Colorado Health Exchange: Interlocking Directorates On Steroids

Among only a handful of scholarly pearls of wisdom I managed to retain from the last century, during my tenure as an undergrad at C.U. Boulder, was the concept of interlocking directorates, which is just an unnecessarily fancy name for the time-honored tradition of mutual job-swapping between private corporations and the government agencies that are supposed to keep them honest. The rationale for occasional swappage went like this:

A banker, who ostensibly gained institutional knowledge of her industry during a stint at Morgan Chase, might later, as a government regulator, be in a better position to recognize and prosecute those who engaged in say, bank fraud.

A government bank regulator, who ostensibly gained institutional knowledge of say, bank fraud, might later as a banker, be in a better position to appreciate the virtues of confining her bank’s activities in conformation with the applicable law.

A certain small amount of this necessary evil was duly noted by learned professorial types, taught like an Aristotelian apology to a whole bunch of budding economists and political scientists like myself and then largely ignored for thirty years or so, as the puerile practice spread like a virus throughout the land.

Nowadays, the selfless public servants who swapped private for public jobs insist that they are NOT giving sweetheart deals to their former business buddies, and are definitely NOT otherwise looking the other way, when their former bosses are thumbing their noses at government rules and regulations. It must be hard for an under-funded government agency to go up against a corporation full of hired guns, especially when most of them are personal friends. How can you prosecute the guy you play golf with; the woman who manages your portfolio?

The entrepreneurially-inclined, who swapped public for private, insist that their brand new multi-million dollar salaries are justified and that they are scrupulously adhering to the no-lobby clause which they had agreed upon as a condition of working for the government.

If a newly-minted private swappee just happen to be on Capitol Hill when a juicy government contract or profitable rule-change is being considered for her new BFL’s, and she just happen to wine and dine, snort and snog with a politician on the deciding committee, this fortuitous co-mingling, which to the rest of us would constitute an unethical and shameless act of whoring, is known by those in private industry as nothing more than a fortuitous informational session. No lobbying going on here! Conflict of interest? Whaaa?

Job-swappers at both ends also insist that they have fully and irrevocably traded one hat for the other, even when they swap jobs (and hats) several times during their careers. They get all mopey and indignant when you point out to them that exactly zero banking/insurance CEO’s were prosecuted by government regulators the last time bankers almost destroyed our economy.

Job swapping has now become the norm, the continuation of which is assured, as the practical effect of this Ozarkian relationship is that both the private movers/shakers and the gummint rule-makers are making out like bandits (the operative word being bandits, not making out).

For those of you who are afraid of the havoc potentially wrought upon the Dow Jones Industrial Average by an outright prohibition against business/government incest, please keep in mind that the very/super/corporate rich own over 80% of all the stocks on the market today. Every time you get all warm and fuzzy as the Dow tops 12,000, you can rest assured that your tax dollars are paying the dues for members of a highly exclusive club which you will never be asked to join.

You steal an iPod, you go to jail. They steal billions; they get a promotion or at worst, a multi-million dollar retirement package in the Cayman Islands. That’s how it works. La Familia Governmentia protects their own, because they are bought and paid for by their malefactor/kinfolk.

So the rest of us have to swallow hard and pretend that those who have swapped-public have genuinely also swapped hats (and Manolos and Armanis and Versaces and jock straps, etc.). We are basically forced to trust that these government officials du jour are actually doing the job we pay them to do. We have to trust that they are working to protect those of us who toil beneath the clouds, even thought they treated us like chattel, while they were sucking down ambrosia on Mt. Olympus. So it goes. Waddaya gunna do? Fuggetaboudit.

Regarding the new Colorado Health-Insurance–Exchange-Board, the ever-innovative Hon. Governor John Hickenlooper has taken government-business incest to the next level. In fact, The Hon. Gov. Hick has completely dispensed with pesky gummint intervention by allowing the mega-medical business to wear both hats at once. They get to regulate themselves. No more duplicitous, burdensome job swapping or even the pretense of conflict-free decision making for this board!

According the Governor’s press release this June:

"This will be a Colorado-based health exchange that is created by Coloradans, for Coloradans. The exchange represents a broad collaborative effort between businesses, consumers, providers, the insurer community and the state legislature. The Colorado Health Exchange will be an independent public entity not affiliated with an existing state agency or department and initially funded by gifts, grants and donations. The exchange will be governed by nine board members of whom the majority will be individuals and business representatives who are not directly affiliated with the insurance industry. The board will hire the exchange’s executive director."  Emphasis added.

Sounded promising until the names of the nine members came out. Four out of the nine members are CEOs of managed- healthcare companies or health insurance companies, who stand to make a bundle off of these insurance pools, as long as the volume of enrollee participation increases (except for sick people), the premiums are kept high, and the payout on claims are kept as low as possible in order to continue obscene profits. The fifth board member, who will presumably cast the deciding vote, is an E.R. doctor who hates the federal Affordable Health Care Act and would like to see all aspects of the plan fail, including, presumably, the health insurance exchanges.

As always, I just know that I can trust these folks to act in the best interest of my family and me.

The in-your-face hubris highlighted by Hick’s picks is jaw-dropping, but I guess allowing the foxes to enforce self-promulgated hen house rules while simultaneously committing wholesale henocide is a great way to streamline the whole process. Streamlining gummint is very popular these days.

Does anybody who is not affiliated with the health insurance industry really think that middle class folks or small business are going to get lower health insurance premiums and/or better health care under the watchful eye of this board? Obviously, this little set-up is designed to scam federal funds under the Affordable Health Care Act, while subverting any real benefits for the people it was designed to help.

Congratulations Governor, in such a short time you have graduated from merely mayoral to major-league politics. I see a future for you in Washington.

J. Brandeis Sperandeo