healthy4u: Amerigroup

The Revolving Door's Bearings Overheat - Two Examples of the Health Care Insiders Who Keep it Spinning

Two recent stories illustrate a kind of conflict of interest affecting government health care policy. Note that neither story appeared in any one media outlet, but had to be pieced together from several sources, not all contemporaneous. The Peripetatic Architect of Health Care Reform Implementation Here is the story of Steve Larsen's latest career move, <a href="http://online.wsj.com/article/SB10001424052702303822204577468680618029466.html">per the Wall Street Journal</a>, <blockquote>A top official in charge of implementing the federal health-care overhaul said Friday he would step down in mid-July, shortly after the Supreme Court is expected to rule on the fate of the law. The official, Steve Larsen, heads the office at the Centers for Medicare and Medicaid Services that oversees most of the insurance provisions in the 2010 law. Those include setting up exchanges for consumers to shop for plans and obtain subsidies for premiums, establishing rules on how much money insurers must spend on medical benefits, and administering a federal program to provide insurance for consumers with pre-existing conditions. Mr. Larsen said in an interview that his departure was '100% for personal and family reasons,' and that he hadn't considered the timing of the court decision. He cited his need to pay tuition for his college-bound children,... </blockquote> The Wall Street Journal coverage made it sound like Mr Larsen was fleeing his post to avoid dealing with how the Supreme Court's decision on the Obama administration's health care reform law might complicate future functions of his office, <blockquote>Mr. Larsen's departure highlights the challenges the administration will face once the Supreme Court rules. If the court upholds the law, the administration has a 2014 deadline to put it in place, including persuading states to set up the exchanges or establishing them on states' behalf. If the court strikes down the law's key requirement, that most individuals purchase insurance or pay a fine, federal officials will have to establish whether they can make the remaining insurance elements of the law work, which would face stiff opposition from insurance companies and from Republican lawmakers who have pledged to overturn the law. If the court voids the law entirely, officials will have to start undoing hundreds of its requirements that are set up to take effect or are, in many cases, already in place. </blockquote> It only briefly mentioned where Mr Larsen was going, ostensibly in hopes that a better salary would aid in his tuition payments, <blockquote>[he] said he would be working at a health-services business unit of UnitedHealth Group, an insurer</blockquote> On the other hand, a <a href="http://www.bna.com/cciio-director-steve-n12884910135/">report from Bloomberg </a>suggested that UnitedHealth thought he would be well worth his salary, <blockquote>Larsen will be executive vice president at Optum, a health services and information technology company that is part of UnitedHealth Group Inc., of Minnetonka, Minn., the company confirmed. UnitedHealth Group is the parent company of UnitedHealthcare, the largest health insurer in the United States in terms of policyholders and revenues. 'We are excited to welcome Steve Larsen to Optum,' company spokesman Matthew Stearns told BNA in an email. 'Steve's extensive, broad-based experience in health care will further enhance the support Optum provides to the health system and consumers in a rapidly evolving environment.'</blockquote>It is funny how that experience seemed to be about crafting the regulations under which Optum, or at least its parent corporation would have to operate. But wait, there is more. Bloomberg also mentioned that Mr Larsen had previously gone from a state government health policy position to the insurance industry before he wound up at the CCIIO. <blockquote>Prior to joining the Obama administration to implement PPACA, Larsen served in a number of capacities at Amerigroup Corp., a public managed care company serving Medicaid and Medicare beneficiaries, according to his biography on the CCIIO website. Larsen also was Maryland insurance commissioner for six years, chairman of the Maryland Public Service Commission for Gov. Martin O'Malley (D),... </blockquote>To clarify, Amerigroup is a publicly-held, Fortune 500 for-profit corporation (look <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=122199&p=irol-IRHome">here</a>). So in summary, and in chronological order, as best as I can establish it, Mr Larsen went from a Maryland state government policy position that affected health (and other insurance) companies, to a health insurance company (Amerigroup), to a US government policy position that affected health insurance, and now to another health insurance company (UnitedHealth). The Peripatetic Legislative Policy Director Brett Roper moved in the opposite direction, to government from industry, and to the Republican legislative majority, not the executive branch now controlled by the Democrats. Early in June, <a href="http://www.republicreport.org/2012/brett-loper-boehner/">on the Republic Report</a>, <blockquote>In late 2010, as Congressman John Boehner (R-OH) prepared to take the gavel as Speaker, he hired a lobbyist named Brett Loper as his new policy chief. Loper left his job at the Advanced Medical Technology Association, a lobby group for medical device-makers, to join Boehner.</blockquote> The Association did not seem to sad to see him go, <blockquote>Republic Report reviewed ethics forms disclosed filed with the House clerk’s office, and noticed that Loper actually received a $100,147 bonus in 2011 for leaving his medical device lobbying group and becoming a public servant.</blockquote> But wait, there is more. Loper also previously made more than one transition between government and industry. As <a href="http://www.politico.com/news/stories/1210/46211.html">Politico reported </a>in 2010, before Loper worked for the Advanced Medical Technology Association, <blockquote>Loper worked in senior positions for then House Majority Leader Tom DeLay and as the House Ways and Means Committee Republican staff director under then-ranking member Rep. Jim McCrery of Louisiana</blockquote> But wait, there is still more. In 2011, the <a href="http://www.theatlantic.com/politics/archive/2011/04/corruption-watch-john-boehners-abramoff-connection/73396">Atlantic reported</a>, <blockquote>In December, Boehner hired Brett Loper to be his policy director. At the time, articles focused on Loper's previous job as a lobbyist for the Advanced Medical Technology, where Loper vigorously resisted attempts to reduce the deficit by fighting cuts in fees to his clients proposed by the Obama administration. That is part of the story. But missing from the pieces about Loper have been his connection to the Abramoff scandal and knowledge of how to use government money to 'nfluence'legislators. Sometimes a picture is worth a thousand words. Here is a photo of Loper (far right), basking in the tropical sun of the Marianas Islands, with Michael Scanlon (center), Jack Abramoff's partner in crime. What is Loper doing in the Marianas? As a staff member for Tom Delay, Loper was part of a mission to deliver money from the "favor factory," otherwise known as the Appropriations Committee of Congress, to two legislators in the Marianas, Norm Palacios and Alejo Mendiola (between Scanlon and Loper, above). In exchange for money for their two pet projects, Palacios and Mendiola agreed to switch their votes and support Abramoff's key ally in the Marianas, Benigno Fitial, in his bid to become Speaker of the House there. The gambit worked. Fitial won. Abramoff -- whose lobbying contract to the Marianas had been canceled -- was re-hired by the Marianas. In that capacity, Abramoff resumed lobbying for the continuation of abusive labor practices in the islands. (For more on this, see my film, 'Casino Jack and the United States of Money.') Abramoff also continued to make sure that the grateful garment factory owners flowed campaign cash to key mainland Republican legislators, including Tom Delay. </blockquote> Note that according to the <a href="http://www.washingtonpost.com/wp-dyn/content/linkset/2005/06/22/LI2005062200936.html">Washington Post web-page on the Abramoff scandal</a>, <blockquote>Former Republican lobbyist Jack Abramoff was sentenced to five years and 10 months in prison on March 29, after pleading guilty to fraud, tax evasion and conspiracy to bribe public officials in a deal that requires him to cooperate in an investigation into his relationshps with members of Congress. Sources familiar with the federal probe have told The Post that half a dozen lawmakers are under scrutiny, along with Hill aides, former business associates and government officials. The scandal prompted Rep. Tom DeLay (R-Tex.) and Rep. Robert Ney (R-Ohio) to give up their leadership posts,...</blockquote> So Mr Larsen went from Republican senior legislative staff positions, during which time he associated with the now admittedly guilty Abramoff, to an industry trade association, and then back to a Republican senior legislative staff position. Summary So here are two recent good examples of a particular type of conflict of interest involving government and health care corporations. Both cases are of people who have made multiple transitions through the "revolving door" between the health care corporate world, and government agencies and organizations that are involved in policies that affect that world. These transitions' multiplicity appears to represent a conflict of interest because these peoples' frequent revolutions through the door might diminish any sense that they ever have a primary interest on behalf of any immediate employer when another employer on the other side of the supposed arms' length government-industry relationship is always beckoning. Thus the people involved appear to have become members of a peculiar class always in transition, and hence more attuned to self-interest than to promoting the health of patients and the population (which ought to have been the primary concern for government leaders.) As Matt Kelley <a href="http://www.complianceweek.com/as-the-revolving-regulatory-door-turns/article/246085">on the Compliance Week blog </a>wrote in response to the Larsen story, <blockquote>if you ever wonder why so many Americans feel like their country is slipping away from them, the revolving door—the sense that a private club of success exists in this country, and most Americans don't get to go through it, but merely live with the dictates of those who do—is a big reason why.</blockquote>As we wrote before health policy in the US, in particular, has become an insiders' game. Unless it is redirected to reflect patients' and the public's health, facilitated by the knowledge of unbiased clinical and policy experts rather than corporate public relations, expect our efforts at health care reform to just increase health care dysfunction. Physicians, public health advocates, whatever unbiased health policy experts remain must educate the public about how health policy has been turned into a corporate sandbox. We must try to somehow activate the public to call for health care policy of the people, by the people, and for the people.

The Revolving Door's Bearings Overheat - Two Examples of the Health Care Insiders Who Keep it Spinning

Two recent stories illustrate a kind of conflict of interest affecting government health care policy. Note that neither story appeared in an...

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What Influenced a Paean to Karen Ignagne?

As the discussion here in the US about health care reform gathers steam, the Washington Post published a rather uncritical <a href="http://www.washingtonpost.com/wp-dyn/content/article/2009/05/24/AR2009052400551.html">profile</a> of one of the prominent participants, Ms Karen Ignagni, CEO of America's Health Insurance Plans (AHIP), the trade group for the health insurance/ managed care industry. It included some compliments from Princeton Professor and prominent health care economist Uwe Reinhardt: <blockquote> 'Whatever AHIP pays her, it's not enough. She's unbelievably effective,' said Princeton economist Uwe Reinhardt. 'It's just amazing what she's achieved for them against all odds.' Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said. Among successes cited by Reinhardt and others is helping persuade the Bush administration to develop private insurance plans within Medicare that are producing unexpectedly high payments for private insurers. </blockquote> What the Washington Post article did not bother to mention was that in addition to being on the Princeton faculty, Professor Reinhardt is a member of the <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=122199&p=irol-govboard">board of directors </a>of <a href="http://www.amerigroupcorp.com/Pages/Home.aspx">Amerigroup</a>, a health insurance company specializing in providing Medicaid and Medicare managed care (see this <a href="http://hcrenewal.blogspot.com/2009/01/what-ruc-prominent-health-care-policy.html">previous post</a>), and a member of AHIP. Former Amerigroup CEO Jeffrey McWalters was <a href="http://orlando.bizjournals.com/gen/executive.html?excode=406F5DF537D14F3AACA5084EC5142068">on the board of AHIP</a>. According to Amerigroup's<a href="http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=6228231&format=PDF"> 2009 proxy statement</a>, Professor Reinhardt controls (via ownership or options) 144,558 shares of Amerigroup stock, and received $226,531 in compensation from Amerigroup in 2008. Perhaps Professor Reinhardt's enthusiasm for Karen Ignagne's performance as CEO of AHIP derived more from his leadership of Amerigroup than a scholarly analysis. Note also that Professor Reinhardt is a member of the <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=62272&p=irol-govBoard">board of directors </a>of <a href="http://www.bostonscientific.com/">Boston Scientific</a>, a medical device company. Furthermore, per proxy statements from the above companies, Professor Reinhardt is on the board of two funds from H&Q Healthcare Investors, and is a Trustee of Duke University and the Duke University Health System. Professor Reinhardt's leadership roles in US publicly traded corporations are public, but not easily found unless one knows where to look. We had first <a href="http://hcrenewal.blogspot.com/2006/03/economist-puts-down-physicians-cri-du.html">discussed</a> these relationships on Health Care Renewal in 2006. However, many of the more academically tinged biographies of him publicly available omit his leadership roles in the for-profit world. At the moment, biographies of Professor Reinhardt on the <a href="http://wws.princeton.edu/people/display_person.xml?netid=reinhard&all=yes">Princeton web-site</a>, and furnished by the <a href="http://www.princeton.edu/~bioethic/about_us/advisors/reinhardt.html">Princeton Bioethics Forum</a>, the <a href="http://www.commonwealthfund.org/bios/bios_show.htm?doc_id=239402">Commonwealth Fund</a>, and the <a href="http://www.kff.org/about/reinhardt.cfm">Henry J Kaiser Foundation </a>did not note these relationships. This illustrates once more participation in the current health policy debate may be driven by vested interests, rather than ideology, much less dispassionate analysis. Were the participants yo disclose, at least, their financial interests, the debate would become that much clearer. Meanwhile, when listening to the debate, always ask, "cui bono?" (Who benefits?) Hat tip to <a href="http://www.thehealthcareblog.com/the_health_care_blog/2009/05/im-not-sure-thats-how-uwe-meant-it.html">the Health Care Blog</a>.

What Influenced a Paean to Karen Ignagne?

As the discussion here in the US about health care reform gathers steam, the Washington Post published a rather uncritical profile of one o...

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BLOGSCAN - Whose Interests Does Health Care Advocacy Serve?

Merrill Goozner, <a href="http://www.gooznews.com/archives/001390.html">on the GoozNews Blog</a>, dissected recent pronouncements on health care reform by economist Uwe Reinhardt. Reinhardt compared our US "system" of financing health care with those of some other countries. He noted some advantages of the latter systems, but wondered whether US citizens would accept the trade-offs they implied. In particular, he wondered whether the US would accept the tight regulation of private insurance companies found in Germany. But he conveniently failed to note that the German plan's success may depend on its exclusive use of only not-for-profit health insurers. Mr Goozner wondered whether if this omission had to do with Mr Reinhardt's position on the board of a for-profit US health insurance company, a relationship not disclosed in Mr Reinhardt's New York Times blog post. (We have <a href="http://hcrenewal.blogspot.com/2009/01/what-ruc-prominent-health-care-policy.html">posted</a> before about how Mr Reinhardt's authoritative writings on health policy have not been accompanied by disclosure of his positions on the boards of several major health care corporations.) Once again, it is hard to tell whose interests prominent health care advocacy serves.

BLOGSCAN - Whose Interests Does Health Care Advocacy Serve?

Merrill Goozner, on the GoozNews Blog , dissected recent pronouncements on health care reform by economist Uwe Reinhardt. Reinhardt compare...

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