by Leesa Tori, President and CEO, The Tori Group
With health care reform facing its broadest implementation to date, the struggle to find experienced, available executives with the required specific skill sets continues.
First of all, let’s revisit the startup environment in which HBEX were born. It’s been challenge after challenge since the passage of health care reform. Once the ACA lived through the Supreme Court decision and a contentious election, there was little time to get the job done, let alone recruit the uniquely experienced individuals necessary to make it happen. With the entire nation required to “Go-Live” on the same day, and the states and federal government vying for talent, there simply wasn’t enough to go around.
In addition, the job description wasn’t exactly enticing to those qualified, private sector professionals who might be in a position to switch jobs: Take a paradigm-changing insurance concept, with a strict, aggressive timetable, a tight budget, and an extremely complex set of moving parts — and implement a sustainable public insurance marketplace.
As Peter Lee, CEO of Covered California, described the task, it was like “building a car while driving 70 miles an hour.”
Add to that scenario decreasing unemployment rates, less than enticing government pay scales, resistance to relocating for many due to under-water mortgages and/or family or two-earner relocation issues, and you have a robust recipe for outsourcing key positions. And let’s not forget (ironically) fear of losing insurance coverage. Remember, at this point there was no guaranteed issue. For more than eight decades, a majority of Americans relied on employer-sponsored coverage, so leaving your job (or your spouse leaving his or her job) could mean leaving your coverage — a scary proposition for many.
Last October, an Associated Press article questioned whether Covered California had a conflict of interest in retaining contractors (including The Tori Group) via sole source contracts to help launch what became the most successful health insurance exchange in the U.S.
In fact, in the case of The Tori Group, Covered California turned to us because our experience in building and managing health insurance exchanges is virtually unmatched. Furthermore, our credentials and detailed proposal were reviewed and approved through the highest of oversight channels.
In any industry, what CEO faced with launching a new product (especially one under an unprecedented spotlight and with so many naysayers) doesn’t want people who have done it successfully in the past? Hiring experienced people means hiring people you know or who know each other.
If this is conflict of interest, then countless organizations are guilty.
In the case of health care reform, I add that success doesn’t only require experienced people who know the health care business inside/out and can hit the ground running. It also needs people with a mission. True believers in the ACA who are willing to focus ALL their time and talent on creating a successful marketplace. The Tori Group prides itself on being optimistic proponents of the ACA. The law may not be perfect, but it’s a good start.
When building an exchange, having experienced people at the table makes all the difference. Here are some examples:
1. How do you get multiple plans to adopt a policy for extension of applications in a matter of days? This type of issue goes beyond writing a policy. You must understand the implications for ALL of the stakeholders involved. Small plans may be nimble and able to more easily make changes in systems and staff policy; however, they often are not as well capitalized and cannot “float” payments to providers while waiting for premiums that may be affected by extension. Understanding how the policy will affect all players helps create a win-win program from the beginning as well as avoid potential alienation of some or most of your supply chain.
2. How do you message enrollees about changes when 40% of the business was sold through insurance agents? Experienced health care leaders will tell you to be sure and message an enrollee’s agent BEFORE you send out communications to the membership. The insurance agent has worked hard to bring you this business and much of their value proposition to the consumer lies in the ability to bring them updates in a timely and proactive manner. Few things will alienate your agent distribution channel faster than getting between them and their clients.
3. How do you train on CHOICE? Choice is both a blessing and a curse. It’s not a simple matter of telling customer service representatives there are 11 health plans for consumers to choose from — they just need to pick one. Rather, you have to educate your consumer-facing workers on how to answer questions about all of the choices, from network attributes to billing policies. And you have to be certain they are getting it right, not just in the training room but in their every interaction with potential customers. A key risk point in the cycle of building a sustainable exchange is ensuring the staff are actually administering the program the way it was meant to be administered. Assuring your participating health plans you have policies in place for proper representation, then later finding out that your team is actually dispensing wrong information can be a quick way to lose the trust of your health plan partners. Without the health plans, you simply do NOT have a product to sell.
In California’s case, did outsourcing so many key positions work? Yes. In it's first open enrollment the California exchange, launched last October, enrolled nearly 3.5 million, including more than 1.2 million in private plans and about two million in Medi-Cal, the state's Medicaid program. That equates to approximately 42% of the eligible market. No other state exchange came close.
I’m also particularly proud of the work we did and continue to do to help Covered California become self-sufficient without the The Tori Group’s help in manning those key interim positions. We think that developing and mapping detailed governance procedures, operational processes and education support systems for growing talent internally is part of our job as responsible and ethical consultants.
It’s true that, as health exchanges mature, there will be more and more experienced individuals to choose from in the talent pool. But the HBEX marketplace will remain the “wild west” for several more years. In the near future we will see the impact of the first year of claims, the first experience with consumer reaction to premium increases and changing health plan choices, the first mandated full portfolio review, the first year of SHOP launches for many exchanges, and more.
Only with time will the skilled talent pool grow. Only in time will exchanges be able to rely fully on FTEs to continue the mission of health care reform. Meanwhile, HBEX leadership must be very conscious of potential hiring practice pitfalls as they move to make this happen. In addition to the obvious — competitive salaries — you must avoid too narrow a focus in job descriptions and lengthy and complex application processes. There is no dearth of testimony that these sins have forced many a great candidate to accept another offer. Antiquated recruiting technology, too, can fail to attract many young hopefuls that could become important assets to the cause.
And finally, if your organization is faced with severe growing pains, don’t let the spectre of any type of conflict of interest inhibit you from relying on tested and trusted outsources as interim solutions.
With health care reform facing its broadest implementation to date, the struggle to find experienced, available executives with the required specific skill sets continues.
First of all, let’s revisit the startup environment in which HBEX were born. It’s been challenge after challenge since the passage of health care reform. Once the ACA lived through the Supreme Court decision and a contentious election, there was little time to get the job done, let alone recruit the uniquely experienced individuals necessary to make it happen. With the entire nation required to “Go-Live” on the same day, and the states and federal government vying for talent, there simply wasn’t enough to go around.
In addition, the job description wasn’t exactly enticing to those qualified, private sector professionals who might be in a position to switch jobs: Take a paradigm-changing insurance concept, with a strict, aggressive timetable, a tight budget, and an extremely complex set of moving parts — and implement a sustainable public insurance marketplace.
As Peter Lee, CEO of Covered California, described the task, it was like “building a car while driving 70 miles an hour.”
Add to that scenario decreasing unemployment rates, less than enticing government pay scales, resistance to relocating for many due to under-water mortgages and/or family or two-earner relocation issues, and you have a robust recipe for outsourcing key positions. And let’s not forget (ironically) fear of losing insurance coverage. Remember, at this point there was no guaranteed issue. For more than eight decades, a majority of Americans relied on employer-sponsored coverage, so leaving your job (or your spouse leaving his or her job) could mean leaving your coverage — a scary proposition for many.
Last October, an Associated Press article questioned whether Covered California had a conflict of interest in retaining contractors (including The Tori Group) via sole source contracts to help launch what became the most successful health insurance exchange in the U.S.
In fact, in the case of The Tori Group, Covered California turned to us because our experience in building and managing health insurance exchanges is virtually unmatched. Furthermore, our credentials and detailed proposal were reviewed and approved through the highest of oversight channels.
In any industry, what CEO faced with launching a new product (especially one under an unprecedented spotlight and with so many naysayers) doesn’t want people who have done it successfully in the past? Hiring experienced people means hiring people you know or who know each other.
If this is conflict of interest, then countless organizations are guilty.
In the case of health care reform, I add that success doesn’t only require experienced people who know the health care business inside/out and can hit the ground running. It also needs people with a mission. True believers in the ACA who are willing to focus ALL their time and talent on creating a successful marketplace. The Tori Group prides itself on being optimistic proponents of the ACA. The law may not be perfect, but it’s a good start.
When building an exchange, having experienced people at the table makes all the difference. Here are some examples:
1. How do you get multiple plans to adopt a policy for extension of applications in a matter of days? This type of issue goes beyond writing a policy. You must understand the implications for ALL of the stakeholders involved. Small plans may be nimble and able to more easily make changes in systems and staff policy; however, they often are not as well capitalized and cannot “float” payments to providers while waiting for premiums that may be affected by extension. Understanding how the policy will affect all players helps create a win-win program from the beginning as well as avoid potential alienation of some or most of your supply chain.
2. How do you message enrollees about changes when 40% of the business was sold through insurance agents? Experienced health care leaders will tell you to be sure and message an enrollee’s agent BEFORE you send out communications to the membership. The insurance agent has worked hard to bring you this business and much of their value proposition to the consumer lies in the ability to bring them updates in a timely and proactive manner. Few things will alienate your agent distribution channel faster than getting between them and their clients.
3. How do you train on CHOICE? Choice is both a blessing and a curse. It’s not a simple matter of telling customer service representatives there are 11 health plans for consumers to choose from — they just need to pick one. Rather, you have to educate your consumer-facing workers on how to answer questions about all of the choices, from network attributes to billing policies. And you have to be certain they are getting it right, not just in the training room but in their every interaction with potential customers. A key risk point in the cycle of building a sustainable exchange is ensuring the staff are actually administering the program the way it was meant to be administered. Assuring your participating health plans you have policies in place for proper representation, then later finding out that your team is actually dispensing wrong information can be a quick way to lose the trust of your health plan partners. Without the health plans, you simply do NOT have a product to sell.
In California’s case, did outsourcing so many key positions work? Yes. In it's first open enrollment the California exchange, launched last October, enrolled nearly 3.5 million, including more than 1.2 million in private plans and about two million in Medi-Cal, the state's Medicaid program. That equates to approximately 42% of the eligible market. No other state exchange came close.
I’m also particularly proud of the work we did and continue to do to help Covered California become self-sufficient without the The Tori Group’s help in manning those key interim positions. We think that developing and mapping detailed governance procedures, operational processes and education support systems for growing talent internally is part of our job as responsible and ethical consultants.
It’s true that, as health exchanges mature, there will be more and more experienced individuals to choose from in the talent pool. But the HBEX marketplace will remain the “wild west” for several more years. In the near future we will see the impact of the first year of claims, the first experience with consumer reaction to premium increases and changing health plan choices, the first mandated full portfolio review, the first year of SHOP launches for many exchanges, and more.
Only with time will the skilled talent pool grow. Only in time will exchanges be able to rely fully on FTEs to continue the mission of health care reform. Meanwhile, HBEX leadership must be very conscious of potential hiring practice pitfalls as they move to make this happen. In addition to the obvious — competitive salaries — you must avoid too narrow a focus in job descriptions and lengthy and complex application processes. There is no dearth of testimony that these sins have forced many a great candidate to accept another offer. Antiquated recruiting technology, too, can fail to attract many young hopefuls that could become important assets to the cause.
And finally, if your organization is faced with severe growing pains, don’t let the spectre of any type of conflict of interest inhibit you from relying on tested and trusted outsources as interim solutions.
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