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TMCNet:  Cover Oregon: Board hires 'turnaround' expert, narrows technology options [The Oregonian, Portland, Ore. :: ]

[April 10, 2014]

Cover Oregon: Board hires 'turnaround' expert, narrows technology options [The Oregonian, Portland, Ore. :: ]

(Oregonian (Portland, OR) Via Acquire Media NewsEdge) April 10--Portland corporate turnaround expert Clyde Hamstreet agreed Thursday to what may be his most challenging assignment: helping solve Cover Oregon's health exchange mess in just a month.


Hired Thursday by Cover Oregon's board of directors, Hamstreet takes the helm of an organization facing daunting technological, legal and financial issues. It has just seven months to produce a functional health exchange, something the state has been unable to do in the prior two years despite spending more than $200 million.

Cover Oregon must decide in coming weeks whether to try to salvage the troubled technology developed primarily by its former chief contractor, Oracle Corp., or whether to give up on the in-house effort and move to the federal exchange.

Time is already running short.

The state's new goal is to have its exchange fully operational by Nov. 15, the beginning of the next open-enrollment period. Alex Pettit, Oregon's new chief information officer, who is on loan to the exchange, told the Cover Oregon board on Thursday he will insist on at least 90 days of testing for the exchange technology. That means the state only has until August to finish additional development of the exchange if it is to meet the deadline.

"This is no small thing," Pettit said. "We have to make time for testing. But that constrains our development time." A third alternative -- moving to another state's exchange technology, is no longer an option. Pettit said Thursday adopting another state's exchange would be too expensive, risky and time-consuming.

The work of sifting through a variety of options has been conducted behind closed doors for weeks by a 16-member technology committee. At Thursday's meeting, board members asked exchange staff to hold those meetings in public, and Pettit agreed.

The state and Oracle have clashed over the company's performance on the exchange. Oregon has paid Oracle $130 million.

In a transition agreement overseeing Oracle's departure from the project, the state reserved the right to sue to recover any or all of the money. Gov. John Kitzhaber has referred the case to Oregon Attorney General Ellen Rosenblum.

In addition to overseeing Cover Oregon, Hamstreet will pursue a restructuring of its management. The exchange is seeking to cut its projected budget by close to 20 percent to account for lower-than-expected private insurance enrollment.

The board did hear some good news. Enrollment has hit 217,413 as of Thursday, including more than 150,000 enrolled into the Medicaid-funded Oregon Health Plan. Cover Oregon is receiving an additional 1,200-1,500 applications a day.

The current open-enrollment period in Oregon was extended 30 days until the end of April because of the exchange's technology issues. The state last fall devised a process to handle applications, in part, by hand when it became clear the exchange website was not functional.

The Cover Oregon board of directors signed off on a contract that will pay Hamstreet's firm a maximum of $100,000.

Hamstreet replaces Bruce Goldberg, who resigned in March. He will fairly soon give way to a full-time executive director, who the board hopes to hire this spring.

Hamstreet has been working as a turnaround and restructuring consultant for 25 years. He is perhaps best known for leading the unorthodox restructuring of Sunwest, the huge Salem-based chain of assisted living centers that crashed into bankruptcy in 2008.

Hamstreet's hourly rate is $300. He listed four other consultants who may work with him on the Cover Oregon project charging rates between $210 and $260 an hour.

Hamstreet conceded that the bulk of his work has been in the private sector. He said he did some consulting for Tri-Met, back in the days when it was led by Tom Walsh. He also served on the Oregon Land Development and Conservation Commission.

-- Jeff Manning and Nick Budnick ___ (c)2014 The Oregonian (Portland, Ore.) Visit The Oregonian (Portland, Ore.) at www.oregonian.com Distributed by MCT Information Services

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