In 2003, the city of Las Vegas had experienced several years of 15% - 20% increases in their annual employee health care costs, and recognized that without significant change in the insurance model, expenses would continue to escalate to the point where the cost was unsustainable.  An analysis of alternatives was conducted, including increasing employee contributions and/or decreasing benefits provided.  It was determined that while such changes could provide short-term cost relief, they would not meet long-term goals, as they were reactive in nature, rather than proactive.  Health care costs are a function of utilization.  However, when employees see only premiums and copays they do not receive a full picture of the actual cost of various treatments, which can lead to overutilization of such items as Emergency Rooms and brand name drugs.  Nor is there a clear connection made between personal health and the overall cost of health care. 

This case study was submitted to the Alliance for Innovation for consideration at the 2010 Transforming Local Government Conference.