After spending a few minutes of my morning listening to Jim Douglas guest-hosting the Mark Johnson Show on WDEV*, my attention turned to the Mitchell Family Organ which I happily subscribe to. And there on the front page was news of the Vermont Health CO-OP’s extremely belated come-to-Jesus moment.

*I could only take a few minutes before the bile hit flood stage in my throat. Good ol’ Jim was hosting a discussion about Our Most Misunderstood President, Calvin Coolidge. He and his guest were explaining how Silent Cal’s presidency was a smashing success that left our economy in terrific shape, and deserved absolutely no blame whatsoever for THE WORST CRASH IN OUR HISTORY happening only seven months after he left office. Based on that discussion, I’m sure Jim Douglas wouldn’t mind if we called him the Calvin Coolidge of Vermont Politics. “When restraint was called for, he was restrained; when action was called for, he was restrained.”

Lika an alcoholic taking The Pledge after waking up in a gutter, the CO-OP has belatedly responded to its failure to win a Certificate of Public Good by thoroughly overhauling its management structure:

— Founder and board chair Mitch Fleischer, forced to choose between a lucrative contract for his brokerage and leadership of his brainchild, has opted for the big money. He’s gone from the VHC Board.

— A bunch of new people have been added to the board, including Governor Shumlin’s real estate lawyer Jerry Diamond, Steve Post of VSECU, and three guys with experience in health care management, insurance, and regulation. The original board didn’t have much of that, which is one reason that Financial Regulation Commissioner Susan Donegan called VHC’s structure a “recipe for a corporate governance disaster.”

— A statement that the lucrative, no-bid contract with Fleischer’s brokerage is “under review.”

— A promise to release new insurance rates in the near future, that will be more competitive than those originally considered by Donegan.

— And, most importantly of all, a complete change of tone by CEO Christine Oliver. After Donegan rejected VHC’s application, Oliver reacted angrily, saying VHC had been “blindsided,” hinting that Blue Cross Blue Shield had undue influence in the process, and all but accusing Donegan of unprofessional conduct.  

Oliver’s new tone is conciliatory to the point of subservience (Mitchell Family Paywall warning; a less comprehensive but adequate account is available free at VTDigger):

“We knew we had to go back and regroup and address her issues, and that’s what we’re in the process of doing right now,” Oliver said Tuesday. “We are completely and thoroughly taking stock of everything that’s mentioned in that ruling, not putting Band-Aids on things but really fundamentally re-looking at what we’re doing.”

This is clearly a desperation bid by VHC to win approval in time for the launch of the health care exchange in January. (It’d actually need approval long before then, since consumers will be able to choose coverage through the exchange starting October 1.) 2014 is, by a country mile, VHC’s best opportunity to get into the insurance marketplace. As a brand-new company facing entrenched competitors, it needs the chance to compete at a moment when all parties will be starting from square one. If it has to wait until 2015, it’ll be at a huge disadvantage.

So VHC needs quick action, and is fully aware of that. Hence the complete change of heart.

If I were Donegan, I wouldn’t give in. The application process was lengthy and thorough; now VHC is asking her to accelerate the process for a reinvented organization with no track record. It’s simply too little, too late.

Oh, and one more note from the Mitchell Family account, penned (of course) by Peter Hirschfeld:

The CO-OP’s troubles have begun winning headlines in Washington, D.C., where congressional Republicans are turning troubles for the CO-OP into ammunition in their war against “Obamacare.”

… The House Committee on Oversight and Government Reform issued a subpoena to the Vermont Health CO-OP recently seeking documents related to its finances.

Great. Not that VHC’s missteps are going to single-handedly destroy health care reform, but the last thing we need is to be giving House Republicans more ammunition for one of their anti-Obama jihads. Thanks, VHC.