least appropriate transitional care for these people. And this is five and a half billion that you may see in a CON sooner rather than later that is not in any of our forecasts or our capital budget. And there is clearly called out in the reports from the agency of human services and specifically that the UVM Medical Center will be called upon to increase inpatient capacity. And when you look at the revenue and expenses associated with our two inpatient units, they lose to the tune of four and a half billion dollars a year. It's one of those services that is subsidized. So being called upon to do more of that is gonna have an impact. We also have things that are on budgeted revenue cuts. The 340B program is under fire in the auto reductions. Dish, the Medicare reimbursements and the bad debt charity care is going up. I would say that the first bullet, the medical center's risk on that 20% of the revenue that's flowing through one care and all care model is close to $10 million, which if you go back a few slides, the margin on the increase that patient service revenue was less than that. It's about eight million. So just to put this in context, something that I'm personally, professionally concerned about and that's that I've sat before you and told you that and committed to you and folks in our community that we will bring on the Miller building in Burlington, the 16 million in added costs, and we will not push that back to the ratepayers to cover. And the same thing with Epic. We're not gonna push that back to the ratepayers to cover these infrastructure necessities. If we over correct, I'm not sure that I can keep those commitments without deteriorating the financial strength of the academic medical center for month, which is obviously an asset that is very important for all of us to be strong. What we're proposing for the medical center, again for central month and a quarter that we will be at or under through medical inflation, we're continuing to do what that national slide did, which is take the increased utilization and use that to push rates down and we are gonna propose in our 19 budget that we do not increase commercial rates in Vermont. And you have heard me say that we need to be very transparent on how these very low, below in faith inflation commercial rate increases translate over to what the commercial premiums are. That is not an easy story to tell, but there has to be transparency around how that happens. And I'll put it right out there. There's been some discussion about why not make a mid-18 correction. I would caution that we have still lots of moving parts, things that are gonna impact revenues that happened after the 18 budget was put to bed. And if you ordered that to happen, I would have difficulty committing to you that we could get it done. It is, and we've had this conversation, it's like turning the Queen Mary on a dime. And it would be difficult, we might get it in towards the end of this fiscal year. It's difficult for me to understand how a mid-course correction gets back to the rate payers and not the bottom line of the commercial payers. Maybe I'm just not understanding it, but our firm recommendation. So can we talk about that? Can we talk about that? Sure. Because I'm not sure why it would have to be at the end of the year if it were to do something. Seems like it would take about a month, maybe five weeks. And wouldn't it be better to do a correction now, gauge the five months remaining in the year, and then know where we should be solidly on firm ground going forward for next years budget cycle? I'll let Todd Keating speak to that, but that's way under the time that it actually takes on a year over year basis to get the new rates into the system and actually have those starting to flow through. We start that process months ahead of time. We can't, I'm a gynecologist and not a revenue cycle person, but that is in all order to do that in four or five weeks. Yeah, so to your point, Chair McMullan, it does take on average for the payers anywhere from 30 to 60 days to make that happen. And it would have to be across many payers, not just a couple of payers. So that would even drag the timeline out longer because our contracts and fee schedules are different across the board. So you have to do it on an air-by-air basis. And that's why we drag it out. So if we do it for Blue Cross and MVP and United Sigma in Vermont, we have to do it for all the other payers that the Medical Center deals with as well. And that's why it's so time consuming. What would some of those other payers be? So we have Excelsis payers from New York. So you have the New York payers that come and do business with us. You have some other national payers that do business with us. I would say that the list is between 40 and 50 commercial payers that we do business with and would be more than happy to get the list for you and provide that to you. But that's why it takes so long. It's not necessarily just a handful of payers. It's literally 40 to 50 different payers that we have contracts with. Thank you, Tony. And I guess, and this is, please, this isn't an aggressive question. This is just a rhetorical question for all of us to consider. If we do that, back to what I said before, we need to fully understand how that goes back and benefits the rate payers and doesn't just go directly to the bottom line of the commercial pay. So on that item, John, if it was 17.2 million, I believe it was the number that you said in commercial payers. The payers have four expenses for taking care of those patients. Okay. But they've had to pay you more than what they had projected paying you based on the budget orders last year. Their rates for this year were based on that. So this would somewhat lower the hit that they took so that they're not looking for an increase in next year's rates to bring back in line, whatever measure of their risk-based capital or capital strengths are. Basically, they're solvency questions. So let's be careful about that because if you look system-wide and those commercial payers are statewide, they're not just in Northwest and it might have been 17 million over budget, not net of expenses at the medical center, but statewide it was 3.1 million dollars. So with all of those ins and outs of statewide contracts, again, I would really like to understand how coming in within $3 million statewide would somehow drive an incremental bump up in commercial rates. We don't do a statewide budget guidance. We do it hospital by hospital. We have each hospital come in and then we make the decisions for each hospital separate. So I understand your point. I think it's a good point but I also think that there would be a way and I'm not saying that we would want to do it but I just think that there would be a way that Vermonters could benefit from that. Point taken, I think we do want to go and make sure that we're looking at actuals and not the delta between actual budget and that's a point taken. So I mean, I think what could be helpful to understand that relationship is that if you go back to slide 15 and this is the actual, two actual year over year growth for both the medical center, the national trend and the Vermont health system to go into each one of those years and put what the Vermont commercial increases were. Because to truly understand that relationship you need to look at it all together because what we're struggling with is the commercial rate increases that we are hearing are significantly higher than the actual hospital trend that we are seeing, whether it's at the individual hospital level or at the statewide level. And so that's the connection that we are having a challenge making. So I'm not, I don't want to add insurers but I just want to say that it's not just hospitals that make up their rates. So for example, we know that 3% of the rate increases last year were due to the institution of the Affordable Care Act tax on Blue Cross Blue Shield. We know that prescription drug use is up. And that's why I caution people from using just hospital growth rates and trying to compare that to per capita growth rates overall it just doesn't work. But aren't we essentially doing that here? We're saying that this savings in this bucket should have flowed right through without knowing what's happening on the other side. It's just the open state. And one practical thing as well, when we talked about the payers outside of Vermont, let's say United Sigma, Edna, et cetera. If we do a rate reduction to them, we'll just get a Christmas card for them saying thank you very much. They're not going to change any rates whatsoever because they're national organizations. So that money will never flow back to Vermonters. But it's probably a fairly small percentage of your overall commercial cost. It's smaller than Blue Cross Blue Shield is and such but it's not all that small when you aggregate all the outside payers. Could you speak a little bit more to why the rate, any rate reduction would have to flow across all of your air contracts as opposed to being targeted to Vermont insurers? What we do is for entities within Vermont, we use the guidance from the Remount Care Board for all payers because what we don't want to do is to start to create, let's say, lack of parity in payer rates, what have you, because if you start to do one at one rate and another at another rate, you start to unintentionally create, let's say, market advantages that you're not intending to create. So what we try to do is keep as much parity between the payers as possible so we don't run into that problem. Thank you. So one aspect is to keep the commercial rate low. The other is to, and Mr. Polito brought this up a week and a half ago, we need to do something with the fact that we've been sticking with budget to budget caps for eight years. And as we've stuck with that, there have been really dramatic shifts in where people live and aging. And we're at a point now where we need to account for what is actually happening. So we need to look at the rate piece. But if we stick with a budget to budget increase, I can virtually guarantee you that we are gonna, and don't take into account what actually is happening. This is gonna continue to overshoot. We would say that much like you did with one care and the CMS did with one care, that 2017 actuals are a very rational baseline to try to forward from. Again, that keeps us very consistent with the model that is in the all-payer waiver and where the actuaries determined what the 2018 spend for the attributed populations would be. That was trended off of 17 action. And if we do that and take into account the shifts in the population, the aging of the population, then we can focus through the all-payer model what the costs per population for attributed life really are and get down to the things that we really can control and that we should be buying. So just to summarize, for Porter and Senator Lamont, you would propose that their commercial rates top out a maximum medical inflation. And then for the Medical Center, we do a zero commercial rate adjustment in the budget and that we do a utilization adjustment based on 2017 actuals. And I think we have a couple of follow-ups, questions that were asked around the commercial that we can reconstruct and stratify some more and provide you more information to your staff. But happy to answer any other questions. So questions from the board? You be in the team, Tom? I'm Tom Houghton, the new person on the board. And it's nice to meet you. I want to start by just saying that one of the things that caught my eye in the way of going through my first rodeo year was that your prospective payments in 2017 were $18.5 million. And for the coming year, the year we're in now 2018, dropped $162 million. So that is a clear demonstration of commitment to the transformation that we're trying to implement here in Lamont. But my questions are, I'm going to try to bunch them quickly into three areas, trying to connect some dots that I up here haven't connected as well as I might and having to do with your presentation. I'm looking here at the information in the budget submission having to do with utilization. And when I first kind of looked at these numbers and heard the comment that utilization was driving the bus here, I looked at some of the year-over-year, these are actual or actual numbers of adjusted emissions down 2.5%. Acute emissions up 1.02%. Acute average length of stay up 2.7%. And so when you get down through all of those, all the rest of the categories that they have here, that's the kind of range of the activity until you get to physician office visits. And those are up 5.8%, 156,000 units up 5.87% and just plain visits up 7.47%. So my assumption was that I'm looking at this data, is this is where the utilization component of this discussion might be captured, but I'm not quite sure I see that here. I'm gonna keep looking to my left to make sure that I can answer your question appropriately. Those numbers that are in budget, again, were built off of the information that we had at the time and they tracked with what we trended forward with whatever the data were at the time. That's just, that's our budget process. And the columns I'm using are 2017 actual to 2016 actual. Oh, I'm sorry. Speak real loud. 2017 actual to 2016 actual. Yeah, I can see the column over here of the 2018 budget, which is what it is, but I'm, and I agree that I'm more comfortable with the actual comparison, the actual budget, the budget, the budget. So I guess my simple question here is, what is a position office visit, technically when it's in a budget document and what is a visit because those are the units that seem to be having growth rates that are extraordinary. So I would have to check from a technical system issue on the exact definition because I wouldn't wanna throw out something and have to retract it. So, let us get back to you on that one because that is directly a system hold number and there's many different ways to track visits, like there's many different ways to track access too. So, let me get back to you, but I, if say I understand your question, there was an increase, the trend from 15 to 16 to 17 was lower than the trend to 18. And you just wanna understand why. Thank you. And I would say that, and again, we'll get back to the details, but the physician visits can be driven by physician practices that over that time actually came from private practice into the medical group and the network and there was one orthopedic practice in Burlington that in that timeframe made a shift and that could be a significant volume. I'm not sure it would be 5%, but that's the one practice, but we'll break that down and get back to you. If I was out and sent out, I would give them a recommendation. Absolutely. And there was one technical issue in the submissions that I think RVUs was showing up under a different category and it might have been that physician visits, but let us work with your staff too. Okay. And we'll get you that. Thank you. Thank you. So now I'm just, I have some questions again. This is actual to actual having to do with the revenue side and the expense side. And I'm just looking at the date numbers that have moved relative to 2016. And those are, and I'm trying to again kind of connect them to how those, not these numbers and changes drive utilization or are related to utilization. So that the four or so big moving parts on the income side are bad debt. It's a relatively small number, an increase of 1.9 million, 17 over 16, but it's a percentage wise, it's a fairly big increase, 8.46%. Free care is up really big going from 13.4 million to 17.7, which is a 32% increase. Deductions from revenue, I truly don't know what those are, but it's a huge number here. It's a 74 million hour increase of 5.4% increase. And then other operating revenue, which is a 13.4 million hour increase or 15%. So overall, your total operating revenue was up 67.9 million, which is a 5.6% increase, but those four items were the big ones that drive the top line. And so I'm just trying to tie that, like bad debt, free care, et cetera, to utilization. So there's a variety of different things that those numbers, so let's start with the other income. As John had pointed out in the presentation, there is significant growth within the 340B pharmaceutical revenues over that period of time, and that is the major driver of the other revenue number. One of the things that we started to see, it started at CVMC and then it's worked its way through the other entities, is that there has been a higher utilization of bad debt and free care. People have been becoming uncovered when it comes to insurance, and that has started to grow significantly. And I'd have to look into what the deductions for revenue are, because those are usually contractuals, and that can be the byproduct of the payer mix itself and the utilization and acuity mix that we have. So I'd have to go through those different things, but those are the three major drivers for the deductions for revenue. And I would just add that I think it's important for everyone to understand that bad debt and free care isn't a payer. That's actually a net patient service, that's actually a net patient service revenue that is booked as net patient service revenue, but it's uncollected. So I think sometimes- In the P&L, that's what drives down, it's a big number that drives down in your, what's called gross, that you're starting point for patient care. And so if that number was smaller, you'd have more falling to the bottom line. If it was different, you'd have less falling to the bottom. Yeah, Becker's finance bulletin that comes out on a regular basis, I wanna say is about a month or two months ago indicated that nationally, bad debt free care increased from 2015 to 2016 by almost $30 billion. So a lot of people were foregoing their insurances. Does he sense here, given the example you've made like that, bad debt free care might be going in a couple of days? So I think the initial part was, and I kind of lived through this in a prior life in Massachusetts, when people are required to have insurance, they will start to when economic pressures are put upon them due to a cost-benefit analysis of, is it better to pay the penalty on my tax return or is it better for me to pay the premium? And what they've found is that the penalty on the tax returns is far less than the insurance costs themselves. So they go on insurance to save money on the premium and then take the risk on the tax returns. And there's also a trending forward of insurance products that have very high deductibles and coinsurance and frequently that's just not collectible. So the growth in those programs, along with people just foregoing insurance or what, at this point, are being cited as reasons for the growth in bad debt and charity care. I'm just going to the expense side for a moment. You, the three or four major drivers there are salaries and non-medical up to 8.3 percent, 32.5 and pretty bad if it's non-medical up 16.5 percent or 19 million dollars. Physicians, fee salary, comp and contracts, not a big number, but it's both 5.7 million dollars but it's 3.24 percent. And then there's this other operating expense which it looked like there were two major categories that netted out to this number. And one was other non-savory expenses down 9.7 and other services up 10.5 million. But then there's this, well, the big number is other services of 221 million, which seems like a lot of money in a kind of a land category. What is other services? I would have to look at that exact same file because there is a crosswalk from the individual hospitals, you know, their GL categories to the submissions under adaptive. So, you know, to make sure that we can respond correctly to the kind of we need to draw the, you know, correlation together. There's this category non-operated revenue which was positive to the bottom line of 10 million dollars. That's a 91% increase. But there was comprised of two components, just two things, a loss on an investment of 39.6 million and all other, a 60.8 million. So my question is what was the loss, which is a big number, and what is all other? At what time period is that? Pardon me? At what time period is that? 2017 or 2017? 2016. I have to go back and look, because we did extinguish some investments, but at the same time, we did a bunch of downs in the market performance as well. So let me get that as well. Just want to make sure that everything lines up. We'll get that to you. So that was 16 to 17? No, the 17s are in 2017. Yeah. So change is 20 to 16, 20 to 17. That's your answer to that. Thank you. Yes, we'll get that to you. Okay, yes. So looking at CVMC, clearly there seems to be an extensive issue there, which I don't think is new, but I recognize that you're working on it. My question, first question is, if you're reviewing productivity at each of the cost centers as you were describing and you're identifying low productivity areas, my follow-up question to that is, what do you do about it? Because I can see two pathways. One is to increase volume to try and spread the fixed costs and cover that revenue or cover those costs or alternatively to cut staff, cut materials costs. And I'm hoping that it's gonna be an expensive reduction pathway solution. Definitely. And if you, the story of central Vermont, this is one of some initial growth that there was build up to support that growth and trend it forward and flatten out. And so this is clearly not a situation where we would definitely chase after revenue. This is a system issue. To understand, based on rational comparators, productivity cost center by cost center, largely on the hospital and hospital outpatient side and develop a methodology for unit of service costs, which scarily does not exist, didn't exist before, but is in the process of being implemented. And then that allows you to control expense relative to benchmarks and build a credible budget. I would say, again, just in total transparency, that there actually is some capacity in the employee position productivity at central Vermont. So part of the access issue may well be to better utilize that position capacity. And so you may see some growth in the coming years from that, but it will be growth that the expenses on a per capita basis will be very well controlled. I know, we know the person that we put in to be the president of that organization very well and have total confidence that she's gonna get to a cost per unit of service that is gonna be best in class. Okay. And then my second question is, sort of goes back to the, you mentioned that you were gonna explain why UVM, CBNC and PNC were above utilization. And I fully appreciate the population change in Chittenden County and I fully appreciate that the UVM Medical Center would disproportionately be impacted by the aging of the population. I'm still confused about why CBNC and PNC, given the counties that they're in, are not seeing the population change specifically that Chittenden County is seeing. So what can explain why those two particular hospital service areas are seeing greater utilization than other community hospital areas that are experiencing the same kind of demographic changes? This may be uncomfortable for some, but I'm very transparent and I fully appreciate and we have external folks that had told us that they believe this as well, that there's component of branding. You put the University of Vermont on the mark to work and there's an appropriate expectation that you're gonna get academic healthcare close to home. And I think that there is definitely a bump up in people staying at home to get their services because of that. And the work has been really, really good work on particularly important, but both of those communities do very well recruiting professionals and particularly the work that Dr. Nipin and Dr. Wolfman have done to rebuild their primary care largely and also some financial services.  People are gonna be comfortable, which is a good thing. Thank you. I'd suggest at one other point. So although when you look at the demographic information of Washington County wasn't showing the same growth as Chittenden, et cetera. However, there is something that they share with what's going on within Chittenden and Addison. It actually is higher utilization of the Medicare patients. And Cheyenne had mentioned a couple of years ago that they had started to see it well in advance at the medical center. So for whatever reason, Washington County utilization by Medicare patients started in advance at the medical center has continued. So they are tend to see growth within that pair over the last three years. And again, that might be part of the same issue that people feel very comfortable staying at home with the system building that we've been working on. I mean, one of the things that I remember maybe from the budget or so ago was when there was increased utilization at CVMC, I remember one of the things you had said was in some sense the medical center was keeping people at CVMC rather than bringing them up to UVM to sort of push that volume back to their community. And so I was thinking, well, okay, maybe that's still happening now in the quarter at CVMC, but then you'd expect to see a net reduction to some degree up at the medical center, which of course you're not, which could be explained by demographic trends. I don't know, it's hard to piece all of that out. But also, I mean, another thing to be totally transparent about it, we're working really hard, and you saw one of those paragraphs to improve access. There's pent up demand for the services and what we're seeing right now is largely in the Medicare population. As we fix access, we're gonna continue to see particularly with the good work that I think Raelyn and others are doing on patient flow through the system. But again, we're not a private healthcare organization. Our entire mission is to take care of whoever comes to our doors. And I can assure you that nobody is out there trying to, you know, drum up business for all about access as part of quality. And one of the things I think this morning we talked about using wait times and getting more information from hospitals about wait times, but one of the ways in which we'll be able to measure this over time is wait loss and wait loss. That's why you do it. If wait times are coming down while utilization is going up to some degree, that's an access piece, right? So, yeah, where we are right now is we're increasing the number of unique patients for servicing, but we still have people upset with difficulty with access. John, on your slide, you're clearly asking for an adjustment of the NAICS. What would be the dollars out here without adjustment? Do you have any swag in there? I think you just look at some, also, you know, those percentages well that we saw earlier about the growth rate and, you know, potentially the 19 guidance. I mean, I would just take 17 actual and multiply it by that guidance and that's the difference in the number. It trended forward using the same methodology that one care used to develop an 18 target of the 17 actual for the attributed population. And I'll also put a plug in. I think that that is best done by actuaries. You've got good actuaries. We have access to actuaries as does one care. I mean, that's what they do. They look at actual use of population. They put in all of the demographic factors into their machine and they come out with incredibly accurate predictors of utilization. And I think that's the bedrock of the all payer models. So, just to- But during the envelope over, you know that you're just under $40 million excess in 2017. Is that close to the number that you're looking for for a replacement? I mean, you know, let me work with Andy and I think that we can get you a pretty exact number. Sure, worry. I just wanted to follow on that one. You know, I do think just looking at UBM, you know, the three year trend in 2015, you exceeded budget by $28 million, 2016 by $25 million, 2017 by $38 million.  And I would, I do believe that there probably should be some type of rebasing. When we look at the $38 million, what the letter that you guys submitted to us, you talked about kind of $21 million in headwinds for 2018.  So, how would we, you know, I could seek us considering doing a rebase, but you already kind of have an update on 18 that although you've got a higher utilization trend, you're expecting, you're expecting some things to bring that down. Some of them that are in the NPRs, not all of them. But, you know, how would we look at that piece as well? Because you were kind of already supporting it like 18. And Marie had said, I think what part does it mean by working with the NPRs. So, it's taking into account the current trend in which you identified within that base variance on an annual basis, and then taking these headwinds and doing it as an offset to it to figure out what the actual number needs to be. So, when we were talking about a 0% increase, we're talking about, you know, a number that's going to absorb medical inflation, it's going to absorb any cost shift for further reductions within Medicaid and others, such the Miller Building coming online, et cetera. It's a 340B reduction. So, it's a combination of that rate plus, you know, trying to figure out what that differential is and stuff. So, we think that, you know, that's kind of getting towards that, but not quite there yet. So, it might leave, you know, and that's why Mark's guessing it's a combination of adding those together to get the actual number. Do you have other questions from the board? Yeah, just to follow up on that comment there, kind of, you know, on the rate piece of it. Given that you were over, you know, 38,000, just looking at the UVM right now, there were efficiencies that were gained from that because you had built a budget assuming you were going to come in at a lower number and so there's a fixed variable piece. And, you know, I think that's where you're coming up with maybe the nine million dollars. But, you know, what would you say you've gained from the efficiencies of being over 38 million in the year? What would you say, the efficiencies? I guess it's a combination of efficiencies and higher volume. So, you've had a higher top arm. So, you're saying for a large amount of money? You know, something, and then you also, it's not a sort of one-for-one cost going up when you add dollars to the system because you have a fixed base that's helping to absorb some of that. Well, I would say that we basically, at this point in time, are probably around 80 to 85% fixed costs. So, once we clear that, you know, we probably have a 20% variable base from what I was going to add to you. And so, going through this number here, you know, clearly we've covered our fixed costs on our end of that variable dollar amount. So, when Mark is doing the calculation of what the margin is less than one-time adjustments, it's that pre-one-time adjustment number that is essentially the efficiencies gained by seeing these additional volumes. So, as you added back those adjustments, that would sit there and take you to what the net would be on a variable basis. Which is what? I have to go back to the slide and do the math on it real quick. But, I think it's like, yeah, something like that. One more. There you go. Yeah. And I think the only thing that I would throw on to that where that's correct, that there is a significant expense space, but when you have an increase in inpatient and when you are taking care of those patients, your variable percentage increases drastically. You're doing it through urgent pay, okay? Which is two times X-regular pay. You're doing it through over time. You're doing it through travelers, which is two to three times the regular pay. So, there's various components. So, I think it really depends on the volume, type two, Maureen, a little bit. But, on the inpatient side, I would say the incremental variable cost for inpatient, I'm talking, speaking to inpatient only, I'm staring at Eileen to make sure that, because there's nobody to my left. Okay. Is that when you talk about inpatient, a lot of the times those increased variable costs eat away a lot of that efficiency on the inpatient side, but I'm gonna pause there. I think we also need to go back to the mental health story. That, the observation costs of the emergency department at 5.9 million, whatever the case may be, that's totally on budget. Those are people sitting, watching people one-on-one. And it can be eight to 10 days. It can be two weeks. I have 10 right now. So, that compounded with the inability to get these patients back out into the community. So, our length of stay is compounded because of it. So, I really think that the cost, perspective based on all of these changes we've discussed is pretty significant. Just looking at this slide. So, with all that in there, the cost was for generated $20 million incrementally at large and offset $16 million in a pension write-off. And when, on that pension write-off, when was that forecasted in? I mean, because that was unbudgeted, correct? So, what happened to Maureen is that the medical center right now is about, I think it's 100% funded on that pension liability. So, what they're in the process of doing is they went through a multiple year analysis of de-risking the pension plan. And at the end of this year, let's say that everything aligned to sit there and make that adjustment literally in September, unfortunately. So, it was something we had been anticipating. We just were waiting for the right time to do it. And unfortunately it happened in September. Had it not happened in September, we would have budgeted for the next fiscal year because we would have been certain that it would have happened over the next 12 months. So, it's just one of those, I would say, a necessary hit. We made a very conscious decision to make that investment in de-risking the pension plan so that we will soon be able to have a little bit over 100% funded so we can tie it to an annuity and take the risk totally off the balance sheet, which is not too far away from happening. Another nice challenge we've been on is the commercial rates and how we get some of this back to the rate payers. And in your example of having a 0% change for UVM, that doesn't seem to get anything back to the rate payers at this point. There's a couple of things there. One, I do appreciate that the total system-wide, the commercial change, was not that large. However, one of the comments you made was that the commercial rates have been impacted by the cost shift for quite some time. So we know the commercial rates are covering more than the costs for the services. So to the extent we have the ability to reduce rates even more than zero, to put a rate reduction in, that would be higher than what was experienced in the year for the system. I'm okay with that because it's giving back something that's occurred over the years. But to challenge, I guess, even just looking at the UVM numbers as an example, the UVM for commercial for the year was budgeted at 703 million in NPR and it came in at 710 million in NPR. So if all of the commercial insurance companies had done their actuarial information correctly, they provided for 703 million dollars of payments. They ended up paying out $710 million in payments. So in reality, what happens is, soon we have one insurance payer, it's not that clean, they have to go up to cover the fact that all else equal, they lost. They were invested $7 million. So that's kind of the first part of it. So that's why sometimes there's a disconnect when people see the insurance rate goes up first before there's any rate decline if the prior year came in higher because they hadn't provided for that information. The other part that I just would wanna challenge is if you are negotiating a rate with an insurance company and if the rate was $1,000 this year and next year it's 950, they only get paid 950 so I'm not sure how they could make profits off of that because one of the comments that you guys brought up was you think it goes to the bottom line of the insurance companies and I just don't understand how that would work if you negotiate a price with them, that's all they're getting paid, ultimately whether your gross billing is $2,000 if they only get 950, they only get 950. So how would they be generating incremental profits assuming that your forecast was correct? So if the utilization, if the number was 700 million they were supposed to get and it turned out to be 700 million, how would they be getting extra profits from that? So first of all, this comes back to about that charity and then understanding that when you say 710 and the complexity of understanding what the true impact of a rate changes with carmer and show payers, okay? That 710 is based upon the fee schedule that's negotiated with them. Different plans have different co-pays, have different deductibles, all of that. So the insurer isn't paying all of that 710 based upon the accounting practices that includes the patient obligation as part of that plan and you need to look at that and charity how it takes away from that. So I think it's an important conversation, but in your example, when you say the 710 not all of that is coming from the commercial payers. It's coming from the payment plans that you negotiate with them but there's a patient obligation component tied to that. Okay, so and then the other piece that I can say. So if I interpret your question correctly that how does the 0% rate increase, create savings in 19 for the rate payers? And I can show you all this information from our 18 budget, but simply if you look at our 18 budget for the medical center, there was a 1.7% inflation increase. You could take a look at that, I believe it ties to our narrative. That generated about $20 million worth of additional expense, okay? Our rate increases, the 0.7 to the commercial and all of the other ones between Medicare, Medicaid, small bumps only covered 10 million of that. So the other 10 million of the 2018 budget inflation was basically that volume buying down future rate increases because those expense increases are real. And basically what we're saying is wait until we can get our arms all around this together and how do we work so we only make the adjustment once? At least, and this is a finance guy talking too.  I can show you those exact numbers from 2018 that tied to our budget submission and also our narrative. I hope and believe that in my professional lifetime, the conversation we're just having in the folks in Vermont is irrelevant because I do not believe that the payers or Medicaid or even Medicare should take utilization risk. The utilization should be accounted for actually rarely in setting targets, but he's right about deconstructing that 700 and 710 million, but that number should be set, should be set prospectively and if it's 702 million and 713 million of cost on services delivered is required, that shouldn't go back to the payer necessarily. That really should be the incentive of the delivery system working with people that are attributed to bring that number in right on budget. Again, I think the pathway that we have collectively crafted with the all fair model and the two waivers we have with the federal government, the work you did with one care to set up that budget for 18 and the fact that Mr. Pelham, absolutely right. Thank you, sir. We did take a big step forward. We are 100% committed to that model and it makes, we've got the messiness of all of this transition, but ultimately we need to get to action where early set targets with the utilization risk really on those that are utilizing and delivering the services. And just another comment on, I think one of my takeaways of going through the budget process last year really was that all hospitals are not the same because their markets are different. And I definitely appreciate the kind of population shift and showing that, diagramming that and also the point that you brought up that although in total the hospital systems were about 20 million dollars or 1%, but the operating profit was down. And that's one of the things we were addressing earlier in the meeting this morning that some of the hospitals that continue to build their budget off of the prior year budget that they're missing by double digits is creating a problem where they're going to have some operating losses potentially because they're building a budget based on a much higher level. So I do think it's something that needs to be considered. It's obviously not an easy process for hospitals that may be falling on the short end of that versus other hospitals. But I think to look at the total system where at the total system goal which we do and then to just assume that every hospital gets the same thing off of the prior year budget that at that point is not valid anymore creates problems in the system. So I do think we need to look at how do we adjust for that. I would also add to that though that the hospitals have some ownership in coming in and alerting the word when things are going up or down dramatically. And I understand you saying maybe you didn't know but when we did the 2018 budget you were about halfway there. I think you were about $20 million over that you acknowledged at that time and when you finished it was over $40 million over. How do we have this conversation earlier? Because the recommendations right now are to push this out to 2019 to make any adjustments versus 2017. So I would just put that out there that I appreciate that there are shifts. It's just when and you guys control over half of the dollars in the system. So if you're coming in higher or lower how do we get that in earlier? And that may be some of the things on the enforcement side whether it's having these conversations quarterly about where performance is and what's going on because that to me because it's been three years in a row that you peep the number if you will, the top line number. It just seems like it's three years down the road that we're addressing this. And I wasn't here for the past two years so I don't know if the story at that time was hey, after 15 was up $25 million okay maybe that was an aberration. $28 million, then 16 was up by $25 million. Now $38 million. I just think there could have been ways to come in earlier. And again, bottom line is you did make more money in 2017. So I understand 18, you have some reservations about what's gonna happen in 18 and maybe holding out to see that. But we know where 17 came in. We know where it came in over and if we wanna try to get that back to reduce costs in Vermont and to the rate payers are remaining to make action sooner on that and looking at this 11 adjustment rate. So just wanna give you some insights there. Okay, are there other questions or comments from the board? Good. Good, Tom, good. Good, Jess. Good morning. Okay, at this point I'll open it up for public comments or questions. Do we have anything? Sure, step right up, speak very loudly so everybody can hear. Well, this is Ken and I working on the healthcare advocate. Just we're speaking a lot about the effect on insurance rates from these budgets and I had two points I just wanted to make sure that I was clear on. So one was when the board approves a commercial rate increase, do you consider that from a negotiating perspective to be a ceiling on negotiations or actually setting the commercial rate for your hospital? And then the second one was I just wanted you to speak, I think you spoke on this a little bit, a little bit more on, was the commercial increase that you saw here based on more patients coming in or a higher cost per patient? I mean, I think there's probably overlap there, but if you could speak on that just a little bit more. Sure, so in regards to many of the guidance from the Green Mountain Care Board, we take that as the gospel, as to that's what the rate needs to be and as we have, as I said, multiple payers, we implement that across the board because we don't want to create pay or parity issues by having different negotiations with different rates. We kind of want to have everybody from a payment perspective packed close together so there is no advantage gained in the marketplace because if we had different negotiations for different rates, you will have pay or parity go away and there was a study commissioned by the Green Mountain Care Board back in 2012, 2013 that looked at a variety of different things and one of them was pay or parity and back around that timeframe, there was pay or parity so we're still trying to maintain that on a going forward basis so we implement uniformly across the board with our payers. And what was the second part of the question? I just wanted to be clarified to the extent that you can whether, I don't know, right, the condition of Israel, whether the increase in revenue from commercial gains from additional people coming in that heightened inpatience before or was it patients that, you know, patients, additional patients, I mean, the hospital more? On the commercial side, the biggest driver was the number of patients and you can track that back through on the Medicare side, it was a combination of more patients and sicker patients but we didn't see that sicker patients in the commercial population. Here, there are other questions or comments? Anne? This is just sort of half of the question. Speak loud. I'm sorry, this is sort of half a question. If you're thinking about John's comment that shift the whole situation in the process of reform the way the hospitals take down risk rather than payers taking down risk, I'm just curious if anybody has an estimate, if you look at just one FQHC which is the Community Health Centers of Burlington that have 30,000 lives, right in the city, right basically right in the city of Burlington, if they had been in, those lives had been attributed, this is sort of a question for John and his team, if they had been attributed, okay, then whatever portion of the 30,000 amount or two that the 30,000 contributed to this, the increased overage, what percentage, how much would the total overage be dropped if that 30,000 people had been attributed? Does that make sense? Maybe I didn't make sense. Yeah, so we'll have a significant difference and I'm calling for my memory only, but I think the first pass of the all payer model had them in, and if I remembered correctly, okay, and if I remembered correctly, that number was about 250 million, well that would have been in the fixed payments, okay, now that's down to 207 million because of them being out, so that one difference right there is 43 million and I'm calling for my memory on that one and just so everybody knows that, and I mentioned this earlier, is that the commitment in the 18 budget, I think that 187 million or that 170 million, that's really 200 million because when you sign up, it's on the calendar year versus our fiscal year, so, but if that was the driving difference, then it's about 40 million. So that's my point. That won't have to be, if the political policy perspective, somebody could push that FDAC, which is just hanging out for no good reason that I can see, then the question of who paid for this shortcoming, this overage, okay, would shift from the payors. There's no question that as we try to move towards the capital cost system, we're able to feed the service that, yes, we all have that same goal, but unfortunately, for a few years, we're going to have our right leg in one boat and our left leg in the other to use that analogy that I've heard others use and we're still going to navigate those orders. So other comments or questions from the public? I don't see any. So gentlemen, thank you very much. It was very, very helpful information and I'm sure we'll be talking again soon. And I'll work with Andy. Great. Yeah, the quicker we can get the answers to those questions, that's better. So the insurers could come up now. What's that? Do you want both at the same time, maybe? Did you not want them all at the same time? I always thought that Macy's and Gimbles were riding together. I think I might get better. I'll let the insurers decide for themselves. Would you prefer to have me together or by yourself? Okay, so, are you ready? Yes. I think we'll introduce ourselves first and then probably Blue Cross, Speedy Corpston and the second. So Sarah T. Jett with Blue Cross and Blue Shield of Vermont and Ruth Green, Blue Cross, Speedy Corpston and the second. And Susan Grieckowski and B.B. Great, so Ruth and I will, I think both be presenting and we prepared a very, very assured slide deck for you and I believe what you were looking for from us was some explanation of the interrelationship between the hospital budgeting process and the insurance premium rates as well as a little bit of the impact of the hospital budgets being over-reported on them. So that's what we attempted to do here. I'll figure it out in a second. I pushed all the buttons, so that's fine. That doesn't work. So that's the laptop. There we go. So we were focusing on three key points and messages that we wanted to make here during this presentation. The first is that higher than budgeted revenue from commercial patients, meaning commercial premiums were not adequate to cover the projected hospital medical costs. And I have one slide to talk about related to that issue. The second is that unit cost and patient utilization combined equal the total hospital medical revenue. It's a simple formula, but there's certainly a lot to working it out. And the last piece, unit price adjustments made sooner will have a larger impact on hospital medical spending. So the three. So on that last item, you heard the testimony that it will take at least two months. Do you agree with that testimony? I believe I heard them, can you hear me? I believe I heard them comment though, it was 30 to 60 days for each payer. And in the basketball shield of Ramon's case, we think that's more or less accurate four to six weeks, maybe four if we really push it. I think their point was that they're dealing with all the payers, I don't really worry about that. So in your case it would be 30 to 40 holidays? Yeah, 46 weeks, yeah. And what about NVBCs and what would it take? As far as I know, it would take around the same amount of time at the Blue Cross Center. Okay, thank you. So the first chart here, we were focused on the first bullet point and what we are showing you are in the first set of two columns. If the budgeted revenue comes in the same as the actual revenue, then premiums are adequate and there's no adjustment required. Now I should back up. These are hypothetical budget scenarios. We didn't try and use actual numbers from any of the multitude of hospital budgets that you have and we made a number of significant assumptions to make this simple because we all know there's quite a bit going on here. So this assumes one insurer in one hospital and premiums and budgets match. So the assumptions made both on the rate setting side as well as the hospital budget setting side lined up. That this is the commercial portion of a hospital budget only. You know there's many, many other portions of their budget but we focused only on the commercial portion there. And the hospital medical spending, this is only the hospital medical spending portion of the premium. So 55% of Blue Cross and Blue Shield of Vermont's premiums are associated with the spending that you're working with in the hospital budgets. So all the rest of the spending is outside of your overview. Now I'll go back to the numbers. So in the first case here, premiums are adequate and there's no adjustments required because they lined up perfectly. In the second scenario, this is when a hospital budget comes, the actuals come in under this budget. And so therefore premiums should be reduced or lower to meet the costs that were expected. And in the third scenario, this is when hospital budgets are over the amount that was budgeted. And so premiums have to be higher in this scenario to cover the costs of the medical spending. So if I could just add that we oversimplified this because as you could tell from that earlier discussion on the UVM Medical Center hospital budget, that there's a lot of moving parts. But fundamentally, when we put together a premium rate, we are reflecting the assumptions in the hospital budgets. And when they come in different from that, it creates a benefit to the next year's premiums as a result of that. So as we sit here today, 2017's budget overages would mean a rate increase. So to follow up on the healthcare advocates discussion over here today, they talked about the question was, is the Green Mountain Care Board guideline a ceiling or do insurers try to negotiate less than that? And what is the practice that each of you will follow there? So we go into our facility contracting exercise, assuming that there's negotiations happening at the table. We did testify in a rate hearing last year that we do find it very difficult to move on hospital CFOs off of what's been approved by the Green Mountain Care Board. We do find that it's treated more like a given. And we have been- Were there any instances in this past year where you actually were able to negotiate a rate lower? I would have to check back on my contracting folks, but I don't recall any significant points in terms of hospitals with large volumes. We do also, just to be clear, once the Green Mountain Care Board rate orders are done, we have included all of those orders in our premium rate development. And that's reviewed and signed off by multiple actuarial reviews. And so the idea that a rate change, we don't know where it goes is not in my view an accurate depiction. And we know exactly where it goes or goes straight into the premium calculation. Does that answer your question? I can follow up on- Regardless of whether it's implemented mid-year or at the beginning of the year? If it's implemented mid-year and one of the simplified examples that Sarah and I brought today will show you how anything done earlier rather than later will mitigate the need for a rate increase as a result of the previous higher than budgeted actuarials. So we can show you a kind of illustration on that. Right. And I was just asking, when you build your budget, at what level do you do that? So you're saying 65% of your premium is based on the hospital? That was 55%? 55%? 55%. 55% is based on hospital. And then do you build that at a hospital level? Yeah, we do. And I think in our rate hearing process we published the confidential schedule that showed how each of the assumptions in our premium development tied that hospital by hospital to the three-month-old orders. And then did you do a reconciliation though? Or I'll say a reconciliation at the hospital level? What happened in the end of the year? So if you were to track 17, now six months down the road or so when Clayton went out, did you do a reconciliation? So the reconciliation that I'm hearing you call for or speak about is reconciliation of actual results. We know that the unit price increase ties out exactly. And then we estimate utilization. And it's usually the utilization, as you saw earlier, where the differences come in. Because we know that we've included the unit price or the commercial rate increase in our premiums and it's usually the utilization. And we don't do the utilization reconciliation per se at a hospital level, but we will look at the larger hospitals and we'll can see if the utilization increases or different at some hospitals versus others. Does that answer your question? Yes. Love, Maureen. Great, we got your answer. Oh, sorry to say that. So for MVP, we do approach negotiations with hospitals as a negotiation. And I would like to bring to your attention language that you've put in our last great order, asking us to be aggressive in our negotiations with hospitals to try to get lower rates and also to get to a parity. So we definitely approach it that way. I think our experience has been both in New York and in Vermont that your ability to negotiate rates really kind of depends upon your market share and your size. You know, the more volume you can bring to a hospital, the more likely they would be inclined, if they're gonna be inclined at all, to negotiate a lower rate than what you folks have approved. And our experience is the same as Blue Cross in terms of the hospitals basically say this is the rate approved by the Green Mountain Care Board. That's what the rate is going to be. We definitely appreciate you trying. Yeah. We do try. If I can share a specific example, not this past year, but the previous cycle, we were likewise instructed to bring our market share power to the negotiation table. We were doing everything possible. We got to the point where the window of time to implement a rate change got so close to the start of the new plan year that we were forced to sort of get to resolution because of the, the only other choice we would have would be to not have a contract and that would be very disruptive to our membership. So we feel like we've pushed that pretty close to where we just not willing to disrupt our membership in that way. So it is one of those things that we put lots of efforts into, but we have yet to see significant change beyond what's been ordered. Okay, so I think we'll move to the next slide. So this slide was intended to focus on the second bullet where we're talking about not only the unit price, which is what the hospital focused on, but utilization. And we believe that's really where a lot of the difference is. So I will try and talk through this and maybe Ruth will jump in, but so the first line at the top that says current shows the unit price of $100 utilization of 50 of whatever medical service that is. So we total revenue or total cost depending on your perspective of $5,000. Then in the next year, the budget should equal the premium amount. And if the unit price goes up by 1%, it's $101 for the unit. And if utilization stays the same, then the total revenue or total cost is $5,050. So the next one that says actual equals premiums increase. So this is what happens when utilization is above what was projected, but the unit price is the same. So the unit price is still 101. Utilization went up by 2%, which is more what we're actually seeing. So that moves to 51. And so the total revenue or cost of medical spending is 5,151. So the premiums need to increase in order to cover that cost. There's two ways to do it. You can do it through changing utilization, which we all recognize would be very difficult, but we have to be focused on that. But you can also do it through unit price changing. So if you reduce the unit price by 1% to 99, you can get the total revenue or total cost in line with the premiums. Right, so a couple of observations, thanks Sarah for walking through that. So the premium increase that I mentioned earlier in this simplified example would have been $101 if there was no change to the go forward scenario. It also just illustrates the order of magnitude. So if 2%, if you expect utilization to be flat or zero, and utilization comes in an increase of 2%, that's really instead of the 1% you thought you were planning for in an overall commercial increase, you actually realized a 3%. So I was just trying to illustrate the order of magnitude here that if utilization was 2% higher than you expected, you need a difference in your rate unit cost of an offsetting 2%. So it really is important, I think, especially as I was hearing the earlier testimony, that if utilization is a part of our medical spend, and it is, it really needs to be planned for and included in any hospital or budget conversations. So to the extent that we have a no-inclusion where a commercial rate increase is 1%, it's really 1% plus whatever you expect utilization to be. And I think that played out earlier this morning when someone was quoting the national rate was 5.5%, I mean, even out here, 5.5%, and the unit cost piece of that was 2 and utilization was 2.5. So I think an opportunity is to just be clear about when we talk about a commercial rate increase, what's the utilization assumption in there? Because the premiums have to cover both. And do you want to try? When their budgets are done, they build a utilization change, you know, an 8% for the other 3% at NPR, built into that is a utilization number, a rate number, and everything else to generate that number of this budget. So I think in my budget, there is a factor of course to tell us maybe like what actually happened. So I absolutely agree. I think what, I think it was you, Marie, who made the point earlier that if the overage has been kind of systematic, it probably means that utilization is higher than we wish it to be or we just want it to be in this budget. So if I can make a plea for the customers and members, they, our community-rated premiums have to pay for that utilization. So hoping that it doesn't happen, it doesn't help our premiums, it will increase the premium. On that point, I think in a fee-for-serves environment, trying to control utilization is challenging, which is why I think we are all hopeful that moving to a different payment methodology would be more successful in that area. I would, however, note that your ACO contract does not get us there in its current form. So I would encourage you to be more aggressive in your ACO program because I think that would also help this dynamic. Absolutely, I agree. Okay, so we will move to the final slide. Again, gross oversimplification to make this easier. What we're showing you is medical cost revenue growth and the red line, which is underneath the other two in the beginning, is the trajectory. The blue line is showing an earlier agreement price adjustment and then the green line is showing a later agreement price adjustment. And what we're trying to demonstrate visually here is that the sooner you make a price adjustment, the greater the impact and the sooner the impact will be felt by a lot of our members. And that is, those were the three of the points we really wanted to make. And I don't know if Susan wanted to talk. Yeah, we would also echo making a unit cost adjustment earlier rather than later, specifically not waiting until the budget order is in September. Now, it's true that if you do make an adjustment now, that will not be reflected in 2018 rates. I mean, I think we all understand why. There's no way that we can redo a rate filing and get some rate relief here. But at least the way I understand it in my non-actuary mind is those costs are in the system already. And there's the potential for it to keep going higher and higher. So if you can make the adjustment now, even though the members won't see it until we do the rate filings effective for next year, we will know what that is and we can build it into the filings for the qualifying health plans that we're gonna be submitting to you in May. So again, you know, so maybe instead of going up this much, it'll be going up this much. So because we've got that much relief in there. So on that specific topic, if there is a rate change, then some place throughout the existing year, do you necessarily have to make the changes on the beginning of a calendar month or how would that work for both your companies? Boy, you know what, let me get back to you on that. I don't want to guess. So let me get back to you on that. Did you say a calendar month or a calendar year? I think you had a month. So let's say that, you know, by two weeks from now, which is what, the 16th of March, this board has made a decision to lower the rates for the existing year. Would the board have to use a date that begins at the beginning of a month? So I think from what I've heard you say, using that timetable, May 1st is probably doable. My question is, if we set it for May 15th, is that also doable or does it make more sense to set it at the beginning of a month? I have to agree with Susan. I have to get back about those, the calendar month. I know that it doesn't matter which calendar month, but I don't know if the actual date matters. It might be the first of the month following when the decision. But I can follow up on that as well. Okay, great. We'll look forward to hearing those answers. And as a data point, each of the hospitals, they're not all in the same fiscal year necessarily, maybe the Vermont ones are, but I know that we deal with other entities that are in different cycles. So when we do our rate development, we're looking at the actual contract year and kind of rolling it through. So it's not even, each calendar year has a mix of the previous contract year and the next contract year. So our rates go down to a very granular level and include that type. That's why an earlier change to Susan's point makes a difference because it prevents, if I can go back. So an earlier rather than later rate change in this example here would right away start chipping away at 51-51 that you've already incurred by having gone over in the previous year if you believe that utilization is gonna continue to go up. In theory, you're gonna have another overage and the idea is that you're trying to stop that overage from continuing. So that's why it has an important impact on earlier. Anything more to add, Susan? Nope. Any questions from the board? I'm not seeing any. So at this point, we'll open it up to the public for any public questions or comments. I'm not seeing any. I'm just watching the University of Vermont call up now. Speak up. When you did your 2018 rate schedule, okay? Did that take into account the actual utilization from 2015? Okay, so you know, all the way through 2016. So my argument is that this base readjustment goes back to 2015. We're talking budget to budget. Those actuals are built into their rates much sooner. And this is what we're talking about. That if we do adjustment now, that 2015 utilization is built into their 2018 rate schedule and those savings should go directly to the premium payer. So that's the first statement that I would make. The second statement is the difficulty or why we say put it off to 19 is so we could pull those negotiations in and you need to factor in 19 inflation too. Because 19 inflation comes into that conversation when we have those negotiations. So that's why at least in my mind, it makes sense to pull all of these pieces together and do it once during the 19 budget process. And then that would change their premiums back on October 1st because at least what I got out of this is these premiums are not changed to the commercial payers until January 1st. I'm referring to the hospital play in here. So anyways, that's just some, but that's our challenge of going budget to budget with that process. That utilization is already built into their rates and that's why we say that that savings goes directly to the bottom line for that time. 18 rates is utilization through 16. What's not in any rate yet is the 17 increase that we're hearing about. But that when we built into our 2017 budget, our 17 budgets based on changing the 16 budget and 18 budget. So what I'm saying is that utilization increase that we saw earlier, that's built into the world, you know, famous students, all I'm saying. And that's the challenge. I may be a little bit tense here, but as I recall, we told the insurers to go back, set the rates based on what our instructions were. And if I came in 17 at 38 million over what they were using. See, I don't think it was old, okay? And here's why. Because they adjust their base for utilization, correct? And then you apply the rate, okay? The UVM budgets were never changed for that utilization difference. So that utilization that we talked about that is real, that's already built into their base. It's just not built into our budgets. But the hospital budget process is budget to budget to budget to budget. Yeah, okay. If you realign yours based upon prior year actuals, then you are building that utilization in, then you're applying that rate increase on top of increased utilization. And that's the challenge that we're having about tying the hospital budget process to the rate setting process. This is your simple example of the one hospital one insurer. If we had a hospital that was 100 in a given year and their budget was 103, but they came in at 110 on actual, then when we base the next year's budget, we're basing it on their budget, which was that 103 when we rolled it up and it goes to 107. Are you guys using the actuals? Since you know the actuals, are you using that 110 to start from? Yes. Yes. I think we have to understand that. From the previous year, so when we're building a rate for 18, we were doing it last year, so we're using 16 actuals, making assumptions for 17, you know the unit cost increases from the hospital to orders. And then, instead of the 2018 rate, so we don't have the actual 17 results yet. But it was 16 and 17. So it might be kind of a hybrid, I think what I'm saying. Yeah. It made, because they were on the upswing in 15s, 16 and 17, but their budgets were kind of going off of the budget, not the actual. I think it's probably somewhere in the middle of what you're doing, I'm not saying it's wrong, you're saying this is where we actually came out and we're going to trend it. And they're working off of a budget to do it. And if there's pretty significant swings, then that could create some type of disconnect. So we would just need to understand that. So at the risk of oversimplifying it, but the premium has, we have to collect enough premium from all the community of community rated subscribers that buy that product to cover the actual costs. Not the budgeted costs, but the actual costs. And so if the actual costs in your example was 110, the premium needs to reflect 110. Yeah, and I guess where I appreciate that, and I think where I was saying before, because UVM, when we looked specifically at commercial, came in at 710 versus 703, I was under the impression that where the commercial insurance would have netted out is that they only budgeted it for 703. And then if it comes in at 710, there's an overage and we have to cover that in the next year's rate. But that's probably not entirely true because their 16 was over too.  And they blew away their, sorry, but they blew away their budget in 16 as well. So if you guys were doing it off of 16 actual, would have put you a little bit ahead. The difference between 15, 16 and 17 budget. So each year, another way to say it would be when we have to explain reasons for rate increases each year when we file our next year's rate, the very first thing we do is we look at what was actual medical costs for the year that we had the premiums that started the year. And if they are higher, we have to increase the premium right out of the gate. So 16 was taken care of in, excuse me, 16 was taken care of in 18. That's one of the contributors to why our rate was higher than people thought it should be because of the commercial rate increase. And then we'll have a repeat of that as we go into 19 for 17. Okay, are there other members of public with any comments or questions? No, thank you very much, Neil. Thank you. At this point, is there any new business to come before the board? Or excuse me, any old business to come over? I wanted to just speak briefly about the individual mandate discussion that's been happening in the federal issues working group, if I may. So that group has been focused the last few meetings on the individual mandate. That question being, just to back up for a moment, folks will remember from last week the staff they even updated about the fact that the federal mandate is no longer being enforced. So there's some discussion in House healthcare about potentially implementing state individual mandate. They came out with a bill this morning which would institute a state mandate with a process for working out the penalty details over time. That process would have the board convening the work group that would work through that over the course of the summer with participation of DFR and DEVA, two legislators and other stakeholders. So I just wanted to bring that up so that folks were aware that we were asked to leave that process. It's quite frankly similar to what's been happening with the federal issues working group with a slightly different configuration of people. And the report on that would be due in November. I think there are some pieces of the work groups that we would want to recommend changes. Like for example, it has all of the technical, legal and administrative support coming from the board. We obviously can't do tax calculations. So I think we would want to suggest that the study be clear that tax and DEVA would also be on the hook for that kind of technical and legal support because we would need both of them. They're the right agencies to do the analysis. I think we could certainly pull people together and facilitate the conversation. I think we also need to make it clear to them that we will need some additional resources. Who is ultimately responsible for writing the report? We can be the stakeholder group. Who's ultimately responsible for handing it in. I think the way it's currently written it would probably be us because we're on the hook for the administrative technical and legal support. I think we need more resources. Yeah. The other suggestion we could make on that is just one I commonly used to do with reports is people don't tend to read reports often. So you can, if you provide like a PowerPoint or some sort of presentation, that's less resource intensive to put together but convey the information that the board is usually looking for. So that's another way that we could reduce the resource need. Could the other agencies also support the development of that report? Absolutely. I mean, I don't know if they would say they could but they would say they could. I thoroughly endorse the PowerPoint approach. Mark up and vote is when? I think it's tomorrow morning because to the extent that it's a committee bill, I don't know if it's a committee bill or if it's a strike ball. If it's a strike ball they could, they have through the end of the day Friday. It's a committee bill they have through the end of the day tomorrow. And you'll be there to monitor that? I will be there, yes, tomorrow for sure. Yeah, and Friday, if needed. Okay. Is there any other old business to come before the board? Is there any new business to come before the board? Would anybody like to make a motion to adjourn? No move. Second. It's been moved and seconded to adjourn. All those in favor, signify by saying aye. Aye. Any opposed? Thank you everyone.


Hello, my amazing math minds and welcome to this week's Math Tip Monday. My name is Heidi Rathmeyer from ESU 8. And this week I want to talk about a digital whiteboard called Whiteboard Phi. First of all, it is free. And I know you have a lot of options out there for digital whiteboards, but this one I liked in particular for several reasons. The pros in terms of this whiteboard are there are no accounts needed for either the teacher or the student. So it's very easy to create on the fly. You can save the work of your students. And the teacher can actually watch the students in real time. And you can push boards to your students so you can create specific backgrounds. You can bring in images, all kinds of things, and then push those to the students so that they can work on those. So this isn't necessarily just a math tool. I think it can be used for any content area. Now, some cons in terms of this particular whiteboard is because the teacher is not creating an account, you can't save whiteboards that you could then use for the future. So you just have to recreate them. And the boards are individual. It's not intended to be collaborative. Maybe you're familiar with Jamboard, and that's available through your Google Suite, which is a collaborative whiteboard. This one is meant to be individual. However, there are some advantages to it compared to Jamboard. So let's take you to the website and I'll walk you through it. So when you go to the whiteboard.fi website, here is where you can create a new class where students can join the class. And I'll show you another way that that can happen as well. So as the teacher, you're going to create a new class. You can just put in your name, just say SR. You can enable a waiting room if you want to make sure only your students are coming in and the enable manual save mode may be beneficial for students who might struggle with bandwidth. So that's something to consider if you have students that are struggling with it being real time. So we can create the new class and there is a URL you could push to the students or they could go to the fi website and put in this code. I'll show you that as well. Or if you have students at home with an iPad or even a phone they could do this on, you could give them the QR code, which will send them to the room. So several options there. All right, so I've created a split screen so you can see what the student side looks like, which will be on the left and the teacher side, which will be on the right. So if a student comes to this particular website, if, for example, they did not use the QR code, they can join the class. So I'll punch in that code. They will put in their name and then join the class. Okay, and there are two views for the students. They can see the teacher's whiteboard or if they close that this will be their whiteboard where they can work on it. So now if I come back over to the teacher side on the right, again, this is my whiteboard. And if I scroll to the bottom, I can see two student whiteboards and one is on an iPad. That's Anna. I'll open it back up. You can see it. She wasn't active for a while because my iPad went to sleep. And then this is William's whiteboard over here. So I can see their work in real time. So several different tools up here you can write. And again, if I come over to the students whiteboard, if they want to see my whiteboard, if I just want them to be watching what I'm doing, two things you could do. One is you could just share your screen or you could ask them to go to the teacher's whiteboard. So they could see everything that you are doing. And students have these tools as well. So we could do some shapes. I'm going to do some work with shapes. We can type. Which one is the circle? For our higher math, we can insert a math equation. So we could do fractions. And I could insert that math. You can also do exponents with the carrot. And then you can insert that math. And move it around where you need it. You can make it smaller, make it bigger. OK, again, over on the student, they could see what I'm doing all this time. But their whiteboard is still empty. So I am going to add a new whiteboard. And let's say I just want to take this particular equation. And I want to put it on this new whiteboard. And now I want to push it out to the students and have them solve it. So I can push. I can push to all students, all pages. Or I can push the current page. And I can push it as a background. This would be what I recommend. Because if you don't do that, they can change the equation. So if you push it as a background, then they can no longer edit that, which I think is an issue with Jamboard, where if they clear the screen, they clear the background as well. So in this case, they wouldn't be able to do that. So I can push it to the students. Keep in mind, though, whenever you push something to the students, whatever was pushed before will be deleted. So it will replace all the whiteboards that they have. So I'm going to go ahead and push that to the students. So you can see now that it's been pushed to the students. So now they can work on the equation. And then as they're working, I can see their work over on the right-hand side down here. Now I could see that Anna's whiteboard was not active because she was asleep. And notice it did not push it to hers. So I can actually select her name. And I can push the whiteboard to her as a background. So now she has it as well. So if you have a student that comes in late, you can still push a whiteboard to that student. So again, now I can watch the student work on their whiteboard and a little lapse in time. But it should show up over here. So I can see what their students are doing. So I can open it up and take a closer look at it. Some other actions that you have in terms of the students, you can erase their whiteboard. You can kick the student out. And you would actually kick them out of the class. So they would have to come back into the class. That's always a good option to have as well. You can save the whiteboard. You can copy it to the teacher's whiteboard. So maybe I want to show this particular student's work so I can copy it to the teacher's whiteboard. You could also share your screen if you wanted to and show student work. Another nice setting that you have is that you can hide the student name. So if you do want to show several pieces of work, you can hide their names. And then you could come down here and show several different whiteboards to help students with common mistakes or to show different strategies. So let's say now I want to save these whiteboards and go to another activity. So what you can do is save all whiteboards as a PDF. So that's great as a teacher. You can also bring in images. So I'm gonna bring in a clock. Now maybe I want my students to show me different times on their clocks. So once again, I have to push it to the students and I'll push it as a background and keep in mind it's going to erase everything that they currently have. So I will push it. And you'll notice now if we come over here on the left-hand side, all their other work is gone but they do have a clock. Now notice students can create additional pages if they want for some of their work. Okay, however, the teacher is only gonna see whatever page that student is on. So right now William is just on a blank page but if I want him to go back to the clock, then the clock will show back up and then I can see William's work on the clock. And notice I sent it as a background image so he cannot edit my clock but he can write over it. Right, there's some other settings you can play with here. You can add a grid background. You can even add a music background while you can insert some emojis if you wish. That might be a little dangerous as a tool for the students but I'm pretty sure they have it as well. Yes, they do. But the math equation is probably the most useful for our math teachers here of course. So as I mentioned, you can save the whiteboards. However, keep in mind it's only gonna save the whiteboards that are active. So in this case, it's gonna save my blank teacher whiteboard and then it will only save the whiteboard images that the students are on. So keep that in mind. When you are done with your session, be sure to close the room, especially if next hour you wanna create a new whiteboard for another class. If you don't do that, it will try to have students join this particular. Now your whiteboard will eventually time out but I'm not sure what the timeframe is but I know I came back a day later and my room was closed. So, but you're gonna do something pretty soon. Make sure you close the room so that you can create a new class. So that is whiteboard fi, a very easy and free digital whiteboard. Certainly there are things that may be more sophisticated for the high school level. But I like this because it's something you could really create on the fly. Perhaps you have students that are quarantined and you wanna make sure that they're involved and then you can share screens between what the students are doing at home with what the students are doing in class or if you need to do your whole class through a digital environment. So please give it a shot and let me know what you think. And until next time, stay well, be kind.


Hi everyone, Joe for Jaspy's casebreaks.com. Coming at you with a box is 2022 top's clearly authentic baseball Random team break number two three different dice rolls happening here. We got eight clearly authentic spots being given away That's the first dice roll second dice roll We're doing the break itself and the third and final dice roll will give away those four postseason mixer spots So big thanks Nico, Barry and Carl for getting in on it. All right, and let's roll it and randomize that one and a two three times So top eight after three we'll get extra spots one two and three After three times Carl Carl Nico and Carl and Barry sneaks in with a there's some extra spots For the gang so we'll put little rooftops next to your name. So you know you won those spots All right, and let's gather everybody's names here and let's roll it and randomize it six and a four ten times For names and teams two three four five six seven eight Nine and tenth and final time six and a four ten times for the teams two Three four. I'll think about it Carl I'm leaning no just because I'll be there at the end of December for like a week Kill some vacation time There's the first half of this right no trade windows in this a second half list right over here. Maybe pop on over to LA We're already going as far as Vegas You can visit the shop. All right, there's the box right here a Braves Astros World Series sounds terrible Brandon Richards. All right It's gonna be a Yankee Louise Gill 20 out of 50 rookie auto in that tech design It's an acetate card. So let's kind of put a blank card back there get a little more contrast pretty cool Yankees Carl with the Yankees there you go Carl There you go everybody That was the break now. Let's see who's gonna win those postseason mixer spots. Let's gather everybody's names again one through 30 new dice new list and it's gonna be the top four after After seven five into two top four after seven one two three four five Six and seven in final time. Good luck everybody. So from five on down sad times Very very close not quite though But only the top four can be happy now. Carl does have the odds on his side. He gets one He gets two he gets three All four spots. There you go Carl. Congrats to you after seven lucky seven for you Appreciate you get in. We'll see you a little bit later for that mixer jazzy's case breaks calm


I'm just going to take a quick 15 minutes. I don't even think I need all that time to welcome you to this conference. So welcome. So this is approximate quantum computing. And the title was from Advantage to Applications. The best thing about a conference is to have great speakers. So thanks for all the people that have come. And they've come to give the talk. There's going to be a great, great lot of talk over the next three days. I also want to thank David Gossett, who really, from outside, did a lot of the organizing and got you guys to come. OK. So why are we doing quantum computing? I like to say, well, not why, we all know why we're doing. When I go back to classical computing, I think back in the 40s, and this is what classical computers look. And we know how classical computers have evolved. They're everywhere in our life. We use them either on mobile phones or we do big computations of them. And you look at what the pictures look back then. You look at what a quantum computer or what our version of a quantum computer looks like. And it looks really like an industry. So you ask the question, what's going to happen in the next five, 10 years? And this is what we really want to try and get at with this conference. But before I go into that, I want to take a little bit of a time and thank Charlie Bennett, who's at IBM. This year, he won the Procedures Direct Mental Award with David Deutch and Peter Shaw. I think most people would know that Charlie's been at IBM for a long time and been working on quantum computing. So if we can just take a minute to thank Charlie. I don't know if he's here. Yeah. And I think, yeah, I think it's just great that we have someone like him in our group. So the first conference that we did on this was in 2013. As you see, there are actually a few people here. I think Ed Farrie's here, Alan Asimov-Guzik's here, Robyn's here. And it was a small crowd. We ran it again in 2015 with another great set of invited people. This time, we focused more on the challenges. It looks like it increased quite a lot in this year. This year, it even looks much bigger than what we have in the last two years, the last two that we've done. So what do I mean by approximate quantum computing? I agree that this is a made up word. I don't. It's not strictly defined. But the next few years is this sort of time where we're not going to have fault tolerance, but we're going to have something which should be more powerful than classical and how we understand that is difficult. So what I mean by when I say approximate is I mean, number one, it's programmable. It has the ability that we can program what we do. Number two is I can fit the quantum computation within the coherence of my device. And why do I care about this? Well, I care about it for a number of reasons. One of them is, like always, to keep studying error correcting codes and fault tolerance and understanding how we make these devices bigger. Some heuristic algorithms that we've been doing, and I know we'll touch on more later from our side and others will touch on it. What I'm calling error mitigation, which honestly is a lump-hole thing for everything that is not error correction. So dynamical decoupling, smart sampling, and things like that. How do we verify and validate a quantum system? And lastly, can we prove something as a quantum advantage about it? So this is why we chose the name approximate quantum computing. And I don't know. I think this defines to me what we mean when we say approximate. So what are some of the things that we've done that I just want to highlight briefly? I hope all of you have had a chance to look at the IBM quantum experience. I think we put this in 2016, and it was a very good demonstration that quantum computing can move from this phase of being a laboratory demonstration to get it out to a lot more people. Since it's gone online, we were very happy that we managed to get it in all seven continents, which I think is pretty cool that someone in our tactic are actually ran a quantum computer. And from a science perspective, over 35 people have actually used this to write archive papers. Some of them publish, some of them ranging from how we view and understand quantum computers to how we look at inequalities. But it's really allowed to take these devices for it traditionally existed in the hardware and give it to people to try things. And we're moving forward in this evolution. We put out what we want to call our quiz tick, which Andrew will actually take an hour on tomorrow. An hour tomorrow to go over and give you a tutorial on how to use this. So we've started to make this quantum computer not only that you can just launch a simple circuit, but program all through a different language. So if you're interested in seeing how that can be done, please go to Andrew's tutorial, and you'll show you how we're doing it. And we are going to keep building this up to give you more flexibility to do a lot more things with the device. We're embedding first in Python, but we're working towards embedding it in other languages. OK. You've probably heard that we have increased the number of devices, the number of qubits in our device. This is a layout of the 20 qubit device. Each one of these are the qubits. At the moment, it's in the stage that it's been characterized, and we're doing multi qubit benchmark experiments on this. And Michael will go into this with a lot more information in her talk. Some other things that we've done is we really want to understand what heuristics we can do. I love that we got a really nice quote by Alan. So I like to put it up. Thank you, Alan, for that quote. But this was an experiment that we recently put out showing that we can start to do these heuristic algorithms with these devices. And we're interested in seeing where that will go. And lastly, there's many more work. And Sergey will talk a lot more about the theory work. But I want to keep reminding people that we're going to take the focus just off the number of qubits and put the focus on what is some metric that is meaningful for these devices. This metric shouldn't just be how many qubits or how good a fidelity. It's got to be a combination of both. And what we are proposing and what we want to work towards is this quantum volume. And we want to aggressively go up the diagonal of this line. Because just making more qubits, we know that if we can't do many gates, we can simulate that. So it's understanding this and understanding this with both theory and hardware in some way that's going forward. So with that, I want to thank you, welcome you, and I hope you have some fun. And enjoy the conference.