Foxes guarding the henhouse? Consumer advocates cry foul over health board

By Katie Kerwin McCrimmon

Gov. John Hickenlooper appointed a consultant to Colorados new health insurance exchange board who has instructed clients in the insurance industry on how to find gold in the exchanges.

A strict conflict of interest policy is supposed to prevent people with direct financial interests from running the exchange board, which could funnel as many as 400,000 new Colorado clients into the states health insurance market.

But, the newly appointed board includes four heads of health insurance companies, along with Eric Grossman, an executive with a privately held company called TriZetto, based in Greenwood Village.

TriZetto bills itself as the leading information technology company to the health insurance industry with its technology touching half of the U.S. insured population.

Exchange board appointees:

  • Richard Betts, Democrat, Telluride, owner of ASAP Accounting and Payroll Inc., appointed by Gov. Hickenlooper
  • Dr. Michael Fallon, Republican, Denver, ER physician and nominee against U.S. Rep. Diana DeGette in 2010. Appointed by Sen. Minority Leader, Mike Kopp, R-Littleton.
  • Stephen ErkenBrack, Grand Junction,president of Rocky Mountain Health Plans, appointed by House Speaker Frank McNulty, R-Highlands Ranch
  • Eric Grossman, Democrat, Englewood, vice president of TriZetto, appointed by Gov. Hickenlooper
  • Gretchen Hammer, Democrat, Denver, executive director of the Colorado Coalition for the Medically Underserved
  • Robert Ruiz-Moss, Republican, Lone Tree, executive with Anthem Blue Cross and Blue Shield, appointed by Gov. Hickenlooper
  • Arnold Salazar, Alamosa, executive director of Colorado Health Partnerships LLC, appointed by House Minority Leader Sal Pace, D-Pueblo
  • Elizabeth Soberg, unaffiliated, Centennial, chief executive of UnitedHealthcare of Colorado, appointed by Gov. Hickenlooper
  • Nathan Wilkes, Arapahoe County,founder and principal consultant, Headstorms Inc., appointed by Sen. President Brandon Shaffer, D-Longmont.
  • Grossman wrote an article last October for an industry publication titled: Theres Gold in Exchanges. Heres How to Stake Your Claim.

    The piece describes the good, the bad, and the ugly about health exchanges.

    Mandated under the Affordable Care Act, health exchanges are the new online tools where individuals and small businesses are supposed to be able to shop for health insurance and, if qualified, receive subsidies, starting on Jan. 1, 2014.

    Grossman wrote that insurance companies should profit since 24 million Americans will be joining the health care market, leaving an estimated $55 billion to $60 billion in annual premium revenue up for grabs.

    He wrote that its bad that exchanges are competitive marketplaces where insurance companies will have to cut costs and increase efficiencies.

    The ugly, according to Grossman, is that in this new system, with ground rules dictated by government, profits likely will drop significantly, especially for those payers most resistant to change.

    Now, Grossman will be one of nine board members in charge of setting up Colorados health exchange.

    Through a spokesman for TriZetto, Grossman declined to talk to Solutions about his board appointment, saying that representatives in the governors office did not wish to have him speak before the boards first meeting on July 11.

    Loren Finkelstein, a media representative for TriZetto said the company is not involved with exchanges.

    Thats why Eric Grossman makes a good representative. Theres no conflict of interest because were not trying to go after the exchange play, Finkelstein said. However, as a very large technology vendor, were in a good position to help evaluate and set up criteria.

    Consumer advocates from the Colorado Consumer Health Initiative and the Colorado Center for Law and Policy are crying foul that industry insiders dominate the new board.

    Law and Policy Center analysts said they were troubled that an industry bloc might have a substantial effect on the boards deliberations.

    If decisions about this new competitive marketplace are disproportionately influenced by the health insurance industry, its hard to understand how the process will result in the strict oversight and high standards necessary to design a market that provides high quality, affordable insurance choices, a CCLP statement read.

    Business advocate Loren Furman, who is vice president of government affairs for the Colorado Association of Commerce and Industry, counters that the exchange selections represent a fair and broad group of individuals.

    We anticipate theyre going to do a good job on this board, Furman said, noting that she disagrees with the consumer advocates that conflicts will plague the board.

    I think there will be people who will be able to have the expertise and be able to serve and lead. We went through a thorough process to make sure that conflicts of interest were avoided, Furman said.

    The four industry heads are: Stephen ErkenBrack of Rocky Mountain Health Plans, Robert Ruiz-Moss, an executive with Anthem Blue Cross and Blue Shield, Elizabeth Soberg, chief executive of United Healthcare of Colorado and Arnold Salazar, executive director of Colorado Health Partnerships LLC, a provider of mental health insurance working primarily with Medicaid patients. In addition toGrossman of TriZetto, the other board members include Mike Fallon, a libertarian ER doctor who ran unsuccessfully for Congress against U.S. Rep. Diana DeGette on a platform of reversing what he calls Obamacare and fighting health exchanges, and three who are seen as consumer advocates.

    Among them is Nathan Wilkes a telecommunications specialist from Arapahoe County, who has fought insurance companies for years after his son was born with severe hemophilia and required expensive medications. Wilkes believes the health exchange board is tilted in favor of industry and is braced to face off against them.

    Ive taken on the big guys as a personal advocate. Its a fight Im ready to have. I dont know the people on the board. But, I certainly share some of the concerns (that consumer groups have raised). Its a typical fox guarding the henhouse scenario, Wilkes said.

    Weve got major insurance companies making up a third of the board and designing the exchange which is going to supposedly regulate the marketplace for their products, he said.

    Wilkes is hopeful that strong conflict of interest policies and open meetings will allow watchdog groups to keep the exchange from being biased.

    Lorez Meinhold, Hickenloopers senior policy director for health issues, said that during his interview for the board, Grossman was asked if TriZetto directly or indirectly would benefit from the exchange.

    We got the answer no. We asked that specifically. They provide IT services (to health insurance companies) but their business model isnt based on the success of the exchange, Meinhold said.

    As for the heavy representation of industry heads, Meinhold said its critical to have their involvement in the exchange.

    To make the exchange successful, we had to make sure that insurers are participants. Its why we have this diverse skill set, Meinhold said. In order for this exchange to be a success, we need a strong board that is committed to the success of the exchange.

    She said 70 people applied for the board, and in interviews each of the selected candidates expressed a commitment to being entrepreneurial, getting better value for customers and being transparent.