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SFHSS CFO reports improved finances; 10‑county survey shows moderated medical trend at 6.8% — board approves survey results
Summary
CFO Iftikhar Hussain reported a slight improvement in SFHSS net position for January and projected pharmacy rebates and interest income increases; the board unanimously approved the 10‑county survey used for setting 2026 non‑represented rates, which showed an average projected increase of 6.81 percent.
San Francisco Health Service System Chief Financial Officer Iftikhar Hussain reported to the Health Service Board on March 13 that the system’s net position improved modestly for the month ending Jan. 31, 2025, driven in part by timing of pay periods and favorable pharmacy rebates.
Hussain told the board the system had expected a $37 million drop last month but saw a $25 million improvement due primarily to pay‑period timing. Pharmacy rebates and higher interest income were favorable: Hussain cited an updated pharmacy rebate expectation of roughly $27 million for the year and interest income of about $6 million because of higher rates. The health sustainability fund balance projection remained unchanged at about $5.1 million, and general‑fund expenses were about $300,000 favorable due to vacancies.
Hussain also flagged a potential future issue: the San Francisco Unified School District is projecting a substantial reduction in headcount (he referenced a projected drop of roughly 600 FTE), which could reduce direct premium revenue and related overhead support tied to that employer’s enrollment.
Separately, the board considered the annual “10‑county survey,” which SFHSS uses to benchmark market rate trends when setting plan year rates for non‑represented employees. Hussain and staff presented survey results showing an average projected increase of 6.81 percent for the 10‑county basket; Santa Clara and Alameda counties showed larger increases for specific carriers. The board moved, seconded and approved the survey results by unanimous roll call.
Action taken: The board approved the 10‑county survey results for plan year 2026 (motion made and seconded; roll‑call vote: President Howe — Aye; Vice President Zavansky — Aye; Commissioner Kremen — Aye; Supervisor Dorsey — Aye; Commissioner Howard — Aye; Commissioner Sass — Aye; Commissioner Wilson — Aye). The item passed unanimously.
Next steps: The approved survey will be used in upcoming rate development for plan year 2026; SFHSS staff and the mayor’s office will continue technical discussions on interdepartmental work orders as rate and budget negotiations continue.
