Healthcare Savings

Healthcare Savings Update


In 2014, Mayor Bill de Blasio and Labor Relations Commissioner Bob Linn committed to a respectful and collaborative labor management process, changing the dialogue

Health Savings Trajectory
with the municipal unions from one of confrontation and deadlock to collaboration and problem solving.

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.

Shared Savings Approach to 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 Fiscal Year 2015 and Fiscal Year 2016, the $400 million and $700 million savings goals were met, and we are confident we will be meeting the $1 billion savings goal for FY 2017 based on the significant plan design changes implemented on July 1, 2017.
 
 
The savings initiative 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 savings are being achieved, please use the links below.