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Advocates Question Investments Of Exchange Board Members

by Christine Stuart | Sep 28, 2012 12:01pm
(2) Comments | Commenting has expired
Posted to: Health Care

Christine Stuart photo

Grant Ritter

(Updated 12:52 p.m) Connecticut is setting up an insurance exchange so that people without insurance can buy it, as part of the Affordable Care Act. An 11-person board appointed by Gov. Dannel Malloy and lawmakers is making the rules for how that will work — and it is generating controversy.

Throughout the legislative session, health care advocates upset with the composition of the Insurance Exchange Board fought hard to pass a bill which would expand the number of consumer voices.

Advocates said the appointments to the board relied too heavily on insurance industry insiders, so they pushed for legislation to add consumers and small business owners.

Despite intense lobbying efforts, the bill died in the Senate during the last-minute crush of business and political gamesmanship. At the time, advocates, blamed Sen. John McKinney, who appointed Mickey Herbert, former president and CEO of ConnectiCare, to the Insurance Exchange Board.

As it turns out, advocates’ outrage may have been misplaced.

According to his 2011 financial disclosure form submitted to the Office of State Ethics, Herbert has no personal financial investments in health insurance companies or providers, and no investments in pharmaceutical companies.

But two of the members of the board appointed by Democratic leadership in the House and the Senate reported holdings in two large insurance companies and several pharmaceutical companies.

Grant Ritter, who was appointed to the board by Majority Leader Brendan Sharkey, has investments with Pfizer, Protor and Gamble, Covance Inc., Johnson & Johnson Co., Quest Diagnostics, and Aetna.

Ritter, a healthcare expert and professor at Brandeis University, said he has no plans to divest himself of those assets unless he is asked to do so.

“If somebody is advising me of the necessity of doing it, I’ll probably entertain it,” Ritter said, adding that disclosure is the key requirement.

By disclosing the information, the public now has the knowledge to hold that person accountable if they somehow misuse their position, Ritter said.

Ritter is married to state Rep. Elizabeth Ritter, who is co-chairwoman of the legislature’s Public Health Committee.

He opined that it’s possible instances may come up where he would have to recuse himself from a vote on the board because of his investments, but he said he will cross that bridge when he gets to it.

“Recusing on an individual basis is probably sufficient,” he added.

That seems to be consistent with the ethics policy the board adopted Thursday.

“Outside employment and business interests of a member of the Exchange Board of Directors (other than ex-officio members) do not constitute a conflict of interest so long as such member discloses such employment and business interests and abstains and absents himself or herself from any deliberation, action and vote by the Board of Directors with respect to any matters regarding such member’s employer or the business in which such member has an interest,” the board’s ethics policy reads.

According to the 2011 financial statement of interest, the other member with holdings in the health care industry was Robert Scalettar, who was appointed to the board by Sen. Majority Leader Martin Looney.

Scalettar’s healthcare industry holdings include Amgen, Forest Laboratories, Johnson & Johnson, Kuehne & Nagel, Medtronic, Merck & Co., Sangamo Biosciences, Teva Pharmaceuticals, Watson Pharm Inc., and United Health Care.

“In my next years filing some of those things will have already disappeared,” Scalettar said Thursday.

He didn’t specifically say which ones, but nodded affirmatively when asked if United Health Care was one of them.

He said he didn’t believe any of his votes on the board to date have conflicted with his personal financial investments.

Looney was not available to speak Thursday, but he emailed the following statement: “Doctor Scalettar is a skilled medical practitioner and patient advocate. He is a leader in the field of patient safety and has a profound understanding of the health care system. I have known him for nearly two decades as a thoughtful, principled progressive.”

Ellen Andrews, executive director of the Connecticut Health Policy Project, said the financial disclosures highlight a concern advocates have been expressing from the very beginning.

“The concern should be consumers and small businesses and those who are going to be buying the exchange and they shouldn’t be worried about investments,” Andrews said. “Mickey has investments — they’re just not in insurance companies, or providers, or drug companies, or hospitals.”

Kevin Galvin, founding chair of the Small Business for Health Care Reform advisory committee and a small business owner himself, said it goes back to the original argument about the framework for the exchanges. He said if they had consumers and small business owners on the board, this wouldn’t even have to be part of the continuing conversation.

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(2) Comments

posted by: middleoftheroad | September 28, 2012  8:40pm

I wonder how many advocates have passive investments in healthcare through their retirement plans.  Probably many.  Putting advocates on the board doesn’t eliminate the possibility of investments in healthcare.  Seems like someone is trying to make a mountain out of a molehill hill.  Let the board members’ actions speak for themselves.  They’ve complied with the ethics rules.  No one is alleging that either of these board members voted on the basis of their investments.

posted by: jiddum | October 2, 2012  10:11pm

This article trivializes the issues and hugely mischaracterizes advocates’ concerns.  In addition to the problem of lack of consumer representation on the board (which Malloy and the legislature had ample opportunity to remedy but failed to do so), several of the current board members are former heads of insurance companies and represent Big Insurance - NOT consumers.  Mickey Hebert may not currently be employed by a big insurance company, but he was recently the CEO of one (do your homework, please, journalists, this stuff is well-documented). You think Hebert can be impartial -let alone a consumer representative- now after living in the mindset of the private corporate insurance companies who invested millions in blocking health care reform and made their profits through the denial of care and mistreatment of consumers? You really think he’s the right person to now be IMPLEMENTING reform? There’s a similar problem with Mary Fox’s past. She’s coming from a private insurance standpoint. The abuses of the private insurance industry are at the heart of why we needed health care reform to begin with. The appointments of these individuals who represent Big Insurance is a clear violation of the law that established the health insurance Exchange to begin with. And this article makes NO mention of those issues - to the detriment of consumers.