month. He said almost 90% of employees have chosen to get physicals, which may have contributed to a spending increase that he said is worth it.
"To me, a managed chronic disease is much more attractive than an unmanaged chronic disease," he said, noting that the fully insured plan had not been managing chronic diseases in the employee population.
City Manager Bruce Moore said self-insured plans are a new concept in health care that the city has talked about doing the past several years, but has not been ready.
Moving to a self-insured plan will increase the city's insurance cost by about $7 million, to nearly $20 million. The city's annual budget is roughly $200 million.
If the self-insured plan is implemented, Kane said, the city would need to implement a reserve fund to make certain there is money available if costs exceed expectations.
The initial renewal offer for a fully insured plan from United Healthcare had a 24% cost increase, which Kane said he negotiated down to 15% , without reducing any benefits.
Mayor Frank Scott Jr. said the city board likely will vote on a plan in early October. The decision must be made before the city sets its 2020 budget. The city aims to pass a budget in November.
Scott acknowledged that a self-funded plan would create an increase in the budget, but that Kumpuris' comments summed up "what a clinically integrated network could do for us."
Metro on 09/25/2019