To: Members of the Oregon Health Policy Board
cc: Governor Kulongoski; members of the Oregon Legislature
Re: The Health Insurance Exchange and Publicly Owned Health Plan
From: Liz Baxter, Executive Director on behalf of the Community Leadership Council
The Archimedes Movement strongly supports the recommendations included in the letter we’ve authored jointly with our health reform allies. That letter describes the desired functions of the health insurance exchange. Our additional comments reflect some of what we’ve learned in the past year about alternative models for structure and governance, and how we see opportunities for Oregon in the design of the health insurance exchange and the development of a business plan for the publicly owned health plan – which is an essential component to Oregon’s reform implementation.
A Publicly Owned Health Plan
As congressional leaders take their August recess it is painful to think back to last summer’s town halls and how rhetoric was thrown back and forth without very much true dialogue. The recent vote by the people in Missouri is this year’s first example of the ‘people’s voice’ on health reform. While many describe the results as denouncing the federal legislation, the vote was primarily about one aspect – the legal requirement to purchase health insurance from a private company.
This provides an opening for creative development of a publicly owned health plan; one that must meet the same requirements as all other health plans – and will allow individuals a clear choice when purchasing insurance. But, in building the organization we can and should look beyond corporate models that exist today. Oregonians also want to know that the organizations are doing what is in the best interests of Oregonians and are accountable to them – explicitly and legally.
The For-Benefit Business Model
The Archimedes Movement leadership has been influenced by a growing partnership with another evolution – the development of a for-benefit business model. This model looks to create a hybrid structure, one with a social purpose hardwired into the corporate structure of the organization.[i], [ii] In essence this ‘fourth sector’ as it is called, is comprised of organizations that pursue social purposes while engaging in business activities. What makes them different is a set of attributes that we may see in various current organizations, but are not all present in any single organization, including inclusive ownership, stakeholder governance, fair compensation, reasonable returns, transparency, and social and environmental responsibility.
The Triple Aim
In June 2008, the membership of the Archimedes Movement endorsed the triple aim, believing that its three objectives can help us transform the delivery system and influence incremental decisions along the way, so we support the focus of the Oregon Health Authority and the Oregon health Policy Board in adopting the triple aim to guide you. We continue to work in communities around the state to introduce Oregonians to the triple aim, especially the relationship of health to health reform, and help them understand what it means today and how it can influence your work as you move forward. We believe that the triple aim can be a key component in guiding the structure and governance of both the health insurance exchange and the publicly owned health plan.
Looking Forward
As you make decisions about the health insurance exchange and the publicly owned health plan we urge you to keep the following ideas and concepts in mind:
1) There should be a social purpose embedded in the core legal structure of both the health insurance exchange and the publicly owned health plan. This social purpose is firstly a commitment to transparently reporting and assessing the ongoing impact of each plan, in terms of health, social, environmental, and financial outcomes. Secondly, these entities must declare – as a stated goal – their commitment to the triple aim.
2) We should not presume that the organizational structure has to look like anything what has existed in Oregon before. We cannot build the system of tomorrow using the same business template we’ve used in the past. Last summer’s town hall debates ranged from ‘keep the government out of my back pocket’ to others who said that health insurance should not be controlled by those looking to make a profit. We can learn from those debates, especially if we can identify characteristics that acknowledge the concerns expressed by the public over the past few years and build upon them. The Archimedes Movement does not presume that a “publicly owned health plan” has to be a public governmental entity, nor a non-profit as they are structured today.
3) We can envision an organization that is a hybrid of a traditional non-profit or public sector organization with the best efficiencies of a private corporation. Some examples of these organizations exist here in Oregon in the private sector already. We don’t have to build it from scratch, but we do have to let the structure be driven by what we want to accomplish and the expectations that are set, rather than building the structure first, then trying to fit those aspects into the predefined structure.
4) We believe that governance must be inclusive; that information and control should be shared with stakeholder constituencies as they develop. We can imagine either the health insurance exchange or the publicly owned health plan in the private sector, but only if each entity is clearly (and legally) accountable to its stakeholders, not to shareholders, allowing creative partnerships to develop over time. Rather than creating an organization that interacts with its stakeholders, we picture an organization that is made up of its stakeholders.
5) If we can think creatively as we move forward, we believe that Oregon may find some synergy with the federal language around CO-OPs as the rules and regulations begin to evolve, which may create an opportunity for Oregon’s publicly owned health plan to also meet the criteria to be deemed a CO-OP. Maybe then we could get away from the loaded term “public” altogether, and call it something like the Oregon Health Co-op.
Words Matter
In closing, we have one additional recommendation and we cannot urge this point enough: please do not use the phrase “public option” to refer to this publicly owned health plan. We all have a tendency to default to shorthand phrases to describe complexities but that only works if everyone listening understands the shorthand we’re using and has the same definition in mind. The public option has been branded in a particular (and often negative) way, and we have an opportunity to create something better and more explicit than what was debated in 2009.
We believe that in order for the health insurance exchange and the publicly owned health plan to be sustainable they must be strong organizations with solid business underpinnings, and with a clearly stated (and legally binding) purpose of social good. We urge you to assure that the structure and governance reflect those requirements.
Thank you for your valuable service to the people of Oregon.
[i] http://www.aspeninstitute.org/publications/emerging-fourth-sector-executive-summary The Emerging Fourth Sector: A New Sector of Organizations at the Intersection of the Public, Private and Social Sectors. Heerad Sabeti, The Aspen Institute
[ii] http://philanthropy.com/blogPost/Congress-Could-Consider/23134/ Congress Could Consider Creating New Category of Organization, Expert Says. The Chronicle of Philanthropy, April 15, 2010
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