“Exchange” as in Bait and Switch
When I initially heard of the concept of state-government healthcare exchanges, my first thought was that only three insurers are willing to do business in Rhode Island — how extensive could such an exchange be? The hook by which Governor Chafee is presuming to step in and legislate via executive order to create Rhode Island’s exchange raises more questions about what, exactly, they’re planning to develop:
The state faces a Sept. 30 deadline to apply for tens of millions in federal money to develop the exchange, but needed to first establish the authority to create, govern and finance the exchange.
The model cited for the exchange is Travelocity and other comparison-shopping sites, but with three insurers to review, how could it possibly take “tens of millions” in (borrowed) federal dollars to put such a thing together? The state ought to be able to get somebody to pull together the necessary documents and deploy a slightly tweaked out-of-the-box search engine for under $100,000.
Apart from finding ways to spend taxpayer money that the state and federal governments do not have, Lt. Gov. Elizabeth Roberts gives some indication of what the expanded scope of the exchange might be:
… Roberts said the exchange will provide more active assistance to people choosing health insurance. It may also set standards for the types of health insurance products offered.
Indeed, the executive order also explicitly calls for “payment reforms and innovative benefit designs” that promote quality and efficiency.
“One of the goals of this executive order is to create the infrastructure with some early goals,” Roberts said. “A lot of those bigger issues are very appropriately going to be discussed by the board going forward.”
As I’ve speculated before, the “exchange” is more of a bait-and-switch. As Roberts describes it, the site will either be a welfare-style means of drawing people toward taxpayer-subsidized programs, or it will grant a small range of technocrats the ability to shape everybody’s healthcare programs in very detailed ways, or both. And a look at the board already in place to guide the thing is not encouraging:
In addition to [former U.S. Attorney Margaret] Curran, the chairwoman, the board’s public members will include Vice Chairman Donald Nokes, president and co-founder of the small business NetCenergy; Michael C. Gerhardt, a former health insurance executive; James Grace, president and CEO, InsureMyTrip.com; Linda Katz, policy director and co-founder, The Poverty Institute; Peter Lee, president and CEO, John Hope Settlement House; Dr. Pamela McKnight (not currently practicing); Tim Melia, UFCW New England Council; and Minerva Quiroz, case manager, AIDS Project RI.
The government members are: Steven M. Costantino, secretary of Health and Human services; Christopher F. Koller, health insurance commissioner; Richard A Licht, director of administration; and Dr. Michael D. Fine, director of health.
In addition to the government bureaucrats, we’ve got a former lawyer, a former health insurance executive, a former doctor, two executives from businesses that offer related technology services, three paid activists, and the obligatory union representative. Not present is a single person who looks apt to approach this sly government power-grab from the perspective of Rhode Islanders’ civil rights (in the government-limiting sense) or of protecting the free market or taxpayers’ wallets. There isn’t even anybody whose background suggests an especial concern with the ethical questions that inevitably arise in matters of medicine.
A further frightening thing is that the only organized voice that the reporter finds in opposition is Barth Bracy, of the Rhode Island Right to Life Committee. About the only other opposition that I’ve seen has come from Mike Stenhouse, CEO of the newly formed Rhode Island Center for Freedom and Prosperity, in an op-ed arguing that the state should be wary of jumping into ObamaCare because many questions remain — not the least being whether the law will even remain in effect. For the most part, that’s a statement of process, not of principle, although he does step beyond the practical argument a bit:
Government does poorly vs. the free market. The very idea of a government-controlled exchange is antithetical to our nation’s historical free-market principles, which is the only proven way to consistently deliver a good service at the lowest possible rate. A true free-market is an exchange in itself!
Unfortunately, politicians (especially in Rhode Island) have long thought the handling of healthcare to be too important to leave to people who actually know what they’re doing. Their exchanges will not be tools to guide consumers to the products that most closely align with their needs and resources, but to tell taxpayers how much they have to spend on healthcare, for what, and for whom.
Ha, ha, ha! You’re way over your depth on this one.
I think there’s massive confusion about what the ‘exchange’ actually is. Some folks seem to think it’s just a website to allow for easy shopping. My understanding is that it’s far more in-depth.
I was approached years ago by a health care lobbyist who wanted to know how to create an interstate database of health care laws/regulations that tapped into actuarial and business data of insurers and outputted personalized insurance options (basically, what the state is trying to do with the exchange). Five minutes into the conversation and it was clear that without real solid standards about ‘coding’ services, electronic record storage, legislative ‘monitors’ in each state, and a massive amount of work, it was all but impossible.
Our health care system is a total mess from top to bottom. Everything about it, from how patients are tracked to how things are paid for and how providers are compensated is so far gone that it’s not worth keeping.
Justin can fix all that for $100k! Gonna run it off his laptop (will have to since the hardware alone for an exchange could be well above that amount).
Here’s the other whopper…
While it’s not written in stone, the plan that was winding through the RI Senate called for creating “quasi-public corporation that provides ‘an essential governmental function’ but is not part of the state government” that would use no state funding.
What Stenhouse seems to be arguing is that any regulation of a market constitutes the boogeyman of “government control.” Consider that by that definition, the New York Stock Exchange is government controled and therefore “antithetical to our nation’s historical free-market principles.” It’s a ridiculous position, but one appealing to the sentiments of the fringe-right (assuming they don’t think too hard about it).
The current health care system combines the worst inefficiencies and abuses of socialism with the greed and unaccountability of corporatism left completely unchecked by market forces. It’s a monstrosity that only government could create and only politically connected corporations could abuse and exploit to its limits.
I have no problem scrapping it. I just wish we could return to a free market system instead. All we’re doing with Obamacare is wallpapering over the mold.
Does Russ stand to make some profit here?
He’s going nuts like a roach that just got sprayed with Baygon.
Joe – Russ is just excited that there is finally a topic he actually knows something about, even if it is just software engineering. Usually he has to blockquote spam op-eds from his progressive idols Kohn and Krugman just to have an input.
As usual, your characteristic euphoria of superiority has led you right past the point: The cost that I cited was for “slightly tweaked out-of-the-box search engine” — that is, a tool that compares the programs offered by RI’s three insurers, perhaps factoring in the circumstances of the consumer (regarding available subsidies, etc.). Obviously, the fancier and more detailed it becomes, the more it will cost. That’s exactly the point: the price tag is evidence that the government isn’t just trying to offer an informational site, but to make itself even more integral to Rhode Islanders’ access to healthcare.
What I fail to understand is how when representatives of the companies that are selling the product (the folks who approached me) back down from pushing their own product because the implementation is too complex, the government steps in to do it.
The problem isn’t confusion about the plans or ability to access the ‘buy now’ button, it’s the cost of the plans. These exchanges don’t seem to do anything about that; they seem to make it worse, actually.
This whole thing reeks of politicians who know next to nothing about technology imagining that the technology can do something magic. The fact that we’re not exactly sure what the exchanges are supposed to do or how they work should already be a harbinger of doom for the whole idea. In the end, I predict a fat contract to an IT consultancy for a product that never quite delivers, because the client never quite knew what they wanted.
And even if it fails, like every other loosely-specced and ill-defined large IT project with an open-ended contract does, it will be labeled a ‘success’ because it ‘created 12 jobs in the knowledge economy’.
And given how this is being described, would it be SO HARD to get the anti-abortion crowd off our backs by having a checkbox that says ‘only show plans that do not offer abortive reproductive services’?
Well, first of all, don’t presume to say “our backs.” Whose backs? Or are the default for what is normal and good?
Second of all, the entire point of ObamaCare and these exchanges is to have the government dictate what must be available in all healthcare programs and who must pay how much for them.
Mythbuster #1: The Govt. does an extremely poor job of spreading the wealth but a great job of spreading the poverty. Just another failed program in the queue. Hussein and Russ will save us all with their progressive path to doom.
“don’t presume to say “our backs.” Whose backs?”
I meant that between Russ and I, and other pro-choicers. I sort of meant it to bring up the liberal paradox between ‘we need this so people can choose what they want from their plan’ with the accompanying ‘as long as it’s done OUR WAY’.
Talked about the Health Insurance Exchange on-air, over many months, on numerous occasions. Spoke with legislators about it prior to it failing in the GA. Then sent numerous email alerts out through RITP and the OSTPA.
Bottom line: it creates another level of bureacracy, some good-paying jobs for the few and absolutely no ability to provide affordable health insurance choices for individuals and small businesses in RI. Re-packaged spin is what it appears to be at this point in time.
By the way, recycled plan designs do not constitute choice to the extent that is required to drive down cost. This does not allow for intra-state purchasing. It most likely will allow for the further expansion of BCBS market niche in RI.
Staff member/consultant in RI’s DOH (Koller’s office) wrote a study comparing numerous states vatying abilities to actually deliver stated goals of an Exchange. That analysis clearly stated that it won’t work in RI. RI still does not have market competition, key factor to drive cost.
“RI still does not have market competition, key factor to drive cost.”
Yes. And as you said, Lee, implementing a federal Insurance Exchange will do nothing to bring market competition to the state.
This is the ultimate feel-good-yet-accomplish-absolutely-nothing government program. It wouldn’t be quite so annoying if it didn’t utilize hard-earned tax dollars.
Unlike some here who apparently think themselves experts on everything.
“…your characteristic euphoria of superiority”
Call what you like. Do I tell you you how to frame houses? Again, waaay beyond your depth on this one.
The great irony, of course, is that the bill to create this exchange was derailed by the folks on the fringe-right who think their religion should dictate which type of health coverage a woman in RI should be allowed to choose. Thus, the executive order.
That’s only an irony to you because you’re misrepresenting what happened. The “fringe right,” including Paiva-Weed, apparently, don’t “think their religion should dictate which type of health coverage a woman in RI should be allowed to choose.” Rather radical pro-abortion extremists don’t think Rhode Islanders should be able to avoid subsidizing killing unborn children.
I do like this: “thus the executive order.” You’re on record in favor of aristocracy and dictatorship, then, provided they serve your political views?
I know, I know. You’re just smarter than the rest of us, so those supporting your views can’t be expected to follow rules designed to hinder theocrats and other PYDLs (people you don’t like).
On the matter of cost, why don’t you educate us, Russ: How much would “a slightly tweaked out-of-the-box search engine for under $100,000”? Site-specific Google search is free. Our blog’s search engine was free. I’ve created simple forms on my spare time… again, for free.
IF the “exchange” consists of a modest search engine, explanations of benefits, and some tables comparing features, then my suggested cost is reasonable. As you layer in features (from factoring in user eligibility in the search form all the way to processing the payment and automating the necessary paperwork), the cost will go up. That is the point of the post: the cost indicates the extent of the intended project.
“IF the “exchange” consists of a modest search engine, explanations of benefits, and some tables comparing features, then my suggested cost is reasonable.”
If the exchange is the ‘orbitz’ or ‘travelocity’ of products put up for side-by-side comparison, it ought to be a job done by the companies selling the product, no? The three providers chip in to a small startup that builds the thing to-spec, then offer a small ‘broker’ fee when subscriptions move through the portal.