Delivery of Care

Debating the future business model of HealthSourceRI

Why is it that the people who purchase health plans through HealthSourceRI get left out of the conversation

Photo by Scott Kingsley

Anya Rader Wallack, the executive director of HealthSourceRI, will make the case for continued support of the state-run health benefits exchange before two different business audiences this week.

By Richard Asinof
Posted 2/23/15
There is something patently absurd to purport to have conversations about health care reform and the future of HealthSourceRI when participation in such a forum or summit excludes those who are buying health plans through HealthSourceRI. The real political scuffle is whether HealthSourceRI will be allowed to continue to expand its market in the small business arena.
When will the news media focus their attention not on consumer complaints about HealthSourceRI but the cause of the problem: the bungled UHIP IT system? That system cost some $200 million to construct; has the R.I. General Assembly ever held hearings to delve into its continuing problems? How does the calculation of saved money on charitable care in Rhode Island as a result of implementation of the Affordable Care Act – some $34 million reported by Lifespan alone – fit into the economics of HealthSourceRI’s projected budget of some $23 million for next year? Is there a direct correlation? Is there a way to reboot Rhode Island’s economy by re-investing in older, skilled employees that were discarded by companies looking to protect themselves from the high costs of health care for an aging workforce? Can that become an economic advantage for Rhode Island?
As long as health care and health innovation are kept separate from Gov. Raimondo’s economic development plans, Rhode Island's economy will sputter, despite the media campaign to “Stop the decline and spark the comeback.” As Mary Burke, the senior economist at the Federal Reserve Bank of Boston told WPRI’s Ted Nesi in a recent interview, the way for Rhode Island to dig itself out of its current hole was not through manufacturing jobs, but rather, by investing in education and health-care sector jobs. “Those are the sectors that are growing nationally based on demographic trends,” Burke said. Are you listening, Stefan Pryor?

PROVIDENCE – Next week, two of the vaunted voices of Rhode Island’s business community will hold so-called discussions about the future of HealthSourceRI.

On Tuesday, Feb. 24, the Greater Providence Chamber of Commerce will hold a free discussion with Anya Rader Wallack, the new executive director of HealthSourceRI.

No matter that the Chamber itself has an advocacy position on its website proclaiming that it supports “only the basic function” of HealthSourceRI, supporting a state-run health insurance benefit exchange with a limited role and curtailed funding.

The question is: how do you hold a discussion when folks in charge of the event have already made up their mind?

Then, on Thursday, Feb. 26, Providence Business News will host one of its native advertising events, a summit on “Health Care Reform and the Insurance Exchange.” At $50 a person, and with three presenting sponsors and eight co-sponsors, the weekly newspaper could take in more than $100,000 in revenue.

Just to be clear, the PBN summit is a pay-to-play event; it’s not so much a discussion as a platform, enabling sponsoring advertisers to be given the microphone. All three presenting sponsors – James Raiola Associates, Pannone Lopes Devereaux &West, and Blue Cross & Blue Shield of Rhode Island – and four of the eight co-sponsors – CharterCARE, Neighborhood Health Plan of Rhode Island, USI Insurance, and Care New England – have a seat on one of the two panels.

Dr. Andrew Sussman, president of MinuteClinic at CVS Health, will also be joining the panelists, as will Dr. Kathleen Hittner, the R.I. Health Insurance Commissioner, and Wallack.

Another question: how can you call it a summit when folks have had to pay $10,000,  $15,000 or more to have the right to talk into the microphone?

Translated, not everything will be illuminated at these events.

No actual consumers who have bought health insurance for themselves or for their company through HealthSourceRI will have a seat at the podium at the PBN summit.

One more question: how do you talk about one of the basic health disparities – access to affordable health insurance – if everyone has been able to purchase health insurance through the workplace?

What the numbers say

The latest statistics from HealthSourceRI point to the basic success of the program: some 30,744 [27,487 paid] Rhode Islanders had enrolled through HealthSourceRI for health insurance for 2015.

Of those, 21,060 customers were renewals; another 9,684 were new customers. And, 82 percent of the first-year customers had renewed coverage, with 79 percent of renewing customers having paid the first month’s premium.

The demographics broken down by age are the most revealing: 10 percent are between 18-25 years old, 17 percent are between 26-34 years of age, another 17 percent are between 35-44 years of age, 22 percent are between 45-54 years of age, and 29 percent are over 55 years old [and below 65, when Medicare kicks in].

Remember: these numbers are for those Rhode Islanders who are purchasing commercial health plans, and do not include Medicaid enrolllments. 

The numbers reveal the upside-down nature of Rhode Island’s workforce and its relationship with health insurance: 51 percent of those buying insurance through HealthSourceRI are between the ages of 45-64.

No qualitative research data is available, but perhaps the gerontology department at Brown University could undertake such research to answer this: how many of those Rhode Islanders were forced out of their jobs by companies who were worried about the risk of higher costs of health insurance caused by aging employees, particularly by self-insured companies?

Here’s another qualitative question to research: have companies, by seeking to remove aging employees from their risk pool for health insurance costs, created much of the current economic malaise? Translated, have companies helped to diminish the skill level of the workforce by getting rid of experienced, older employees to avoid health care cost risks?

Digging deeper, looking at the numbers for individual plans vs. family plan enrollment, the numbers tend to support that analysis.

For 2015, the largest amount of individual health plans were bought by people between the ages of 55-64, with a total of 4,649 individual plans, according to data provided by HealthSourceRI.

The next largest grouping for individual health plans was for Rhode Islanders between the ages of 26-34, at 3,190 plans.

That, in turn, was followed by the grouping for the ages 45-54, with 2,955 individual health plans purchased.

What these numbers reveal is that as Rhode Islanders age, and as their children age, they are the ones most likely to be forced out of the workplace and left without employer-based insurance.

The complaints

In recent weeks, news reports by Susan Hogan at WPRI and Jim Hummel of The Hummel Report have pumped up the volume on complaints about the poor customer service provided by HealthSourceRI.

Hogan’s report captured the anger of customers but failed to penetrate to the cause: a problematic $200 million state health IT system, the Unified Health Infrastructure Project, or UHIP, built with Deloitte as the principal contractor. 

As detailed in ConvergenceRI’s story published a month ago, on Jan. 16, “The case of the missing briefing book,” glitches caused by UHIP resulted in HealthSourceRI having to spend about $10 million and divert staff to address the snafus. [See link to ConvergenceRI story below.]

“Inadvertent dis-enrollments are causing many Rhode Islanders who think they have health coverage and who are up-to-date in paying their premiums to find out that they aren’t covered when they go to the doctor’s office, hospital, or pharmacy,” the briefing book report said.

In addition, billing and correcting premiums remained a problem, as did the poor interface between UHIP and the insurance carrier systems, according the briefing book.

As a result, HealthSourceRI had to operate under a “contingency plan” since March of 2014, the briefing book revealed. In total, the extra costs that were absorbed by HealthSourceRI as a result of UHIP’s glitches and snafus were calculated to be $9.7 million the last year. In other words, HealthSourceRI diverted scarce staff resources to attempt the fix the problems with manual overrides.

Hummel’s investigative report dug a little deeper, capturing the dynamics of the system, but pointed his finger of blame at HealthSourceRI for its poor customer service. He did not delve further to look at the role played by the R.I. Department of Administration, then under Richard Licht.

It appears that the same person, a Licht deputy, who was responsible for overseeing the problematic health IT upgrade at the R.I. Department of Motor Vehicles, may have also been responsible for overseeing the implementation of UHIP, according to signatures on the contract provided in the briefing book.

It’s also important to note: the call center at HealthSourceRI is managed under contract by Optum, the non-insurance division of UnitedHealthcare.

By making alleged poor customer service the issue at HealthSourceRI, rather than the bungled health IT upgrade undertaken by the state of Rhode Island, it deflects attention from the more fundamental economic equations needed to measure the success of HealthSourceRI accurately.

Compared to what?
The bottom line needed to measure the success of HealthSourceRI will be found not in the individual health plans but in the traction of the small business options for health insurance. Those numbers keep climbing, not governed by a three-month enrollment period but rather when health insurance policies are renewed.

The latest figures from HealthSourceRI, as of Feb. 14, show that there were 1,958 small employer accounts created, with 579 applications completed, with 464 companies enrolled, representing 3,349 covered lives. Equally important, 76 percent of small employers are enrolled in the Full Choice model, known as SHOP, allowing employees to choose their health plan

The real political argument behind what to do with HealthSourceRI is whether or not to support the planned expansion of its SHOP program into the small business market. In 2016, the definition of a small business eligible to participate increases to 100 or fewer employees from 50 or fewer employees, more than doubling the potential market.

The projections for SHOP enrollment in the briefing book were that it would roughly double each year through 2018: 2,500 in 2014; 7,000 in 2015; 14,000 in 2016; 25,000 in 2017; and 35,000 in 2017.



By comparison, the individual market projections were 25,000 in 2014, 30,000 in 2015, 36,000 in 2016, 45,000 in 2017, and 50,000 in 2018.

Translated, between 2015 and 2018, the growth in the individual market was projected to grow by 166 percent. In the small business market, in that same time period between 2015 and 2018, the growth was projected to climb by 500 percent.

For those defending the status quo, that number – a 500 percent growth spurt – must be very scary.

The briefing book also documented the efforts to build the customer-engagement tools to work with small businesses – including the development of online tools and transparency of insurance premiums for an entire year.



These relationship-building tools were critical to success in the small business market, because, as the briefing book made clear, they represented the population most at risk in terms of cost, morbidity and churn because of affordability.

The risk of morbidity only drops once the company can achieve sustainable, affordable health insurance plan coverage, according to the briefing book’s analysis.

Money talks. No one should be surprised, then, if the so-called compromise offered by Gov. Gina Raimondo on how to make HealthSourceRI more sustainable and keep it a state-run enterprise will be to lop off the small business market from its mandate.

Editor's note: In his comments, Philip M. Papoojian offers some excellent testimony about the value of the small business SHOP platform offered by HealthSourceRI, exactly the kind of voice that should be included in the conversation about the future of the state-run health insurance benefits exchange.

Papoojian said he participated on a panel as part of a PBN native advertising summit in September of 2013, a year and a half ago.

However, that was before HealthSourceRI had opened for business and had begun to enroll customers in October of 2013.

His experiences with HealthSourceRI occurred after his participation in the PBN native advertising event in 2013; he apparently was not invited to any subsequent “summits” to share his views.

Papoojian’s experiences with HealthSourceRI are insightful as to why the SHOP program can benefit small businesses. ConvergenceRI is glad its recent article prompted Papoojian share his thoughts. Such experiences very much need to become part of the ongoing conversation about HealthSourceRI’s future – perspective that has often been lacking in the public conversations.

If HealthSourceRI is turned over to be run as a federal exchange, the SHOP option goes away. Perhaps Papoojian will make his views known to the R.I. General Assembly leaders in addition to the readers of ConvergenceRI.

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