Donna Lynne at the CPR studios April 2, 2016.

(Hart Van Denburg/CPR News)

Kaiser executive Donna Lynne will go before a state Senate committee today, hoping to take the next step towards becoming Colorado's lieutenant governor. She got approval from the state House last week. Current Lieutenant Governor Joe Garcia is resigning this week.

Lynne has a 20-year career in healthcare, and previously worked in New York City government. Governor John Hickenlooper also plans to make her Colorado's chief operating officer, a position that does not currently exist in state government but is common in the private sector. She spoke with Colorado Matters host Ryan Warner.

Lynne on efficiencies she would like to create as the state's COO:

"I think one is we have a lot of agencies that work in the healthcare space. There are literally, depending on how you count, are five or six, and bringing those agencies together is really going to be a focus that I have... [As a result], I think the individual purchaser, whether it's the employer or the individual consumer could save on their insurance rates."

On how she handles working on partisan issues:

"Most of my work in government... was very non-partisan quite frankly, because my role was to either work to improve the health care that was offered to the workers in the City of New York or it was to work on efficiency issues. So I wasn't front and center on policy matters in my past. And I think... the role that the governor has carved out for me is very similar to what I did in the past."

On her opposition to a proposed ballot measure in Colorado that would create a single-payer healthcare system:

"It throws out a system that we've spent years now building under the Affordable Care Act and creates obviously a substantial tax on both businesses and individuals. I think my view and the view of the governor is we've got -- we've made some great advances already under the Affordable Care Act and we need additional years to see that work before we throw out that system."

On whether she would support cutting Medicaid funding in Colorado:

"I think an important thing to recognize about Medicaid and those people who don't have insurance is that we all pay for it one way or another. There's cost shifting that happens, that goes to the private sector, to businesses and to individuals if we have people who are uncovered. They still go to the emergency room and they still get care."

On the possibility that Gov. Hickenlooper may leave office early to work in a Hillary Clinton administration, if  Clinton is elected president:

"[Governor Hickenlooper and I have] not had a conversation about that and other than what he's declared publicly that he thinks I'm ready, I'm going to take him at his word. I think there'll be a lot that I have to learn about in order to do that, should that opportunity ever happen."

Read the transcript:

Ryan Warner: To what extent do you see yourself as originating ideas for this state?

Donna Lynne:  First, as lieutenant governor, my number one job is to continue the policies and the initiatives that the governor and his administration have started.  But I do think there is a little bit of a spin on that, because the governor has asked me to become the chief operation officer for the state, which is a position that didn't exist before.

Warner: We'll dig into the position of COO in just a moment. But by way of introduction, you are currently an executive vice president at the health giant, Kaiser; former chair of the Denver Metro Chamber of Commerce. You also worked in New York City government for several years. What was your first thought when the governor called and asked you to do this?

Lynne: Oh, I have a tendency to say "yes" all the time to things and I was struggling because as much as I wanted to say yes, I do have a great career at Kaiser and really envisioned that I would continue that for a number of years.

Warner: So let's go back to this idea of being the COO. This is certainly government drawing from a corporate structure, would you say?

Lynne: Absolutely. Most enterprises, large and small, have a chief financial officer, a chief operating officer, and that's the model that the governor's envisioned.

Warner: You won the approval of the democratic controlled House last week and in a committee hearing there to consider your nomination, there was a lot of talk of efficiency. Your ability to find efficiencies, to create them. Give me a specific efficiency you think state government could benefit from.

Lynne: Well I think one is we have a lot of agencies that work in the healthcare space. There are literally, depending on how you count, are five or six, and bringing those agencies together is really going to be a focus that I have.

Warner: Do you have some sense that they are not today all on the same page?

Lynne: I think it's more that there are, as you say, some efficiencies that can be accomplished by bringing them together and to working with the private sector. As somebody who does that now and interacts with all of those agencies, I can see some overlap and opportunities.

Warner: Can you give me an example?

Lynne: Well one of the things that Kaiser does as a health plan is that we intersect with the Department of Personnel Administration because we offer benefits to state employees. They intersect with the insurance department because they approve our rates. And they intersect with what's called HCPF, for the Department of Healthcare, Financing and Policy. And I think a coordinated approach to not just Kaiser, but to each of the health plans that offer benefits, sometimes not in every one of those buckets, would create some opportunities for the state to use, quite frankly, its purchasing power.

Warner: And how might the consumer save exactly in that scenario?

Lynne: I think the individual purchaser, whether it's the employer or the individual consumer could save on their insurance rates.

Warner: You held a similar role as we said, in New York City government before moving to Colorado. Can you tell me something specific you did there to make things more efficient?

Lynne: Absolutely. So in New York we had multiple departments doing similar kinds of things. So we consolidated some of those agencies, like personnel and administration. Another thing that I did was I coordinated emergency management. A lot of agencies have a role in emergency management and up until that time, which was 1994, we didn't have a single focus on emergency management so we actually created the office of emergency management in New York and it delivered services a lot more efficiently than they were currently spread out over multiple agencies.

Warner: In articles from that time, some of them in the New York Times, there was reporting about a turf war that was then created between the police and this mayor's Office of Emergency Management, and the sense that in some crises, it was hard to determine who was in charge.

Lynne: That's absolutely correct. Up until then, the police were always in charge, and as you can imagine, not every emergency in a city needs the police to be in charge. So a snowstorm of unprecedented magnitude is an emergency but you need a lot of other expertise in many emergencies, whether they're weather related, they're spills of toxic material. It's not always about the public safety in the traditional way that a police department might look at it.

Warner: Did that chapter though, teach you perhaps, about the obstacles to creating efficiencies? Or that an efficiency might create more problems than it solves?

Lynne: What it taught me was that collaboration was critical to getting any job done.

Warner: How did you smooth things out with the police department?

Lynne: Well, the mayor helped a lot because we issued an executive order creating that entity. We also hired an individual who had a lot of background and experience in public safety and I think there was clearly recognition that the police department had other things to do in some of those situations.

Warner: This was Mayor Giuliani at the time.  So you have 20 working in healthcare. That is obviously as area of expertise. And Coloradoans will get to vote on a universal healthcare system called ColoradoCare in November. What do you think are the pros and cons of such a system?

Lynne: Well I think the first thing I'd like to say is that the Affordable Care Act already has taken us down a path that has created greater coverage. Without coverage, oftentimes people don't take care of their health conditions, they don’t have access to prescription drugs when those things could actually help them be healthier. ColoradoCares takes it much farther. It throws out a system that we've spent years now building under the Affordable Care Act and creates obviously a substantial tax on both businesses and individuals. I think my view and the view of the governor is we've got -- we've made some great advances already under the Affordable Care Act and we need additional years to see that work before we throw out that system.

Warner: You say it creates something of a tax burden but I think that the proponents would argue that there are a lot of benefits in return if you do something like this.

Lynne: I think the jury's out. We haven't seen what. I don’t think we've seen an articulation of what all of those benefits would be.

Warner: The state now spends more than $5 billion a year on Medicaid. Many Republicans at the Capitol would like to see that number come down significantly. Would you support cutting Medicaid spending somehow?

Lynne: I think an important thing to recognize about Medicaid and those people who don't have insurance is that we all pay for it one way or another. There's cost shifting that happens, that goes to the private sector, to businesses and to individuals if we have people who are uncovered. They still go to the emergency room and they still get care.

Warner: Are you saying that if you compare the burdens, that is the Medicaid budget and then the burdens that you're talking about that can be kind of amortized, the Medicaid burden is a better burden to be bearing?

Lynne: I think if the Medicaid program is run efficiently, it's absolutely a better burden.

Warner: Do you see Medicaid in this state as an efficient system?

Lynne: I think the governor and his team have done a great job. Organizations are given additional money to help manage the care of particularly chronically ill patients. But I do think there's additional opportunities.

Warner: Can you give me an example you've seen that makes you think that?

Lynne: Sure. First of all in Colorado there's only four health plans that are providing services to Medicaid patients. Many have opted to stay out and I think a lot of people would agree, competition is a good thing. So if you have more health plans agreeing to participate in the program, it leads to I think creative thinking and lower prices for the state and the state has to purchase those services on behalf of the Medicaid recipients.

Warner: But you have to make the insurance companies want to provide that coverage.

Lynne: That's right. Many of them stay out because they argue that the reimbursement isn't sufficient.

Warner: So how do you lure more insurance companies into that market?

Lynne: Oh, I think the governor's bully pulpit is tremendously effective in luring them in.

Warner: That is, he commands them to?

Lynne: I said lure.

Warner: But you said bully pulpit. The word 'bully' has appeared in your language there. But you think he ought to persuade them.

Lynne: I think he ought to persuade them.

Warner: Just to go back to something of a philosophical question around Medicaid, more than twenty percent of Coloradans are now on the program and that number continues to grow. In some ways doesn't that demonstrate that Colorado is already heading towards a single-payer type system, as envisioned in something like Colorado Care? Is it so far from, you know, the current tack?

Lynne: So 20 percent still leaves 80 percent who, through their employer or through their individual purchasing decisions have said, no, I don’t want to be in that program. Obviously there's income limits with respect to Medicaid but many employers view that how they designed their health care program is an important recruitment and retention device and so the diversity of how the benefits are designed is pretty broad across the employer population. And that's where most people still continue to get their healthcare.

Warner: It sounds like you're a fan of Obamacare in general, with the Affordable Care Act?

Lynne: I think the Affordable Care Act recognized two important things. That we had fifty million people in the United States who were not covered by a health plan. The other thing I think the Affordable Care Act did is it started a conversation around quality.

Warner: When one insurer on the state's healthcare exchange, the non-profit Colorado HealthOp went under last year, it left 80,000 customers without insurance and more than $100 million in outstanding claims. Now those claims are or will be paid off by a special guarantee fund that is set up for just such a circumstance. And to replenish that fund then, insurers may put a surcharge on customers. How concerned are you that consumers will see their bills go up in the coming years because of the HealthOps collapse?

Lynne: So I think that I am concerned about that. And I am concerned that the health-op, while I think the idea was a good one, didn't understand the importance and the difficulty of setting up an insurance company. I mean you can have a bad flu season one year, you need reserves to be able to pay those claims. I think that the health insurance companies who still remain in the exchange are going to do the best they can to try to absorb some of those costs but it is inevitable that they'll be pushed back out to consumers.

Warner: And how much do you think that would be?

Lynne: I honestly don't know. I know we've been given a surcharge so that we can continue to replenish the guaranty fund.

Warner: We being Kaiser.

Lynne: We being Kaiser.

Warner: At that point: So Kaiser has passed that on? Or hasn't yet?

Lynne: Not yet. Not yet.

Warner: But you anticipate passing it on.

Lynne: I anticipate that we will have to pass some of that on.

Warner: You have been critical of free-standing emergency rooms. Saying in a House committee hearing that there is not much demand for them. In theory they bring important healthcare closer to where patients are, in a mall parking lot, for instance. What do you dislike about them?

Lynne: Well I had a personal experience actually with one of them where I was given an inducement to actually go visit one. And that was, I was told, I was given some information as a consumer just walking around one of the street fairs, that if I went to the emergency, that free-standing emergency room I could get a $25 Starbucks card. None of us who are involved in the healthcare world now, and we seek very hard to make sure there's sufficient hours of coverage, we don’t do those kinds of things because that is actually an inducement. So I had a personal experience and there's quite frankly an explosion in new facilities all over the state. And my own observation is, I rarely see any of them with any cars in the parking lot, whenever it is that I go by them. And I try to just sort of look around and see because I do want to create the right kind of wearing my Kaiser hat, the right kind of access to healthcare.

Warner: So won't the market just determine their fate?

Lynne: Yeah, the market can determine their fate. I think there's been some strong evidence though that some of them have engaged in some billing practices that are quite extraordinary, from a finding-things-that-are-wrong perspective.

Warner: That is to say, kind of inventing diagnoses?

Lynne: I would say what, at least I've observed, is that you tend to go to an emergency room when there is a critical need and you are taken care of by a hospital that is covered by all kinds of rules.

Warner: What exactly are you saying there? Is that an accusation?

Lynne: It's not an accusation. I think there's some evidence that we have seen a proliferation of for-profit emergency rooms. I haven't heard a human cry that we don’t have sufficient geographic coverage from our members, and we hear from our members all the time.

Warner: You expressed some distaste at the notion of the Starbucks card as a way to kind of lure people that service. Kaiser advertises everywhere. I mean I feel like everywhere I turn, I see a Kaiser logo. Isn't what's good for the goose, good for the gander?

Lynne: I think they're two very different things. Part of what we advertise about is the importance of prevention and taking care of yourself. But we don’t provide financial inducements for someone to come in and get care.

Warner: You did not get unanimous support in the House committee that approved your candidacy last week. Rep. Patrick Neville, a Republican of Castle Rock, was one of two members who voted against you and he specifically cited your support for a Democratic proposal that would reclassify a fee that hospitals pay to make it no longer count towards the total money that government can collect before it triggers refunds to taxpayers. This has been the subject of much debate and negotiation at the Capitol this session. Tell us about an example in your background when partisanship was front and center in an issue you worked on.

Lynne: Hmm.

Warner: Or is this new territory?

Lynne: Most of my work in government, up until when I was in New York City was very non-partisan quite frankly, because my role was to either work to improve the health care that was offered to the workers in the City of New York or it was to work on efficiency issues. So I wasn't front and center on policy matters in my past. And I think…

Warner: Are you ready for that?

Lynne: Well I think first of all the role that the governor has carved out for me is very similar to what I did in the past.

Warner: I wonder if it's a bit naïve to think that you'll not have to be involved in the politics of it or if that's just what you wish to maintain in the office.

Lynne: I think that's part of what I wish to maintain and as I said, first and foremost, I'm going to carry out the policies that the governor and his administration have set forewarned.

Warner: And yet so many of the issues we've talked about even so far in healthcare are very partisan so how do you address those without getting your feet in the political waters?

Lynne: Well I think you bring up a great point. There isn't a stark line between policy and operations. They often intersect. I think my point was I have a great team around me, as does the Governor who think about policy, including the agency heads and I would rely on their working with me to think about when those things cross, how do we approach those issues.

Warner: You've given about $10,000 in political contributions since 2000, nearly all to Democrats, according to the National Institute on Money and State Politics. That includes more than $2,000 to Gov. Hickenlooper's campaign, making the allowable limits in 2010 and 2011. Now you're nominated to be in his cabinet, is there any quid pro quo here?

Lynne: I don’t think there's any quid pro quo. I, like thousands or hundreds of thousands of people, have chosen to give the governor money and this was not anything I pursued. This was an ask that the Governor made, once Lt. Gov. Garcia resigned his office. And I will be resigning a position in the private sector that provides me with a different kind of compensation than what the lieutenant governor provides.

Warner: A higher compensation, you're saying.

Lynne: In the private sector, yes.

Warner: In the private sector. All right.  In addition to lieutenant governor and COO of Colorado, you may become the head of the state's Department of Indian Affairs. What would you like to accomplish in that arena?

Lynne: Should I be confirmed, one of my first duties is to head down to Cortez to meet with all of the representatives of the various tribes. For me this is going to be a big learning experience. I have not had anything in my past like this and I'm very sensitive though to the issues that the Indians are facing with respect to the same kind of issues we all face, particularly in rural Colorado, which is the importance of healthcare and the importance of education for everybody that lives in those locations.

Warner: When you were nominated, Gov. Hickenlooper said you weren't interested in becoming Governor when he leaves office. He's term limited in 2018. Are you at least leaving open the possibility of running?

Lynne: No. Not at all.

Warner: The state constitution says that the lieutenant governor has to succeed the governor if he or she leaves office for some reason, even temporarily because of illness, something like that. Those are the only constitutional duties I believe. And you know there's been speculation that Gov. Hickenlooper could garner an appointment in a Clinton Administration, were that to manifest, come November. Are you prepared to be governor in that scenario? And is he, I suppose, this is another way of asking, has he talked to you about this?

Lynne: So first and foremost to the extent that we've had detailed conversations, it's been about his vision as lieutenant governor and that's going to be my focus. We've not had a conversation about that and other than what he's declared publicly that he thinks I'm ready, I'm going to take him at his word. I think there'll be a lot that I have to learn about in order to do that, should that opportunity ever happen.

Warner: But if he knew that he wanted to join a Clinton Administration, wouldn't that be a very different call to his potential deputy, like listen, you're going to probably have this job in a year.

Lynne: Ah, as I said, his focus has been on I want you to be the lieutenant governor. I want you to be the chief operating officer. That's been our conversation and that's been to the extent that I'm getting prepared and I'm putting "prepared" in quotes. That'll be the focus of my preparation once all of the approvals happen.