Switch in Third Party Administrators producing savings for Davenport, says Alderman Jason Gordon PDF Print E-mail
News Releases - Business, Economy & Finance
Written by Jason Gordon   
Thursday, 24 October 2013 07:27
Davenport, Iowa - October 24 2013 - A switch in Third Party Administrators (TPA), the entity that processes city employee insurance claims and provides employees with a PPO network of doctors, is producing significant cost savings for the City of Davenport. Effective January 1st of this year, the city switched from its previous TPA to United Health Care, after the city went out with a Request for Proposals (RFP) last year. Alderman Gordon first brought up the potential for cost savings if a new TPA was secured during FY13 budget discussions, and continued to work on the issue throughout the year. “For the first few months under the new TPA, we didn’t see the savings right away as we were still paying out claims from the previous TPA, but by about July 1, we started to see the cost savings I thought we would,” said Alderman Gordon. He continued, “It is my understanding from finance staff that we have seen a 12% savings in health care claims in the first quarter of FY14 compared to the same period last year. Assuming that trend continues for the rest of this calendar year, the savings to the taxpayer will be between $1 to $1.5 million.”

Alderman Gordon was the driving force behind the switch in the city’s TPA. “I had a conversation with a colleague who works in the insurance industry, and I was convinced we could save money if we went out to bid for a new TPA. I am not sure staff was initially convinced it was the best idea, and putting together an RFP is somewhat labor intensive, so I kept gently insisting that we pursue this course of action.”

Alderman Gordon indicated that he is excited to see what the savings will be in 2014. “That will really be the first full year that the new TPA is processing 100% of our employees’ insurance claims, and I am optimistic that the savings to the taxpayer might be closer to $2 million. As we continue to deal with growing budget constraints, I am proud of the fact that I found a way to save taxpayers approximately $1.5 million this year.”

For more information, contact:
Jason Gordon
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