Posted Jun 23, 2008
Opinion

Warwick and health care - all is not as it seems to be

They say no good deed goes unpunished. I believe it.

Last fall I got a call from my hometown mayor, Scott Avedesian of Warwick. He asked me to co-chair an advisory group to help the city control its escalating health care costs. Learning that my fellow co-chair would be Dr. Andrew Snyder, a licensed physician and fellow Warwick resident currently serving as president of the American Academy of Pediatrics, I agreed. Snyder works as a Lifespan executive, a medical director whose duties include contracting matters for the Lifespan/Physician's Services Organization.
Also serving would be Christine Ferguson, former chief of staff for the late U.S. Sen. John Chafee. She is also a former director of the R.I. Department of Human Services, as well as commissioner of health in Massachusetts. She is widely considered among the nation's leading health-policy experts, and is now a professor of health policy at George Washington University in Washington, D.C.
I was flattered to be considered among such notable health care thought leaders. I commended the mayor for his recruiting efforts in a project I knew would be difficult, time consuming, probably contentious and completely uncompensated except for the satisfaction of helping my fellow taxpayers.
The task force roster would be filled out by members of the mayor's administration, representatives of each of the employee unions, the consulting firm hired by the city and the president of the City Council. The city provided a meeting room but no administrative support. The meetings therefore were informal, but the discussions were provocative and productive.
At the outset we focused on the pre-conceived attitudes and ideas that participants brought to the table. It very quickly became evident that the employee groups were adamantly opposed to any change from Blue Cross & Blue Shield of Rhode Island as the third-party administrator (TPA) of the city's self-funded benefit plan. They were vigorously challenged by the consultants and city officials aware that savings could be available by piggy-backing the state,s contract with UnitedHealthcare of New England.
Doggedly, the employee representatives held their ground and made a rational case, based in part on carefully documented evidence of widespread corporate malfeasance and questionable ethics by United across the nation. Indeed, there were legal proceedings against the company on-going in about 30 states. They provided a compendium of documentation against United so comprehensive it was ultimately included as an attachment to the group's recommendation to the City Council.
It is critical to understand that the TPA contract represents only about 5 percent of the city's total health-benefit costs, the preponderance consisting naturally of claims. Even seemingly substantial savings on the TPA fee very easily could be more than offset by changes in claims experience, which would subsequently show up in higher premiums with the re-insurer the city uses. So the manner in which the program is managed is a critical concern, and the cooperation and trust of the covered employees and their families would be a critical element of that success or failure. Here's why.
Our analysis revealed that a mere 5 percent of the covered group was responsible for about 60 percent of the claims cost. This is a very manageable group, consisting largely of individuals with chronic health conditions such as diabetes and high blood pressure.
The advisory group learned there were significant differences in the way in which the competing insurers proposed to manage this group. I met with Dr. Harold Picken, the new medical director for BCBSRI, who carefully outlined the process the Blues envisioned. As a local entity, Picken described locally based clinician support for this population but was careful to acknowledge that success was still highly dependent upon a delicate, trusting relationship with the individual subscriber. The principal impediment to achieving success in controlling costs turns out to be lack of patient compliance or cooperation.
Snyder, my co-chair, from his experience as a pediatric provider and as an administrator, described the United approach as far less personal, less local and more automated. Cheaper, to be sure, but effective? The risks were great.
Ferguson concurred that what we already knew of the attitudes of the employee groups made any chance of United gaining the critical element of trust among them certainly unlikely, if not impossible. United of course, later complained that, we did not consult with them in person. There would have been little point.
The rest of the story has been in the newspapers. United submitted the low bid, although its proposal did not conform technically to the city's request. The consultants and the administration recommended that the council award the contract to United, but the Health Care Advisory Committee recommended an award to the collaborative offering Blue Cross services. We provided a detailed report of our findings as substantiation for the business soundness of our recommendation. The council decided to reject all bids and to solicit new proposals.
For our efforts the CEO of the local UnitedHealthcare affiliate issued a stinging rebuke of our group as either unqualified or having conflicting interests or both. It is completely unfounded and just wrong in nearly every way, but then, he has a product to sell. The press picked up the scent of controversy and several critical, even sensational pieces have appeared. All this seems curiously inappropriate for a volunteer effort by the city's own taxpayers to solve a most complex and sensitive problem.

So it is that no good deed goes unpunished. But stay tuned.

Ted Almon is the president and CEO of The Claflin Co., a medical equipment supplier, and is an active participant in the debate over health care in Rhode Island.

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