More than eyebrows should be raised at the news that Illinois Health and Family Services (HFS) Director Felicia Norwood has resigned to take a position with Anthem, a for-profit subsidiary of health insurer Blue Cross Blue Shield. The resignation of Ms. Norwood, a government “insider” who will head up the company’s division tasked with landing government contracts, should raise questions about the propriety of the move, and if it violates Illinois’ Revolving Door Act
If the job change sounds suspicious, that’s because it is. Ms. Norwood, a seasoned health insurance industry executive, came to the role of HFS director from her previous employer, Aetna, the nation’s third-largest health insurer. She moves to Anthem, the nation’s second largest health insurer, bringing with her specialized knowledge of what it takes to win government contracts such as the ones HFS awarded to her former employer Aetna and Blue Cross Blue Shield, the parent company of her future employer.
While it may seem normal to return to the private sector following a stint with the state, it is in fact the reason the Revolving Door Act was created. Federal and state- health insurance contracts like Medicare and Medicaid, though not intended to make anyone rich, are extremely lucrative for private sector corporations. The competition to land these contracts is so fierce that corporations hire brokers and consultants to navigate the RFP process. Ms. Norwood, with her 3-year tenure at HFS, is as valuable to Anthem as a team of third-party consultants.
Ms. Norwood is leaving HFS at perhaps the worst possible time. Having ushered in a new era of what was supposed to be cost savings for taxpayers, Ms. Norwood, at Governor Rauner’s direction, moved the state’s Medicaid to a managed care model that has left providers and pharmacies scrambling to provide patient care while seeing deep cuts - often below cost - to reimbursements for providing these services. It is a system that is unsustainable and driving many small and independent healthcare providers - most notably community pharmacies - to the brink of closing their doors and threatening access to care for patients in rural and poorer communities.
Managed care is based on the premise that health care costs are containable. An attractive idea, managed care means the state pays medical providers and pharmacies a designated rate pre-negotiated by for-profit corporations, who serve as the intermediaries between the state and the providers and pharmacies. These “managed care organizations” (MCOs) pay the providers and pharmacies and bill the state for services rendered. The difference between what they charge the state and what they pay the providers is called “the spread” - this is where MCOs make their profit. It’s all good until the providers and pharmacies realize that they are in “take it or leave it” situations - either accept the contract and the reimbursements that barely cover the real costs of providing care, or leave it and have few or no patients to serve. Most providers can’t afford to walk away.
This is the condition Ms. Norwood leaves Illinois patients, providers and pharmacies in as she returns to the private sector for a prestigious new job. She is, in fact, joining one of the largest MCOs in the country and taking with her expertise in how to destroy a working healthcare system in order to maximize shareholder returns.
Taxpayers should be asking why such a move has been sanctioned by the Governor when the law mandates a one-year gap between state and private sector employment when the new employer stands to gain from the hiring of a former government employee.
Fortunately something can be done. The Office of the Executive Inspector General (OEIG) offers residents a portal to ask questions and lodge complaints. Information can be found on the OEIG website at www2.illinois.gov/oeig. PUTT encourages patients, caregivers and providers - anyone with a stake in state-subsidized healthcare - to voice their concern over Ms. Norwood’s move to a corporation who clearly stands to financially gain from her time overseeing HFS.
There’s no doubt Ms. Norwood is an experienced, hard-working professional who has earned the right to the accolades and perquisites that come with a long, successful career in the insurance industry. She simply shouldn’t use her experience as a civil servant of the people of Illinois to help her next employer profit off taxpayers and healthcare providers in the process.