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MNsure leaders face big decisions, bleak projections

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

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

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.

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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.

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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.”

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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.