PR, advertising firms out as exchange shifts from consultants to full-timers

By Katie Kerwin McCrimmon

Colorado health exchange managers are gambling that big expenditures will yield big results — and ultimately long-term viability.

Connect for Health store front

“We know that we have to execute well on this next open enrollment or the conversation about what happens in 2018 is not a good one,” interim CEO Kevin Patterson said during a board committee meeting early Wednesday.

Board members at Connect for Health Colorado last week voted for fee hikes, and managers are planning to spend about $8.8 million on technology improvements.

During today’s meeting, outgoing interim CEO Gary Drews unveiled a plan to significantly beef up the full-time staffers at Colorado’s exchange, while cutting consultants, who for years have been paid hefty fees for long-term contracts.

One of the contractors that will be out is OnSight Public Affairs, the firm that ran Gov. John Hickenlooper’s political campaigns and has aggressively fought any critiques of Colorado’s struggling health exchange.

The firm’s contract — which has recently netted them $9,000 a month — ends on May 31. The exchange’s advertising and marketing agency, PILGRIM, is also out and exchange managers do not plan to replace the workers at either OnSight or PILGRIM.

The exchange also has had long-term contracts for project management with a company called North Highland Worldwide Consulting. During the calendar year, 2014, Connect for Health paid nearly $2.4 million to North Highland. One of their key exchange consultants, Adele Work, shifted from consulting to the exchange to working for them full time. She became chief information officer in March and will get paid $165,000 per year. Exchange spokesman Luke Clarke said North Highland will continue to provide some services to the exchange.

Overall, Drews presented a staffing plan that would shift from 53 full-time employees to 76. His plan calls for eliminating 11 contractors. Salaries for the larger staff would cost about $3.1 million a year, while eliminating the contractors would save about $1.8 million, with a net cost of $1.3 million.

Even at the lower staffing number, the exchange has had trouble recruiting and retaining qualified employees.

Updated enrollment targets. Source: Connect for Health Colorado.

Updated enrollment targets. Source: Connect for Health Colorado.

“We’re really operating at about 80 percent of capacity. We’ve got to get ahead of that curve,” Drews said.

Along with the new staffing plans, Drews also unveiled new enrollment targets that show low, medium and high projections.

In order to be financially self-sustaining, Colorado’s health exchange must attract more customers, recoup significantly more money from Medicaid and drum up many more customers among small business clients.

Even with the significantly higher fees, Drews repeatedly has warned that everything must work perfectly for the exchange to bring in enough cash to survive. He also warned board members about letting reserves dip too low.

“Over the last nine months, at almost every meeting, we’ve had to come back and ask for money for something that was beyond the scope (of the approved budget),” Drews said. “It’s a tradeoff. There’s a balancing act… You can budget (for contingency funds) and plan for it or wait and see what happens.”



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