Agenda - Council - 11/26/1979 - Laserfiche WebLink

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ATTACHMENT FOR REQllEST FOR BOARD ACTION PlIYSICIANS Il[ALl'Il PLAN & MID C[NI'[R II[ALlll I'LAN (1'111' & MCIII') The results of the bidding process were not as satisfactory as desired. The County continues to be disappointed in the ability of both PHP and MCHP to provide adequate data and justification for the capitation (premium) rates charged to the County. It is thus suggested that the bids of these two HMOs be accepted conditionally .for a one year period with an understanding that neither contract will be recommended for renewal on January l, 1981 unless the County receives satisfactory back-up data to justify the capitation (premium) rates charged. We are not able to justify outright rejection of either HMO's bid at this time. The PHP bid is higher than any other bid, but we must deal with the fact that more employees of the County and participating instrumentalities are enrolled with PHP than any other provider. Rejection could cause substantial adminis- trative dislocation and employee dissatisfaction unless employees are advised of our concerns well in advance of any change. Changing a relationship with an HMO is more difficult than cancelling an indem- nity plan because of physician/patient relationships. Below is the most recent tabulation of total participation in each plan: Single Family Contracts Contracts Total PHP 2,697 1,577 4,274 BCBSM 1,976 641 2,617 GNP 1,185 1,130 2,315 MCHP 386 373 759 6,244 3,721 9,965 County employees should be advised that PHP is being placed on notice that the PHP contract may not be renewed in 1981. MCHP, although unable in our opinion to satisfactorily justify its special 20% "governmental load" to the County's capitation rates, retains relatively com- petitive. We assume many of its members were patients of a MCHP clinic before adoption of the HMO plan and if they remained patients of these clinics would have to increase their family contributions some $7.00 per month to return to the BCBS indemnity plan with potentially lesser coverage. Further if the 386 single contracts moved to the BCBS on January 1, 1980, the cost to the County would be approximately.$60,O00 greater in 1980. GROUP HEALTH PLAN (GHP) GIIP's rating is true community rating with no special ra~e loadings to the County. GHP provided the County with examples of capitation rates charged to other major political subdivisions within its service area. The rates .proposed are justifiable and acceptable.