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sharing; pharmacy management; prevention; and disease management. Ms. Daut noted the Benefit Study Group's role in reviewing costs/utilization, employee education, and in reviewing plan design options. She provided additional detail on the City's cost containment strategies. Ms. Daut called attention to the levels of premium cost sharing for all employee groups. Ms. Daut noted the availability of further information at http://www.ci.eugene.or.us/HRRS/RISK, htm. Mayor Torrey called for council questions and comments regarding the presenlation. Ms. Taylor said she had recently returned from a National League of Cities Human Development Steering Committee meeting and learned that Eugene was not alone in facing rising medical costs. She noted the league's support for a single-payer system. She understood that advertising and repackaging of drugs with new names was leading to higher health care costs. Ms. Taylor asked why medical trends were projected to go down. Mr. Johnson responded that trends were turning down because most carriers were experiencing growth in their surpluses and the contracts negotiated with provider groups were more favorable to them. He also believed that carriers who had resisted in investing in disease management and chronic care were starting to become more involved in those areas, and that also affected trends favorably. He pointed out that trends tended to be cyclical and carriers sometimes overreacted when costs went up by increasing premiums. Ms. Taylor was happy to hear about the wellness program and asked about the potential of giving participating employees half-days or days off to reward them for being healthy and to help them manage stress and reduce disease. Ms. Taylor said the City appeared to encourage early retirement but it also appeared that it cost more money to ensure those individuals. Ms. Daut agreed. The early retirees were increasing the City's health care costs because of the subsidy involved. She noted that the Public Employees Retirement System (PERS) reforms had increased the retirement age. Ms. Taylor was surprised to hear older employees cost more because of her experience that older employees tended to take less sick time. Mr. Johnson said it was true that older employees had higher health care costs, particularly with regard to prescription drug utilization and the average cost per script. The curve was particularly dramatic in that area. Mr. Pap6 asked when the City could reduce its administration to one plan. Ms. Daut said the City was securing a quote from ODS on the costs of administering the managed care plan. Mr. O'Hanlon anticipated ODS would evaluate the option during the upcoming winter. Mr. Pap6 determined from Ms. Daut that all employees had the choice of two plans and enrollment in the plans was about evenly split. The Pacific Source Plan had fixed co-payments for office visits and the City's self-insured plan was a preferred provider plan with an 80/20 cost split for most services. In the past, the City had attempted to get agreement from the employees about one plan but was unable to do so. Ms. Daut said the City hoped to have one plan but collective bargaining had an impact on that issue. Mr. Pap6 asked where the market was on co-pays and deductibles. Ms. Daut said the public sector lagged behind the private sector, where deductibles were higher. She noted that there were some public sector agencies with less than $100 deductibles. She said the City negotiates its benefits with its unions, and over time, health insurance had become a more important bargaining issue because health care costs had MINUTES--Eugene City Council October 13, 2004 Page 2 Work Session