Money buys results & erodes trust

Posted in Around The State, Commentary, Health Care, Money In Politics, Public Employees at 4:40 pm by wcnews

A couple of weeks ago it was announce that the Employees Retirement System of Texas (ERS), who administers retirement, health and other insurance benefits for current and former employees,  was changing corporations that administers health insurance.  From Blue Cross to United HealthCare, via the ERS web site.

On February 21, 2012, the ERS Board of Trustees agreed to enter into contract negotiations with United HealthCare Services, Inc. to serve as the third party administrator (TPA) for the self-funded HealthSelectSM of Texas health plan starting September 1, 2012. United HealthCare Services, Inc. call center and claims processing unit is located in San Antonio, Texas.

Since that time Paul Burka has been all over this story as a clear sign that “The Perry gravy train is back on the track”. This post shows how the ERS contract is sweet deal for Perry insiders, and not a good deal for state worker and retirees. Burka starts by pointing out the ties to UnitedHealthCare and Gov. Perry.

UnitedHealthCare is a client of … Mike Toomey. What a remarkable coincidence.

I went on to quote from the release:

Chris Cronn, a former Perry staffer, will become Vice-President for state affairs for UnitedHealthCare, and other former Perry staffers are on the gravy train. Their names appear below, following the text of an email that went out on Wednesday:UnitedHealthcare was selected by the Employees Retirement System of Texas (ERS) to be the third party administrator of the HealthSelect of Texas health insurance plan. As the administrator, UnitedHealthcare will process claims, provide customer service and manage the HealthSelect network starting September 1, 2012.  We will be working with ERS, and the current administrator, Blue Cross and Blue Shield of Texas, to make the transition as easy as possible for all HealthSelect members.

The names that followed included Cronn (as the new vice president for state affairs for UHC); Toomey; Laura Keel; Louis Saenz, a former senior adviser for Perry; and Victoria Ford, a former Perry health care staffer.

This certainly highlights what many refer to as the “revolving door” of politics and the corporate world. Those who leave state government and use their connections in the private sector for personal gain. While there is no evidence of corruption, this certainly looks fortuitous.  He then goes on to point out that this will cause “major disruptions”.

First, UnitedHealthcare’s competitors are not going to go quietly into that good night. I am told that ERS will meet tomorrow, and that representatives of the speaker’s office and the lieutenant governor’s office will be present. The switch from Blue Cross to UHC is going to have huge implications, both financial and personal. (Full disclosure: I am covered by Blue Cross through TEXAS MONTHLY’s parent company.) The UHC plan will cause major disruptions in patient care, at least in the beginning, as well as considerable cost-shifting to state employees and retirees.

And ends with this:

I don’t want to rush to judgment here. I haven’t read the contract. I don’t pretend to understand the nuances of health insurance. I haven’t seen a comparison of the two plans. But the combination of possible influence peddling by the governor and his former staffers turned lobbyists, and the potential impact of the plan on thousands of state employees, should motivate the state’s leadership (excluding Perry) to determine whether state employees are getting the best possible deal here. The integrity of TRS has already been compromised by Perry’s appointments–remember the Michael Green whistle-blowing letter–and now ERS is likely to come under scrutiny. Dewhurst and Straus should seek a thorough airing of the differences between the new UnitedHealthcare plan and the Blue Cross Blue Shield plan that is no longer in force and determine whether state employees are well served by the new contract.

And what about ERS’s lawyer — Greg Abbott? He is widely  believed to be planning a race for governor. He would benefit significantly if Perry were to step aside. But would Abbott risk a fight with Perry by questioning the process that led to the awarding of a contract to Perry’s friends? Unlikely. This is really ugly, and it is going to get worse before it gets better.

What’s sad about this, especially from what I’ve read thus far, is that there doesn’t seem to be much being said, especially from the ERS board members, about how this will effect their membership.  Here’s what the “Get Answers” link says regarding coverage and cost.

The new contract is expected to save the health plan money, while providing quality benefits.


You will not pay more because of this transition. The legislature and/or the ERS Board of Trustees determine the plan design and premium changes.

What that says to me is that, “quality benefits” is not “the same benefits you have now”, and that yes you will pay more in the future but we’ll blame it on something else.

Burka has more here, here, and here.

But this also goes to what Lawrence Lessig has been pointing out for several years now, money buys results.  Here’s the video which lays it out pretty succinctly.

He’s written a book about what’s wrong and how to fix it, Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It. Here’s how he explained what is highlighted above several years back, in the context of Congress. But it fits this situation too.  A Declaration for Independence.

You can enter any of the office buildings of Congress fairly easily. There’s a metal detector manned by guards, obviously not happy with their TSA-like shift. The search is brief, almost fake. You’re then inside a building typically with long, beautiful hallways, onto which the offices of congressmen and senators open. Often the halls are empty. Silent. Almost abandoned. Then, seemingly at random, a single person may enter a hall, or a gaggle of staffers. And sometimes, at the center, is a Member of Congress. Harried, focused, typically reading something as he or she walks, often frowning, unless you catch his or her eye. Then you’re met, whether you know the Member or not, with an “of course I remember you” smile, for a second, until light won’t bend to you, at your angle, anymore. The race then resumes, to a typically meaningless procedural vote, or to a florescent-lit cubicle in an office just next to the Capitol, where Members spend hours cold-call fundraising, the only truly required work of Members of Congress.

It is easy in this mix not to notice the basic bankruptcy that is the First Branch of the Framers’ Constitution: Congress. The obsessively hard work of the staff, the fawning of visiting constituents, the respect of uniformed officers—all that fuels an obliviousness to the basic failure of this the democratic core of our government. Public cynicism about Congress couldn’t be greater; public approval couldn’t be lower. (Rasmussen, for example,recently reported that for the first time, favorable views about the work of Congress fell to single digits—9%.) But most in Congress do their job as if the standing of Congress were simply not their concern. Members are loved locally, and that is enough. That the institution they serve is despised is irrelevant.

Nothing on the political horizon is going to change this. Bush v. Gore notwithstanding, the public still trusts and admires the Supreme Court. No matter whether Obama or McCain wins in November, the public will once again approve and admire the Presidency. But nothing will save Congress. Without fundamental change, the institution will remain despised and increasingly irrelevant. Power will continue to shift—as it has for the past fifty years—to the President and the Court. The core institution of the Framers’ democratic design, the institution that many of them were most proud of, will remain essentially bankrupt.

That’s a strong term. But it predicates well of Congress. If the credit of any public institution is trust and respect, then Congress is, as Websters would define it, “discredited, having forfeited all credit.” Not because of any particular decision, or failed vote. Most couldn’t name one thing Congress did or didn’t do that they object to. Not because anyone believes its Members (or most of its Members) are bribed, or evil people. To the contrary, Congress is filled with souls with an extraordinary commitment to the public. These are good, not evil, people.

Rather, Congress’s “credit” is “forfeit” because of a profoundly deep sense among most that the machine that Congress is is simply bent. Like a rigged slot machine at a casino, or a balance sheet by the Enron accounting department, the vast majority of Americans don’t believe that the answers Congress gives are the right answers for the right reasons. Most believe that they track something else entirely: not sense but dollars. And not the dollars of an illegal bribe (though no doubt, too many believe this too), but the dollars that fund the essential element of congressional tenure—campaign contributions.

America’s view of Congress’s behavior is not likely correct. Political scientists are almost unanimous in their judgment that there is no simple quid-pro-quo to what Congress does. If there is improper influence, it is far less direct, or obvious. Any improper influence is well hidden in the web of relationships that power attracts.

But this is one of those crucial contexts in which perception is reality. Congress is bankrupt because the people see it so. Why America sees as it does is obvious; likewise obvious is what Congress must do to change that belief. Not obvious, however, is how that change gets effected.

Because of the “revolving door” and campaign finance system, now in place, it’s impossible for us to trust our elected, or appointed in the case of ERS, leaders are doing what they believe is best for ERS members and the state of Texas.


  1. Eye on Williamson » I knew something was wrong said,

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