One of the things that surprises me about the Healthcare.gov debacle was that their decision to build a complex suite of transactional applications that would in one fell swoop replace the entire health insurance distribution system for 30 million people. Custom systems are notoriously hard to design and build to a cost, quality and timeliness standard, particularly if you are trying to replace a complex existing infrastructure. The the most successful customer facing 'bespoke' systems tend to be extremely iterative starting small and then adding more and more functionality as the previous releases prove their stability and value. For a huge system with hundreds of external interfaces to leap Prometheus-like from the head of President Obama without exploding said head was the longest of long shots.
What's really sad for the Obami (but happy for opponents like me - zippedy doo dah!) is there was no reason to take such an extreme risk. Because there are a number of existing health insurance distribution channels that already get the job done. Why didn't they simply leverage the infrastructure that was already in place? It's like the Food Stamp program setting up its own grocery store chain because 'we can't trust Kroger'. If the feds can't deliver custom systems then they certainly don't have the chops to replace a complex service distribution infrastructure. Distribution is complex and a lot of people get paid a lot of money to make it work yet here we have the Federal Keystone Kops roaring in with Clowncare. Neenah, neenah indeed.
Had they demonstrated the situational awareness of an Autistic Tree Sloth they would have focused their (apparently limited) attention on developing an eligibility and subsidy calculation module that could work with the existing channels. This is a much more manageable task - and one that you can iterate, using limited information sources at first and then adding more data elements and making eligibility calculations more accurate over time.
Here's how it could work: The customer or his insurance agent goes to the stripped down Healthcaer.gov site and calculates the subsidy he is eligible for (well, really an algorithm that the insurance price is input into). Alternatively, the IRS calculates a preliminary subsidy algorithm for everyone based upon their previous year's Tax return and the consumer just updates the information. Once the subsidy algo is determined, it is stored and the consumer is issued a unique identifier. He goes insurance shopping and buys insurance via Esurance or his agent or Union. When he selects the insurance, he is asked to input the Healthcare.gov unique ID and it calculates the amount that the consumer will pay.
The objection to using the existing insurance distribution system is no doubt its expense. Individual insurance agents make decent commissions on selling health insurance as does Esurance. But thinking that way is crazy. How much better for the Obami if 50,000 experienced insurance agents with scores of millions of customers were out beating the street, persuading their customers to sign up and helping them to get it done? That's the role they play for the insurance companies and the insurers pay them well for it because it drives demand and value far in excess of its cost. The agents and other middlemen are in effect a 'lubricant' that makes the system work because as Barack Obama so tardily but trenchantly noted: ''buying insurance is complicated'.
But the Obami, being academics and politicos and knowing next to nothing about insurance product distribution, behaved like intellectuals always do: denounce 'the parasitic middleman' and attempt to bypass him as if his role has little or no value. So at Healthcare.gov they reinvented (incompetently) the Esurance distribution system and then they recruited and 'trained' thousands of health insurance naifs to be 'navigators' rather than leveraging the deep expertise resident in the agent distribution network. The result is a tragically bloated and kluged system that may never get done and a bunch of clueless navigators sailing consumers off of the edge of the health insurance world. It's as if they designed and built a replica of a 15 year old engine design with some parts missing and then decided to use water instead of motor oil as the lubricant.
It is characteristic of politicos to dismiss the complexities of the real world with a wave of their hand. Just assuming that 'implementation' will 'happen' once they put the right runes on the magic hard drive. Like little lambs who didn't pay attention to their shepherd they end up wandering lost in a thicket of complexity and chaos. And they deserve to be skinned for it.
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