Monday, April 20, 2009

Dr. Uwe Reinhardt Offers Magic Health Care Solution to WH Nancy-Ann DeParle

Six years passed since a health care summit with Princeton health economist Uwe Reinhardt, Medicare/Medicaid Chief Tom Scully and CCMP Capital Partners Nancy Ann-DeParle. They hinted at something innovative, but the Bush team never delivered.

Fast forward to early 2009. All three players are integral to health care reform. Nancy-Ann DeParle is the White House Health Care Czar. Tom Scully is a private equity underwriter (PEU) with Welsh, Carson, Anderson & Stowe. WCAS specializes in buying and selling for-profit health care companies. He recently defended Ms. DeParle's reform effort.

Dr. Uwe Reinhardt continues to advise elected leaders on health care reform. In 2005 he invoked the image of a horse pooping to highlight our two tiered health care system. "The have's" can buy oats before the horse eats them. "Have nots" must take the digested version. I believe they're known as road apples.

Uwe can afford to buy oats pre-digestion with his appointments to various for-profit health care corporate boards. Reinhardt sat on the Triad Hospitals board alongside Nancy-Ann DeParle. He made $2.3 million from the sale of Triad, while Nancy-Ann got $1.4 million.

Reinhardt currently sits on three boards Boston Scientific, AmeriGroup and Legacy Hospital Partners. Ms. DeParle sits alongside Uwe on the Legacy and Boston Scientific boards. (Nancy-Ann's complete list of board slots can be found here.)

Enough history, Mr. Reinhardt proposed a hybrid public-private insurance option, one based on state insurance plans. Ms. DeParle expressed an interest in such a compromise. Who wins under such a plan? Reinhardt's AmeriGroup, which partners with states and the federal government. AmeriGroup offers Medicaid, CHIP, Medicaid expansion and Medicare Advantage plans in 11 states.

Why would he prefer a scenario where AmeriGroup benefits? Uwe Reinhardt’s holdings in AmeriGroup includes 144,558 beneficially owned shares. Most are stock options, but he holds restricted and unrestricted stock as well. His 2008 board compensation was $226,531. That doesn’t include pay from Boston Scientific or Legacy Hospital Partners.

Uwe's solution brings us back to public-private partnerships (PPP), the mantra of the Obama administration. AmeriGroup can play in PPP efforts to cover more people. Mr. Reinhardt's obvious conflict of interest should be disclosed and taken into account by America's elected officials. But many public servants are tied to for-profit healthcare like Uwe. Nancy-Ann DeParle, Max Baucus, Kent Conrad, Evan Bayh ... the list isn't pretty.

I smell a PEU partnering with the government to PPP. Why does it steam like a fresh road apple?

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