Did campaign contributions help land a state contract?



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Posted on November 1, 2010 at 10:14 PM

Updated Tuesday, Nov 2 at 1:43 PM

SEATTLE -- A few years ago, Bellevue resident and family therapist Staci Sprout needed help. Acute depression kept her from being able to hold down a job.

“I was severely depressed. I was suicidal. And I was unable to work," said Sprout.

Knee problems sidelined Howard Berry from the work force.

"Without work, you can't pay rent. You can't eat. You can't live," said Berry.

Both Sprout and Berry got the help they needed from a state-funded program called GA-U: General Assistance Unemployable. It’s a type of welfare program that provides a monthly stipend of $339, food stamps and health care for single adults without children who temporarily can't work.

These clients don’t qualify for the federally funded Medicaid program. Instead, the state picks up the entire tab of roughly $200 million per year for about 15,000 participants.

"It's good medical. It's not about the money. It's the things that I need for getting my health together," said Berry.

Last year the state made a big move with how to help people like Sprout and Berry. The idea seems sound: save taxpayer dollars by having an insurance company take over the health care portion of the program.

The savings are expected to come with the insurance company coordinating each patient's trips to the doctor or hospital. This is a managed care approach designed to deliver more effective care, save money, and to get clients off the program quicker.

"Hopefully the outcomes (are that) they are employable again, as opposed to unemployable when they were so ill," said Sen. Karen Keiser, D-Kent, Chair of the Senate Healthcare Committee.

"We tried to come up with a new approach that would provide better outcomes at a lower cost," said Keiser.

But the KING 5 Investigators have found that so far, the new system is costing taxpayers more, not less.

"We've not seen in this managed care approach that they can actually save the taxpayers’money. It's actually costing us more, which begs the question: why did we go in this direction, especially in the times we're in?" said Senator Joe Zarelli, R-Ridgefield, the top Republican budget writer.

The legislature cut from the budget this year:

  • $9.6 million from aid to low income college students.
  • $10.7 million in nursing home funding.
  • $30 million from programs to keep class sizes down.

All that cutting, yet the Legislature's Democratic leaders found the $24 million to keep the GA-U program afloat.

Dave Kinard is with the insurance company Community Health Plan (CHP), which has the contract. He says be patient, the savings are on the way.

"You can look at the upfront costs and say, yes, we're spending more money on the upfront to save more money down the road," said Kinard.

There's an interesting catch to the contract with CHP. If the state is able to save money by cutting down on how often clients go to the hospital, those savings won't go back to the taxpayers. Instead the money goes to CHP. The state contract says in the first year, 95 percent of any savings goes to the insurance company. That's expected to be at least $1 million.

"Why did we change? If we weren't going to get the upside value of savings to begin with, what was the point of changing if the whole goal was to save money?" said Zarelli.

There weren't any bidding wars to get this multi-million dollar state contract. CHP was the only company consulted. People who worked on the plan say no one else seemed interested.

But some Republicans we've talked with think it has more to do with following the almighty dollar -- campaign financing dollars.

KING 5 has found that CHP’S sister company, Community Health Network (CHN), is a generous contributor to the Democratic Party campaign committees:

  • In 2008 CHN was one of the top givers to the democrats with contributions of $74,000.
  • This year CHN gave more than anyone: $97,000. The 2010 contributions outpaced organized labor, the tribes, and the hospital lobby.

Those involved in the deal say the money given to the campaign committee has nothing to do with the contract.

"There's no quid pro quo. None at all. It's easy to call names and make snide insinuations, but I can just tell you what I think; that we are doing the best we can with very limited resources in a difficult time and a huge and growing demand," said Sen. Keiser.

"Absolutely not. We have not paid for any contract to get us into Washington state," said Kinard.

However the contract came to be, supporters say you can't put a price on getting GA-U clients back on their feet.

Last month, Governor Chris Gregoire proposed cutting the GA-U program altogether. She put it on a list of items that could get chopped to help close the growing gap in the state's budget.