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MNsure leaders face big decisions, bleak projections

MinnPost file photo by James Nord
MNsure senior staff and Optum representatives addressed the exchange's governing board at a meeting Wednesday.

MNsure leaders now face some big — and expensive — decisions, after hearing a blunt assessment of the health exchange’s continuing operational problems and bleak projections about its enrollment and finances.

The biggest decision: whether to stick with making small step-by-step improvements, or blow up the whole thing and start over.

It could take up to two years to fully fix the exchange if leaders decide to make incremental improvements.

The alternative: a complete overhaul of the IT infrastructure and the potential hiring of new vendors.

MNsure, however, will be hard pressed to find the money for such a massive overhaul.

Its options are limited by a projected deficit that could reach $3 million over the next two years, even if private enrollment beats current expectations by about 15 percent.

The exchange’s financial condition also doesn’t take into account the funds needed for expanding its beleaguered call center’s capacity and for some external IT fixes that the exchange is contemplating,

In the meantime, “MNsure will fall short of achieving its original enrollment goals and consumer satisfaction levels,” according to Wednesday’s report by Optum, a subsidiary of UnitedHealth Group.

Interim CEO Scott Leitz said the exchange would move as quickly as possible to address the issues.

“The legislative auditor will be taking a look at how things were in the past,” he said, “but our focus is how do we move forward and make the system a better one for Minnesota.”

“How we choose to move forward will obviously have some implications for what the budget will be,” Scott Leitz said after Wednesday MNsure board meeting. “We certainly want to make it a better system than it is today, and I think we’ve learned a lot.”

The Optum report, however, was strongly critical of MNsure leadership, saying, “Current Program Management structure and process is nonexistent, and management/leadership/decision making is occurring via crisis mode.”

Optum advised the exchange to return the staff-governing structures that were in place before the health exchange’s Oct. 1 launch.

The report also found that the state would have to continue with using many manual procedures through the 2014 open enrollment period that ends in March.

It also called for a significant increase in call center capacity, which routinely has been plague with hour-long wait times.

That, too, would require extra funding.

The exchange’s governing board, searching for new funding sources,  even asked if the ubiquitous “Paul and Babe” advertisements that have blanketed Minnesota could be shelved to pay for more staff at the center.

Senior staff already has cut the ads, they were told.

The Optum review was — by its own admission — only a preliminary view of what’s going wrong at MNsure. The report, done for free, made its case for how Optum could fix the struggling exchange.

Leitz, however, said that a variety of vendors would be considered for any outside fix.

“There are any number of organizations that could play that role,” Leitz said. “Optum may be one of them … they came back with recommendations that we asked them to do, and that’s where we’ve left it with them.”

Steve Parente, a finance professor at the University of Minnesota, called the Optum report “sort of self-serving.”

Given the company’s potential role in MNsure’s future. it’s unwise for the report to say in effect, “It’s completely trashed, and we’re going to be the savior,” according to Parente.

While some governing board members talked about bringing in a new general contractor to oversee that work, Leitz and board Chair Brian Beutner assured reporters that the state isn’t interested in giving up and joining, the federal exchange.

The big fixes would come for 2015 and 2016. Those are also the years when MNsure is supposed to be self-sustaining. Right now, though, the financial outlook seems bleak, and it’s unclear how any significant IT re-working will be paid for.

Projections from as early as July have shown MNsure could operate at a deficit. According to that month’s spreadsheet, obtained through an open records request, staff predicted that lower-than-expected enrollment could cause a $3.7 million deficit for 2015. That number has since been revised to $2.5 million.

The lack of clarity has frustrated GOP Sen. Michelle Benson, who repeatedly has questioned MNsure’s budget and enrollment estimates.

enrollment chart
Source: MNsure
MNsure must complete many more enrollments to meet projections.

“Some of the damage could have been mitigated if there had been a more open environment,” Benson said.

That appears to be changing at MNsure. In addition to the typical enrollment figures, the organization released a trove of new information on Wednesday

The latest statistics show about 80,000 people in the process of enrolling in MNsure, including nearly 28,000 private consumers.

In a twist being seen across the country, the number of Medicaid enrollees — about 33,000 — is already double the expectations for the entire year.

Comments (10)

  1. Submitted by Dennis Litfin on 01/23/2014 - 12:12 pm.

    paul/babe ads

    When I first saw them, I could not believe that they were something being used to promote MnSure…or anything else coming out of Minnesota. Is that the best you could come up with ?
    Other than being totally stupid and given the impression that they were directed towards children /and or low I.Q. adults, they used up financial resources which could be better used to intelligently make people aware of MnSure.
    Please…please dump those childish promos….and the advertising agency that developed them, and make better use of that money.

  2. Submitted by Dennis Tester on 01/23/2014 - 01:01 pm.

    Regardless of what you think

    of UHC or Optum, they are highly skilled and experienced program and project managers who use sound, industry-standard IT project management methodologies. I would listen to their advice.

    And unless Steve Parente, a finance professor at the University of Minnesota, has his PMP certification, I would ignore his.

    • Submitted by Tom Lynch on 01/23/2014 - 05:33 pm.

      Re:Regardless of what you think

      Of course you would.

    • Submitted by Rebecca Hoover on 01/25/2014 - 05:02 am.

      Institute – Root a Toot

      PMP certification always reminds of certification from the Institute of Vegetable Shortening. Realistically, PMP certification is seriously lacking.

  3. Submitted by jody rooney on 01/23/2014 - 01:43 pm.

    A side effect of MNSure

    While our insurance is not through MNSure our rates did go down. I believe the visibility created by the MNSure site had our provider up their game a bit.

  4. Submitted by Tom Anderson on 01/23/2014 - 07:21 pm.

    Does anyone really believe

    That MNsure won’t be funded by the legislature and Governor that implemented it?

  5. Submitted by Jon Kingstad on 01/23/2014 - 07:40 pm.

    Reinventing the wheel

    I wonder if the people who set up MNSure were aware that something that I would describe as an “exchange” already existed in Minnesota several years before this program was even conceived. It’s called “e-health” and basically matches an individual or family with a private health insurance plan that meets their profile and needs. Now e-health does not decide whether or not to accept your application. Nor does it act as an intermediary in premium payments.The insurer can reject you or accept you at a higher premium than presented. But basically it function for all intents and purposes as an exchange.

    Maybe the problems in implementing a program that complies with the Affordable Care Act creates some special problems in software and it doesn’t address the problem of people who simply can not navigate a program like this without coaching from a person. But e-health is a working “exchange.” I can’t believe our government needs to completely reinvent the wheel to make affordable health insurance available to Minnesota.

  6. Submitted by Bill Schletzer on 01/24/2014 - 06:41 am.

    I would like to see the real story told

    In all these articles I’ve read lately they only mention the new leadership of MNSure and how it isn’t his fault. I wish some reporter would go after those two vacationers that were let go a couple months ago. What were they doing for the last couple of years? Did they have any background that qualified them to implement this program? What was Dayton’s role in hiring them? Were the appointments done to serve a political purpose when he should have been hiring for competency? I think there is a real, important story there that would be very uncomfortable for the state DFL and I think the Star Trib or someone like MinnPost should be telling it.

  7. Submitted by mark wallek on 01/24/2014 - 09:26 am.

    Fear and loathing

    I need to sign up for this program if I want my employer to continue providing me with a stipend that used to just go, tax free, into a medical saving account. Now that is illegal and it will come to me, taxed as wage, as soon as I sign up for the new auto, er, health insurance. Now to hear this about the state of the agency thru which I’m supposed to commit hundreds of hard earned dollars a month is extremely disturbing. I feel like I’m being asked to have faith and push the handle on the toilet. Since I will be committing more out of pocket money to the monthly payment-which of course will not cover the first 5000 of actual medical expense or the copays-I would really like to feel that I was one, dealing with a competent agency run by competent people, and that two, I was not just throwing money at the CEO and CFO of whatever “plan” I choose. The design of this system assures the current players in the “capitalized medicine” game are still collecting the cash, but now they get to do it like it was auto insurance. You can bet some folks will be buying new rides and building new homes and enjoying some overseas quality time.

  8. Submitted by craig furguson on 01/25/2014 - 04:49 pm.


    “In a twist being seen across the country, the number of Medicaid enrollees — about 33,000 — is already double the expectations for the entire year.” Really, MN has poor people without coverage? Usually they are invisible.

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