By Katie Kerwin McCrimmon
Gov. John Hickenlooper booted a vocal critic from Colorado’s health exchange board after the November elections and before Colorado auditors released a scathing account of financial mismanagement at Connect for Health Colorado last week.
Hickenlooper had appointed Ellen Daehnick, a supporter of the Affordable Care Act and a small business owner, to the exchange board in July of 2013. Now registered independent, Daehnick said she has always voted for Democrats including Hickenlooper and President Obama.
Nonetheless, she has been a fierce critic of spending at the exchange and opposed a raise for the former CEO.
Today is the deadline for sign-ups for people who want health insurance coverage to start on Jan. 1. By late last week, about 8,500 new customers had signed up for private health insurance and an additional 16,500 had renewed their plans. Last year, one month into enrollments, about 12,700 new customers had signed up, so this year’s pace is slightly below last year’s for new enrollments.
The governor quietly removed Daehnick just before Thanksgiving and his spokeswoman declined to say at first whether Hickenlooper had forced Daehnick off the board or whether she had resigned.
Health News Colorado filed a request under the Colorado Open Records Act for emails to and from the governor and his staff regarding Daehnick and confirmed that Hickenlooper removed her.
What’s less clear is why the governor would make such a move at a time when he’s trying to portray himself as a transparent leader who doesn’t play political games.
In one email, Hickenlooper’s new deputy chief of staff, David Padrino, outlines how top officials should spin Daehnick’s removal.
“Here are some suggested talking points,” Padrino wrote to the head of the exchange board, Sharon O’Hara; Insurance Commissioner Marguerite Salazar; the director of Medicaid in Colorado, Sue Birch; and other members of Hickenlooper’s staff.
“The governor recently appointed David Padrino to replace Kevin Patterson on the board,” Padrino wrote about himself. “David’s background in business includes experience with small businesses in public and private sectors, which overlaps with Ellen’s experience.”
He suggested that Hickenlooper’s cabinet members say that the governor is interested in the “long-term financial sustainability of the exchange, which will benefit from diversity of opinions and expertise.”
And he added: “We aren’t commenting publicly on whether or not Ellen left on her own, or was asked to leave.” (Click here to read Padrino’s email.)
After obtaining the documents, Health News Colorado asked the governor’s spokeswoman again on why he removed a woman who had repeatedly raised questions about finances and sustainability at the exchange. Spokeswoman Kathy Green sent an email saying that appointees “serve at the pleasure of the governor, and it is not unusual for movement to take place on boards … Given the challenges that the Connect board has faced and is just starting to undertake given the recent audit, and with the transitions already happening, the governor thought the timing was right to make additional changes to the board.”
Daehnick asked officials in the governor’s office to explain why they said they were removing her “with cause.” She said she asked what the cause was and got no response. It’s probably “because I asked a lot of tough questions that embarrassed the folks running the show.
“Maybe my primary sin was being the board member who was willing to raise these issues publicly.”
Daehnick said she had been honored and humbled to be on the exchange board.
“I support President Obama’s health reform efforts. I thought I could bring some useful expertise to help and I wanted to do so. Early on, it was clear that Connect for Health had significant and troubling technology operations and financial and organizational issues,” Daehnick said. “The questions I asked and the recommendations I made were to ensure a successful, sustainable marketplace.”
Now, she’s deeply disappointed in Hickenlooper for apparently trying to silence an exchange critic.
“This is the kind of small-time politics not fit for a modern state like Colorado and it stinks,” Daehnick said. “Gov. Hickenlooper talks up transparency and accountability in state government.
“But in this case, he’s all hat and no cattle,” said Daehnick, who grew up in Texas, worked extensively as a management consultant helping troubled companies, then started a business in Colorado called Helliemae’s Handcrafted Caramels.
Daehnick said the recent audit findings show that exchange board members weren’t doing enough to hold managers accountable.
“A broader audit absolutely is needed to get to the bottom of the situation at Connect for Health Colorado,” Daehnick said.
She found the talking points from Padrino especially ironic considering he said that he claimed the governor wanted “financial sustainability” and a “diversity of opinion.”
Daehnick said that when the governor’s aides interviewed her for the board in 2013, they specifically said they wanted her to bring “technology and financial horsepower to address what was going on at the exchange.”
Time will tell who the governor picks to replace Daehnick. He also will appoint another new exchange board member because the former board chair, Gretchen Hammer, resigned to take a job with Colorado’s Medicaid agency.
Independent political analyst Eric Sondermann said Hickenlooper has been trying to brand himself as a person “committed to openness and transparency,” and Coloradans will have to decide if Daehnick’s replacement “also shares that commitment to openness and transparency or if that replacement is going to be a ‘go along, get along’ person.”
Certainly “Hickenlooper has the power of appointments over many of the exchange board members, but I think the political stars are lining up so there are going to be a lot more questions, more openness, more transparency and more disclosures whether the board and the exchange wants that or not and whether the governor’s office wants that or not.”
Sondermann said the recent audit findings were “pretty scathing.”
“You’re going to see increased legislative interest (in Connect for Health) and increased oversight of the exchange. The days of a Democratic Senate rather blindly killing the notion of a detailed audit (as they did last year) are probably over,” Sondermann said.
Daehnick was never one to mince words and tangled at times with fellow board members including Arnold Salazar, who frequently argued that the exchange should spend more taxpayer money than the $177 million already allocated to Colorado for exchange start-up costs.
Other board members praised Daehnick as bright, hard working and willing to ask tough questions. Of those that Health News reached, all said that they were surprised that the governor had removed Daehnick and that they had not received any advance notice.
“I appreciated her. She was very helpful on a number of fronts,” said board chair, Sharon O’Hara. “She was incredibly helpful in orchestrating our search for the new CEO.”
O’Hara said she has no idea why Hickenlooper removed Daehnick.
“They have not consulted me,” O’Hara said, noting that in the past, when another board member resigned, she was simply “informed” when the governor chose a successor.
O’Hara said she does not expect Daehnick’s removal to silence others and she doubts there will be any “chilling effect.”
Board member Dr. Mike Fallon was appointed by Republicans and often has pressed exchange managers to reduce costs rather than spending more taxpayer money.
He, too, said he was surprised when he was told at the last board meeting on Dec. 2 that Daehnick was “no longer on the board.”
“I’ve never really gotten an explanation and I don’t know the whole story behind it,” Fallon said.
“I’ve been very vocal and very critical of the spending and some of the things that have gone on with the board,” said Fallon, a doctor who operates urgent care clinics.
“I thought she asked very good, very tough questions. Often, she echoed some of the things that I was thinking. I think she did a good job for the taxpayers and Colorado citizens’ perspective trying to make sure we do the right thing,” Fallon said.
“She wanted to make sure taxpayer money was well spent. She’s a small businessperson. She understands you have to run a business in a very transparent, fiscally responsible way or you won’t be successful,” Fallon said.
He did not attend the legislative hearing where auditors unveiled their findings last week, but said he’s read “with modest horror” about the results.
“The organization grew entirely too fast by mandate. It didn’t have the controls needed for the kind of organization it needed to be,” Fallon said.
He’s hopeful that managers and board members will be in a better position now to be better stewards of public dollars.
He said board members should have done a better job of more closely supervising former CEO Patty Fontneau and her staff. But he said that the board did not know enough about day-to-day operations. And, he said, that’s typical of all boards.
Fallon said he has always felt free to speak his mind.
“I don’t feel any sense of intimidation, nor do I sense it from the rest of the board,” he said.
Eric Grossman, who is also one of Hickenlooper’s appointees, said he appreciated Daehnick’s contributions.
“She’s a good person. I like her and she’s really smart. It’s a lot of work. I called her and thanked her for her contributions,” Grossman said.
Grossman does not worry that Daehnick’s departure will silence other board members. And he said there are plenty of watchdogs keeping an eye on the exchange.
“I think having new board members is important. That’s what the structure (of the exchange board) was set out to do,” Grossman said.
He said the board has a fiduciary duty to make sure funds are being well spent.
“The audit shed some light on some areas of improvement,” he said, noting that the board and the exchange, itself, are much more mature now than when Connect for Health was first being created.
“It’s hard to look back. What we’re focused on now is looking forward,” Grossman said.
Board member Nathan Wilkes, who was appointed by the then-Democratic Senate President Morgan Carroll, said he didn’t work on any committees with Daehnick and therefore didn’t know her well.
He hopes her removal will not cause other board members to curtail any criticisms they might have.
“I would hope that any current or future board member feels comfortable speaking openly and freely in board meetings,” Wilkes said.
Other board members were not available to comment.
It’s not clear when Hickenlooper will pick two new board members. Connect for Health is also trying to pick a new CEO, CFO and COO after the exchange’s three top leaders left in August and later this fall.