Council approves $21M healthcare bid

Warwick Beacon ·

It was during discussion about renewing the city’s healthcare and dental contract for municipal workers that the microphones in the council chambers of Warwick City Hall went berserk, interrupting with an incessant, piercing shrill that one could almost expect to crack glass and drill right through an ear drum.

“Hopefully you have good hearing aid coverage under these plans,” joked Rob Calise, a consultant for the Hilb Group of New England, which was hired to examine bids received by the city to provide over $21 million in healthcare and dental coverage for about 1,175 city employees.

The microphone malfunctions were eventually (and mercifully) silenced, but the discussion over the contracts waged on for over an hour. Eventually, the council would unanimously agree 8-0 (Ward 9 Councilman Steve Merolla absent) to renew the city’s health and dental contracts with the West Bay Community Health (WBCH) for an approximate total of $21,180,000 (about $18,000 per employee).

WBCH is a purchasing group based out of Warwick that supplies Blue Cross Blue Shield of Rhode Island for medical and dental coverage. They are self-insured and self-funded, meaning that they establish working rates at the beginning of a budgetary year and, once the year is complete and the actual cost of claims established, any surpluses can be rolled into an account used to offset increasing rates in the future towards their next contract and any deficit can be calculated into the next year’s rate as well.

Calise explained how the Hilb Group identified potential savings of $6,098 if the city switched providers to United Healthcare, stemming from a .03 percent difference in rate increases between them and WBCH from last year. Savings could be much more significant for the school department, which operates separately from the city. Through United Healthcare, the schools could potentially save approximately $495,000.

However, Calise said that, given the soft costs of transitioning to a new carrier and the potential for grievances filed by unions whose members will have to deal with the changes as well, the savings were not worth switching.

“I'm not making light of a half a million dollars, but when you look at about $40 million [total cost of health plans between the city and schools], it represents about 1.25 percent of the overall spend, which is how we have to measure this,” Calise said, later adding that savings would need to approach 3 percent before warranting a switch. “Ultimately I think the city, for this upcoming fiscal year, should move forward with West Bay.”

The Warwick School Committee still needs to vote on their own decision, which will likely be decided during their upcoming meeting on Tuesday, May 15. However, Calise said that, despite finishing his report about six weeks ago, he has not been asked to discuss his findings with the school department as of this time.

“I think in an ideal world this meeting would have happened a month ago and we would have already been in front of the school committee to have the conversation about United Healthcare's bid and solicit feedback from the school committee and answer any questions they might have so I could come back to this body and give you their feedback as well,” he said. “I'm not sure what the process is on the school side but I have never been contacted by the school committee.”

Upon hearing this information, City Council President Joseph Solomon, who will take over as acting mayor of Warwick on May 15 when Mayor Scott Avedisian takes leave to prepare for a new position as CEO of the Rhode Island Public Transit Authority, expressed some frustration.

“To say I'm disappointed would be an understatement, but I can assure you that things will be getting better,” he said.

Ward 5 Councilman and chair of the council’s finance committee Ed Ladouceur expanded on Solomon’s sentiment.

“How is that possible that the administration sits on this book of business, $42 or $43 million, one of the largest financial responsibilities we have probably aside from pensions, you guys sit on it for six weeks before we get the information,” he asked of Bruce Kaiser, the city’s finance director. “We get the information, like so many other things, and you expect us to make decisions on the fly.”

Kaiser said the report was received by the city around April 10, and due to “moving parts” within the bids they were not able to finalize a report and make it onto the docket for the April 23 City Council meeting. However, Ladouceur maintained that to not even receive the information that was ready and prepared by Calise was wrong.

“All I can say at this particular time, once again, we get information last minute,” he said. “Mr. President [Solomon], all I can say to you is I'm looking forward to a new chapter opening up in city government where we will be getting things on time and in an appropriate manner.”

This story was originally posted by Warwick Beacon. Click here to view the original story in its entirety.

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