Questions about Memorial consultants misplaced?

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Is it all needless worrying?

The Memorial Commission on Ownership and Governance recently hired a consultant, causing some to wonder what exactly the commission’s role will be in the upcoming months.

Hiring a consultant, the thinking goes, would seem to negate the need for the commission itself.

After all, the consultant hired, Larry Singer, has experience in guiding cities in their decisions about the future of their municipal hospitals.

That’s supposed to be the job of the commission.

It’s going to be expensive, too.

Consultant fees for this kind of work are in the five-figures monthly. Memorial Health System is paying for the consultant, as well as the fees charged by the Bachman Group, recently hired to handle the commission’s public relations.

These aren’t taxpayer dollars, but they do come out of Memorial’s profits, which normally are funneled back into the system.

So if Singer is now on the job, what will the commission do?

Well, they won’t be relaxing. They’ll need to learn as much as they can about the complexities of Memorial, as well as complicated health care reimbursement rates, insurance negotiations and other issues.

That makes the move to hire an outside consultant neither unusual nor unnecessary.

“Most cities, when they look at selling the hospital, hire a consultant,” said Steve Berkshire, director and professor of the doctorate in health care administration at Central Michigan University. “It’s not unusual at all. Health care is complicated, and a consultant helps get people up to speed.”

Even cities that appoint citizens’ commissions — like Colorado Springs — still need a health care consultant, he said.

“In a meeting or two, the consultant could pass along as much information as the commission might take months to gather,” he said. “It definitely makes sense.”

That said, Berkshire said hiring a pr firm might be taking things a little too far.

Volunteers can do all the things currently being done by the Bachman Group — updating the website, sending out meeting notices and agendas, he said.

None of that work is difficult or complex — although it is time-consuming, he said.

WellPoint to undergo national scrutiny

Two months after Colorado’s Division of Insurance decided to take a closer look at Anthem’s premium increases, the federal government is asking every state to look at the insurer’s parent company — WellPoint — with the same level of scrutiny.

Anthem’s premium increases in the individual market for 2010 led to several complaints to the Division of Insurance. Commissioner Marcy Morrison decided to launch an inquiry into already-approved increases that averaged 24 percent.

Last week, U.S. Health and Human Services Secretary Kathleen Sebelius sent a letter to the nation’s governors and insurance commissioners, requesting that they re-examine WellPoint insurance rate increases in their states after Anthem in California withdrew its plan to raise premiums in that state by as much as 39 percent. Auditors found the rate hikes were based on unreasonable assumptions, she said.

“For too long in this country, Americans have been at the mercy of insurance companies, and have ended up paying a steep price,” Sebelius said. “Using faculty assumptions and loopholes, insurers have tried to game the system and consumers have ended up with one bad deal after another.”

In the letter, Sebelius said that evidence has shown that “where the prior-approval rate authority does exist, rate increases can be moderated, while still enabling insurers to earn a reasonable profit.”

‘Individual and small business insurance purchasers have little or no bargaining power and limited access to meaningful comparative price information,” she said. “That’s why state assistance is so necessary to prevent excessive rate increases.”

The Colorado Division of Insurance launched its investigation in March. The review takes eight weeks, and DOI then has 60 days to compile its findings, but it could take less time. Anthem has 30 days to file its response, and Morrison will have another 30 days to issue a final order.

Anthem can file an appeal within 30 days of the final order with the Denver District Court, or if there is a monetary penalty involved, with the Colorado Court of Appeals.

While Anthem of California withdrew its premium increases, a Maine court affirmed the insurance commissioner’s decision to reduce Blue Cross of Maine’s proposed 18-percent rate increase to 10 percent.

Amy Gillentine can be reached at 719-329-5205 or amy.gillentine@csbj.com. Friend her on Facebook.