Eric Grossman, vice-president of TriZetto health technology group--wrote last year, "There's gold in exchanges, here's how to stake your claim." Now he's staked his claim to a seat on Colorado's SB200 health care exchange board.

The Denver Post reported yesterday:

A fifth board member is an executive of a large health-technology company that has had vendor contracts with at least three of the four managed-care companies represented on the board.

That company, TriZetto, declined to comment on the exchange or any of its contracts until the exchange board meets for the first time Monday. TriZetto also declined to comment on whether it has recused itself from seeking any business with the exchange.

Eric Grossman, the TriZetto vice president appointed to the board by Gov. John Hickenlooper, recently wrote an article exhorting health-insurance executives, "There's gold in exchanges -- here's how to stake your claim."

Grossman, appointed by Democrat Governor John Hickenlooper, wrote this article on staking claims on the "gold" of state exchanges.

The Bad: Exchanges are competitive marketplaces where payers will have to differentiate themselves based on brand, price, customer service and more--all while cutting costs and increasing efficiencies.

So the "bad" thing about exchanges are that they're competitive? It's interesting to see free-market competition being filed under the "bad" category by a member of the SB200 health exchange board. Perhaps the "badness" of free-market capitalism can be reduced by the exchange?

It will be interesting to see what requirements the exchange might eventually place on potential providers to participate. If there are onerous requirements--such as minimum amounts of sales, market capitalization, or numbers of current customers--then it will be a strong indication that the exchange doesn't exist to create competition but to reduce it.

If the requirements to participate in an exchange are such that the marketplace is effectively limited to the current participants (or just a few more so it doesn't look obvious) then competition may very well be reduced over the long-term. In such a scenario, the current players could be effectively protected against new competition by making the requirements in the exchange such that new players would have difficulty qualifying to get their products in front of customers browsing the exchange.

TriZetto recommends that payers act now to prepare for the future of healthcare. As the leader in Integrated Healthcare Management, TriZetto can help you understand not only state-run exchanges, but all the changes ahead. We can show you how your business can effectively navigate these changes, and how you can position your organization to take advantage of all the opportunities presented by national healthcare reform.

Of course TriZetto can help you understand state-run exchanges. Especially in Colorado where their vice-president will be helping create the exchange!

Unless TriZetto commits itself to not being commercially involved in Colorado's health exchange--nor commercially involved with health insurance providers that participate in Colorado's exchange--this smells really bad.

In any case, though the gold rush days of the 1800's are over, at least there's still "gold" to be found in Colorado... even if it's just by being appointed to a seat on our health exchange. I guess, for Grossman, that's "winning" because that's just how he rolls.

And this mess was brought to you by SB200.