Health-care cost savings in contracts between New York City and its municipal labor unions should be recurring and "bend the cost curve" by making the system operate more efficiently, said Carol Kellermann, president of the Citizens Budget Commission watchdog organization.
"This means savings that lead directly to reductions in per person or per family costs," Kellermann wrote in a
Earlier in the week, the United Federation of Teachers ratified a nine-year contract with the city that is expected to set a pattern for settling expired contracts with 152 municipal unions.
Savings from changes in national and regional health care inflation, temporary rate "freezes," or headcount reductions should not be counted as savings under the agreement, according to Kellermann, who said only changes that improve the efficiency of the system or reduce the city's annual health care cost should be counted.
The letter further calls for a system of quarterly public reports to monitor the results of each savings initiative.
Moody's Investors Service rates the city's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
