Health Insurance Exchange Tech Winners and Losers

Between the federal Healthcare.gov site and various state websites, more than 7.5 million Americans signed up for 2014 healthcare coverage on a health insurance exchange. Building those exchanges proved to be much, much easier said than done. Here's a quick look at who succeeded and who failed.

To say that building health information exchange websites wasn't easy would be a tremendous understatement.

Though things seemingly work out in the end, with 7.5 million Americans signing up for healthcare coverage through the exchanges between Oct. 1 (roughly) and March 31 (sort of), the Healthcare.gov launch was a textbook lesson in how to botch a software development project. Many of the states that opted to build their own sites similarly struggled. A host of errors confronted users, from lorem ipsum text to latency issues to woeful security.

That said, some bright spots did emerge. Healthcare.gov recovered from its disastrous debut, as did several state exchanges - including some operating in difficult political environments.

With the 2014 Obamacare enrollment deadline behind us, here's a look at health insurance exchange technology's winners and losers. (For a more comprehensive look at the exchanges, their impact and their projected growth, PwC's Health Research Institute has you covered.)

Winner: Connecticut

Let's start with something positive. When faced with the prospect of doing something that had only been done once before - in Massachusetts, in 2006, when that state built a portal as part of its healthcare reform bill - the Nutmeg State made the wise decision to hire Kevin Counihan, who'd been the chief marketing officer for the Massachusetts Health Insurance Connector Authority.

Counihan, CEO of AccessHealthCT since 2011, describes Connecticut's website, built by Deloitte Consulting, KPMG and other private contractors, as an " exchange in a box." It's reliable, reusable and scalable, so it's no wonder that Maryland and other unnamed states are looking into the Connecticut model.

Loser: Maryland

There's nothing wrong with using someone else's stuff when yours isn't up to par. That's what Maryland decided to do after its $129 million health insurance exchange website didn't work. The Old Line State opted to use the same technology deployed in Connecticut. Deloitte says it will cost between $40 million and $50 million - or, much less than the original, failed project.

That's well and good. You know what you shouldn't do, though? Testify before Congress that something you did wrong isn't your fault. According to The Wall Street Journal, Maryland officials blame the software vendors, saying that patching together a site instead of building one from scratch was a "major misjudgment." Maryland Gov. Martin O'Malley got in on the act, too, telling The Connecticut Mirror, "The vendors we hired failed to build us the platform they promised."

In particular, the state singles out IBM, which made the software intended to help Marylanders determine whether they were eligible for insurance. Maryland says the software "hasn't worked well." Big Blue says the state failed to manage the project. Regardless, Capitol Hill is no place to air your dirty laundry.

Losers: Oregon, Oracle

Speaking of what you shouldn't do, let's talk about Cover Oregon. In the long run, this may be more embarrassing than Healthcare.gov.

As of mid-March 2014, the site still wasn't working - and that was one full year after Cover Oregon staff were "shocked" to see that the Oregon Health Authority hadn't yet built a working site.

It gets better (or worse). That quote comes from a tort claim notice - the typical precursor to a lawsuit - filed by Carolyn Lawson, former OHA CIO. Lawson says she was forced to resign amid a "substantial cover-up" about the state of the project and was "privately threatened and publicly scapegoated" when she said she wanted to be truthful with the public. (The Cover Oregon CIO resigned, too.)

Lawson blames Cover Oregon, involved in the project since June 2012, for an "inability to articulate clear business requirements" and "provide effective leadership." She also blames Oracle, saying the firm, acting as a systems integrator, "committed serious and fatal blunders in its work."

The federal Centers for Medicare and Medicaid Services tends to agree. In a report, it says Oracle failed to communicate with Oregon officials in a timely manner, to provide testing results and to plan for disaster recovery and business continuity.

That said, CMS also blames Oregon for never actually setting up a central project management office and relying on the vendor for that purpose. CMS adds that Oregon is using "the most complex mix" of Oracle products among those states working with the vendor.

Losers: Massachusetts, CGI

You'd think the state that successfully build a health insurance exchange website eight years ago would have a leg up on everyone else, right? You're forgetting that the Bay State is the home of the Big Dig, which serves as a proud model of how not to proceed with a highway project.

Why build a new site and not reuse the existing, functioning Massachusetts Health Connector? State officials say they needed to connect to the so-called " Obamacare Hub" that combs IRS, Social Security, Veterans Affairs and Homeland Security data to verify the eligibility of would-be applicants. That part of the site did work - but an analysis from Mitre, a consultancy, found a host of other problems, from inadequate testing to complex governance to faulty architecture.

Massachusetts also played the blame game, pointing to CGI, the contractor also responsible for Healthcare.gov. Testifying before the U.S. House Oversight and Government Reform Committee, Health Connector Director Jean Yang says CGI "impeded our progress and full vision for the website," according to The Boston Globe."

Winner: Kentucky

When officials from the three states above, plus Minnesota, testified before Congress, they received a sharp rebuke from Rep. Darrell Issa (R-Calif.), according to The Globe:"To use a common platform would be common sense ... It makes no sense to ask vendors to duplicate the software but bill us twice, three times, four times for simply reinventing it."

Kentucky opted to build its own exchange, Kynect. As its technical leader, Chris Clark, said in an interview with FierceHealthIT, "No one understands the local health of the state better than Kentuckians."

Kynect's keys to success, Clark says, include making the office of the health insurance exchange a state agency, engaging with stakeholders, focusing on usability and spending the summer "head-down in testing." The site experienced some high volume on Oct. 1, 2013, but adding virtual machines addressed that, and the site experienced no technical issues thereafter, Clark says.

In the end, about 321,000 Kentuckians - more than 7 percent of the state's population - enrolled using Kynect. Seventy-five percent hadn't previously had health insurance. Given healthcare reform's goal of insuring the uninsured, Kentucky serves as a model for other states to follow.

Winners: Deloitte, Optum

Deloitte was behind the health insurance exchange websites in Connecticut and Kentucky - and, if Maryland's do-over is any indication, the consultancy will be building more sites.

Meanwhile, Maryland, Massachusetts and Minnesota are turning to Optum, the technology unit of the insurer UnitedHealth Group, to fix their exchanges. Makes sense, since Optum was instrumental in turning around Healthcare.gov, which the government declared "fixed" on Dec. 1.

(Minnesota, for its part, launched a buggy health insurance exchange on Oct. 1, and the MNsure site will be thoroughly audited - but the state beat its signup goal by 34 percent, and Minnesotans pay the lowest health insurance premiums in the country. Let's call the Land of 10,000 Lakes a draw.)

Winner: California

Despite hiccups, the Covered California exchange wins on sheer volume alone: More than 1.2 million enrollees, including 412,000 in March alone, plus another 1.9 million who signed up for the state's Medicaid program. (With 500,000 incomplete applications as of March 31, many a victim of poor site performance, California extended the enrollment deadline to April 15.)

Loser: Hawaii

At the other end of the volume spectrum: Hawaii, where fewer than 8,000 had officially enrolled by the March 31 deadline - so few, in fact, that state officials say the health insurance exchange website may not be financially viable, according to the WSJ.

Explaining why that number is so low gets to the technical problem: A backlog of 11,000 applicants who, for whatever reason, weren't able to complete registration by March 31. They're still eligible for coverage this year but obviously have to complete the process. If other states' failures are any example, these customers will do so over the phone or in person - which defeats the purpose of using the health insurance exchange website in the first place.

Winner: Healthcare.gov

Hear me out. Imagine if what transpired in the first few weeks of Healthcare.gov's life continued until the end of March. It's not about the politics of the Affordable Care Act, either - the entire IT industry would be devoting considerable time, energy and money defending itself against a citizenry that would have lost a lot of faith in technology's ability to actually do things. "Why use the website," they'd say, "when it's faster and easier to call?"

The fact that Healthcare.gov rescued itself from utter embarrassment and (re)constructed a website able to register millions of Americans for health insurance is no small feat. Sure, it would've been nice if Healthcare.gov worked properly the first time, but sometimes you need to make a monumental error the first time to know what you truly need.

Loser: Former HHS Secretary Kathleen Sebelius

Unfortunately, the stains of that monumental error won't wash out easily. When you're repeatedly mocked in the opening skit on Saturday Night Live, you have a PR problem that isn't easy to solve.

Ultimately, problems as large and as public as Healthcare.gov's failed launch go straight to the top. We will thus largely remember Sebelius as a failed IT project manager and not as a two-term Kansas governor once on the short list of women likely to be the first female U.S. President.

Brian Eastwood is a senior editor for CIO.com. He primarily covers healthcare IT. You can reach him on Twitter @Brian_Eastwood or via email. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.

Read more about health care in CIO's Health care Drilldown.

This story, "Health Insurance Exchange Tech Winners and Losers" was originally published by CIO.

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