PR tab of $118,000 included push to control board

By Katie Kerwin McCrimmon

Colorados health exchange has paid nearly $120,000 this year for outside PR advice that included discouraging members of the oversight board from talking about the exchange as it launched.

So far this year, Connect for Health Colorado has paid about $118,100 to the Denver firm, OnSight Public Affairs. A contract between the exchange and the firm calls for $15,000 per month in payments from September through November, $13,000 a month from April through August and $9,000 per month for January through March. The contract called for about 60 hours of work per month in exchange for the monthly retainers.

The exchange also has an in-house director of communications and outreach along with other employees who specialize in digital communications, marketing and outreach.

Myung Oak Kim directs the exchanges communications team and said funds paid to OnSight covered the work of as many as four employees there and two at a marketing firm. OnSight partner, Ben Davis, leads the firms exchange work. Kim estimates Davis and the others spend about 180 hours per month on exchange work.

Solutions obtained records about OnSights work through the Colorado Open Records Act.

Ben Davis is primary consultant representing Colorados health exchange. His company is getting $15,000 a month to consult for Connect for Health Colorado.

Among the communications strategies that the exchange promoted was a plan to stifle dissent from board members who oversee the multi-million dollar taxpayer-funded exchange and represent the public.

On the eve of the exchanges Oct. 1 launch, CEO and Executive Director Patty Fontneau sent an email to board members urging them to avoid calls from the media, to refer them instead to Davis or to use one of several canned quotes that Fontneau supplied. (Click here to read the email.)

In particular, Fontneau did not want board members to talk about potential IT problems.

We strongly recommend you not engage in extended discussion especially of the technology.Most of these reporters have already spoken with Ben and are shopping for a different answer, Fontneau wrote.

Solutions has reported extensively this year on technology challenges and the difficulties that exchange and Medicaid managers have had in working together.

Colorados challenges are different than the software glitches that have dogged the federal exchange,

In Colorado, two separate entities one a state agency, the other a public nonprofit struggled to work together to build a planned, streamlined application for customers. Instead, Coloradans who want a federal subsidy must first apply through the state for Medicaid, then get a denial before they can buy private health insurance through Connect for Health. Medicaid and exchange managers now are under orders from the federal government to create a single streamlined application. Colorado is using Kentuckys application as a model.

On September 30, as the exchange prepared for its debut the next day, Fontneau gave board members specific communications advice.

The board members represent varying constituents from insurance carriers to the chronically ill and uninsured to small business owners. Rather than commenting on how the opening was going for affected people, Fontneau urged board members not to talk to the media, or if they did, to make upbeat, general comments such as, This is an exciting time for Colorado as we open the Connect for Health Colorado marketplace, allowing Coloradans to learn about their health insurance options and shop for new health plans that will begin providing benefits as early as January 1, 2014.

Board member and small business owner, Ellen Daehnick, has been disconcerted over attempts to thwart open discussion about the exchange. She and other board members have been increasingly vocal about their concerns and have pressed both exchange and Medicaid managers for immediate fixes as the first deadline to buy 2014 insurance approaches on Dec. 23.

I was very surprised to receive such a directive email from the executive director telling us what we could and could not talk about with the press, Daehnick said of Fontneaus Sept. 30 email. Connect for Health is an entity delivering on a public promise, spending large amounts of public dollars to do so and the executive directors attempt to maintain tight control on information flow is at direct odds with that mission. Were all in this together and the only way for it to work is transparency.

Following Fontneaus Sept. 30 email, as the exchange launched, it became clear that Colorado was experiencing some snafus. In the first few days, many potential customers could not create accounts.

Then in the weeks that followed, some customers complained vociferously about Colorados long, invasive Medicaid application that required extensive financial information. After struggling to fill it out, some customers then had to wait weeks to get Medicaid approvals or denials before they could buy private insurance.

As the problems escalated, board member Nathan Wilkes, who runs an IT company and has a chronically ill child, called the complex Medicaid application odious and embarrassing. Medicaid managers have since removed some of the unnecessary questions about financial assets.

Connect for Health spokeswoman Myung Oak Kim said the exchanges PR strategy was appropriate and that OnSight has coordinated all press relations for the exchange.

The board members and staff often request guidance and training about ways to communicate in a clear and consistent manner in a quickly-evolving environment and with speaking to the media and OnSight provides such guidance, Kim said in a written statement.

In fact, Davis and Fontneau have barred some exchange employees such as Connect for Healths technology supervisor from speaking to the media.

Kim also defended the decision to hire outside PR help.

Our approach from the beginning has been to maintain a lean staff, and our budgets were developed to use contracted services in areas where we did not envision a long-term staff position, Kim wrote.

Given the aggressive schedule and all of the activities that needed to happen within a span of months (choosing and launching a new brand, launching grassroots outreach and speakers bureau, opening the marketplace, educating Coloradans about the marketplace and their options, selling insurance, etc.) as well as the growing demand for coordination on communications and outreach activities with partners and requests for information from the press, OnSight provided the range of expertise and resources we needed in the most cost-effective way, she wrote.

Kim said Colorados exchange would have had to hire three full-time employees to handle the work that OnSight has provided and that other states have much larger in-house PR and marketing teams.

The exchanges spending could be a factor in the future. After federal grants run out next year, Connect for Health is supposed to become financially self-sustaining. Sign-ups in the first two months are lagging well below the lowest projections. (Click here to read Boomers dominate health sign-ups.) If too few people sign up for health insurance through Colorados exchange, Connect for Health might have to charge each user higher fees or could have to cut costs. Lower than expected sign-ups come at a time when executives at the exchange are being considered for pay increases and bonuses. (Click here to read Exchange boss wants pay hike.)

The OnSight contract calls on the consultants to provide the exchange communications planning, assistance with outreach efforts and responses to media inquiries. In addition, Kim said OnSight trains speakers, coordinates presentations about the exchange and distributes news for the exchange.

Along with OnSight, Connect for Health also has contracted with an advertising firm and a market research firm.

Davis said his firm has provided valuable help.

Our whole team at OnSight is very proud of the work we are accomplishing with Connect for Health Colorados staff and board to publicize the important and valuable services they are providing to Colorado consumers.

Correction: An earlier version of this story said that the contract between OnSight and Connect for Health did not specify a minimum number of hours to be worked per month in exchange for the retainer. The contract specifies that the consultants will work roughly 60 hours per month.