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...yo call on our meeting to order and turn it over to Jay Chapa.' Good afternoon.

This meeting is another step as we move toward um.

Through the summer, to get to uh a recommended budget in August.

And uh, one of the the only items we're going to talk about today is uh one of the major issues that we're uh experiencing some issues with here.

Um, as we go forward around the uh group health fund.

Kristen is gonna come up and provide a presentation and we will uh have she also has her her hub consultants with her that will assist as we go through.

But basically what we're dealing with is the structural issue on how we were funding our health uh program the last couple of years and part of it's tied to a big part of it is tied to prescriptions and prescription drugs overall.

I'll let her go through the presentation to go to.

But one of the things I've asked staff after we got reports, she'll touch on this, is to ensure that we are not out of market when it comes to what our employees pay for their portion of the overall health plans.

So you'll as you'll see as we go through it, we're trying to keep that level for employees so that we don't have an impact with employees because we don't want to get out of market with other cities and and entities in Fort Worth overall.

So Kristen, if you go forward.

Good afternoon, Mayor and Council.

Um as the city manager shared, I'll be walking you through just really historically what has gotten us to this point with the health fund and the extensive amount of work that has occurred over the last several months to uh come up with both a strategic plan that will better align us, but also you know, kind of bring to the forefront some of the opportunities for both this fiscal year and the upcoming fiscal year.

Right, so just background information, our group health fund or group health and life insurance fund as it's officially called, is responsible for all of the claims expenses and administration and just overall costs for our employee uh and a portion of our retiree uh health insurance.

The revenues come from employees, you know, in a traditional model through uh benefit premiums as well as contributions from the uh city and entrance on interest on investments.

So it includes our health benefits, any wellness programs, condition management, uh, employee health utilization and overall plan administration.

So partners like Blue Cross Blue Shield.

Um I refer to this as my pillars slide, and um the pillars are important because when you think about kind of the big rocks or the big cost drivers for a program like this for a self-insured model, which the city is, that means that you know, as employees are utilizing their benefits, they're going out, they're going to the doctor, they're getting medical procedures, um, we are incurring um all of those costs.

The city is is uh managing that risk.

Um, so there are kind of three main buckets that drive the expenses and costs of that fund.

Uh, one is the administration, so again, TPA or third-party administration fees from a blue cross blue shield who's our current partner, uh, and then claims make up the bulk of impact to this fund.

So any type of medical activity for our employees, um, our covered members and their dependents, uh, any pharmacy claims, which we are gonna spend a lot of time talking about this afternoon, uh, and then any of our condition management uh programs and for example anything that would be diabetes related or uh other condition MSK related, which is a big uh cost driver as well.

And then best practice and also city policy is that we have a reserve component.

Um so you know, we do our very very best to project claims activity based on historical usage.

We're also looking at uh diagnoses, uh, how long someone is expected to uh continue for certain types of treatments, um, but it does require kind of a an ongoing refinement.

Where did we think we were going to land, where are we currently landing, regardless, having contingency or reserve funding uh is important because of the um amount of fluctuation that can happen uh in a fund like this.

And so we have shared, I've shared actually a couple of times.

Um we were uh in uh the audit and finance committee.

Um we shared um in December kind of where this fund was projected to be.

We went through a very extensive strategic analysis and strategic plan development with our now broker Hub International.

And these numbers have been shared repeatedly with where this fund is expected to land.

And these numbers, although they look you know definitely scary, and that's why we're having these conversations, but these numbers are reflective of if nothing else changes.

And so, you know, there are some cost reduction efforts, there are other decisions from a fiduciary perspective that can be made to help to offset some of the increases that we've seen, and I'll share what those look like.

But you know, just from what we're seeing and where we're expected to land, you know, anywhere from a 30 million on up to a you know very significant number, but hopefully the things that we're talking about today will prevent moving further in that direction.

Um, as I also shared over the last few months, the reserve current reserve allocation in this fund is basically diminished.

So it has been reduced over several years.

Over the last five years, the reserve balance for this fund has reduced more than 80%.

So, you know, all of these numbers that you're seeing are, you know, if things remain static and there are no plan or program design changes to help prevent this.

All right, similar to my pillars slide of just you know, kind of what makes up the cost for a fund like this, this is an internal service fund, and so you know, departments are contributing to costs, including any fluctuations.

So is our you know, utilization you know, trends upward.

Uh, if our projections are off as you know, claims experience as we start to study claims experience, then you know, there is a possibility that departments have to contribute additional amounts, and that has occurred.

Uh so in FY25, there was additional contributions that were required from departments, and that's expected to continue for FY26 based on where we are where we're projecting right now.

All of this, well, let me not say all of it, the majority of it is related to claims expense, but there are some kind of best practices that we need to also implement to help with this.

All right, so again in 2025, and this was late 2025, around December, the city started a strategic review and a strategic plan development, so that we you know had very specific guidance of where we could make the most impact, but also you know, not just focusing on the cost of managing the fund, but what are we doing from a plan and program design perspective and what does that look like over multiple years?

So the key findings from that strategic plan number one was that the city has been underfunding the health fund contributions, meaning that in looking at what it costs you know per member per participant based on claims activity, we were not contributing enough or did not have a model that was uh contributing enough to the fund.

And so, you know, when that happens, if you have a reserve, that reserve is going to be you know reduced at a much faster rate if it was not funded fully, if the expenses were not funded fully initially.

Also, we have uh a very fast-growing category of pharmacy, and so you know, everybody is familiar with GLP ones.

If you you know turn on any TV channel, you've seen weight loss medications, and while they have uh specific uses and were initially introduced from a you know diabetic perspective for the most part, they are a huge cost driver on our plan.

And so I'm gonna spend a lot of time talking about that.

Um the study also found that we you know we're not fully accounting for our overhead and administrative expenses.

So just like we have Blue Cross Blue Shield is our third party administrator, I have members of my team, our HR benefits team, um, we have several direct contract partnerships for other programs, and those costs related to kind of the internal administration of our programs are not being captured.

And so that further reduce the availability of fund balance.

And then we also have just as far as kind of member or employee behaviors, we have higher than benchmark utilization in many categories, but the largest category was around emergency rooms.

So you know what we consider kind of a higher utilization is people going to emergency rooms for care that could have been taken care of at their you know regular doctor or even through an urgent care so that we don't have you know these additional costs.

So, you know, if an employee is going to an emergency room or they're taking their child there for an ear infection, you know, yes, they may be paying a higher out of pocket, but the city is also paying you know exponentially higher than if they you know would have gone to a primary care provider.

Also lots of imaging and um still you know we're learning more about what that looks like.

Some of it is outpatient, some could be inpatient, but just the benefit of having this strategic review is we kind of you know pulled the band-aid off of everything, looked at every category.

How do we line up against other employers that are of a similar size of our full benefit population?

And then as the city manager mentioned, uh it also showed that our employees, so our our participants are paying more out of pocket.

So, you know, our employees are contributing more, and even with the higher contributions, and this is not their premiums, this is if I'm going to utilize services the way our plans and programs are currently defined designed, um, it shows that they are paying more out of pocket.

Um, so you know, just if as we're thinking of levers to pull to right size this fund, you know, we have to look at the employee impact as well as the employer impact.

So this it's an important benchmark to consider is as you're facing decisions over these next few months.

All right, so with our strategic plan, we had a multi-year kind of focus that our um our broker team has come up with us, uh, and some of these are already in the works, even though it shows that it starts FY27.

We because of where the fund is performing, uh we wanted to move, you know, as quickly as possible, but um the three categories over the next three years for FY27 stabilization and containment.

So, you know, before we can talk about plan and program design or what works you know, longer term, we have to stop the increase of expenses to this fund.

And so cost reduction and really right sizing, making sure that we are set up for um better success by fully funding um the true claims expense associated with this fund.

And then for FY28 structural reform, that's why we will look at you know, kind of what our strategy is for longer-term reserve replenishment, we want to make sure the fund is healthy, but we also want to make sure that we're meeting the city city requirements and best practices around our fund reserve, and then aligning our plan design, so you know what our employees have as far as health uh plan choices and how much they're paying for those.

So is it accessible?

Is it affordable?

Is it in alignment with benchmark?

And I know that you know some of you are also a part of our plan.

So right now we basically have you know a plan that drives members to our employee health clinics, or we have a plan where you have, you know, really some somewhat expensive, you know, high deductible cost.

And so there's not really a middle ground, there's not really a kind of traditional health benefit program.

So it's either you know, you have a lot of money to save, or you're using the clinic, and you know, there are pros, pros and cons there.

And so part of our kind of future exploration will be do we have the right mix uh of plan offerings, and then um for the last year, um really optimization and sustainability, just long-term planning, uh, a mature governance model, you know, how does this fund work?

But what I can tell you is there's been an extensive amount of collaboration, both with city management, our brokers, the lab, FMS, everybody has been working very closely together.

There are lots of eyes on this, and even though this looks like a you know kind of three-year strategy, we are accelerating that.

We have been working um repeatedly over the last several months to make sure that we have the right level of collaboration for managing this fund.

All right, so for some of the immediate kind of cost reductions, which we are already starting to work on for FY26, the priorities that came from the plan, one uh well, two of them have to do with best practices.

So making sure that we are verifying plan participation, so doing a dependent verification audit, do we have the right dependents in traditional plans dependents, and that includes both children and you know spouses, often are very high, high cost drivers.

Um, and you know, at the end of the day, we want to make sure that we have eligible members only participating in our plans.

This is a very big city, and you know, we have um you know over 11,000 members on our plan, but making sure that we have best practices around verifying dependents and verifying them consistently over the course of participation.

Uh, and then also reviewing all of our direct contracts.

So anything that we have that is you know, hitting our plan, evaluating the return on investment for those contracts, and if there are any opportunities for consolidating or evaluating how those services are being delivered.

And then increasing kind of what our model looks like for GLP1s, is really out of this list, although all of these are important.

Uh the GLP one member share is the most important from a cost perspective, and I'll share more about that.

Alright, so the city currently covers, and I'm I want to say this and I'll repeat myself again because it's really important.

Um so GLP ones, again, when they were first introduced to the market, they really were for diabetic type conditions, is we're looking at comorbidities, and the it really is a balance, right?

Any type of prescription that you have, there are certain risk or benefit.

And so the way GLP ones were initially introduced is you know, someone has you know one or more comorbidities, and kind of the risk of taking this type of medication, you know, balanced or outweighed some of the potential risk of the can of the actual disease or condition.

Um GLP ones are um considered to be lifetime medications, and that means that you know, once you start them to continue to see the benefit, you continue on those for the foreseeable future.

From a fun management and just kind of overall perspective as an employer and providing health benefits, most of our medications, let me not say most, all of our medications are tied to a condition, and that means if you know, I'm in the hospital, I'm receiving care, I can look at other similarly situated, you know, patients, historical information to see how long I may be expected to receive this type of treatment depending on my diagnoses.

And again, we only receive aggregate data, but you know, are able to kind of project out cost for uh certain conditions.

Um, but with GLP ones, and I'm specifically talking about GLP ones for cosmetic use.

Um, so we have several types of prescriptions that are purely cosmetic, meaning that I'm not diabetic, I don't have a comorbidity, I'm accessing this drug because I'm, you know, just want to lose weight faster.

Um, so it's very member driven, it's not condition driven, and so I can you know look at our plan and say we have you know, maybe 500 members that have cancer, we have you know 200 that have this condition, but the the risk with GLP ones is since there's no real medical condition, you never know how many people will access that medication, and that means that it's very difficult to project the current and long-term cost.

Um, only one benchmark city.

Um, so we had our brokers also take a look both for size and you know, larger cities that we may be competing with for talent or just you know, use as kind of a ruler, only one benchmark city uh offers GLP one coverage for cosmetic care, uh, and that is only through a controlled program.

So right now the city of Fort Worth is you know, we don't have parameters around this drug category, which is what's driving a lot of the cost.

Um, and so our pharmacy costs are rising sharply, much faster than uh what was initially projected.

So the fact that we have kind of you know very little um barriers around this category, um the cost is uh exponentially grown.

Um and then that coupled with kind of underfunding already on the plan and not having a reserve uh has put us in the position that we're in right now.

All right, just to give you a little more context on the impact of this category of uh pharmacy, so for just a six-month period, um GLP ones uh represented about 40% of our total pharmacy costs, and this is for all GLP ones, so that those for diabetes as well, uh, and that was uh over seven million dollars just for a six-month period.

Uh well, Govey and Zetbound uh are written for purely weight loss, and out of that 7 million, so out of in a six month period, that seven million dollars represents all types of GLP ones, whether you have you know just a desire to lose weight or whether you have diabetes or other comorbidities.

So out of that seven million, um, about five million of that was just for cosmetic GLP ones.

So we, you know, although we're offering this to employees if they have you know certain conditions, the majority of the use on the plan is purely cosmetic.

And then Zet bound um as just as another example in the same six-month period, it um rose over two thousand percent in utilization.

And so, you know, when we're trying to level set and look at projections, uh it becomes very difficult to provide a realistic view with you know accelerated growth in that way.

All right, another concern and and you know, just kind of um data point is that for the entirety of the time that GLP ones have been on the market, um, they have been in an injectable form, right?

So, you know, you're giving yourself periodic shots, uh, and the numbers that we will talk about today, you know, which is roughly a million dollars a month that are going towards this category that has all been for the injectable form of this medication.

But as of this month, um there is now a pill option, but the the concern with the pill option one is that the our cost, the cost to our plan is going to be roughly the same, but the expectation is that you know, if for all of this time, I may have thought I don't want to give myself a shot um, you know, in this category, but taking it by mouth makes it a lot more accessible, and so we expect that those costs are going to continue to rise, but even faster than they have been over this um over the review period, all right.

So to exponite cost containment, one of the um next steps and really um you know immediate interventions that we're presenting uh is moving GLP ones and again, just the cosmetic option for GLP ones, moving that to a hundred percent member cost share, meaning that the city will contribute for uh GLP ones that have a comorbidity, you have diabetes or you know, a diagnosis that would qualify that it still stays the same.

But if you're on GLP ones and it's purely cosmetic, that is a hundred percent cost to um to those members.

And so the you know, although it you know sounds um aggressive, it again is representing in some cases over a million dollars per month to the plan, and that is prior to the pill form being available.

Um, and the difference now is that there are plenty, there are several direct to consumer options.

Like you see the commercials, there are affordable options for accessing this drug that uh have has not existed uh in prior years, and then um we also plan to have a 90-day notice to members, that way they have an opportunity to um you know start to find another option uh and providing recommendations for what those direct to consumer choices uh actually look like.

Now the city does already offer at no cost um nutrition and weight management and fitness programs, and so making sure that employees know that there are other routes to take that are not just GLP 1 focused, but I know if giving you a lot of information, I'll pause to see if there are any questions about what that recommendation looks like so far.

Questions?

Staff?

Yes, Councilman Flores?

Um, I just want to make sure that I have this uh correct in my head.

Um focused on GLPs, right?

That medication and how associated costs increases with that or having this impact on the group health, right?

Um, is that all there is to it contributing these increases?

No, it's yeah, so there it is not for the most part that it for by far the most part, absolutely.

So then um you have any idea what rate of increase, say over the past few years uh there has been to you know employee health care costs?

Um we can definitely take that as a takeaway, yes.

Um probably kind of under the same, you know, uh consideration on average.

Is there is there a dollar amount that that you can tell us on average that employees in this uh you know group health fund have put you know spanned out of pocket?

Um yes, out of pocket, yes, we'll be able to provide that information.

I'm looking at the brokers behind me, but yes, we'll take that as a some quantitative feeling.

Absolutely.

All right, thank you.

Yeah, can you so can you give me the definition of exactly what it like what's that breaking point where it's considered medically necessary versus cosmetic?

And so the it is if they have a a comorbidity that would and again it's the balance of is this lifetime medication um the risk associated with this lifetime medication, is it balanced or less than the risk of the disease or condition that you have?

And so typically it is that they have another comorbidity, they you know have have diabetes, they're also overweight, they may have you know something else that's contributing.

So I guess my question is if I wanted to go get excuse me, set bound um today, and I um we could all I don't know a woman that doesn't want to lose five to ten pounds, right?

So I go in and I say I want to lose five to ten pounds, and I don't have high blood pressure, I don't have high cholesterol, my A1C is fine, that's considered cosmetic.

Yes.

And Z-bound and Wagovy, it's all the same medication.

So Ozempic is a good one to use in it as an example.

Typically it is for somebody that has you know diabetes or something similar, whereas that ban ZEP bound and wagovi are purely weight loss.

Okay, and so Ozimbic would still be available to folks who were let's say they're the BMI is they're in the obese category, but they don't have diabetes or high blood pressure, they would still be eligible because obesity would be considered one of the comorbidities.

No, the recommendation is that we keep the category that focuses just on diabetes, but for all of the comorbidities and purely weight loss, it would be a hundred percent member cost year.

And it's a specific reason for that.

Sorry.

So if someone's overweight, yeah, and they also have high blood pressure, they would not be eligible for this drug that we know would treat both the obesity and the high blood pressure.

Is that what I'm hearing?

They would be able to access the drug on our plan, but they would have to pay a hundred percent of the cost, or they would be able to go to a direct to consumer option and pay that way.

So saying that they I let's not say that they can access that, because sure they can access pretty much anything if they want if they can get a doctor to prescribe it, but if we're not covering for it, covering for what's an expensive drug, that limits the access to them.

And so part of what makes it I I do think we need to make some changes to the system.

But part of what makes these drugs so revolutionary is that they also help treat a lot of those comorbidities, the high blood pressure, the borderline diabetes, those um long-term illnesses that have long-term effects on our health plan.

And so if we have a healthier uh working, if we have uh healthier people on that plan, in theory, that comes down.

So I'm absolutely for if it's purely cosmetic, if someone's just trying to, you know, lose some weight, but if we have obesity and a comorbidity, shouldn't we be looking at ways to support them?

And if we have a a drug that we know treats that, why would we take access away from them?

And it's not fair to say that they have access if we're not covering it.

They don't have access, they have the ability to get that prescription.

Okay.

And to Councilmember Beck's point, I think you probably do have this data, Kristen, and working with Hub, but to break down for council how large of a category and how many employees to Elizabeth's point that is impacting that do have serious health issues that can be helped by GLPs.

So if it's 300, is it a thousand?

And let us evaluate that because you're not gonna get any any negative reaction of we have to stabilize the fund, that has to be a priority.

But to Elizabeth's point to have a healthier workforce and how that overall impacts um costs long term, I think is an important consideration for the council to consider.

I also wanna put this in terms of women's health.

GLP ones have been revolutionary in helping uh women achieve health goals.

A lot of times there are hormonal or um endocrine issues that you women uniquely have that cause them to have uh to be overweight or to have these other comorbidities that aren't necessarily diabetes, say maybe it's pre-diabetes and we're taking this drug away from them.

And so what we're doing is we're the the long-term effects of of women's health that studies have shown that small doses of GLP ones have big impacts on how are we negatively impacting the um the the women here on this plan.

I'd like some more information on that as well.

Council member Hill and then count and then Jay, go ahead.

Thank you, Kristen.

I want to go back and talk about the administration of the plan.

You said a blue cross blue shield as the administrator.

Yes, okay, and what is our contract period?

Um we just switched to Blue Cross, was it just 2025?

Last year.

Last year, last year, okay.

And then is it an annual contract or what is the term for that?

It's a multi-year contract.

Okay, do you know how long?

Um not off the top of my head.

I don't normally we sign three to five year uh agreements, so it would be somewhere in that ballpark.

Okay, and there's a bid process that goes along with that.

Yes, a formal bid process.

Okay, so we we think it's three to five years, likely.

I think it's three years with a with an annual two even two more years that you can.

Okay, I think it'd be helpful for council to see how much that contract is, too.

What we've paid in the past, okay.

Thank you, thank you.

I just wanted to mention on the GLP ones.

I think the comorbidity piece is something the doctor decides, right?

And so I think Ozempic is the one that's used for comorbidity issues, so like diabetics or diabetes is one of those items.

The other two, which we've seen the big growth is only for weight loss.

And so we can go back and look if there's other comorbidity issues that are medically decided by the doctor.

Um because what I want to avoid the staff and non-medical folks making decisions on what should be covered and not covered.

And so I think we want to make sure that that it's on on that side of the ledger that those decisions are made.

And Kristen mentioned there's other options.

So currently in the city's plan, if on these on this program, the city gets a discount, but the discount drops it to fourteen hundred dollars a month.

So the city's direct to consumer $250.

Right, and the city is paying $1,400.

If we didn't have that discount, it would be $1,800 or something like that.

So we get the $1,400 a month.

If you if you would for this purpose, would say if you're an employee and you still want to do the weight loss, you can go outside of the city's program and get it through a variety of different options for $200 or $150.

If we do that, is there some sort of compensation for the city employees that are are seeking that route?

Well what we're suggesting is if for weight loss only, no, that's but they have that option.

If it's for weight loss and it's not for a medically medical reason, then they have that we would help them go find those options where they can get it for a lot less than the city is can even get to.

But I want to go back to your it's the side of the ledger that it should be on.

And this is where I'm getting very uncomfortable with this kind of like wholesale decision that it seems like we're making if someone's four hundred pounds and say they've managed to become four hundred pounds without being have high blood pressure or high cholesterol, right?

Otherwise they're healthy.

I think we can all agree that they probably could benefit health-wise, and it would be a long-term benefit to our plan if they lost weight.

And so that should be a decision to your point that the doctor makes, and maybe that is Wagovi instead of Ozempic, but we know the the likelihood of not having a knee replacement or long-term high blood pressure medication or a stroke or heart attack are there.

Um, but again, I want to put it on the medical side of the ledger, not on us deciding those things because you can come up with all sorts of examples of where it might work and might not work, but system wide we have to be able to have some rules to follow.

That's all I'm that's all I'm getting at.

The the example you gave, for instance, if they if the other option is the city now says we're gonna have a co-payment, right?

Because that's one of the areas where there's only one other city, and I think they're doing the same thing that's paying a hundred percent of the cost.

And so if it was a kind of a co-payment type piece and it was divided, and you had a 25% to 75%, for instance, uh it would be higher than the direct the patient options that are currently out there, so uh we've looked at they've looked at all sorts of options, and so at the end of the day we have to stabilize this, and we're trying to we're trying to figure out how we reduce the cost on on the health plan.

It's part of the overall forty-nine point five million dollar deficit.

So Kristen, is Osempic only uh prescribed for uh diabetes, but is it forever prescribed for like people that uh councilwoman beck reference it have high blood pressure and maybe overweight?

Ozempic was initially introduced for diabetes.

I know it is written for other categories as well.

There's a reason for the you know different nomenclature for basically the same drug, and so again our focus right now is on Zapbound and Wagovi, which are written in that way because they are identified as purely weight loss.

And I get that you had mentioned I was moving along with you until you said we were only going to approve those or OZIP for diabetes, and so I think I'd be more comfortable if we were saying doing away with Wagovi and Zet BAM, but keeping Ozempic um for not only diabetes but any other comorbidity.

Well, and I think it's the doctor saying that there's a comorbility.

Okay, because they can do OZIP for weight loss.

We don't want to cover that either.

But there has to be a there has to be a trigger for Blue Cross Blue Shield or whoever's you know the administrator to be able to say that's covered or it's not covered, and so that's what we're trying to get at.

Okay.

Councilman.

Just to clarify, so you all will clarify that and bring that back to us.

Make sure we understand okay, the delineation.

Thank you.

Did you?

I'm sorry, Jay.

Did you say uh how much did you say we're paying per month for Wogovi?

About a million dollars a month?

Well, I mean for one person, that would say.

What's that?

Oh, for one person.

Um I don't want to yell at a number, but on average about a thousand to fifteen hundred is pretty typical.

I guess that'd be my other question too.

Is like, why aren't we able to take advantage of the economies of scale with so many people being on it?

If an individual can go to you know hymns or a row or one of the other places and it's a hundred and fifty bucks, two hundred dollars a month.

We're part of a broader system prescription program that has negotiated.

So, hey, if you go get it on your own, we will cut you back a 200 rebate and set up the city a ton of money.

I have to undo the whole the whole program.

Right.

And then I mean I don't want to be the person that talks about you know maintaining self-control too, but I think that's a part of the talk we really need to be having as well because I love me, king-sized Reese's in a regular coke from time to time too.

But you know, if it's getting the point where it's costing the city a lot of money, you know, if we go down to the uh little snack shop downstairs and somebody's like, I'm on my GLP ones costing the you know the city this much money, and while they're also not doing anything to really help themselves, I think we need to have a have a tough conversation about that too.

Yeah, I like the whole rebate thing.

That's makes sense to me.

So it sounds like Kristen I know you're not done with presentation, still have more slides.

No, uh to get through, you don't know funding model.

Yeah, you do, okay.

Um, come back to us on this particular topic.

I think range of pricing is important.

Impact individual employees, how many employees are really talking?

I think that may help give clarity to the council.

Um I think I've gotten more confused as we've talked through this today, and um there is a there's a lot of there's so much expanded research around GLPs right now that I just want us to be mindful of.

So and then to to to your point, Jay, on the pharmacy benefit side, I'm not trying to blow things up, but if this to your point, if we're paying a thousand fifteen hundred dollars a month with our pharmacy benefit plan, it just is what it is, we could do better than that, and so we need to be mindful of that as well.

So I have several um responses.

Um just were you about to say something?

I was just gonna add to Mayor, and I I think this this slide particularly says similar organizations, so the other organization that you're comparing uh this organization to, if you can come back and bring that as well.

And I can tell you that it's only the city of Dallas that currently offers GLP ones, but it's through a control program.

Um but we have access not just to kind of benchmarking other cities, but you know, through our brokers, we can look at other organizations of similar participant size for our benchmarking.

But I I would like to just add a couple of follow-up responses just for the information that I do have today of some of the comments.

Um, you know, whenever we see a new pharmacy category being introduced like GLP ones, you'll see, you know, very rapidly a lot of additional use cases for them.

And so, you know, it started with a with diabetes, it's you know, evolved into many other things, and it's you know, kind of a part of how uh these pharmacy changes happen.

And I'm just saying this is we're looking at other comorbidities.

If we, you know, kind of allow it for any comorbidity that's out there, you can expect that to continue to increase.

Um, and then I also wanted to share just how many participants um we have, uh, and it really is a small number.

So we have you know almost 12,000 members on our plan.

This includes all of our employees and dependents.

Uh so in 2025, we had a total of, and again, this is purely for weight loss, just for Zetbound and Wagove.

Um, we had about 600 participants for the cost that you're seeing.

Um now we have uh as of April 2026, we have about 800 um participants, but for those 800 participants, you're talking about you know more than 40 percent of all every other type of pharma uh of prescription that's written for every other kind of condition for all of our members, um, just you know, eight hundred people are almost fifty percent of your pharmacy cost, and so that's you know, a significant amount of of money.

So I'm just kind of you know, putting those um tidbits out there is as you're considering, but we you know have takeaways there too.

Thank you, Kristen.

Okay, want to keep rolling?

I think we gotta start another meeting of five.

Sure, I will speed it up.

So this is just a summary of uh some of the cost savings.

So um we anticipate, and this was prior to the pill form being available.

About 10 million dollar cost savings with uh the GLP one weight loss category.

Uh and then you know, just in total, um, between 13 to 14 million with some of the other best practice uh items that we're planning to put in place.

Um, and then I'll I'll fast track a little bit um to the funding model.

So uh with everything that we've talked about, so right sizing the contributions to make sure it's really reflective of the claims expense um and all of the other pillars that I shared, um, our FY27 estimate is about a hundred and eight million towards um the fund, uh, and we are um proposing an 83 uh 17% split with employees.

Um and the uh amount to employees um will remain flat, and that is you know, because we already know that employees are paying more out of pocket than benchmark.

Um, so as we work through our strategic plan, um kind of right sizing what that looks like.

Um this is kind of the full funding from an employer perspective, so eighty-nine point four million to uh the fund um for claims and um kind of the pillars and activity, about 5.5 million for overhead, that's all of the staffing and additional programs, and then um you know, working towards building up our reserve requirement, so utilizing interest earnings both to address this year's shortfall because we are still uh expected to be in a deficit for ending this fiscal year, as well as starting to contribute to uh FY27.

Can I um Chris, I know you're having to get through this pretty quickly, but can you explain so that I know that I understand orthopedic redirection and MSK redirection?

I think we talked about that in a previous presentation, but I just want to make sure.

Sure.

And I'll take that as a follow-up, but MSK is one of our highest cost drivers, so you know, lots of shoulders and hips and knee replacements, and so being able to have either through direct uh contracting or partnership, a way one to reduce the amount of surgeries that we're having through earlier intervention, but then having some uh competitive uh cost modeling.

If somebody does need to have a knee replacement, for example, kind of limiting where they get that uh surgery from, where we have better negotiated rates.

It doesn't mean that they can't access it in other areas, but having a pathway that helps with some of the cost reduction there, and with regards to those redirections, I know that we had already asked the question about the GOP ones and comparative studies.

Can you in the future share also how that looks as comparison?

Like what other municipalities are doing?

Absolutely that area.

Yep, yes.

All right.

Okay, so I'll I'll just pause there.

The last slide just you know said that we are taking a you know very collaborative multi-year approach to this.

Uh it's a big ship to turn around, so we know it's you know it's going to take a while, but um, hoping that some of the immediate um interventions we've identified will help to move us in that direction.

And Kristen went through that really quickly, but you saw the reduction of about 14 million dollars without those changes instead of a 20 point something uh increase from one year to the next for this coming year, it would be 30 nearly 35 million dollars.

So um so yeah, it's currently that's baked in as part of that the uh 49.5 million, part of that overall increase at the higher number.

So we were able to move forward with a semblance of this of these recommendations, we'll be able to be cutting them to that overall increase.

Yes, all the numbers here represent um cost reduction um efforts.

And when the I'm sorry, um I've noticed that it said about a nominal increase to uh retirees, not not active employees.

You say nominal, but it's nominal.

So with the cost, so these um cost reduction efforts, they impact both employees and retirees.

And so, you know, same as here with the numbers baked in.

I think the difference in the funding for this year versus next was about 200,000.

You know, and so the the retirees, you know, will not see basically the same as the employees are not going to see an increase into the amounts that they're paying.

Thank you.

Any other questions for Kristen?

Thank you very much.

We appreciate you.

Okay.

Any future agenda item requests beyond what we'd ask Kristen for on this presentation?

No.

Yes, Carlos?

Um maybe it's not necessary to do an IR on it.

I think there is a need to revisit the form base code.

The zoning ordinance, sorry, have that on the mind a lot lately.

Um to revisit the zoning ordinance to look at um distance requirements between permanent and temporary uh concrete national.

Carlos, we're in a budget work session, friend.

You didn't want to forget it.

I'm teasing you.

Okay, got it.

Council Rebecca.

When um when you bring out thank you for I know we were asking you for a ton of information.

Um, but if it's possible, um, I'd like to see if we can get a comparison of uh real data driven as we've introduced these GLP ones.

Have we seen a reduction in some of those other um health, you know, cardiac instances, um, diagnosis of type two diabetes, you know, so that we can kind of get a better idea too if the um juice is worth the squeeze.

Councilman Martinez.

I just want to make a comment, and um just I've noticed that when folks or when women mostly are on OZEMPEC, they they achieve a certain weight, and you know, because it is cosmetic, and then they get off of it and for a little bit, but then they go back.

So it's just gonna be a reoccurring thing that continues to happen.

Um, so I'm really glad that we're looking at that, and then I really hope that this um that that medication is available, but after they complete a certain wellness program that we are looking at creating.

Anyone else?

Meeting adjourned.

See you all in five minutes.

Um, I don't know what we're