WILKES-BARRE – The sooner the better for the city, if it wants to see the health care cost savings proposed by a consultant.
Council members on Thursday night heard from Robert Fountain, who said his company, IDM Consulting Services, could save $321,216 in health care costs for employees not yet eligible for Medicare.
If the city makes a decision by early next month, he said, the process could begin by March 1 to coincide with the rates for Blue Cross. However, that depends, upon not only the cooperation of city, but also its employees and the health insurance provider.
Fountain was not the first one to pitch savings, said Drew McLaughlin, the city's administrative coordinator. Certainly we'll give this its due diligence, he said.
But, he said, the city will not enter into the exclusive agreement sought by Fountain, who wanted the city officials to sign a non-compete agreement before he presented all the specifics of his plan.
On Friday, Fountain, who has an insurance background, went into more detail about how his plan works, but kept specifics to a minimum in order to protect his research. I'm using alternate plans that Blue Cross already has and fashioning them in a way that I'm generating discounts, Fountain said.
The discounts are generated by plans that are less expensive, but they have some liability that the client has to pay, he said.
On average he saves clients, including other municipalities, 15 to 16 percent a year, he said. They pay a fee for his services, he said. He declined to identify them, citing client confidentiality.
Fountain estimated saving approximately $700,000 on the slightly more than $4 million premium the city pays. Part of the savings would pay for the liability and the rest would go the city, he explained.
The $300,000 is free and clear savings they don't have to stockpile for something else, he said.
It's the hope of the city resident and taxpayer that the savings would be used to reinstate laid- off employees, such as the 11 firefighters let go in December to help make up for an estimated $2 million revenue shortfall.
They were not included in the $44.9 million budget approved by council for this year, even though it included a 25-mill property tax increase.
Mayor Tom Leighton originally proposed a 30-mill increase and sought concessions from the mainly unionized workforce, asking employees to forgo an annual 3 percent raise or face job cuts.
Fountain said the city might pay more attention to him due to its financial problems. I've been trying for eight to 10 years, he said. They've listened to me but never believed that this could be done and just brushed it aside.