PROVIDENCE – On Thursday afternoon, Dec. 18, ConvergenceRI sat down with Christine Ferguson, executive director of HealthSourceRI, to talk about the agency’s future plans and challenges, not knowing that it would become an exit interview, one of the last one-on-one interviews given by Ferguson in her current job.

Ferguson, after months of being crammed into a veritable cubbyhole next to Gov. Lincoln Chafee’s office on the second floor at the State House, seemed much more at ease in her more roomy new digs on the second floor at One Weybosset Hill.

On her wall, across from a white board, was a framed portrait of her, as one of the 30 women in power lauded by RI Monthly in its December issue, which featured Gov.-elect Gina Raimondo on the cover. The irony of the cover was not yet apparent.

A sense of confidence and accomplishment pervaded the HealthSourceRI headquarters, as the agency moved through its second open enrollment season.

[The lunchroom at the HealthSourceRI headquarters was filled with leftovers from the staff’s potluck holiday celebration the day before, including half a “Death By Chocolate” cake from Gregg’s, now known as Obamacake, as one staffer joked, offering ConvergenceRI a cup of coffee and a piece of the chocolate cake, which ConvergenceRI declined.]

Ferguson was busy preparing for the final week’s push approaching the Dec. 23 deadline for re-enrollment to keep health insurance coverage beginning on Jan. 1, 2015.

Her job had been made that much more difficult because The Providence Journal had run an inaccurate wire story earlier that week, using the incorrect date of Dec. 15 as the deadline – which had been true for the federal exchange, but not for Rhode Island.

Even Rep. David Cicilline had been tripped up by the gaffe, tweeting a reminder to make sure that folks re-enroll by Dec. 15. The inaccurate tweet has since been deleted.

Unbeknownst to Ferguson, Raimondo had decided to replace her with Anya Rader Wallack, a health policy consultant who had most recently been managing Vermont’s $45 million State Innovation Model grant, a grant she had been responsible for writing, under a $100,000-a-year, no-bid contract.

The news of Ferguson’s demise was leaked on Dec. 23 by Raimondo’s communications transition team directed by Cara Cromwell, two days before Christmas [and a week before the official announcement was made] – without anyone from Raimondo’s transition team ever having talked with Ferguson. A week later, on Dec. 30, Raimondo issued an official announcement.

In hiring Wallack, who with her husband, Stanley, runs the Fall River, Mass.-based Arrowhead Health Analytics, Raimondo had chosen the person who had been managing Vermont’s efforts to transition toward the single-payer health care delivery system, an effort that Vermont Gov. Peter Shumlin had pulled the plug on in a surprise announcement on Dec. 17, saying it was going to cost too much.

The message that Ferguson wanted to drive home in the interview was about what the latest numbers for enrollment revealed: consumers are getting it; with transparent information, they can make good decisions.

“In our re-enrollment,” Ferguson told ConvergenceRI, what we’re finding is that 50 percent [of the 26,000 previously enrolled] have actually come and re-enrolled, which is way above the feds. And, of those, 60 percent of them have changed their plans, and of the ones that have changed their plans, 40 percent of them have changed carriers.”

In other words, greater transparency and increased competition works: consumers can make good decisions when given the tools.

Are you listening, Governor?

ConvergenceRI: At the recent jobs summit, there was a fascinating moment in the small group discussions on manufacturing when one of the participants, when asked about what kinds of things were working that Rhode Island needed to invest in, talked about SHOP, the program for small businesses to buy health insurance through HealthSourceRI. But the facilitator moderating the conversation didn’t know what it was. And, another participant, a CEO from a local manufacturer, quickly moved the conversation away from SHOP to talk about her own pet idea. Why do you think there’s such a disconnect between health care and health insurance in economic discussions? Why doesn’t the business community know more about SHOP?
FERGUSON: I think there are two or three different ways to approach the answer to that.

One is that anytime someone – or a company or a new foundation or even a large company – with a new product comes into a market, there are significant resources that have to be spent to just break in.

When we think about iPads and iPhones now, they’re so ubiquitous in the market. But, if you go back and really look at the length of time it took to get the whole MP3 [technology accepted], at first, it was just the music piece, iPods, and then it moved to the iPhone.

You’re breaking in something new, and you’re doing something that’s completely unique, that’s never been done in the market, there’s a natural ramp-up to awareness.

The second is: that what we are doing [for small businesses in SHOP], for example, having rate quotes that you can get a year in advance of your renewal, that’s never been done anywhere, ever, in the entire history of health insurance.

So, again, [there is an awareness issue of] getting people to know that this is something different.

But there are a lot of barriers to that.

What we’re doing is introducing a neutral, third party comparison, with transparency of information, explaining to people how it works, making it a little easier to understand.

And, if you are an entity that has offered products in the market and sold products in the market since the beginning of health insurance, essentially, the possibility that you might lose market share, or the possibility that you might have to work with businesses in a different way, is a barrier.

There are a lot of people that have been successful with the status quo, and with the way the market has existed for 30 years, and this is very new and different for some of them, it might feel a little disruptive.

These changes, while really important and good for consumers, employees and employers, aren’t necessarily comfortable for those who have been providing these services and products.

I think that that’s an inevitable and a very difficult barrier to overcome.

The way that you overcome that barrier, you can do a couple of things.

The one that we’ve focused on to date has been [to work] much more directly with businesses and brokers, to be very on the ground, making the case one by one, to get enough word of mouth and enough experience so that there is a comfort level, so that you can point to a specific business, one that you can talk with, instead of coming to me. That’s where we focused a lot of effort.

There are some very, very, very, very strong interests that don’t want to see that reality take hold. There are some, however, that see it as a real opportunity to change their business model.

We have some brokers, who are very much involved and working with us. Some of the health plans that have less market share may view this as an opportunity moving forward. It’s challenging.

The piece about business leadership in the state understanding and embracing [HealthSourceRI] is harder. Every business has an interest in keeping health care costs under control, and managing them, from a larger perspective as well as for their own business.

The question on everyone’s mind is: are these changes going to lead to lower costs, or higher costs. How is it going to affect my business? How is it going to affect me? How is it going to work?

When you have something as innovative and completely different than anyone has ever worked with in the past 30 years, it’s hard sometimes to wrap your head around it.

It requires a belief in the individual consumers and employees about how they make decisions, and their ability to make good decisions.

And, there are a lot of people who don’t think that employees can make good decisions.”

ConvergenceRI: In the new State Innovation Model plan, an emphasis is placed on developing new analytical capabilities to better understand population health outcomes. As part of that grant, HealthSourceRI has a role to develop new analytical capability. Will you be able to choose your own vendors? Or, has the state already determined who those vendors will be?
FERGUSON: I think that one of the things about the data has been really interesting to watch [in its evolution] is that there’s a difference between the source of the data and the analytics of data.

The backbone of the sources of the data is going to be the All Payer Claims Database. We also have [access to] third party data, so that we can do the same thing that the private sector does, in looking at their rates, so we can push back and make that transparent to people.

There are so many different sources of data, I think that a lot of people don’t understand that the ownership of the data "cleaner" of those sources is less important than how you use the data to do the analytics.

On that piece, we’ve always included in our budget going forward is an advanced analytics component, the creation of a data and analytics environment that allows us to use the data in ways that will help accomplish a variety of goals.

Not only in population health, but also looking at different delivery system models and outcomes. A big component of what we are doing, and what we will do, is understanding how consumers make choices: What is it that consumers want to know about a health care network, or about a health care provider?

I’m not sure that the vendors of the data cleaners are the most important piece, obviously some are better than others.

The real issue is: do you have in your particular agency the ability to do the advanced analytics on what that data [means]? And, that you don’t allow yourself to be limited in the breadth and range of in [analysis] you put out.

The really encouraging thing about the new governor is that she does understand data and analytics.

So, she is going understand that when you say we need a metrics to reduce the overall spend in Rhode Island [for health care] by 1 percent, that’s $89 million a year. If you can maintain it, you’ve got $225 million [over a four-year term] that goes back into the economy.

I think it’s more about how each effort uses and is able to develop the analytic capacity.

[In terms of the economics and health care], let me say that I have briefed a couple of governors and worked with a lot of other states. I can remember my first conversation with Gov. Mitt Romney, and with numerous U.S. senators.

I think one of the problems with the health care community is, as a whole, that we haven’t discussed these issues in the context of the economy.

Businesses, as a general rule, and government, and legislators for that matter, United States Senators, everyone, look at health care as a black hole that nothing can be done about.

And, so, when they are thinking about what’s the best bang for their buck in terms of effort and should it go into the black hole of health care, (which Obama did and look what’s happened to him, you know), there is a feeling that when you go into health care, there’s not a lot of reward. That’s one piece.

A lot of times, people don’t really understand what the economic impact is.

As I’ve said before, the total health spend in Rhode Island has doubled every nine years since 1991. The last full year of data is 2009 and it was $8.9 billion. And with the trajectory we’re on, that will be $18 billion in just three to four years.

That is 18-20 percent of our economy. You can’t do much if you’ve got 20 percent of your economy in what everyone in the business community considers to be a black hole.

So, I think, one of the things that we are doing, and one of the reasons why this is such an important effort around SHOP and around businesses in general, is to really put this in the context of the economy.

If you have, as we do [through HealthSourceRI], a business with half-a-million dollars in premiums through us, they have in the past only had 30 to 60 days to make a renewal decision. And, they never knew what the percentage was going to be, so that percentage could be anywhere from 5 percent to 30 percent in some years. The result of that was, according to [the business owner], was that amount of money that it would cost year-to-year [in premium increases] was the difference between putting an investment into his equipment and hiring two people.

What SHOP does is give that manufacturer the ability to pick a plan that is in a range he can afford, and then allow his employees to pick their own plans. [The savings] are money that then goes into the employees’ and employers’ pockets. And, it allows for investment [back into the company].

ConvergenceRI: What is the economic equation that is needed to make the case for HealthSourceRI? Is there a way to quantify the outcomes? What kinds of metrics are needed?
FERGUSON: I think the [incoming] governor understands the use of metrics and data and analytics. There’s a different between academic research and clinical research and consumer outcomes and financing issues. We don’t need to publish a double-blind study on whatever it is when the analytics come out.

The real use of data, for most of us, is more about trends. Because the legislature had to make decisions year to year, they can’t wait for a study to do something. You have to make decisions quickly, so you take the trends, the data, and look at what you’ve got.

On the re-enrollment issue, you may remember, you were in a lot of those conversations [with the news media, when they said]: “Oh, it’s your theory that consumers really can make decisions. But it’s too confusing, people just want to be in the plan they are in.”

In our re-enrollment, what we’re finding is that 50 percent have actually come and re-enrolled, which is way above the feds. And, of those, 60 percent of them have changed their plans. Of the ones that have changed their plans, 40 percent have changed carriers.

I look at the calls that are coming into the call center, and [consumers] are asking really good questions and comparing plans. What that tells me is that this is the kind of data and information that people really want. It will help us push back and negotiate with the carriers and providers around plan design – about how care is delivered, and not just changing numbers.

Having that information and giving it to people is really going to make a difference.

ConvergenceRI: Consumers can make good decisions?
FERGUSON: They do.

Editor’s note: Here are the most recent statistics from HealthSourceRI on open enrollment, as of Dec. 27, 2013

•17,941, or 71 percent of some 26,000 first-year customers have renewed coverage. Another 4,969 new customers have enrolled.

•532 employer applications under SHOP have been completed, with 437 enrolled, and 76 percent choosing to enroll in the Full Choice Model.

•In the individual market, the carriers selected were Blue Cross & Blue Shield, 55 percent; Neighborhood Health Plan of Rhode Island, 42 percent, and UnitedHealthcare, 3 percent.

The open enrollment period for individuals ends on Feb. 15, 2015.