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Council Member Menin questions OMB on healthcare cost savings initiatives
3:24:17
ยท
4 min
Council Member Julie Menin raises concerns about two healthcare-related initiatives aimed at reducing costs for the city. She questions the understaffing of the health care accountability office and the delay in issuing an RFP for a new health care provider for active city workers. OMB officials Jacques Jiha and Kenneth Godiner respond to her inquiries.
- The health care accountability office, mandated by law, is severely understaffed with only 1 out of 15 positions filled after a year.
- The RFP process for a new health care provider, potentially saving the city $1 billion annually, has been ongoing for nearly two years.
- OMB officials cite the complexity of the process and collaboration with the MLC as reasons for the delays.
Julie Menin
3:24:17
Thank you so much, chair.
3:24:19
So I have two questions.
3:24:20
Because of the threat of budget cuts to social services from the Trump administration, it's obviously more important than ever to try to find savings in the city budget, as you know.
3:24:31
So my first question has to do with the health care accountability office.
3:24:35
As you know, I fought very hard for the creation of that office.
3:24:38
It is now the law that that that office has to be created.
3:24:41
It was supposed to be fully staffed with 15 lines by February of last year.
3:24:47
So my question is how many lines have been actually filled?
Jacques Jiha
3:24:53
I would come back to you with that answer because I don't have it in front of me right now.
Julie Menin
3:24:58
Okay.
3:24:58
My understanding is of the 15 lines, only one line has been filled.
3:25:02
There have been discussions about seven lines, 14 lines have not been filled.
3:25:09
Okay.
3:25:09
So I just wanna get confirmation that that is correct.
3:25:12
That so we're a year behind, and that office is supposed to issue an important report.
3:25:17
And the reason why this matters so much, of course, is that studies show that this office can save the city $2,000,000,000 a year by harnessing our city's purchasing power to drive down costs.
3:25:28
As you know, we're spending $12,000,000,000 a year of our city budget on these health care costs, and it was 6,000,000,000 just five years ago.
3:25:36
So when we have an office that can potentially save the city $2,000,000,000, it's very upsetting and frustrating that it's not fully staffed.
Jacques Jiha
3:25:43
Let me let me get back to you.
3:25:44
I'm gonna talk to the tax first to get an update in terms of where they are.
3:25:49
Okay?
Julie Menin
3:25:50
Okay.
3:25:50
And then the second question I have also relates to health care.
3:25:53
So you have been talking for a long time about this RFP for hospital costs.
3:25:59
We know that the hospital costs are extremely high and rising very, very fast.
3:26:06
So the state's per capita hospital spending was 43% above the national norm, up 22% from a decade ago.
3:26:14
I mentioned that the city's cost, you know, have risen from $6,000,000,000 a year five years ago to 12,000,000,000 of our city budget.
3:26:23
So we've been hearing for almost two years from the administration that the city's latest RFP for a health care provider for active city workers could save the city over a billion a year without a diminution in the quality of care.
3:26:37
So why is this taking almost two years when we know we could realize close to a billion dollars of savings?
Kenneth Godiner
3:26:46
Process in order to get the new health program does take a substantial amount of time.
3:26:55
There was a great deal of time taken on back and forth as we came up with the general plan design.
3:27:05
Subsequent to that, we got or received bids from the vendors.
3:27:13
We narrowed down to two finalists.
3:27:19
We go through this process jointly with the MLC.
3:27:25
Unfortunately, that process has taken a great deal of time.
3:27:30
We recently had to ask for refresh bids because of the passage of time.
3:27:35
We received those bids.
3:27:36
We're on a timeline now.
3:27:38
We expect to have a vendor finalist selected by the spring during the spring of of this year.
Julie Menin
3:27:49
Okay.
3:27:49
I just, in closing, wanna say it should not take the administration two years to issue an RFP on something of this importance where we could potentially save a billion dollars, which is by your own admission, we can save a billion.
3:28:00
So this is not just some statistic that I'm quoting.
3:28:03
This is from testimony that you all have actually given.
Kenneth Godiner
3:28:06
Right.
3:28:06
It's not the issuance of the RFP.
3:28:08
It's it's it's the selection of of a vendor and then award.
3:28:13
And you know, it is a bilateral process which has many positive aspects, but it does tend to take one more time when it is not simply the administration doing this, but that we're working jointly with the MLC.
Julie Menin
3:28:28
Okay.
3:28:28
Thank you.