In 2014, Mayor Bill de Blasio and Labor Relations Commissioner Bob Linn committed to a respectful and collaborative labor management process, changing the dialogue
As a result, in collective bargaining, labor and management agreed to address the issue of escalating health care costs by working together to generate cumulative healthcare savings of at least $3.4 billion over the four fiscal years 2015 through 2018, with at least $400 million for fiscal year 2015, $700 million for fiscal year 2016, $1 billion for fiscal year 2017 and $1.3 billion for fiscal year 2018.
The agreement with the Municipal Labor Committee also stipulated that if the savings exceed the $3.4 billion minimum, the first $365 million of excess savings will go back to the workforce in a bonus payment. If there are additional savings beyond that, the excess will be split between the City and the workforce. This innovative gain-sharing approach aligned labor and management’s motivation to work together around the common objective of identifying health care savings.
This plan did not specify exactly how the health care savings were to be accomplished, only that it would be done by an ongoing collaborative effort between the City and its municipal unions, aimed at bending the health care cost curve for NYC health programs. For FY 2015, the $400 million savings goal was met with an eight point program, and we are now well on our way to meeting the $700 million goal for FY 2016.
The plan is being accomplished using the Institute for Healthcare Improvement’s “Triple Aim” initiative as its guidepost” –improving the population health, improving the patient experience of care (including quality and satisfaction) and reducing the per capita cost of care.
For detailed information on how the first year savings of $400 million were achieved, please use the links below.