September 13, 2006

Not-So-Blind Trust: The Qualifacts Mystery Deepens

Mass layoffs and management changes at Qualifacts, a healthcare software company founded by Phil Bredesen before he became governor of Tennessee, are raising new questions about the governor's ongoing relationship with the company even though his holdings in the Qualifacts are supposed to be in a blind trust.

And, so far, the governor's office isn't talking.

A few months ago, when Gov. Bredesen's hand-picked TennCare director abruptly resigned to become the CEO of a healthcare software company owned by Bredesen (photo: left), questions were raised - but not answered - about the level of involvement the governor may have had in the hiring of TennCare director J.D. Hickey (photo: right) to run Qualifacts, Bredesen's software company.

The announcement of Hickey's move from the state's healthcare program to Bredesen's healthcare software company left a swirl of questions about Bredesen's involvement in the job switch, and about Qualifacts' connections to TennCare.

I speculated in one blog post that Bredesen orchestrated the sudden move of Hickey from TennCare to Qualifacts, and imagined Bredesen telling Hickey, "Get over there and run it the way I told you to, J.D."

That's looking more and more likely given the news reported yesterday by NashvillePost.com:

Major shakeup in Bredesen company
Company co-founded by Governor lays off 23, names new management team; Bredesen's son retains his job

[Three months ago, the blogger at GeoTennCare speculated that becoming CEO of Qualifacts was the plum promised to Hickey to get him to leave the McKinsey & Co., consulting company and come to run TennCare for a couple of years, to gut it as per Bredesen's policy prescriptions for the program.]

As the governor's office has said nothing beyond its original press release regarding Hickey's move to Qualifacts, there remain unanswered questions about the job switch and about Bredesen's involvement with the company since he became governor. Original reports of Hickey's move to Qualifacts, all based on a press release issued from Bredesen's office late on a Friday afternoon, said Bredesen is the majority owner of the company. But how does Bredesen know he's still the majority owner of Qualifacts when his holdings are asserted to have been in a blind trust?

Now, in light of the latest news - wholesale layoffs and management changes - it appears that Qualifacts was in deep trouble when Hickey left TennCare to go run Bredesen's company. That raises a new question: Did Bredesen send Hickey to save Qualifacts? If so, how did Bredesen know Qualifacts was in trouble?

The news releases posted on the Qualifacts website - none since May - gave no indication that the company was in trouble. Has Gov. Bredesen been kept in the loop behind the scenes? Has Gov. Bredesen been spending some of his time overseeing the management of Qualifacts while he's supposed to be running the government of the state of Tennessee?

Update: I have confirmed that an open records request was submitted to the Bredesen administration on July 10 for all documents and records related to the move of J.D. Hickey from TennCare to Qualifacts, including internal emails, memos and even Blackberry emails between Hickey and Bredesen - but that Bredesen's office, although it acknowledged receipt of the open-records request, has not provided the requested information. Strange.

Tidbit: Nashville City Paper, July 18, 2006, reported that Qualifacts is moving its offices into a renovated building in downtown Nashville.