WARWICK—Mayor Scott Avedisian has recommended to the City Council that the city switch the administrator of its health insurance program from Blue Cross & Blue Shield of Rhode Island to UnitedHealth of New England on a one-year trial basis, given the promised savings of $883,000 next year.

If the School Department were also to switch administrators, it could save an additional $923,000 over the current rates, according to a final report issued Wednesday.

“The administrative savings, the comparable claims costs, the ability of United to replicate the benefits in all areas cannot be ignored,” the report, issued by the Cornerstone Group, the city’s health care consultant, stated.

In an interview yesterday, the mayor said it was hard to argue with the numbers. “We have traditionally in this city taken the lowest bid and that is a hard thing to all of a sudden start not doing,” Avedisian said.

He acknowledged that the switch does not come without a certain level of anxiety.

“I am very concerned for what the transition will be for our employees. I want to make sure that people who are now getting covered don’t suddenly find out they don’t get coverage. I want to make sure our employees are treated fairly,” the mayor said.

That trepidation was reinforced at a City Council meeting Wednesday night when municipal employees, many of them police officers and fire fighters, packed the chamber to protest the possibility of a switch from Blue Cross.

Given the concerns, Avedisian says he feels it is only fair to award United a one-year contract, when Blue Cross’ current contract expires, on June 30.

The majority of the prospective savings comes from lower fees that United charges for administering the health insurance program. As a self-insured community, Warwick pays the cost of patient services, plus a monthly administrative fee per subscriber. Though Blue Cross had agreed to lower its administrative fees, its new bid would have still cost the city $516,627 more than United.

The cost differential of specific medical services — which make up almost 90 percent of the city’s total health insurance costs — is negligible, according to the most recent report.

“The only area that United has a notable deficiency is in their number of specialists/ancillary providers,” this report adds. Blue Cross has approximately 1,136 primary care physicians compred with United’s 987 — a total of 10 percent fewer doctors.

But a review of claims submitted by Warwick employees found that 96 percent commonly used providers were in both networks, according to Cornerstone. To help ease the transition for the small percentage of patients who would lose network access to their doctors, the report recommends a six-month transition period where the city funds any out-of-network claims at an in-claim rate. The mayor did not comment on that recommendation yesterday.

The switch must be authorized by the City Council, which is expected to vote on it Monday night.

Council member Robert Cushman, who has been a vocal supporter of the move, said he feels good about what he’s heard so far.

“What we are trying to do is preserve the same level of benefits for employees at a cost savings, so we can preserve the same level of services to taxpayers by keeping the same level of personnel,” Cushman said. “Look at what is happening on the school side. They are laying off 40 people. What people need to realize is that could happen on the city side if we don’t start to cut costs.”

The mayor says he will recommend that the city’s dental insurance, now administered by Blue Cross, stay the same.

It remains unclear whether the School Department will consider switching its coverage. Avedisian emphasized that he has no say over the schools’ budget. Any policy decisions fall to the School Committee.

Robert W. Dooley, the School Department’s director of business affairs, said he has asked Cornerstone to provide School Committee members with a more detailed comparison of the two plans. That report is expected early next week and the committee will meet in a special session next Thursday to vote on whether to replace Blue Cross.

The School Department’s health insurance obligations remain slightly more complicated than those on the city side due to language in the teachers contract requiring Blue Cross coverage.

cneedham@projo.com