Finance Committee - 07/10/2019 Page 5
and it is working in conjunction with Anthem our Health Insurance Carrier for about a decade. They have
developed the program which has been in place in the State of New Hampshire and the City of Manchester for
a number of years. More recently used by Health Trust which is the risk pool that smaller New Hampshire
municipalities belong to for their health insurance. Smart Shopper is a program that incentivizes the members
of the health plan to shop when they have to any one from a list of 50 procedures. So for example an x-ray,
someone goes, and this is how it works, I’ll give a quick explanation. You go to the doctor, the doctor says, I’m
not sur if your foot is broken, you should have your foot x-rayed. You could do it at the practice which is
associated with my doctor’s office or you could do it anywhere else. So the patient is encouraged by this
program not to make an immediate appointment but rather to access the Smart Shopper Program either by
telephone or on the Internet.
When they do that they will see, they will put in their zip code and there will be a number of places that can x-
ray your foot. All of which are well qualified places that x-ray feet and that Anthem has claims history for years
and years. So the place that the doctor recommended may cost $400.00 for the x-ray and the other place may
cost $200.00. If you choose to go to the place that costs $200.00 you will get the fee, the employee or
member receiving the service, dependents over 18 are included in this, will get a check for $25.00 about a
month and a half later after it is evidenced that you accessed the program and had the x-ray at the less
expensive provider. In general, the reason we endorse this program and many others are endorsing this
program is that there is a belief that one of the prongs of trying to not necessarily reduce health care costs,
although that would be a great goal but rather more realistically to slow the pace of growth is to get people
involved and to behave as consumers for some of their health care needs. Generally we don't, this country
moved towards HMOQ’s years ago just kind of took people out of that decision-making mode and this is a
program designed specifically to get people involved in shopping.
The reason that we are here before the Finance Committee and Board of Aldermen is a little unusual because
there is no existing outlay of money. We are not signing up to spend a fixed or identifiable amount of money.
We are signing up for a program that let me just finish my explanation I’m sorry. So if the $400.00 that one
provider was going to charge, the $200.00 that the chosen provider charged there is ostensibly a $200.00
savings. The contract with Smart Shopper is going to allow Smart Shopper to retain 30% of that savings and
the City to enjoy the benefit of that balance of $140.00 savings. That’s the program, that’s how it works.
Alderman Klee
Thank you. Number one anything that lets me go shopping I’m loving, but putting that aside with this in the
long run, | mean one of the biggest hits to our budget this year was the cost of health care. We could have
kept it down to a 1.6 budget increase but because of the cost of health care, would this help in any way reduce
future healthcare costs. We keep talking about the savings, is this an actual savings in our health care cost?
Does the City realize the savings | guess is what I’m looking at?
Mr. Budreau
So more realistically then ever seeing healthcare costs go down from one year to the next, from everything I’ve
read and everyone I’ve talked to, that is unlikely. Health Insurance is likely to escalate at a rate above inflation
for the foreseeable future. However, anything that we can do to slow that cost increase is beneficial to the City
and to the Budget. So the direct answer is no | don’t think it will reduce the budget but | think it will slow the
climb. And the City of Manchester has been at this since 2010, they are realizing about $400,000.00 to
$500,000.00 of savings now on a slightly smaller population than we have. So that’s the order of magnitude,
you know, the health care spend is going to be around $40 million dollars this year. We are talking about the
possibility of, in several years, saving half a million or a million dollars. So it is not going to be earth shattering
but it certainly my premise that every little approach that we can take to minimize increases, we should take
advantage of.
Alderman Klee
That’s the speech | give for taxes.
