The Colorado health exchange costs federal taxpayers $1,427 per enrollee

June 3, 2014 by Linda Gorman · Comments Off
Filed under: Op-Eds, Publications 

A May 2014, report from the law firm Mehri & Skalet estimates that the Colorado health exchange is costing federal taxpayers $1,427 per enrollee. That was before its director, Patty Fontneau, got the $14,000 bonus, and a 2.5 percent salary bump that raised her salary to $195,314 a year and sweetened an already generous retirement plan. Only exchange directors in California and Connecticut make more.

In California, the exchange cost is $758 per person. In New York it is $1,158 per person. In Washington, it is $1,630 per person, in Connecticut it is $2,077 per person.

On average, it has been more expensive for states to run state exchanges than to join the federal exchange, something that critics of the Colorado effort warned would be the case. The average cost per enrollee in all of the states that use the federal exchange is an estimated $922 per enrollee. All of the states with the lowest cost per enrollee are in the federal exchange. In Florida, the average cost per enrollee is $76, in Texas it is $102, and in Georgia it is $240. The average cost per enrollee for the state do-it-yourself projects is $1,503.

So far, the federal government has spent $7.394 billion building health exchanges to deliver subsidies for the purchase of its poorly designed coverage products. By 2019, the Congressional Budget Office estimates that federal exchange premium, cost-sharing, and insurer risk corridor subsidies will cost $127 billion a year, $6,240 per person enrolled. This does not include the amount that the states will collect in order to run the state exchanges.

Recall that public support for the Obamacare health exchanges was whipped up by people complaining that the US system was broken because people were getting health care without paying for it and those costs were unfairly added to private insurance premiums. In 2009, researchers at the Urban Institute estimated that the cost of uncompensated care was $63 billion a year. They warned that unless Obamacare passed, annual uncompensated care costs would inflate to at least $107 billion, possibly going as high as $141 billion, by 2019.

Instead the Democrats passed Obamacare. It is working so well that $127 billion a year will be added to tax bills to cure a problem that the private sector was handling for $63 billion.

Linda Gorman directs the Health Care Policy Center at the Independence Institute, a free market think tank in Denver.

Colorado’s Obamacare exchange deserves an audit

April 2, 2014 by admin · Comments Off
Filed under: Op-Eds, Publications 

By Joshua Sharf

Imagine you own stock in a company that consistently failed to meet sales targets, yet the CEO asked for a raise. Imagine that a director had been indicted for embezzlement from a previous employer; an ad campaign had been launched that verged on the pornographic in order to achieve its desired customer mix; and that this company had just spent $46,000 on sunscreen.

Unfortunately, Colorado taxpayers don’t have to imagine. This description of the troubles surrounding the state’s Obamacare exchange demands an audit that Democrats in the state Senate have refused to approve, and a closer investigation into how our money has been spent.

If the board of such a company said they had decided against an audit that year, because management said they were already in compliance with the mandated oversight, as a stock-owner you probably would be outraged.

Probably the only thing that would make you madder would be to learn that management had spent $575 an hour on an attorney, even though they had access to in-house counsel, whose job it was to inform the board that they had no authority to order an audit in the first place. But that also is exactly what happened at Connect for Health Colorado.

Like it or not, your tax money is invested in CFHC, the state’s government-run health exchange designed to implement Obamacare.

On March 26, the Senate Health and Human Services Committee Democrats rejected a bill to audit the Obamacare exchange. Every one of the misfortunes and miscues spelled out above had happened before that 4-3 party-line vote. Indeed, the committee voted the bill down after the House of Representatives had passed the identical bill 60-1, the lone Democratic holdout being Rep. Sue Schafer of Jefferson County.

The reason for the audit was clear, at least to the House. CFHC failed to reach its “sustainable” target by 13 percent, enrolling fewer than 120,000 in private insurance. Despite the obvious shortcoming, CEO Patty Fontneau last year asked for a 3 percent raise on her already-generous $190,000 salary.

In an effort to make up the difference, CFHC paid for advertising targeted at younger uninsured Coloradans. Included were the notorious “Brosurance” and “Hosurance” ads, as well as scantily clad models encouraging visitors to Denver’s 16th Street Mall to “GetCovered.”

The Senate committee heard no testimony. However, when the House Health, Insurance, and Environment Committee met to consider the measure, they heard from attorney Marc Grueskin, retained by CFHC to explain why the Legislative Audit Committee had no authority to audit the state-funded entity. Grueskin has long been a legal advocate for Democratic and progressive causes in Colorado.

While some of CFHC’s problems have been covered sporadically in the press, an actual audit with an actual governmental report could prove embarrassing to those Democrats who have wholeheartedly supported the state’s implementation of the increasingly unpopular Obamacare.

The majority party certainly would like to avoid a repeat of the debacle of the audit of the Governor’s Energy Office. In January 2013, it was discovered that the office couldn’t account for over a quarter of a billion dollars.

Republicans produced measures to fund an additional eight hours of research time for the audit, and to suspend funding for the energy office until the question of how the office’s $252 million had been spent from 2007 to 2012. Democrats defeated both measures, but the whole incident has served to tarnish the reputation of “Green” energy and to direct attention to the government subsidies that it uses to survive.

With the unpopularity of Obamacare now approaching Nixonian levels, the law has become an albatross around many Democratic politicians. So it’s little surprise some legislative Democrats wish to prevent an audit.

Colorado citizens and taxpayers, though, deserve better.

This originally appeared in the Greeley Tribune, April 2, 2014.

Senate Bill 016 gives hospitals an emergency room monopoly

February 3, 2014 by Linda Gorman · Comments Off
Filed under: Op-Eds, Publications 

In 2013, University of Colorado School of Medicine researchers concluded that people covered by Medicaid and Medicare use emergency rooms because they lack timely access to primary care. Thanks to the Colorado legislators who voted to expand Colorado Medicaid, an estimated 275,000 more people will ultimately enroll in the program, according to estimates by the Colorado Health Foundation.

The Oregon Health Insurance Experiment showed that when non-disabled people are enrolled in Medicaid, their overall emergency room use rises by as much as 40 percent. With little or no increase in the number of primary care physicians they can see, many of them likely will seek care in already crowded emergency rooms.

Some Colorado legislators have shown impeccable timing in seeking to exacerbate the problem. Sen. Irene Aguilar, D-Denver, and Rep. Dominick Moreno, D-Commerce City, have introduced Senate Bill 016, which would force the closure of already existing freestanding emergency rooms unless they are owned by a hospital. SB 016 provides an exemption for emergency rooms more than 25 miles from a licensed hospital. Given the geographic structure of the Front Range corridor, however, the practical effect of the bill would be to give hospitals monopoly control of all emergency facilities.

Freestanding emergency rooms — some owned by hospitals and some not — already serve patients in metro Denver. They locate in areas that are underserved by the emergency rooms attached to hospitals. Different from urgent care centers, they charge more because they can do more. They typically have board-certified physicians on duty 24 hours a day, every day, and are equipped to diagnose and stabilize cardiac arrest, stroke symptoms and trauma.

Ambulances do not deliver patients to freestanding emergency rooms, and patients who arrive at them needing surgery or specialist care are transferred to hospitals. Under the federal Emergency Medical Treatment and Labor Act, all emergency rooms must treat and stabilize life-threatening conditions regardless of a patient’s ability to pay.

Without question, closing emergency rooms would harm patients. Patients visit emergency rooms because they are ill, though only about 17 percent of emergency room visits comprise conditions that result in admission to a hospital.

According to a 2013 Annals of Emergency Medicine study, patients wait longer and are more likely to leave without being seen in emergency rooms that handle large numbers of patients. As one would expect, these are often found at trauma centers. Freestanding emergency rooms can improve patient care by reducing travel times, waits for care and missed work. In doing so, they also may lessen pressures on the emergency departments that handle major trauma cases.

Why introduce a bill that harms patients? Competition from freestanding emergency rooms has the potential to reduce the amount that monopoly hospital emergency rooms can charge for their services. Like other special interest groups, Colorado’s existing hospitals have developed a loyal group of state legislators who are willing to vote for them without regard for the harm that protecting hospital cashflows inflicts on ordinary citizens in need of health care.

In 2009, these legislators supported a tax on hospital bills that had removed $2.9 billion from taxpayer wallets by 2012. Disguised as a fee to evade the Taxpayer Bill of Rights requirement for a vote on tax increases, this tax has increased health care costs. In addition, the hospitals have convinced legislators to pass laws prohibiting physician-owned specialty hospitals, even though research has shown that such hospitals help patients by improving care and reducing health care costs.

Colorado’s hospitals are big businesses. As the bill to close competitive emergency rooms shows, they would rather outlaw competitors than outproduce them. Colorado legislators need to remember that handing hospitals a monopoly over freestanding emergency rooms does not serve the best interests of their constituents. It will increase health care costs while reducing health care access, and increase the pain for ordinary citizens already suffering from Obamacare cost increases.

Linda Gorman, Ph.D., is director of the Health Care Policy Center at the Independence Institute, a free market think tank in Denver. This op-ed originally appeared in the Greeley Tribune.

States Begin Selling Information from their All-Payer Databases

June 20, 2013 by Linda Gorman · Comments Off
Filed under: Op-Eds, Publications 

Even before the Colorado legislature passed the All-Payer Database law and the Department of Health Care Policy and Financing turned your medical records over to CIVHC, a private 501(c)(3), the Independence Institute warned that allowing states to routinely requisition medical records would compromise medical privacy (see this, this, and this). The problem is that medical records contain so much personal data that individuals can be identified even if names and SSNs are redacted.

Bloomberg is now reporting that states hungry for revenue and flush with the power to requisition individual medical records are moving to capitalize on the value of that information by selling the information in those records to all comers. Unlike private companies, states and their agents are exempt from HIPAA requirements and therefore do not have to take data privacy especially seriously.

In an experiment, researchers were able to match several dozen people with their supposedly de-identified medical records by combining public record searches and the information in a sample group of records purchased for $50 from Washington State. Among other things, “an executive treated for assault was found to have a painkiller addiction,” and a “retiree who crashed his motorcycle was described as arthritic and morbidly obese.”

CIVHC’s “De-Identified” data set for Colorado includes type of insurance, gender, month and year of birth, city of residence, race/ethnicity, month and year of admission, where service was provided, the zip code where service was provided, the DEA code or National Provider Identifier number code for the person providing service, details of the drugs prescribed and how they were delivered, and all payment details for everything. The de-identified data set also includes details of family relationships, such as whether the person receiving services is the spouse or child of the person who owns the family insurance policy.

The attack on medical privacy also represents another front in the legislature’s war on rural Colorado. In rural areas with small populations, there is more than enough data in the “de-identified data set” to link individuals to their medical records.

Consider Montrose hospital. In 2012, it hosted 2,563 surgeries and 469 births. In 2011, the hospital received 77 percent of its patients from an area with a population of about 42,000. It contained about 7,000 females of childbearing age, 4,347 people between 25 and 34, and 127 black people. Its service area includes the town of Naturita, population 635. Census records show that there are 32 Hispanic residents fewer than 10 of whom were between the ages of 15 and 40 in 2010. If the de-identified data set includes a birth by a Hispanic mother from Naturita, it would not be difficult to match her to her medical records.

With the passage of the All-Payer Database, members of the Colorado legislature made it quite clear that protecting your medical privacy was not a priority. Until the law is repealed, along with similar requirements in ObamaCare, your medical records are for sale to the highest bidder.

Every future visit to a doctor or a hospital should be made with this in mind. If you need health care and you have, or have ever had, a health condition that you do not want to make public knowledge, you might be wise to travel to a state or foreign country that takes medical privacy more seriously.

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