In December 2006, we had an extensive article on the proposed change in the Employee Assistance Program (EAP) provider from the locally owned PRA to the nationally based Cigna.
As is often the case, trying to pin the city down on these types of issues is tantamount to trying to hit a moving target. The original proposal was a Consent Agenda Item schedule for December 5, 2006. Upon being alerted that a councilmember intended to pull the item for discussion at the December 5 meeting, City Manager Bill Emlen announced that this item was being pulled by staff and would be brought back at the next meeting on December 12, 2006. At that point, the majority of members on the council had questions about the item and so it was postponed until this week. Each time the staff report has changed which reveals some new information about the plan.
It has now on this evening's agenda as a regular discussion item—which it really should have been in the first place. The consent agenda should be limited to items that truly are non-controversial.
The purported "significant fiscal savings" described by city staff appears to come at the cost of a great loss in service provided to the employees. There are currently 51 employees receiving this service from the City ofDavis
One key area of note in the new report is this:
But that changes the calculations we performed in our previous article.
The city staff has proposed a shift from the locally based PRA to Cigna based primarily on the differences in their quotes. PRA is quoting $38,500 while Cigna is quoting $14,500--$24,000 less than PRA (and nearly a third of the cost of PRA's quote). That’s a tremendous difference percentage wise, which leads us to question how exactly Cigna derives that figure. (Again I refer you back to the original article, the numbers are slight different with the now known cut in number of visits).
If we do the math on this, we realize that the city saves a lot of money primarily through a cutback in services.
PRA pays its psychologists $70 per hour while Cigna pays $62 per hour. (This is for psychologists who have a master’s degree rather than a PhD).
Last year the EAP program helped 51 employees. At 8 visits, PRA provided employees with 408 hours of care whereas the new plan would allow only 306 hours.
If we do the math:
PRA: 408 x 70 = $28,560
Cigna: 306 x 60 = $18,972
Now if we compare the profit we notice even with these revisions that while PRA is turning about a $10,000 profit, Cigna would be about $4000 in the hole. Obviously that cannot be accurate since Cigna would not accept a bid where they lose money.
Apparently that is made up for by cutting back on the number of employees that the plan actually helps get treatment. According to PRA's figures, they serve between 9 and 13 percent of the cities employees. On the other hand, the average large company serves a much lower figure of 2 to 3 percent. That means that Cigna would actually cover on average three or four times fewer employees than PRA.
That represents a large cut in the scope of the service, not just a cut in the number of visits allowed.
As we suggest in great detail in the original article, Cigna makes their profit by creating a burdensome and intrusive referral process whereby a number of employees get weeded out just by making the process for getting treatment exceedingly difficult.
So while the city has spent tremendous amounts of resources on the employee benefit packages of some employees, they have been quietly cutting the benefits of others by changing providers. And of course they attempted to do this through a consent agenda item.
---Doug Paul Davis reporting
As is often the case, trying to pin the city down on these types of issues is tantamount to trying to hit a moving target. The original proposal was a Consent Agenda Item schedule for December 5, 2006. Upon being alerted that a councilmember intended to pull the item for discussion at the December 5 meeting, City Manager Bill Emlen announced that this item was being pulled by staff and would be brought back at the next meeting on December 12, 2006. At that point, the majority of members on the council had questions about the item and so it was postponed until this week. Each time the staff report has changed which reveals some new information about the plan.
It has now on this evening's agenda as a regular discussion item—which it really should have been in the first place. The consent agenda should be limited to items that truly are non-controversial.
The purported "significant fiscal savings" described by city staff appears to come at the cost of a great loss in service provided to the employees. There are currently 51 employees receiving this service from the City of
One key area of note in the new report is this:
“The proposed EAP contract allows employees up to six visits per incident per year; our current EAP contract allows employees eight visits per year, with no per issue cap. This has allowed employees to use the current EAP provider for long term psychological counseling. The City’s desire is to only offer short term counseling for employees to help them through a traumatic event that is causing problems at work, home or both. The City has no desire to pay for employees’ long term psychological counseling.”How exactly a shift from eight visits per year to six visits per incident per year, constitutes a shift from long-term to short-term counseling is unclear. That seems a very arbitrary distinction. If an individual met once per week, you are talking the difference between six weeks and eight weeks. In either case, it does not seem to be long term counseling.
But that changes the calculations we performed in our previous article.
The city staff has proposed a shift from the locally based PRA to Cigna based primarily on the differences in their quotes. PRA is quoting $38,500 while Cigna is quoting $14,500--$24,000 less than PRA (and nearly a third of the cost of PRA's quote). That’s a tremendous difference percentage wise, which leads us to question how exactly Cigna derives that figure. (Again I refer you back to the original article, the numbers are slight different with the now known cut in number of visits).
If we do the math on this, we realize that the city saves a lot of money primarily through a cutback in services.
PRA pays its psychologists $70 per hour while Cigna pays $62 per hour. (This is for psychologists who have a master’s degree rather than a PhD).
Last year the EAP program helped 51 employees. At 8 visits, PRA provided employees with 408 hours of care whereas the new plan would allow only 306 hours.
If we do the math:
PRA: 408 x 70 = $28,560
Cigna: 306 x 60 = $18,972
Now if we compare the profit we notice even with these revisions that while PRA is turning about a $10,000 profit, Cigna would be about $4000 in the hole. Obviously that cannot be accurate since Cigna would not accept a bid where they lose money.
Apparently that is made up for by cutting back on the number of employees that the plan actually helps get treatment. According to PRA's figures, they serve between 9 and 13 percent of the cities employees. On the other hand, the average large company serves a much lower figure of 2 to 3 percent. That means that Cigna would actually cover on average three or four times fewer employees than PRA.
That represents a large cut in the scope of the service, not just a cut in the number of visits allowed.
As we suggest in great detail in the original article, Cigna makes their profit by creating a burdensome and intrusive referral process whereby a number of employees get weeded out just by making the process for getting treatment exceedingly difficult.
So while the city has spent tremendous amounts of resources on the employee benefit packages of some employees, they have been quietly cutting the benefits of others by changing providers. And of course they attempted to do this through a consent agenda item.
---Doug Paul Davis reporting
