Hello:

Below are the lastest economic indicators.  Unemployment has remained much the same and there is some modest improvement in housing indicators.

Thanks for reading!

Shayne Kavanagh,
GFOA

GFOA has issued Containing Health Care Costs: Proven Strategies for Success in the Public Sector, a report resulting from a GFOA research project funded by a grant from Colonial Life, for the purpose of identifying the most innovative and effective strategies local governments across the United States are using to meet the dual goals of containing costs and managing the quality of their employee health-care benefits. The research report is available, along with other GFOA research reports, on this page of GFOA Research and Consulting Center website. GFOA is also holding a webinar on November 9th to review the findings of the paper and to highlight two of the most innovating cost containment strategies we found: value based insurance design from the City of Asheville, NC, and a comprehensive wellness program from the City of Irving, TX (who won a GFOA Award for Excellence for their program). You can register here.

Just as in the private sector, the public sector has faced relentless increases in the cost of employee health care benefits, contributing to the ongoing fiscal stress most local governments have experienced in recent years. The report found that public employers have worked hard to contain the costs of employee benefits while providing benefits at a level needed to maintain a healthy, productive workforce and attract qualified candidates to public service.

The report describes several cost-management strategies that have the highest potential for public employers, including:

Onsite clinics. Onsite clinics direct employees toward a low-cost provider while simultaneously increasing their satisfaction with the care they receive. Return on investment ranges from $1.60 to $4 saved for every dollar invested.

Variable premium contributions. Employee premium contributions can be structured to increase as premiums go up, so the employer doesn’t bear full burden. This also gives employees a stake in other strategies that will reduce premium costs.

High-deductable health plan (HDHP). HDHPs introduce a consumer-driven approach to employee health care and can save between 12% and 30% of total premium costs, although such plans have the downside of adverse selection.

Wellness programs. Employers are enthusiastic about wellness initiatives, and for good reason: The return on investment for large employers averages $3.27 for every dollar spent, over a three-year period.

Self-insurance. This strategy is generally for large employers, where it can reduce health costs by about 10%. Self-insurance appears to be underused by public employers relative to private employers.

Cooperative purchasing. Governments can consolidate their purchasing with other employers, potentially reducing costs by 5% to 20%.

Value-based insurance design (VBID) disease management. VBID uses cost differentials to get the best use out of limited medical resources. The City of Asheville, North Carolina, saved about $4 for every dollar invested over a multi-year period.

A change to health benefits can be emotional and potentially controversial because it can directly affect the well-being of employees and their families. This research report also provides advice for considering which strategies to pursue and how to build support among elected and appointed officials as well as public employees.

I hope this report proves useful to you.

Shayne Kavanagh,
GFOA

Hello:

Below are the lastest economic indicators. Not much as changed!
Thanks for reading!

Shayne Kavanagh,
GFOA