Bloomberg News

Obamacare Crashes Months in Coming Not Easily Repaired

October 22, 2013

Obamacare website

The HealthCare.gov website flaws have made it harder for people to enroll, marring its debut and giving critics ammunition to undercut the law called Obamacare by detractors and supporters alike. Photographer: Karen Bleier/AFP/Getty Images

In the weeks before the start of Obamacare, officials failed to complete exhaustive testing of the program’s website in a push to begin signups by Oct. 1, according to people involved in the rollout.

The federal Healthcare.gov site -- which has been plagued by software bugs -- went live without attempts to replicate a customer’s complete experience, said a person familiar with the project who asked not to be identified to discuss what happened.

The introduction was so rushed that, as recently as last week, the exchange’s computer code contained placeholder language that programmers typically use in preliminary drafts, said Clay Johnson, a former White House presidential innovation fellow during 2012-2013.

“It was a perfect storm for an IT meltdown,” said John Gorman, a former assistant to the director of the Health Care Financing Administration’s Office of Managed Care, the predecessor to the agency responsible, now known as the Centers for Medicare and Medicaid Services, or CMS.

The website flaws have made it harder for people to enroll, marring its debut and giving critics ammunition to undercut the law called Obamacare by detractors and supporters alike. The failures may discourage the young, healthy, web-savvy consumers whose participation is critical to offset the risk of insuring older, sicker people and to keep the program sustainable.

“If they can’t get it fixed for most people by mid-November, they start raising questions about who’s going to enroll and concerns about adverse enrollment,” said Gail Wilensky, a former administrator of HCFA and now a senior fellow at Project Hope at Center for Health Affairs.

Software Bugs

The system’s start was hobbled by software errors and overwhelmed by higher-than-anticipated consumer demand. About 8.6 million people visited the federal online health exchange in the first week, running long waits that kept many from registering to check out insurance options. At one point, the site posted error messages in at least 24 states. Independent, state-run exchange websites have seen fewer waits and flaws.

Patti Unruh, a spokeswoman for the Centers for Medicare and Medicaid Services, didn’t answer e-mailed questions about website testing or communication with contractors.

Design Change

Officials from CGI Group Inc. (GIB:US), one of the main contractors for Healthcare.gov, told staff of the House Oversight and Government Reform Committee that the site’s design was changed about a month before the Oct. 1 debut to prevent users from comparing prices without registering for an account, according to a letter sent by Republican lawmakers today to Todd Park, the U.S. chief technology officer, and Steve VanRoekel, the U.S. chief information officer. The company wasn’t able to identify who in the administration made the decision, the letter says.

Health Exchanges in a Nutshell

“We are concerned that the administration required contractors to change course late in the implementation process to conceal Obamacare’s effect on increasing health insurance premiums,” according to the letter from Darrell Issa, a California Republican who leads the panel, and four subcommittee chairman.

While the Patient Protection and Affordable Care Act survived Supreme Court review last year, Republicans in Congress have sought to delay the law or strip funding for its implementation. Their objections triggered a fiscal standoff that culminated in the 16-day partial U.S. government shutdown that ended last week.

Opened Door

White House Press Secretary Jay Carney yesterday opened the door to adjusting deadlines for those who can’t get coverage because of signup delays.

“The system was tested,” he said. “And based on the expectations we had, you know, we were confident that it was going to work more effectively than it’s been working.”

Open enrollment is scheduled to close March 31 and the deadline to sign up in time to avoid a fine for not having insurance is Feb. 15.

The Government Accountability Office, Congress’s investigative arm, warned in June of shortcomings in testing, and the prime contractor’s record in Canada offered another red flag.

Ontario in 2012 abandoned a project managed by CGI to establish a diabetes registry about 3 1/2 years after it was supposed to be completed, according to a provincial auditor general’s report.

No Sugarcoating

President Barack Obama yesterday for the first time said he was upset with the online exchange’s performance so far.

“There’s no sugarcoating it: the website has been too slow,” Obama said in the White House Rose Garden. “Nobody’s madder than me about the fact that the website isn’t working as well as it should, which means it’s going to get fixed.”

Obama stood in the same spot on Oct. 1 for the opening of the federal online exchange, boasting of a shopping experience comparable to electronic-commerce sites run by Kayak Software Corp. and Amazon.com Inc. (AMZN:US) Pop singer Lady Gaga promoted the website with a Twitter message to 40 million followers.

The U.S. government, which plans to spend $82 billion on information technology in fiscal 2014, has a history of mismanaging projects. Recent failures include the Homeland Security Department January 2011 cancellation of a $1 billion network of sensors and cameras to monitor the U.S. border with Mexico, according to a GAO report issued in July.

IT Failures

Breakdowns haven’t been confined to the public sector. United Continental Holdings Inc. (UAL:US) delayed thousands of passengers and hundreds of flights in a series of software breakdowns in 2012 after the merged United and Continental stitched together computer systems.

The London Olympics’ website last year was riddled by technical issues that hampered ticket sales.

The GAO cited issues with the health exchange’s website in June. While CMS completed many tasks needed to open the federal exchanges on time, “many remain to be completed and some were behind schedule,” the watchdog said.

“Several critical tasks, such as final testing with federal and state partners, remain to be completed,” the report said. Investigators found “many activities yet to be performed” that “suggest a potential for challenges.”

In the Ontario project, CGI underestimated how long the work would take and failed to effectively manage completion of project components, according to the auditors’ report.

Plan Errors

CGI’s project plan “appeared to contain many errors and omissions, which led to rejections and reworking of the design,” the auditors’ report said. Three years after the project was supposed to be done, “there were still hundreds of defects remaining,” it said.

Linda Odorisio, vice president of U.S. communications for CGI, said in a statement that company employees, “along with CMS and its other contractors, are working around the clock toward the improvement of healthcare.gov, a system that is complex, ambitious and unprecedented. We remain confident in our ability to deliver continuous improvement in system performance and a more positive user experience.”

The Centers for Medicare and Medicaid Services didn’t give CGI final technical requirements for healthcare.gov until May, according to one person familiar with the project. About a third of the work the contractor had previously performed had to be thrown out and started over as a result, the person said.

Late Changes

HHS was making changes to the exchanges hours before they were scheduled to go live, Sanjay Singh, chief executive officer at software contractor hCentive Inc., said in a Sept. 30 phone interview.

Singh, whose company did exchange work for an insurer working with the federal site, said at the time that his employees were rushing to accommodate “a late-night patch” that the department had just added.

“There was not enough time to do end-to-end testing,” he said. “The system keeps changing, so how do you run the tests?”

Singh nonetheless said on Sept. 30 that he thought the exchanges were ready to open, with basic functions available. Insurers and government were counting on low volume initially to give them more time to complete development, he said.

Carney, Obama’s spokesman, yesterday said there was enough testing to give administration officials confidence the websites would work better than they have.

Rushing Results

More than one-third of funding for Affordable Care Act contracts with the top 10 exchange vendors was committed in the six months before the exchanges opened, according to a preliminary analysis by Peter Gosselin, a senior health analyst with Bloomberg Government in Washington.

“On a consistent basis, it shows they were really rushing, and we see the results,” Gosselin said.

Secretary of Health and Human Services Kathleen Sebelius agreed yesterday to testify before the House Energy and Commerce Committee on Oct. 30. Representatives of contractors have been summoned to appear before the committee on Oct. 24.

“We are now entering week four of the botched health care rollout, and with hundreds of millions of taxpayer dollars spent for a system that still does not work, Congress and the American people deserve answers,” the committee’s chairman, Republican Representative Fred Upton of Michigan, said in a statement.

To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net; Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net


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