The Covered California Non-Story
Many of my colleagues in journalism scratch their heads and wonder why fewer people read their product these days. The answer is obvious: Many of them report facts without appropriate context.
A prime example of this kind of depth-less journalism occurred earlier this week, when Michael R. Blood of the Associated Press reported that the Covered California health insurance exchange gave away $184 million worth of no-bid contracts, or about 20% of the total dollars the organization spent in gearing up to enroll millions of the state's residents under the Affordable Care Act.
That's exactly the type of story that gets people's blood boiling. Unchecked government agencies giving away huge chunks of money totally unaccounted for!
It's perfectly appropriate to report on no-bid contracts if they're linked to incompetent or incomplete performance. However, Blood did not report a single instance of that occurring as a result of those contracts. He did report that Covered California had been given broad authority to award no-bid pacts in order to meet tight federal deadlines for ensuring that the exchange was up and running, and that one PR firm had close ties to Covered California Executive Director Peter Lee when he oversaw Pacific Health Advantage, a private exchange once run by the Pacific Business Group on Health, which he ran for many years before moving over to the exchange.
Under those circumstances, would it have made sense for Lee and his staff to give no-bid contracts to people they had not worked with in the past?
What Blood and his editors failed to note in his article was that Covered California enrolled 1.4 million residents during its first open enrollment period – about double the agency's own projections.
Indeed, Covered California was the unmitigated success of the state's health insurance exchanges. Many were hamstrung by the glitches in the healthcare.gov website, which as Time magazine reported earlier this year, came perilously close to being scrapped. Oregon's own state-run exchange was so inept that it is likely it did not enroll a single resident in a health insurance plan.
So, the story in reality is: A government entity is given leeway to provide no-bid contracts in order to meet tight deadlines. The head of the entity gives contracts to people he has worked with in the past and trusts. Deadlines are met. The government entity's performance exceeds expectations.
Nevertheless, Attorney General Kamala Harris, who is almost certainly running for governor in 2018, is being asked by the advocacy group Consumer Watchdog to look into Covered California's contracting practices.
Consumer Watchdog has good reasons to exhort Harris to investigate: It's going to wind up losing not one, but two ballot propositions it sponsored in the November election. Prop. 45, which would give the California Insurance Commissioner right to regulate health insurance premiums, is being swamped with tens of millions of dollars worth of often misleading television advertising paid for by the insurance sector. Given Consumer Watchdog's leadership knew this was inevitable, they did little to get in front of that issue.
Meanwhile, the Santa Monica-based organization completely shot itself in the foot on Prop. 46, which would have raised the cap on non-economic damages in malpractice lawsuits. That reform was badly needed, but Consumer Watchdog inexplicably linked it to another mandate for physician drug testing, strongly (and wrongly) suggesting that nearly every doctor in California practices drunk or stoned.
Again, if there's impropriety involved with these perfectly legal no-bid contracts, an investigation by Harris should be warranted. But conducting one in the absence of any malfeasance is a waste of time and money. And it certainly should not be done to pull focus from Consumer Watchdog's initiative mismanagement.
Lee himself seemed to be aware that the no-bid contracts were intended to expedite Covered California's launch, not mandated in perpetuity. As he noted in a statement, as Covered California matures, it will rely less and less on such pacts.
It would be nice if my colleagues' reporting matured as well, allowing them to tell the whole story rather than rely on a few free-floating facts that were never put into appropriate context.
Ron Shinkman is the Publisher of Payers & Providers.
