An interesting if anecdotal view.....
http://nationalreview.com/corner/361577/assessing-exchanges-yuval-levin
Assessing the Exchanges
By Yuval Levin
October 17, 2013 10:41 PM
Over the last few days, I have spoken in some detail about the state of the federal Obamacare exchanges with several officials of the Center for Medicare and Medicaid Services (the HHS agency that is running the exchanges), and with a number of reasonably well placed insurance company officials in Washington. The picture they paint of how the rollout of the exchanges has gone is similar in its broad strokes to what has emerged in other reports in recent days, so I don’t think I’ll be breaking much news here, though some of the details have (I think) not been reported. For what it’s worth, I offer below the basics of what they had to say and some reflections on its implications. This is a long post, with apologies, but I thought some of the particulars would be of interest.
First, a couple of words of caution: I do not present this as a broad sampling of people involved in the rollout or a comprehensive overview. The CMS people I spoke with are people I know (from having worked on health policy for some time in and out of government), and who in turn know me, which means they know that (unlike all of them) I am an opponent of Obamacare. This may have led them to tell me some particular things and not others, or it may not—I have no way of knowing. The assessment below summarizes conversations with five CMS officials and three insurance-industry insiders, all of which took place on the understanding that I would publish such an overview, without their names attached. (I approached several additional people at CMS who politely declined to discuss the exchanges on these terms.) The CMS officials are all career agency personnel, not political appointees; they are fairly senior people but not so senior as to be routinely privy to political discussions. All are involved in the exchange project in different ways. What they see is the nitty gritty operations of the program. But they are policy and management people, not information-technology experts.
This latter point turns out to be quite important. The reaction of these individuals to what has happened in the last two weeks is the reaction of people who are coming to realize that their expectations and understanding of web development were mistaken. They believed (as I did too, I admit) that whatever technical problems the exchange sites encountered at first could be cleared up quickly and simply once things got going—that the contractors developing the websites could just respond to problems on the fly, as they became apparent. It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.
Some blame the contractors involved for not being upfront about the potential for such fundamental difficulties, but some say the contractors did offer warnings, and especially that the contractors believed the time they were given for development was totally inadequate. It seems clear, though, that the administration was not warned to expect quite what has happened here, and was not prepared for it.
What has happened, at least so far, presents itself in several layers. One key problem, which to date has been the most prominent in public, has to do with a late-in-the-game decision to require users to go through a complex account-creation process before even reaching any coverage options. Administration officials apparently went back and forth several times on this question, and the ultimate decision required the creation of a series of patches over an already developed site in a very short time. Most of the problems people have faced so far are a function of that decision, and have had to do with creating user accounts and so getting through the very first steps involved in purchasing coverage. Some journalists and analysts have speculated that this decision was made in order to prevent people from seeing premium costs before they could also see any subsidies they might be eligible for, so that the shock of higher prices could be contained and so that simply curious observers and journalists couldn’t get a picture of premium costs in the various states. This explanation strikes me as plausible, and it struck several of the people I spoke with as plausible, but none of them could confirm it. It may be true, but it’s surely not the only possible explanation. Whatever the cause, that decision has created crippling problems that are still largely unresolved.
Many of these problems were reported in an October 12 New York Times story that detailed some serious dysfunction in the development process. The people I spoke with all confirmed that nearly all of the details in the story were correct, though several of them did strenuously deny one claim—that CGI Federal, the biggest contractor involved in building the site, was not provided with the information it needed to start writing code for the site until the spring of this year. This detail in the story aroused some shock and surprise among outside web developers, and these CMS officials say it’s just not true.
The people I spoke with did all confirm the importance of one other detail in the Times story: that CMS did not hire a general contractor to manage the exchange project but handled that overall technical management task itself. None of the people I spoke with wanted to get into how this decision was made or at what level, but all of them agreed that it was a very bad idea and was at the core of the disaster they have so far experienced.
The problems people are now facing with the basic interface have taken up most of the time that CMS and its contractors have devoted to troubleshooting so far, and although things have improved a little on this front quite serious problems remain. But there are very serious problems beyond that, which are more like the sorts of problems people were predicting before the launch: database problems at the nexus of several federal and industry data sources. The federal data hub itself is so far doing reasonably well at its basic tasks, and that has come as a relief to CMS. But some of the site functions that rely on the hub, both in the federal exchanges and a number of the state exchanges, remain highly problematic. The calculation of subsidies continues to fail tests, and it’s pretty clear that some actual consumers have made actual purchases with bad information, which will become apparent to them when they get their first bills. If the interface problems are addressed and the volume of purchases increases, this calculation problem could become a huge concern.
Meanwhile, the back-end communication between the exchanges and the insurers has been terrible, as is increasingly being reported. The extent of these problems has also been a surprise to CMS, and here too an increase in volume if the user interface issues are solved could lead to huge problems that would be very difficult to correct. CMS officials and the large insurers thought at first that the garbled data being automatically sent to insurers must be a function of some very simple problems of format incompatibility between the government and insurer systems, but that now seems not to be the case, and the problem appears to be deeper and harder to resolve. It is a very high priority problem, because the system will not be able to function if the insurers cannot have some confidence about the data they receive. At this point, insurers are trying to work through the data manually, because the volume of enrollments is very, very low. But again, if that changes, this could quickly become impossible.
In a couple of ways, then, the severe user-interface problems at the front end of the federal exchange has actually had some advantages from CMS’s point of view, because by keeping enrollment volume low it has kept some other huge problems from becoming instantly uncontrollable.
But that low volume is mostly a very bad thing for Obamacare, of course, since the viability of the exchanges depends on a certain size and demographic mix which cannot be attained unless these problems are resolved very quickly. I couldn’t get enrollment numbers from any of the people I spoke with, but I was told that the uptake model that HHS built (using CBO projections) to predict how the exchanges would work made a low-end estimate that just under half a million people would enroll nationwide by October 31st, and that enrollment would then accelerate dramatically between November 15 and December 30th. The October 31 target, which was thought to be modest, now looks essentially impossible to reach, but their bigger worry is that period in November and December.
If the problems now plaguing the system are not resolved by mid-November and the flow of enrollments at that point looks like it does now, the prospects for the first year of the exchanges will be in very grave jeopardy. Some large advertising and outreach campaigns are also geared to that crucial six-week period around Thanksgiving and Christmas, so if the sites are not functional, all of that might not happen—or else might be wasted. If that’s what the late fall looks like, the administration might need to consider what one of the people I spoke with described as “unthinkable options” regarding the first year of the exchanges.
cont....
http://nationalreview.com/corner/361577/assessing-exchanges-yuval-levin
Assessing the Exchanges
By Yuval Levin
October 17, 2013 10:41 PM
Over the last few days, I have spoken in some detail about the state of the federal Obamacare exchanges with several officials of the Center for Medicare and Medicaid Services (the HHS agency that is running the exchanges), and with a number of reasonably well placed insurance company officials in Washington. The picture they paint of how the rollout of the exchanges has gone is similar in its broad strokes to what has emerged in other reports in recent days, so I don’t think I’ll be breaking much news here, though some of the details have (I think) not been reported. For what it’s worth, I offer below the basics of what they had to say and some reflections on its implications. This is a long post, with apologies, but I thought some of the particulars would be of interest.
First, a couple of words of caution: I do not present this as a broad sampling of people involved in the rollout or a comprehensive overview. The CMS people I spoke with are people I know (from having worked on health policy for some time in and out of government), and who in turn know me, which means they know that (unlike all of them) I am an opponent of Obamacare. This may have led them to tell me some particular things and not others, or it may not—I have no way of knowing. The assessment below summarizes conversations with five CMS officials and three insurance-industry insiders, all of which took place on the understanding that I would publish such an overview, without their names attached. (I approached several additional people at CMS who politely declined to discuss the exchanges on these terms.) The CMS officials are all career agency personnel, not political appointees; they are fairly senior people but not so senior as to be routinely privy to political discussions. All are involved in the exchange project in different ways. What they see is the nitty gritty operations of the program. But they are policy and management people, not information-technology experts.
This latter point turns out to be quite important. The reaction of these individuals to what has happened in the last two weeks is the reaction of people who are coming to realize that their expectations and understanding of web development were mistaken. They believed (as I did too, I admit) that whatever technical problems the exchange sites encountered at first could be cleared up quickly and simply once things got going—that the contractors developing the websites could just respond to problems on the fly, as they became apparent. It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.
Some blame the contractors involved for not being upfront about the potential for such fundamental difficulties, but some say the contractors did offer warnings, and especially that the contractors believed the time they were given for development was totally inadequate. It seems clear, though, that the administration was not warned to expect quite what has happened here, and was not prepared for it.
What has happened, at least so far, presents itself in several layers. One key problem, which to date has been the most prominent in public, has to do with a late-in-the-game decision to require users to go through a complex account-creation process before even reaching any coverage options. Administration officials apparently went back and forth several times on this question, and the ultimate decision required the creation of a series of patches over an already developed site in a very short time. Most of the problems people have faced so far are a function of that decision, and have had to do with creating user accounts and so getting through the very first steps involved in purchasing coverage. Some journalists and analysts have speculated that this decision was made in order to prevent people from seeing premium costs before they could also see any subsidies they might be eligible for, so that the shock of higher prices could be contained and so that simply curious observers and journalists couldn’t get a picture of premium costs in the various states. This explanation strikes me as plausible, and it struck several of the people I spoke with as plausible, but none of them could confirm it. It may be true, but it’s surely not the only possible explanation. Whatever the cause, that decision has created crippling problems that are still largely unresolved.
Many of these problems were reported in an October 12 New York Times story that detailed some serious dysfunction in the development process. The people I spoke with all confirmed that nearly all of the details in the story were correct, though several of them did strenuously deny one claim—that CGI Federal, the biggest contractor involved in building the site, was not provided with the information it needed to start writing code for the site until the spring of this year. This detail in the story aroused some shock and surprise among outside web developers, and these CMS officials say it’s just not true.
The people I spoke with did all confirm the importance of one other detail in the Times story: that CMS did not hire a general contractor to manage the exchange project but handled that overall technical management task itself. None of the people I spoke with wanted to get into how this decision was made or at what level, but all of them agreed that it was a very bad idea and was at the core of the disaster they have so far experienced.
The problems people are now facing with the basic interface have taken up most of the time that CMS and its contractors have devoted to troubleshooting so far, and although things have improved a little on this front quite serious problems remain. But there are very serious problems beyond that, which are more like the sorts of problems people were predicting before the launch: database problems at the nexus of several federal and industry data sources. The federal data hub itself is so far doing reasonably well at its basic tasks, and that has come as a relief to CMS. But some of the site functions that rely on the hub, both in the federal exchanges and a number of the state exchanges, remain highly problematic. The calculation of subsidies continues to fail tests, and it’s pretty clear that some actual consumers have made actual purchases with bad information, which will become apparent to them when they get their first bills. If the interface problems are addressed and the volume of purchases increases, this calculation problem could become a huge concern.
Meanwhile, the back-end communication between the exchanges and the insurers has been terrible, as is increasingly being reported. The extent of these problems has also been a surprise to CMS, and here too an increase in volume if the user interface issues are solved could lead to huge problems that would be very difficult to correct. CMS officials and the large insurers thought at first that the garbled data being automatically sent to insurers must be a function of some very simple problems of format incompatibility between the government and insurer systems, but that now seems not to be the case, and the problem appears to be deeper and harder to resolve. It is a very high priority problem, because the system will not be able to function if the insurers cannot have some confidence about the data they receive. At this point, insurers are trying to work through the data manually, because the volume of enrollments is very, very low. But again, if that changes, this could quickly become impossible.
In a couple of ways, then, the severe user-interface problems at the front end of the federal exchange has actually had some advantages from CMS’s point of view, because by keeping enrollment volume low it has kept some other huge problems from becoming instantly uncontrollable.
But that low volume is mostly a very bad thing for Obamacare, of course, since the viability of the exchanges depends on a certain size and demographic mix which cannot be attained unless these problems are resolved very quickly. I couldn’t get enrollment numbers from any of the people I spoke with, but I was told that the uptake model that HHS built (using CBO projections) to predict how the exchanges would work made a low-end estimate that just under half a million people would enroll nationwide by October 31st, and that enrollment would then accelerate dramatically between November 15 and December 30th. The October 31 target, which was thought to be modest, now looks essentially impossible to reach, but their bigger worry is that period in November and December.
If the problems now plaguing the system are not resolved by mid-November and the flow of enrollments at that point looks like it does now, the prospects for the first year of the exchanges will be in very grave jeopardy. Some large advertising and outreach campaigns are also geared to that crucial six-week period around Thanksgiving and Christmas, so if the sites are not functional, all of that might not happen—or else might be wasted. If that’s what the late fall looks like, the administration might need to consider what one of the people I spoke with described as “unthinkable options” regarding the first year of the exchanges.
cont....
