Claims of big savings from Vero city health clinic start to look anemic
A consultant hired by the City of Vero Beach’s advisor on insurance matters to support his claims that the city would realize multi-million-dollar savings by establishing a municipal employee health clinic not only refused to endorse his assertions, but concluded that the city’s health care costs might actually go up rather than down.
“We couldn’t recommend any cost savings,” said Alison Pool, consulting actuary for the Wakely Consulting Group, a firm specializing in the health care industry based in Clearwater. “We like to see a track record so a real benefitrisk analysis could be performed, and there is none.”
The Wakely Group was hired by the Gehring Group, the city’s insurance advisor, to support its contention that an employee health clinic would save the city $267,000 in the first year of operation and $2.4 million in three years.
The savings claim was based on the Gehring Group’s estimates – derived, it claimed, using a proprietary formula – of how much Vero Beach would save if its employees and their families went to a municipal clinic rather than their own physicians to obtain prescription drugs and for non-major medical issues.
Vero Beach 32963 has consistently questioned the saving assertions after we could find no support for the assumptions made in Gehring Group presentations, which have been embraced by city Risk Manager Barbara Morey, Human Resources Director Robert Anderson and accepted by City Manager Jim Gabbard, all of whom have pushed the plan.
While city staffers continue to push the Council to move forward with entering into a contract for the clinic, Council Members finally seem to be taking a second look at whether in these difficult economic times, it makes sense for the city to get into the health-care business.
Several Council members seem to have had their enthusiasm shaken by the Wakely Group’s report that there is simply not enough evidence on city-run health clinics to make a judgment as to any long-term benefits.
“The numbers provided to us were projected savings that the City hopes to see but may not ever see,” said Pool, who worked on the Vero Beach report for the Wakely Consulting Group.
She said the City might be taking a risk by opening its own clinic, and suggested that perhaps “the City should look into other avenues to save money on health care costs.”
Kurt Gehring, CEO of the company that bears his name, has told Vero Beach 32963 via e-mail that calculations he used in making the cost-saving predictions Vero Beach would enjoy were privileged information.
Representatives of the Gehring Group did not respond to a request by Vero Beach 32963 to discuss the Wakely report.
Morey told Vero Beach 32963 that Gehring hired the Wakely Consulting Group to validate the projected savings he initially told the City of Vero Beach it would receive by running its own employee health clinic.
Documents in the Wakely report state that Gehring estimated cost savings for Vero Beach based on 57 percent of the city’s 503 employees using the clinic.
The Wakely report said this could not be justified.
“The lower the shift in the persons choosing to use the clinic over a regular office visit, the lower the savings potential,” the report said.
Morey said she still believes the city will save money at least on prescription costs, but could not offer a cost savings projection.
Unexplained by all pushing the idea of a clinic which would largely achieve savings by prescribing generic drugs in place of far-more-costly brand name drugs is why the city could not achieve comparable savings through changes in prescription coverage by its existing employee health plan.
Meanwhile, city staffers continue to push the City Council to move forward with negotiating a contract for the employee health clinic.
Council Member Debra Fromang, who has spent many hours looking into the pros and cons, is the leading skeptic of the idea.
She has repeatedly voiced her view that the city should not get involved unless Indian River County joins with Vero Beach in its operation.
Fromang is not the only one dubious about the health clinic. Members of the medical community and government watchdog groups have also come out against the venture.
Dr. Michael Weiss, a member of the Hospital District’s Board of Directors, said the clinic proposal is moving into the area of the absurd in light of the city’s present financial crises, as well as the new information indicating no one knows whether the clinic would result in any savings.
“The city’s consultant hires a consultant who says they can’t say whether it will save the city any money?” he said. “This new information is very damaging. The City Council would be irresponsible to approve spending over a half-million dollars on a ‘maybe’ particularly considering the facts now on the table.
Taxpayers’Association President Paul Teresi said the health clinic proposal was a bad idea from the start.
“I have to agree with County Commissioner (Gary) Wheeler who said the whole idea of the employee health clinic smelled badly from the beginning,” he said. “It would be a complete injustice to the taxpayers’.”