July 29, 2011
The Honorable Diana Dooley
Chair, California Health Benefits Exchange
The Honorable Kim Belshé
The Honorable Paul Fearer
The Honorable Susan Kennedy
The Honorable Robert Ross, M.D.
Pat Powers, Director, California Health Benefits Exchange
Re: Strategic Visioning for the Exchange
Dear Secretary Dooley, Ms. Powers, and Members of the Board of California Health Benefits Exchange:
I understand that the California Health Benefit Exchange (“the Exchange”) Board engaged in a visioning exercise at the Board meeting Friday July 22, 2011 which I was unable to attend, and invited public comment on important questions related to the Exchange’s mission and identity. The following brief comments are offered on behalf of Consumers Union, nonprofit publisher of Consumer Reports, regarding those questions. These comments are not intended to be comprehensive, but rather are preliminary reactions to the questions posed:
- Do any of these models resonate? (price leader, service provider, change agent, public partnership)
- How will we know if we are successful?
- What words would you use to describe your vision of the Exchange?
- What guiding principles do you suggest for the Exchange?
We agree with the major caveat by the contributors of the various papers informing the discussion: a single set of goals and strategic emphasis will not, and should not, prevail. Components of each model presented have merit. Nonetheless, the service and price leader functions may need to predominate in the near term since establishing credibility and operational competence from the starting gate are key; the “change agent” role –our true vision for how the Exchange can transform our healthcare systems with its substantial long-term benefits for health improvement and cost saving– may need to be phased in over time. Of course, the planning for that sort of phase-in needs to occur at the outset.
Many of these models and goals overlap and relate to each other. So, for example, low-price under the “price leader” model will be key from the outset since affordability is the main concern of consumers and small businesses; but without the convenience and easy access described under the “service center” model, low-price may not be enough to attract consumers or small businesses.
The Exchange is the cornerstone of federal health reform under the Patient Protection and Affordable Care Act, the most dramatic features of which aim especially to fix the broken individual market and to provide significant help for the small group market. The Exchange must succeed for health reform to succeed, and Consumers Union intends to do all we can to ensure the success of both. We urge setting bold, aspirational goals for the Exchange, even while recognizing the many operational and financial challenges that may make them seem unattainable. This is a golden opportunity for the California to set the standard for the nation and we should aim high.
We are pleased that the Board is engaging in this process, including public comment, at this formative stage. Words do matter and set forth below are some of those that come to mind for Consumers Union in characterizing the Exchange. It needs, above all, to be credible and accountable in its mission to provide affordable, quality products in a highly consumer-friendly manner:
- Credible—transparent, free of conflicts, with easy-to-use and responsive systems, accessible staff, operational soundness, and offering a manageable number of products presented to consumers in a format that is easy to understand and compare.
- Accountable—the Exchange is a public entity and must engender the public’s trust for sound use of public funds and consumer dollars. It also should have collaborative relationships with other state government agencies overseeing health insurers and plans to share information and expertise on plans’ risk adjustment etc. (e.g. for cross-checking insurer and plan filings, complaints about marketing practices etc.).
- Providing affordable, quality products—negotiate rigorously on price and quality, spur development of the infrastructure necessary to obtain the data for quality and prevention assessments of plans and insurers.
The Exchange will be able to identify success if, in the first six months, of operation, a reasonable number of plans have committed to participate, millions of consumers and small business employees have enrolled in coverage, and those eligible to receive needed subsidies have obtained them. We know that more than 2 million Californians are currently enrolled in public programs other than Medi-Cal that could readily apply to the Exchange, and this does not even take into account the 6-7 million uninsured Californians. With the right outreach, enrollment system capacity, and pre-applications, the Exchange could realistically meet the two million mark early on. Other measures will be the Exchange’s success at providing consumer assistance and its ability to nimbly adjust to marketplace, regulatory and consumer demand shifts over time. Longer term success measures for innovation and the “change-agent role” will require amplification over time.
Suggested guiding principles include:
- Defining consumers and small business employers (and their employees) as the Exchange’s primary customer/audience.
- Making “the customer comes first” the motto and making that concept meaningful in how the Exchange provides assistance with eligibility, enrollment, plan selection, grievances/appeals etc.
- Ensuring universal design in all Exchange IT and operations to meet the needs of the disabled, and establishing sound linguistic and cultural access standards to serve California’s extraordinarily diverse population.
- Allowing for phase-in of the full complement of functions, while recognizing that getting the core operational functions up and running and right at the start is key—one bad experience with the Exchange will take years to overcome.
- Providing a top-notch shopping experience, with continual usability testing for consumer and small business ease and understanding.
- Making consistent, large-scale as well as targeted outreach/marketing a key priority– and starting that planning now– for successful enrollment and retention.
- Making continuous customer feedback and continual improvement the practice of the Exchange, built into its “DNA.”
- Once the Exchange is fully operational, promoting incentives to cut ever rising healthcare and insurance costs.
I also note that the functions described in the paper on “Operational Functions” are critically important as well to achieving each and every goal. For example, the Exchange will not be credible if it cannot enroll people in a timely and efficient manner. It won’t be considered consumer-friendly if it does not pay the subsidies and arrange tax credits in an accurate and timely manner. It will not be deemed fair by insurers if it does not adeptly execute its role in risk adjustment (whatever that might be).
We look forward to continuing the dialogue with you about the Exchange’s early strategic and operational decisions, grounded in its goals, branding, and identity development. In addition, we would be happy to send you our report and issue briefs on the consumer testing work described in the footnote above and provide an in-person briefing on these findings.
Elizabeth M. Imholz
Special Projects Director