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ITEM #: 3.
DATE: 12/16/2024
AI #:2390

CITY COUNCIL ACTION REPORT

SUBJECT:

AUTHORIZATION OF EXPENDITURE OF FUNDS WITHIN THE SELF-INSURED HEALTHCARE TRUST FUND

STAFF PRESENTER(S):

Lyman Locket, Human Resources Director, Jared Askelson, Finance Director

SUMMARY

Authorize the expenditure of funds within the Self-Insured Healthcare Trust up to $1,200,000 for the purposes of operating the Goodyear Wellness Center.

STRATEGIC PLAN ALIGNMENT

RECOMMENDATION

Authorize the expenditure of funds within the Self-Insured Healthcare Trust up to $1,200,000 for the purposes of operating the Goodyear Wellness Center. (Lyman Locket, Human Resources Director)

FISCAL IMPACT

The annual anticipated cost associated with the Goodyear Wellness Center is $1.2 million, including supplies provided onsite. The cost is budgeted within the Self-Insured Healthcare Trust Fund. The fund balance for the Trust exceeded the reserve requirement by $3.0 million at the end of fiscal year 2024. That amount will be used to cushion potential future rate increases. The use of the Goodyear Wellness Center is more cost-effective than other alternatives, such as urgent care or emergency room visits.

BACKGROUND AND PREVIOUS ACTIONS

Employers are increasingly turning to onsite and near-site employee clinics as a strategy to manage healthcare costs, boost productivity, and enhance employee health and wellbeing. Our city was ahead of the curve with the implementation of the Goodyear Wellness Center.

In 2018, we took steps to further maximize the cost containment opportunities by self-insuring our healthcare plans. As a self-insured healthcare entity we are positioned to reap the full benefit of cost savings derived from the operation of an onsite clinic. These dollars flow into the Healthcare Trust and are partially responsible for helping build the fund balance of $8.2M which exceeds our reserve requirements. Impact of the Wellness Center is also evidenced by our compounded growth rate of only 5.2% in healthcare plan expenditures over the last 4 years. This compares with the compounded growth rate of 24.8% for US healthcare during the same period. Additionally, the Wellness Center has generated a notable ROI, with a return of 1.5 times for every dollar invested from September 2023 to August 2024.

We have strategically implemented an advanced primary care model at the Wellness Center, aiming to provide comprehensive and integrated primary care services that improve patient outcomes, enhance patient experience, and reduce overall healthcare costs. On average the Wellness Center treats just under 300 patients per month. The patient population including spouses and dependents has grown by 14.2% over the past 2 years. Currently, the employee participation rate at the Wellness Center is 71%.

Our key performance indicators (KPIs) reflect high patient satisfaction levels and opportunities for further cost savings by adding capacity. Currently, our utilization rate stands at 102%, with a desired utilization rate of 85%. Employee satisfaction scores are at 4.8 out of 5, and our net promoter score is 94.

Per city of Goodyear Resolution 08-1255, all expenditures of budgeted funds in excess of $500,000 must obtain Council approval. This request for funding authorization pertains to the new contractual rates from an RFP process completed in November 2024, which includes expanding service hours at the Goodyear Wellness Center. The increased service hours will accommodate our growing population and provide alternative options to meet our workforce's needs.

STAFF ANALYSIS

With healthcare costs continuing to rise, the complexity of accessing healthcare continuing to present challenges that impact health outcomes, we recommend maintaining a proactive cost-conscious strategy to provide cost effective healthcare benefits for our employees. We recommend the authorization of expenditures for the Goodyear Wellness Center.