Something ups and another observation is do we do auto enrollment again for those people for which the only difference would be a lower contribution so its just a thought. Its a question that they wait and explore all kinds of autoen roll and not discovered and whether we want to engage in that process again its really i think something that prolonged discussion and i would expect there would be some necessitys to bring forward if we decide to mh370 of this that direction and some engagement of this board before we make the final decision and. I wasnt look forgeron a decision. Thank you. Does anyone have any questions . Commission commission sheehy. I did find it confusion and i know a lot and i think identifying a specialist problem i still havent figured that out and the web sites are not very good on a i wasnt clear whether my primary care physician was in the network or not and i was one of those who was delighted because ive had trouble, i was at ucsf before here and shes been my doctor for 20 plus years and so at one point i was paying her out of pocket because when you create those relationships you want to keep them but so i think really a lot more clarity and a lot more ability to identify whether the various providers if you are like me and you have complex heath needs that would be helpful. If you are thinking about the ucsf fees was under sold and a lot of people, i know myself i was excited to be able to really be able to have my doctor and uc sf access so you might start earlier and work with ucsf talking about that relationship and again i have a buy as because i worked at ucsf but i think a lot of people in town recognize the excellence of that institution and so that is the main thing. I just these things, i mean i know a lot, ive been doing this for years and i really found it a couple of times i was completely confused and almost slipped back because i thought i lost my primary care physician because the information wasnt able to be accessed and like even when you go to soy went to get my flu shot as people have identified and also to do the enrollment and talk about trio and it wasnt really easy to get the information like one person looked on the screen and said my doctor was not in trio and another person looked on their screen and said that my doctor was in trio and so that level of confusion i didnt talk you are reminding me. We had another there were lots of nuances i didnt mention but i recall there was a lot of provider confusion at the open enrollment meetings and so brown and toll around again, they customize this network and protocols just for h. S. S. And they had representatives at the open enrollment meetings who didnt fully understand it and we did hear about that because fortunately they are right next door to each other so we mitigate it but it did impact some people so that was a huge lesson to learn as well. Thank you. Other comments from commissioners . Yeah, from members i very much exactly what is said. And especially there was a meeting over here at the hotel, there were two meetings there i believe and people i know and the members said they were more confused after they left than when they got there because they did get a different story from brown and tollhappened than they did with blue shield and i dont like the auto enrollment at all and i wonder who is going to take the burden of putting these people back in when they go to their doctors and find they cant access them. Will blue shield be doing that work or will it all be on you . So, after we end open enrollment and we send out a confirmation letters changes permitted are Administrative Changes and administrative errors . People can appeal anything and we do handle those appeals in open enrollment and we always get a lot of appeals after open enrollment so theres an appeal process if someone wants to move back in to access. The reasons that we would do it outside of appeal for some reason we demonstrated an address issue, a Mailing Address issue because that was one of our Key Communication is the mailing, a second one would be an issue about continuity of care if someone is in the middle of treatment. Other than that they would need to send an appeal and it would be reviewed by h. S. S. First and according to our member rules after that if we up hold the denial they can appeal to the board. What was the last thing you said director griggs . The first level appeal is handled by h. S. S. And if we up hold the denial, our own denial then the member can request to appeal to the board at the second level appeal . All right. There shouldnt be a lot of communication putting people back to the access plus because a lot of members did not opt for this and they find this out and otherwise the board here is going to be inundated with appeals there was an appeal letter already here from a member who said it appears compulsory as i did not effect to make the change nor was it clear i would need to check the blue shield access so that the enrollment wasnt clear and i cant imagine how timeconsuming its going to be for staff and everyone if you would have to take these back to the board and i mean, if these are honest mistakes, and theyre not gaming the system, i just dont think it should put a lot of extra work on anybody and it should just happen because, i had two other people that were automatically enrolled and each one of them, their husbands and children had ten different providers and i dont know how you can plus infusions and they were automatically put in to this trio also so i mean, it seems to me like its going to be a lot of this issue. Right. As far as the provider 5,000 have no change and this is more than 5,000 so half of them have no change at all and the other half would be the brown and toll en and they have a change in hospitals so for that reason there was a robust marketing and Education Campaign around that including multiple phone calls to every member and of course we had a lot of members call us and custom mailedings whether theyre enrollment resulted in a Network Hospital change or not and then informational sessions as well as open enrollment meetings so there were significant attempts to and that doesnt again to talk about the Electronic Communications so there were significant attempts to educate all members on what the changes meant. As far as infusions, transfusion s, now theyre going to go for an infusion and they wont accept you, now you have this date set up and thats a big deal. Yeah, that is if people are in the midst of treatment they would continue on with those same providers for that treatment. Commissioner. I mean i was just having been trained at ucsf and attempted to practice there early in my career and then having my career in fee for Service Practice with myriad contracts my medical group had multiple contracts with every provider in the city and then half of the time at kaiser i think i have some experience with this and im saying the complexity overwhelming, i mean i know my own former colleagues what kind of contracts they have with sub specialists and its just amazing to me that this could be navigateed easily or quickly and im surprised that any Sutter Foundation primary care provider had any contracts because they have because they have control if theyre not foundation documents, that said, the percentage of what you call missed opportunities switched backout and speaks the fact that members were alerted to what was happening and had the had sometimes people see the glass as 10 full and they sent out letters further pulled members what was happening and should have raised some red flags for those individuals so it seems to me that i had a major concern about auto enrollment and i think that actually the result was encouraging despite some individual experiences and really i do think the sub specialist issue was predictable and we talked about it here and hopefully you can navigate through some of that. Its always difficult. I like your perspective. If i could add anything, im glad you brought up sutters robocalls and that letter, i spoke about it in the report. The one issue that we definitely made sutter agree on is the only people that would get this communication are patients of the Sutter Medical Foundation so werent auto enrolled to begin with. The 10 that we didnt agree with was one word in there that they were giving members direction to select access plus and so when that i think what went wrong is people had that letter and came to the office and talked to their coworkers and that word the mouth and the word spread, emails spread but the commercial communication between sutter, as far as my knowledge, because i agreed on with sutter to the Sutter Medical Foundation patients and we didnt autoen roll those. I was consulted as part of that process and pushed it in the letter as well. So, whether we do this like process like this next year or not, to me its a subject that needs to engage us early and so that we can get some sensing about the results of this year because were right now just doing it and weve made the journey across the bridge and we have not traveled further so the consequence is ahead of us so thank you for your report and are there any other comments or observations from the board . Well expect follow on reports as we go forward. Is there Public Comment on this item . No Public Comment well go to the action item 6. Clerk item 6, action item. Presentation of audited Financial Statements for fiscal year 20162017 and 2016 and kpmg director levin good afternoon good afternoon, pamela levin Financial Officer, we had to make sure everything was set right. Who do you have in your company . We have a presentation. I want to first turn the presentation over to the kpmg auditor, this is gi walee and we worked with them for several years and shell talk about the audit process and i will quickly give a overview of the Financial Statement. You might find it for someone to sit in the chair and assist you so you can maintain eye contact with us here. Ok, yeah. Thank you. Ok. Good afternoon, everyone. My name is key wa lee and im an auto manager for kpmg so im here to present the Financial Statement auto results for the fiscal yearending june 30th, 2017. So i have in front of us the presentation so lets go down the first slide. The most important slide is the auto results and you can see that there is a result of our audit and there are no uncorrected or corrected misstatements and weve issued a unqualified opinion with a clean opinion and there are no issues and control noted during our ought i had. Im going to add emphasis to this. Its always an audit speak and i just wanted to be on the record that you found nothing outside of the audit expanders that would cause a question about how the funds been disbursed, managed or controlled during the course of this year is that not correct . That is correct. Theres nothing that we found. That is deemed to be report able to the board. Thank you. Ok. Ok and going through the next couple of slides these are required communications that presenting to the board so the first one called the management over of controls so this is a re but the able and this is the fact that across all entities theres some risks associated with the management override of controls so its part of our audit procedures and we are required to have procedures in place to evaluate from the control of substantive area if theres anything that deems to be a warrant that there is control and as a result you can see on the presentation that theres nothing that came about that everything resulted from a procedures that warrant any type of communications to the board. Ok, moving onto the next slide, this is also a, what we call a significant risk and this is basically just that we as auditors have to do more diligence to make sure that the significant risk has been mitigate. This is related to the blue claims reserve. It is a significant risk because its an estimate with judgment involved coming up with a liability for the june 30th and from our procedures, we have from a control and substantive area we have looked at their liability with involved our own kpmg action so look at the methodology and what goes in to the liability and nothing there were no exceptions noted at the end of the day. All right, moving on next slide, the significant account practice s so its been very consistent year over year and these are actually presented in the Financial Statements under note 2 where management has actually reported like all of their significant counter policies and as a result of our task work, they are in accordance with general accepted counter principles and consistent with our practices. Ok. Onto the next slide, these are the required communications and other matters that we as auditor s are required to report so no concerns from management and i know there was a change in some management but nothing that can warrant any problems. Management has been helpful and cooperative so you can see on this wonder wonderful slide theres nothing that needed to be worrisome or any concerns at this point. All right, the next couple of slides very worry but its basically to kind of communicate what management is responsible for and so managements responsibility for the presentation and preparing the Financial Statements and making sure that there are controls in place when theyre preparing these financials. And then the next slide is just kind of more responsibilities making sure that the Health Service board your responsible really for the oversight of the controls over Financial Reports and that is the proper tone at the top and because we do the audit financials it doesnt release the management or the board of the responsibilities when prepared these Financial Statements. Last couple slides are our kpmg responsibilities so better responsible for doing, planning and performing the audit, conducting our audits in accordance with professional standards as well as forming and expressing opinions over the financials. And a communicating to management and the board of any significance issues and concerns very last page this is also just responsibilities over over the m dna and its something that we dont issue opinion on but we do perform limited procedures and it is a required supplement in addition to the Financial Statements. And mdna is the Management Discussion and analysis. Thank you. Yes. And that is all for my presentation. Were you the partner that led the process a year ago. I was the manager. Did you find the same high degree of professionalism and cooperation you found the year before present this year . Yes, yes, management consistently performed really well and very cooperative. All right. Thank you. I just wanted that to be on the record as well. Thank you. Just one quick question. Yes. Some adjustments that were passed from kpmg . No pass auto adjustments. Thank you. And now i will give a high level overview of the Financial Statements theres a lot of detail theres provided and both in the notes at the beginning and the Management Discussions so i will just give a real quick high level because i know we have a tight time line so the trust began 20162017 with a balance of 68. 6 million in net assets and end of the year with a balance of 72. 5 million. So thats a 3. 9 million increase and the primary reasons for that is a 9. 2 million decrease in City Health Plan net position as you know, we continue to subsidize the rates in order to bring them down and make them affordable. And then theres 13. 1 million increase in the net position that 6. 9 million for the blue shield and 3. 7 million for the dental plans and . 8 million for the healthcare sustain ability fund as we know as the 3 and. 5 for flexible spending and 1. 2 as the Interest Income performance penalty and forfeitures. There is a outline in the presentations towards the back that item eyess for the performance guarantees and penalties and forfeitures and there are obligations as weve discussed and reserves against the net assets and they are 45. 3 million against the 72. 5 million and theres a explanation in the report but essentially its 22 million in contingency reserve, 19 million in stabilization reserves, 3 million for the healthcare sustain ability fund and as i mentioned, theres 1. 2 million for adoption benefits basically its im looking at the timeframe from 2008 to 2021 and as you know weve been funding the adoption benefit through the performance guarantees. And i provided some other information in the report for and i the first thing is at the end of calender year 2016 there was a combined total of 14. 1 million in the stabilization reserves for the city plan and delta dental. We have used 7. 7 million of that for 2018 rates and what is available for the future years is 6. 4 million and that is in delta dental so essentially we have a decision by the board to buy down rates using the complete amount in the stabilization reserve. Theres also a comparison of the investment earnings performance guarantees and forfeitures between the two years and so there was a total decrease there the total decreased from 1. 18 million in 1516 to 1. 16 in 16 and 17 and that was a lot of increases and a few decrease so the increase 113,000 and forfeitures 263,000 and while the performance guarantees decreased 396,000 and that reason of that decrease is not because were not collecting performance guarantees and its not due to inadequate controls that we have in our contracts, we got, in 1516 we received two years of performance guarantees and 1617 we received one year so its very strange comparison so i wouldnt be concerned about that. The next steps are Financial Statements were issued in october and we have hard copies at the office, soft copies are Available Online and then the comprehensive annual Financial Report that contains us as a portion for the citywide report is due out some time in december and as we expected as i expected the going between the Financial Systems has resu