The Office of Health Strategy (OHS) contracted out more than $11.5 million to healthcare consulting firms to author reports, provide technical assistance, manage projects, and analyze data in fiscal year 2025, essentially taking up nearly all of the agency’s $13.7 million budget as former Executive Director Dierdre Gifford requested legislators provide funding for more staff during this year’s budget negotiations.

Nearly all the funding for consultants has come from the Insurance Fund, a separate government fund paid for with fees levied on insurance companies that are ultimately passed down to Connecticut consumers, according to a breakdown of consulting contracts that OHS provided in response to questions raised by the Appropriations Sub-Committee on Health in February of 2025. 

The breakdown showed $11.5 million in contracts for eleven different consultant groups, with $9.1 million of those contracts being applied to the Insurance Fund, and $3.3 million coming via the federal government. The consulting companies are all out-of-state, and many are quite large and national in scope. The companies consult for programs within OHS, like the health information exchange, cost growth benchmarks, and health equity.

Meanwhile, OHS’s budget has grown from $2.7 million in 2019 to $18.5 million as of the latest budget, with $13.5 million of OHS’s appropriations coming from the Insurance Fund, according to budget documents. More than $12 million of OHS’s 2026 budget is devoted to “other expenses,” and the agency, at the time, was requesting six more staff, including two attorneys, an economist, and an insurance actuary.

One of the largest contracts listed was with Health Information Alliance Inc (HIA) for $7.8 million to essentially run Connecticut’s health information exchange under the brand name Connie, which “collects, integrates, optimizes, and securely shares health data, according to OHS’s website and the Connie website. Connecticut open data records show that between 2021 and 2025, HIA was paid $41.3 million through OHS, with much of it coming from the Insurance Fund. 

Onpoint Health Data was listed as having a $1 million contract to manage Connecticut’s All Claims Payer Database, and open records show the company has received $3.9 million between 2021 and 2025, again, almost entirely through the Insurance Fund.

The agency was criticized for its growth and impact on the Insurance Fund by a 2025 working group convened by the General Assembly that found state agencies were dipping into the Insurance Fund for staffing costs that should be covered by the General Fund, including the OHS, whose primary purpose is to lower healthcare costs.

When OHS released its healthcare benchmarks for the next five years in July, the Connecticut Hospital Association (CHA) responded with a statement critical of the agency’s reliance on “out-of-state consultants,” rather than those in the state providing care, saying they were “disappointed that OHS moved forward without responding to – let alone addressing – concerns raised at the listening session last month, last week’s public hearing, and in formally submitted comments.”

The Healthcare Cost Growth Benchmark Initiative is an OHS program borrowed from Massachusetts’ healthcare playbook that has, thus far, been a failure in Connecticut, according to OHS’s own report authored by consultant Bailit Health. Bailit Health has been paid more than $2.6 million since 2020, with $1.6 million attributable to the Insurance Fund, for technical support and data analytics for the benchmark initiative.

Rep. Kerry Wood, D-Rocky Hill, who led the working group to examine the Insurance Fund and is co-chair of the Insurance and Real Estate Committee, says the legislature is taking a harder look at how agencies are using the Insurance Fund.

“The legislature has been much more vocal with our opposition to increasing costs via the Insurance Fund and will continue to provide more scrutiny on behalf of our constituents,” Wood said in a statement. “At the end of the day, we pay for these consultant costs through assessments on our insurance plans.”

“It’s my observation that OHS, despite its burgeoning budget, does not have employed resources within the agency to effectively manage its mission and responsibility,” said Jeffrey Hogan, a Connecticut healthcare and insurance consultant who works with states across the country. “OHS should have personnel with strong financial backgrounds capable of assessing the ongoing financial viability of care delivery organizations operating in the state. Regulatory oversight should not be outsourced.”

OHS says such outside consultants, however, are a cost-saving measure, noting they have fewer full-time staff and a much smaller budget than do similar agencies in other states with similar responsibilities, like managing Connecticut’s certificate of need process, affordability and market oversight, and data analytics.

In an email, the agency pointed to Massachusetts, where those responsibilities are spread across three different departments, committees, and commissions employing hundreds of full-time employees and taking up more than double OHS’s $18.6 million budget and 46 full time staff.

OHS’s two biggest projects – the Health Insurance Exchange and the All Claims Payer Database – comprise “Connecticut’s most comprehensive and complex data resources” that “manage millions of health care claims or interactions, requiring extensive privacy, security and data management capacity,” and require “extensive technical expertise beyond the scope of OHS staff.”

The consultants and contractors “secured through competitive procurement processes,” essentially can provide expertise in complex fields across multiple state agencies and respond to lawmaker questions without OHS having to take on full time employees, which they say would not be “feasible, or cost-efficient for OHS or the state.”

“The Office of Health Strategy strives to meet Connecticut’s growing demand for health policy research and analysis,” OHC Acting Commissioner Amy Porter wrote in a statement. “Balancing employed and contracted resources provides the flexibility needed to be as responsive as possible to the legislature, the administration and the needs of our community.”

OHS also utilizes an unpaid panel of consultants who comprise a technical team used by OHS to evaluate healthcare costs and set the benchmarks. Those consultants come from a variety of university and policy organization backgrounds and determine the methodology to establish the benchmarks and spending targets. 

The methodology, however, has neither reflected nor restrained costs in Connecticut, as healthcare costs between 2021 and 2023 blew through the benchmarks for those years that ranged from 2.9 to 3.4 percent growth, sometimes by three times the benchmark. Despite the benchmarks “not working,” OHS set benchmarks of 2.8 percent each year for the next five years.

“Connecticut, because of the prevalence of national insurance companies, has a preponderance of talented and trained healthcare related professionals including those with financial, actuarial and analytics competency who should operate at the core of OHS functions,” Hogan said. “The state desperately needs data driven strategies that meaningfully influence health care delivery, cost reductions and optimized sites of care.”

“Agencies are expected to have direct oversight and that they’re not completely delegating major duties and functions to third parties,” Hogan continued.

“My goal has been to lower the costs on insurance products we offer here in Connecticut and create a more competitive marketplace,” Wood said. “We can do that immediately by removing unrelated assessments.”

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