AGENDA MEMORANDUM

MEETING DATE:               June 28, 2010

FROM:                                   Dann L. Herrin, Risk Manager

SUBJECT:                              Resolution approving the concept of a Shared Services Employee Health Clinic

Staff Recommendation:

Staff recommends approval to move forward with the shared services employee health clinic concept, including:

• Negotiation of a contract with CareHere, LLC, for management of the clinic(s);
• Negotiation of a shared services inter-local agreement with the cities of Mount Dora, Tavares, and/or Eustis; and 
• Allocation of funds for start-up and on-going expenses of the employee health clinic

Background:

As detailed in the attached proposal, the costs of providing health care benefits to the employees of the City of Leesburg continue to increase at an alarming rate.  While the City experienced only moderate growth in their group health insurance costs in fiscal years 2005 through 2007, there has been significant increases in the last few years.

Shifting these increases to the employees, while providing some immediate and short-term financial relief to the City of Leesburg, fails to achieve the desired results of lowering the total costs of providing health insurance, or changing employee’s consumer decisions regarding their healthcare. In order to achieve real success, the City and its employees must begin working together to manage health rather than just managing costs.

The City of Leesburg staff has been working hard with their counterparts from the cities of Mount Dora, Tavares and Eustis to explore the feasibility and cost-effectiveness of implementing a shared-service, multi-site employee health clinic model. An on-site employee health clinic is a solution that more and more organizations are turning to in order to reduce the costs of providing health care benefits to their employees.  This multi-city task force completed the Request For Proposal (RFP) process and selected CareHere, LLC, as the finalist to provide management services for the multi-site employee health clinics.  Each of the participating cities will be presenting this proposal to their respective City Commissions in the latter part of June.

In the event that Mount Dora, Eustis, and/or Tavares decide not to move forward with the employee health clinic concept, the City of Leesburg can move forward independently.  The Request for Proposal (RFP) was written to allow each entity to independently execute a contract with CareHere, LLC.  The projected savings and expenses for a City of Leesburg employee health clinic contained within the attached proposal were developed independently of the other entities.

Using actual health insurance claims data, CareHere, LLC, has estimated that the City of Leesburg could save up to $1.3 million over the next three years by shifting primary care away the Blue Cross Blue Shield provider network and into an on-site employee health clinic(s) model.

Options:        

1. Approve concept as presented, or
2. Such alternative action as the Commission may deem necessary.

Fiscal Impact:

The projected expenses and savings of an employee health clinic are as follows:

• Start-up costs:                                     $100,000
• On-going annual expenses:                  $479,870
• Projected savings (net of expenses):    $1,300,000 over the next three (3) years.

Submission Date and Time:  _______________________________

Department: Human Resources_________ Prepared by:  Dann Herrin_____________                      Attachments:  Yes__X__   No ______ Advertised:   ____Not Required ______ Dates:   __________________________                      Newspapers: _________________________________                                                     _________________________________            Revised 6/10/04

Reviewed by: Dept. Head ________ Finance  Dept. ____JB____________                                    Deputy C.M. ___________________                                           Submitted by: City Manager ___________________

Account No. _064-1340-519-xxxx__ Project No. ___________________ WF No. ______________________ Budget  _______-0-_____________ Available _____________________

RESOLUTION NO._______________

A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA, AUTHORIZING STAFF TO MOVE FORWARD WITH THE SHARED SERVICES EMPLOYEE HEALTH CLINIC CONCEPT INCLUDING NEGOTIATION OF A CONTRACT WITH CAREHERE, LLC TO PROVIDE MANAGEMENT SERVICES OF THE CLINIC, NEGOTIATION OF A SHARED SERVICES AGREEMENT WITH THE CITIES OF MOUNT DORA, TAVARES AND EUSTIS, AND ALLOCATION OF FUNDS FOR START-UP AND ON-GOING EXPENSES ASSOCIATED WITH THE CLINIC; AND PROVIDING AN EFFECTIVE DATE.

BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF LEESBURG, FLORIDA:

THAT the Mayor and City Clerk hereby authorize staff to move forward with the shared services employee health clinic concept including negotiation of a contract with Carehere, LLC to provide management services of the clinic, negotiation of a Shared Services Agreement with the cities of Mount Dora, Tavares and Eustis, and allocation of funds for start-up and on-going expenses associated with the clinic.

 THAT this resolution shall become effective immediately.

PASSED AND ADOPTED by the City Commission of the City of Leesburg, Florida, at a regular meeting held the _28th____ day of _June________ 2010.

                                                                            __________________________

                                                                             Mayor

ATTEST:

__________________________

City Clerk