State/Provincial Update - September 28, 2016

There’s Still Time to Register for GFOA’s Upcoming Web-stream Events

Host your members to view the training program together and save with group discounts! 

  • First Annual Better Budgeting
    October 6, 2016; encore presentation, January 12, 2017
    2:00 p.m.−4:00 p.m. (Eastern)
    Save with group discounts ● 2 CPE credits

The program is designed to equip those on the front lines of local budgeting to do an even better job meeting the many practical challenges they must face from day to day and from year to year. Click here for details and to register today.

  • 21st Annual Governmental GAAP Update
    November 3, 2016; encore presentation, December 1, 2016
    1:00 p.m. −5:00 p.m. (Eastern)
    Save with early and group discounts ● 4 CPE credits
    Early discount registration fee for the November offering ends Friday, September 30!

Learn everything you need to know about the most recent developments in accounting and financial reporting for state and local governments, including the latest GASB statements, exposure drafts, and implementation guidance. Click here for details and to register today.

If you have any questions about the training, contact GFOA.

 

Sign Up as a Host Viewing Site

There are no direct costs to your organization for hosting a viewing site. Out-of-pocket expenses, such as facility and/or equipment rental or food/refreshments will not be reimbursed, however. To help offset these costs, GFOA offers a revenue sharing program, through which organizations will earn a percentage of their site’s net revenue based on the total number of paid participants. The program is open to state associations and government entities, but is not open to private-sector organizations. To sign up as a host viewing site, contact Barb Mollo.

 

Submit a Topic and/or Speaker for GFOA’s Annual Conference

The call for topics for GFOA’s 111th Annual Conference, May 21−24, 2017, in Denver, Colorado, is open hereGFOA staff will review all suggested topics and identify a complete program for the 2017 conference in late 2016. Speakers will be invited in early 2017. 

Registration for the Annual Conference will open soon on GFOA’s website. We will hold the rate of $380 for all GFOA state and provincial representatives and presidents through the span of the conference. If you have any questions about the conference, contact GFOA.

 

Look for GFOA Training in your Area

This training brochure provides a list of courses taking place through December 2016. Go to GFOA’s training schedule page for course descriptions and speaker listings, to register, and to view future listings. GFOA’s training courses provide a great opportunity for your members to earn additional CPE credits at an affordable cost and to save with group discounts. 

If you have any questions about training, contact GFOA.

 

What Drives Rising Health-Care Costs?

Government leaders across the United States are concerned with rising health-care costsbut what are the root causes of those large and persistent annual increases that we all have learned to take for granted? Understanding those forces will inform the strategies your organization needs to contain the cost of employer-provided health benefits. 

Research conducted by the Commonwealth Fund found that family plan premiums for private employer-based health insurance (the type typically found in most local government organizations) grew an average of 7.3 percent a year between 2003 and 2013. Employee premium contributions grew an average of 9.3 percent a year in the same period. The study also found that deductibles for firms of all sizes more than doubled over this timeframe, causing premiums and deductibles to combine for a greater share of an average family’s income than ever before. These facts clearly illustrate the challenges posed by rising health-care cost. 

This kind of cost growth is not inevitable; clear and striking differences exist in the U.S. rate and that of other industrialized nations. Observers might assume that the high costs in the United States are related to higher capacity (an ability to do more for patients) or greater utilization (patients electing to purchase more health care than their peers in other countries). They might also assume the higher spending totals produce a superior level of care. But some findings contradict this belief. Research conducted by the Organization for Economic Co-operation and Development (OECD) Health Division (2006) found that the United States fared poorly when compared to 30 other industrialized nations with market economies. Take the number of physicians per capita for instance. The OECD found that the United States had 2.4 physicians per 1,000 people, while the OECD median was 3.2, suggesting a roughly equivalent doctor to population ratio. Also, while the U.S. has much higher spending per capita, the OECD median for average hospital stay is almost two days longer than that of the United States. Taken together, these findings seem to suggest that, compared to other places, the United States simply has higher prices for similar goods and services. 

Spending More and Buying Less? 

If we conclude that the U.S. spends more than other industrialized nations for comparable utilization rates, the next logical question is, why? Why is the United States willing to pay more than other countries for what appears to be similar health-care utilization? The answer to this question may be found not in what we purchase but rather in the way we purchase health care—namely, the separation of payment and consumption. Put simply, economists believe this separation of payment and consumption affects purchasing decisions by introducing an element of irrationality into the buying process—the true value of consumers’ purchases is not determined in the same way it would be if consumers experienced the full cost at the time of consumption. Some researchers in the fields of behavioral and health economics think high-deductible health-care plans (HDHPs) offer a solution to this challenge. 

Unfortunately, the “spend-more-buy-less” situation is not the only catalyst for rising health-care costs in the United States. Other, more traditional challenges—wasteful spending, prescription drug cost, advances in medical technology—also play a role, exacerbated by an aging workforce, unhealthy lifestyles, high administrative costs, and service provider consolidation that creates a seemingly insurmountable climate of cost growth. Public-sector public-finance professionals need a robust understanding of this dynamic before they can begin addressing these challenges. 

Wasteful Spending

Wasteful health-care spending generally takes the form of excessive treatments, tests, or prescription drugs.

Services. Redundant, inappropriate, or unnecessary tests and procedures that are recommended by physicians or requested by patients are a huge source of waste. Some believe physicians “over-treat” in an effort to avoid litigation or to appease demanding patients, while others believe the goal is simply to increase profitability. The reasons believed to be driving patients’ demands for high-priced care also vary. Value-based insurance design, which steeply reduces or eliminates the cost of preventive care, might help combat this challenge. The approach seeks to decrease the frequency of expensive procedures, thereby reducing overall cost. Activities such as wellness visits and some treatments such as blood pressure medication would be provided at no charge or a drastically reduced rate. 

Prescription Drugs. U.S. prescription drug spending doubled between 1995 and 2000, reaching $122 billion, according to a 2003 report by the National Institute for Health Policy. Despite significant efforts to control cost (e.g., encouraging employees to purchase generic drugs), prescription drugs remain among the top three cost growth categories, along with hospital usage and physician services. The causes for rising prescription drug cost are twofold: 1) purchasing habits, or the propensity of patients to select brand-name drugs; and 2) the type of drugs being consumed. The cost difference between brand-name drugs and their less expensive generic counterparts is so well known that some studies categorized the cost difference between the two as “waste” because this cost difference should be avoidable. Programs aimed at changing purchasing behavior help by educating employees about the similarities and differences between brand-name and generic drugs. According to the AARP’s Public Policy Institute, plan participants who viewed generic and brand name price comparisons were 60 percent more likely to select a generic drug than those who did not conduct price comparison exercises. The study also cited a 22 percent increase in plan participants switching to generic drugs because of direct-mail educational efforts. Web-based shopping tools have also increased the likelihood of selecting less expensive drugs by making that option simpler and more user-friendly. Tools such as tiered prescription drug benefits, which charge plan participants different co-pay amounts depending on the tier their drug is in, may offer a viable cost control option as well. 

Part 2 of this article, in next month’s newsletter, will discuss the role of medical advances, the aging of the workforce, and unhealthy lifestyles.

If you have any questions, please contact Mark Mack, a consultant in GFOA’s Research and Consulting Center.

 

Certified Public Finance Officers (CPFO) Program

The CPFO Program of GFOA is a broad educational self-study program designed to verify knowledge in the disciplines of government finance. To earn the CPFO designation, candidates must pass a series of five examinations covering the major disciplines of public finance.

NEW Click here to view the program’s new brochure.

There are now 664 individuals who have achieved the CPFO designation. The next CPFO exams are taking place this Fall at locations across the U.S. Click here for more information about the exams and the Certification Program.

If you have any questions about the CPFO Program, contact Jim Phillips, Senior Program Manager.

Congratulations to the following individuals who recently achieved the CPFO designation: 

Silvia Amparano, Finance Director, Tuscon, Arizona
Cynthia Thayer, Financial Analyst, Colorado Department of Local Affairs
Susan Worrell, Chief Accountant, County of Albemarle, Virginia

Click here for a listing of all active CPFOs that is searchable by state!

 

GFOA Awards Program Update

GFOA encourages and recognizes excellence in financial reporting, budgeting, and financial management by granting awards to those governments that meet program standards. Below are the latest recipients of Program awards: 

  • Certificate of Achievement for Excellence in Financial Reporting Program (CAFR Program)
    NEW Congratulations to the following entities that have received the Certificate of Achievement for Excellence in Financial Reporting for the first time:

City of Lafayette

CA

Town of Stallings

NC

Town of Wayland

MA

Oakland Community College

MI

Edinburg Consolidated Independent School District

TX

River Forest Public Library

IL

East Brunswick Public Schools

NJ

City of Lincoln

CA

City of Covington

GA

Carpinteria Valley Water District

CA

Multnomah Education Service District

OR

City of Lake Elsinore

CA

Weldon City Schools

NC

Michigan Finance Authority

MI

Town of Mansfield

MA

Tarrant Regional Water District

TX

Ravenna School District

OH

City of Hudson Oaks

TX

Town of Portsmouth

RI

Haralson County

GA

Mt. Hood Community College

OR

Midvale City Corporation

UT

City of Twin Falls

ID

Village of Estero

FL

Trinity River Authority of Texas

TX

City of Lawrenceville

GA

Click here if you are interested in participating in the CAFR Program or serving as a reviewer.

  • GFOA’s Latest Budget Awards Program Winners
NEW! View list of governments in your state that earned the Budget Award in August 2016. Budgets that are initial winners of this award are identified by the phrase “FIRST-TIME WINNER.” GFOA encourages you to contact each of the first-time award winners and to offer to arrange a formal presentation of the award. If you have any questions regarding the award winners, please contact Kathie Schultz, Senior Program Associate, GFOA Technical Services Center.
 
  • Popular Annual Financial Reporting (PAFR) Award Program First-Time Winners
NEW! Congratulations to the following governments for achieving the PAFR Award for the first time:
- Putnam County, Georgia
- City of Clayton, Missouri 
- City of Conroe, Texas

Read more about the PAFR Program or e-mail us.


Do you have an Upcoming Annual Conference?

If so, please fill out the “GFOA Promotional Items” form, checking off any materials you are interested in receiving for your upcoming annual conference. The form is interactive, so you can type and save your changes directly to the document. Submit the completed form at least two months before your event to Kate SouthardPlease note: raffle items are limited to annual conferences.

If your state or provincial association has any new educational or mentor programs to promote or events at your annual conference to connect fellow finance officers and advance the profession, we will share the information in this monthly memorandum. Please send a brief description of your program to Natalie Laudadio.   

 

Washington Update

Click here for the latest Washington Update prepared by our Federal Liaison Center in Washington, DC. More information may also be found on the Federal Government Relations section of GFOA’s website.

 

Help Us Keep Our State/Provincial Officer Directory Up-To-Date 

If you have not done so yet, please review the State/Provincial Officer Directory we have on file and let us know if you have any changes. Any changes can be e-mailed to Kate Southard.