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The time to fix the federal Exchange is now

The rollout of the federal Exchanges has been a disaster.

There’s no way to sugar coat it; whether it’s a design, technology, or communications problem (more likely all three), they are NOT working. And yes, there’s a clear management/leadership failure here; the Obama Administration failed twice;

  • first – designing the right development process (it appears that among other things, political decisions caused them to hold back on issuing detailed guidance to key stakeholders, i.e. health insurers)
  • second – encouraging Americans to use the Exchanges on day One, when they should have known they were not ready.

While the feds and their contractors are working feverishly to fix things on the fly, I’m hearing from my tech expert colleagues that they’d be far better off taking the Exchange off line, fixing the problems, then re-starting it.

Among the issues/problems, there’s:

  • a requirement that enrollees enter all their personal info before they can look at and compare plans
  • a lack of server capacity to handle the traffic volume
  • a lack of communication between the Exchange and the various health plans (this may be the most critical problem over the next few months as folks get cancellation notices from their current insurers and are required to sign up via the Exchanges)
  • erstwhile enrollees can’t find out if their doctors are in any of the plans available to them.

HHS bears a lot of responsibility for this, and perhaps Sec. Sibelius should be fired.  However, that would require the President to nominate a new Secretary, and given the hyper-partisan approval process, any new Secretary would face uncertain-at best-chances of approval by the Senate. And yes, President Obama is ultimately responsible, and therefore it is incumbent upon him that this gets fixed now, and gets fixed correctly.

Better to shut down the Exchanges now, get them fixed, test the heck out of them using feedback from early users, and get them back up when they are really ready..

If that requires delaying the mandate for a few months, so be it.

What does this mean for you?

A very big, and very painful, lesson on how not to do big IT projects, and an equally big and painful lesson on the perils of allowing politics to trump common sense.



12 thoughts on “The time to fix the federal Exchange is now”

  1. Well said Joe. It’s also appalling that they spent almost $600 million on this debacle.

  2. CGI, the Canadian company hired to create the software for the exchanges, was originally given a government contract by that old crony capitalist himself, W. So blaming the Obama administration completely is not correct. This was brought out last night on the NBC Nightly News.

    One has to remember that government does not work like business, and there are middle-level managers more interested in keeping their jobs and pensions, than interested in doing the job right, and it was my understanding that these problems were brought to someone’s attention, but in typical government bureaucratic ineptitude, they were not fixed. It kind of reminds me about how people used to, and may still describe the way the military handles things in the chain of command…SNAFU, Situation Normal, All Fouled Up.

    1. C’mon Richard, the fact that years ago George W had a contract, that had nothing to do with this exchange set up, in no way “apportions” any blame off of this present adminsitration’s culpability.

    2. Of course, it’s Bush’ fault that Obama didn’t conduct proper bidding for vendors, it’s not like there are not at least a hundred companies out there ready to take on a project of this magnitude. Bush has only been out of office for six years now, you gotta give it at least a century before you dems stop blaming Bush for every stupidity that comes out of this president. Technology changes by the second, my friend, and what Bush did 10 years ago should have no relevance to what your boy O is doing right now.

      1. So according to Richard, ObamaCare website not working is Bush’s fault too. WOW.
        I just wanted to mention that W’s Part D website did work very well actually. We may dislike the PartD. But they sure executed it much better than what Obama administration has done.

  3. I cant say we did not see this coming. take any good Idea add politicians turn it over to bureaucrats and voila …

  4. Richard, according to information posted on CGI’s website they have been doing business with the federal government for more than 36 years so according to your logic the problems with the exchange site is actually Carter’s fault?!?

    1. Mike: The history lessons you’ve been providing in the comment section of this blog are a welcome addition. Keep up the good work!

  5. I have no personal knowledge of this project, but generally in this type of IT mess you can be sure of a couple of things.

    First, the problems will compound and the situation will get worse before it gets better. Each emergency “fix” runs the risk of causing other unintended consequences.

    Second, when the post mortem is finally conducted, one major part of the problem will likely be in the requirements. Consider that this was a massive bill which “we had to pass to find what was in it.” Then, literally hundreds of decisions were left to the HHS secretary or other paper pushers. Very tricky to write requirements for.

  6. Joe–

    This is one of my favorite websites, and normally I agree with your posts.

    But this time, I think you’re being a little too tough.

    The one thing you don’t mention is the state-run Exchanges that are working well. In some cases, very well.

    Kentucky, California, New York, D.C. are examples.

    These are states where the state government WANTED the websites to work. For instance, in Kentucky Governor Steve Beshears is both a Democrat and a Technocrat. and he made it work:
    “Kentucky’s state-run exchange Kynect has succeeded in enrolling more than 15,000 people in health insurance since it began running Oct. 1. Kentucky is one of 17 states that runs its own marketplace for uninsured people to shop for coverage.

    “Kentucky’s exchange ran into a few technical problems on its opening day, but state tech workers quickly added new servers and solved the problems.

    “The state had outsourced the design of its exchange to the same contractor, CGI Group of Canada, that is facing blame for the technical problems with the rollout of the federal exchanges.”

    That last part is important, I think. The media has accused the administration of “crony capitalism” because it hired CGI, who has done work for the govt in the past.

    But it seems CGI can do a good job–if given the
    right marching orders. Kentucky’s governor knew what he was doing, and kept a close eye on the project.

    Sebelius is not a technocrat. She’s head of HHS,which calls for a different set of skills. (Most of the time her job is not about overseeing websites.) She needs to be chief
    cheerleader for the ACA, but not the tech czar. Blaming her is foolish. (“Cherchez la femmef!”

    Obviously she needed people under her who understood the challenge the way Steve Beshear did. And just as obviously seems that she didn’t have them.

    But we should remember that at the outset, no one expected Washington to be responsible for running so many Exchanges. The idea was that the state’s Wanted to control their own sites (state’s rights, etc.)– until it occurred to Red States that they could cause real problems for Obamacare by saying: “You do it.”

    The federal government wound up with way too many Exchanges to run–and too little time.

    Should they have moved up the Oct 1 date? I don’t think so. Republicans would have said, “Since you’ve opened up the legislation to make this major change, let’s see what else we can change.”

    But Joe, I do agree with you that the government should not have urged people to go to the websites Oct. 1.
    It should have warned them: in the early stages, there are bound to be problems. This is a start-up operation. We’re doing something we have never done before. Sit back, relax. Also, keep in mind you have to pay your first premium 30 days after you sign up–even though the insurance doesn’t start until January 1.
    You have until Dec. 15 to sign up for insurance in January.
    Why not wait until November 15 to visit the websites.”

    Finally, this will get fixed. The media is exaggerating the problem- focusing largely on the federal exchanges. and ignoring those that work.

    What did Beshear do right

    The New York Times should be interviewing him, rather than running a story, as they did a few days ago, that is filled with unnamed sources “people close to the project say” and “experts say.” Not one of these sources is named. Yet the Times claims to know that it will take
    months to fix things. . . .
    The senior writer on the story, Robert Pear, has written numerous negative stories about health reform–dating all the way back to 2009..Thus he’s quick to believe anonymous sources who say it’s a disaster.

  7. Hi Joe,

    I’ve worked in the HRO industry for Health and Welfare and the recent information regarding testing 2 weeks prior to “Live” date is shocking. Working with a client of just about 300k employees, we tested our website for Annual Enrollment at least 4 months in advanced. We would have at least 3 waves of testing to find defects and fix them as during and between each wave. Even then, we would continue to encounter problems up to, and in some cases throughout the entire annual enrollment process. This is for an existing client, not a brand new client as the Exchange would be similar to. We also limited enrollment in 3 waves (based on employment status) to control volume. No question that those involved in design/set up were not aware of server limitations. I feel that the blame should be put on both the administration and the companies involved for even allowing the UAT (user acceptance testing) to be scheduled so closely to “Live” date.

    Internally, our response to any defects or glitches was to extend enrollment deadlines or allow changes past AE end dates. This should definitely be strongly considered by the Administration, because I for one would not even consider calling a hotline to get information on health coverage.

    If the requirement to shop for coverage would be to have a profile set up, they should have vigorously promoted the requirement and the fact that you can set up your profile prior to Oct 1.

    There is so much that should have been done, but the fact that none of the major HRO firms in health and welfare was involved was the first mistake.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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