11/21/2014

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Politics

Turnaround expert takes on Cover Oregon challenge

Turnaround expert takes on Cover Oregon challenge

PORTLAND, Ore. (AP) — The task of getting Oregon's troubled health insurance exchange back on track is now in the hands of a Portland consulting firm that specializes in turning around struggling businesses.

Cover Oregon's board of directors voted this week to hire Hamstreet & Associates to take over the day-to-day duties of executive director, assess the organization's business operations and financial management, and recommend a restructuring plan.

The assessment will look at Cover Oregon's business mission, management structure and accountability, the budget and accounting controls, and a variety of other aspects of the operation.

Clyde Hamstreet, the firm's founder, has more than 20 years of experience with complex turnarounds, according to a biography on the firm's website. The firm led the restructuring of Sunwest Management Inc., a Salem company that owned a chain of senior living facilities and came under fire from creditors and investors.

Hamstreet has advised a number of companies through bankruptcy and restructuring of their finances, operations or management.

"We work with situations where there's a lot of stress on the company," he said Thursday. "There is right now because of the software issues. There's a lot of issues with how it's going to go forward whether those decisions are going to be made."

The state Legislature created Cover Oregon as a semi-autonomous public corporation. It is still considered an arm of the state government, but it has more independence than most state agencies and is supposed to be self-sufficient. Its revenue comes from a monthly charge of $9.38 for each person covered on a private insurance plan purchased through Cover Oregon. The organization also earns a smaller fee for people who apply to Cover Oregon and get referred to the Oregon Health Plan, the state's Medicaid plan for the poor.

Cover Oregon has received a total of $305 million in federal grants to fund its operations from 2011 through the end of this year. Most of the money has gone to develop technology that would allow people to compare health insurance plans and sign up, but the website has been plagued with glitches and has not been launched.

Hamstreet's contract says the firm will be paid up to $100,000 for its services and expenses. The contract lists five consultants who may be involved with fees ranging from $210 per hour to $300 per hour, which the contract says are lower rates than those charged to private-sector clients.

Steven English, a Portland attorney and head of Oregon Litigation Perkins Coie, has worked with Hamstreet in the past. He told KATU's On Your Side Investigator Chelsea Kopta on Friday that with Hamstreet at the helm there's a good chance of a Cover Oregon turnaround.

"He understands how to turn something around, which is really what we have here," he said. "We have something that is broken. He fixes broken companies."

The firm will run Cover Oregon until a permanent executive director takes over. A search panel is expected to recommend one at the end of May.

KATU's On Your Side Investigator Chelsea Kopta contributed to this report.


Full coverage of the troubled Cover Oregon website:

 

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