A representative from the Government
Accountability Office (GAO) testified before Congress on the
rollout of HealthCare.gov—the federal health exchange system
created under Obamacare—this morning. Here’s the short version: It
didn’t go very well.
“We found that CMS undertook the development of Healthcare.gov
and its related systems without effective planning or oversight
practices, despite facing a number of challenges that increased
both the level of risk and the need for effective oversight,” the
GAO’s
prepared testimony says.
But you already knew that. Everyone paying any attention at all
to the news last fall knows that. What the GAO
testimony does is add some color and confirm a few details.
One of the big problems was that federal health bureaucrats kept
changing their minds during the development process. The Centers
for Medicaid and Medicare Services (CMS), which was charged with
building the exchange system, “incurred significant cost increases,
schedule slips, and delayed system functionality.” These delays
were largely due to “changing requirements that were exacerbated by
inconsistent oversight.” The dithering cost time, and it also cost
money. Between September 2011 and February 2014, development cost
estimates blew up, from about $56 million to $209 million for the
federal marketplace. Costs for the data hub, another key part of
the exchange, went from $30 million to $85 million.
It was a classic bureaucratic circus. No one knew who actually
had the authority to tell contractors what to do, so contractors
got jerked around and sent on fruitless tasks, or asked to do work
that they shouldn’t have been doing. The GAO report says that CMS
improperly spent $30 million on bonus features that it didn’t
technically have the authority to order.
Delays and costs piled up, with some held off until weeks before
launch, and when it came time to flip the switch, no one knew if it
would work. “CMS launched Healthcare.gov without verification that
it met performance requirements.” We know how that worked out.
And thanks to this morning’s testimony, which in addition to the
GAO also included a representative from CMS, we know what’s likely
to happen next: more foul-ups when open enrollment begins for the
second time this year.
CMS Deputy Administrator Andy Slavitt said this morning that
“there will clearly be bumps” when the exchanges open for all
business again in November,
according to a report in Politico.
Slavitt also confirmed that the exchange still isn’t built yet,
with key backend payment systems that have already been delayed
multiple times still incomplete. Slavitt said that the
administration doesn’t expect work to be finished on those systems
until next year—after the second open enrollment period is
over.
Slavitt seems to think that the situation is under better
control than last time, thanks to an improved early warning system.
The folks at GAO, however, aren’t so sure. One of the
watchdog’s recommendations in the report is to “assess the causes
of continued cost growth and delayed system
functionality”—basically to figure out exactly why the system
consistently costs more and takes longer to develop than expected,
and what the real risks are of further delays and problems.
I don’t expect this year’s open enrollment period to be nearly
the catastrophe that last year’s was. Most likely, it will go more
or less the way that the last few months of open enrollment did
this year, with some ups and downs but basically acceptable
performance for the front end of the system.
But I am not totally sure of this, in part because last summer,
the GAO issued another early warning that that administration was
not on track with work on the exchanges.
This was the administration’s response:
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