The Parallel Failures of the Oregon and Maryland Health Exchanges

Whitehouse.govWhitehouse.govThere are plenty of notable bits of information in The Oregonian’s detailed, damning report on Oregon’s failed health exchange: The $160 million state-run project was one of the most ambitious in the nation, but it failed to launch at all last October, and now state officials are considering ditching the project completely and joining the federal exchange system. 

What stands out the most to me, however, is how similar Oregon’s troubled experience attempting to build an exchange was to the similarly disastrous experience building a state-run exchange in Maryland.

Unlike Oregon’s exchange, Maryland’s exchange went live on October 1 last year, at least in the sense that it went online. But it was basically unusable, and remains largely broken.

The pre-launch development of both exchanges, however, had a lot in common. 

Both states were recipients of “early innovator grants” from the federal government to develop what the administration hoped would be model exchanges: Oregon got $48 million, plus an additional $11.8 million IT supplement; Maryland got $6.2 million. Along with the grants came praise from the administration. In May 2013, a Washington Post report described the Oregon exchange as a White House favorite. And just days before the October launch of the exchanges nationwide, President Obama went to Maryland to tout the state’s work developing its system.

And yet despite heavy funding and praise from Washington, there were clear early warnings that both exchanges were headed for trouble, with independent analysts telling officials in both states that the projects were not on track.

In Maryland, those warnings came from consulting firm BerryDunn, which warned of significant risks to the project as early as 2012. Oregon’s warnings came even earlier, in November of 2011, when analysts from the consulting firm Maximus “noted high risks due to insufficient management controls,” according to The Oregonian’s report.

Both exchanges suffered under muddled leadership and lack of planning: Oregon’s system was to be built by one bureaucracy, but managed by another, which led to managerial confusion and bureaucratic turf wars. In Maryland, BerryDunn reported early on that there was simply no one in charge of the project, and that no one had even taken the step of drawing up a basic timeline of milestones and achievements.

There were problems during the testing phase in both states, with Oregon delaying its initial tests and Maryland flunking late summer performance reviews. And there were clueless senior state officials, pushing forward despite the warnings and the risks. Those closer to the projects seem to have ignored the warnings; those at the very top appear to have been out of the loop. 

Part of what these stories tell us is that you shouldn't always trust the official narratives when it comes to the implementation of large-scale projects like Obamacare's exchanges. In both cases, officials insisted that everything was basically fine with the exchanges, right up until the point that it became blindingly obvious that everything was not. (The same, notably, was true in the federal system.) 

The parallel problems of the two exchanges also suggest something about the health law’s hopes and limits. These were two of Obamacare’s most ambitious exchange projects. It’s telling, then, that they turned out to be two of the law’s biggest failures. 

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    If only those racist Republican Teabaggers in Oregon and Maryland had not sabotaged the program...

  • John||

    Maryland is a one party DNC dictatorship. But that won't stop the dead enders from believing Obamacare only failed because evil, racist, Republican, governors sabotaged it.

  • some guy||

    There are a few Republicans left in Maryland, but they are all whipping boys and fools.

  • The Last American Hero||

    Aside from some excellent craft breweries, it's not like Oregon is Galt's Gulch. This one belongs to Team Blue.

  • SForza||

    Do any of the craft breweries brew an Artisanal Mayo Ale? If not, I think I know a market that's begging to be exploited.

  • Dweebston||

    It's bacongrease mayo all the way down.

  • Cdr Lytton||

    Oregon is well on it's way to that as well. Democrats have held the governorship for almost thirty years, the state Senate since 2005 and the state House since 2007 except for 2011-12 when it was split down the middle.

  • kinnath||

    The good news is that being protected from the consequences of failure allows the management teams to innovate and take risks so that we can have world-class products like the exchanges in Oregon and Maryland.

  • Archduke von Pantsfan||

    The Oregon trail leads only to Dysentery.

  • ||

    That's just crazy talk. There's also cholera, broken bones and starving after you try to float your wagon across a river and it tips over losing all of your supplies.

  • John||

    Just don't leave too late in the spring, especially if you are a fat guy whom your companions might find appetizing in a pinch.

  • Brett L||

    Do I look like a fucking sailor? I'm as far from an ocean as I can get for a reason!

  • ||

    Yeah, John, Brett was the construction worker in The Village People, not the sailor. Wait, was there a sailor in The Village People? It doesn't matter, my point stands.

  • Brett L||

    No but "In the Navy" was a big hit for them. Well, the B-side to their big hit anyhow.

  • Ted S.||

    Do I look like a fucking sailor?

    No, you look like a sucking failure. ;-)

  • Brett L||

    Nice. May I always fail upwards like so many politicians seem to.

  • Anonymous Coward||

    I never had that problem. I single-handedly drove the Bison into near extinction on my way to Oregon.

  • some guy||

    You could only carry 100 pounds, you monster!

  • ||

    There were 20 or so states that were going to run their own exchanges. Did any of the rest of them come up with one that worked?

  • some guy||

    I hear California's was sort of ok-ish. I mean statistically speaking at least a few of them should have gotten lucky.

  • JFK||

    Did all 20 get grants to develop software?

    Did HHS fund all of them plus the Federal effort thinking that it was efficient to pay for competing software rather than one central effort?

    The latter would not likely have gone well and the failure would be all the more visible. But 21 separate efforts building mostly the same thing?

  • ||

    The ones everyone cites seem to be Washington, Kentucky, and California.
    Although most of that is with Medicaid enrollment.

  • The Late P Brooks||

    Those aren't failures, but rather the makings of a delectable omelette!

  • some guy||

    Making an omelette requires more than just breaking the eggs. You also have to actually do something useful with the innards. That's the part they keep forgetting about.

  • ||

    Obamacare is a people omelette!

  • some guy||

    What omelette? It's just broken people rotting on the sidewalk.

  • Ted S.||

    Obamacare is Soylent Green?

  • ||

    Maybe not. As some guy suggests, Soylent Green was popular.

    Tuesday is Obamacare day!

  • ||

    Politics is fun. Implementation is boring.

  • ||

    It was always really about getting revenge on Republicans for ... something.

  • The Late P Brooks||

    In Maryland, BerryDunn reported early on that there was simply no one in charge of the project, and that no one had even taken the step of drawing up a basic timeline of milestones and achievements.

    Garbage in, garbage out.

  • ||

    Taxpayer money in, garbage out.

  • John||

    They can't even make the trains run on time. If these people ever tried to do real harm, like say locking up all of the Japanese on the west coast, they would end up locking up all of the Koreans in Georgia and forgetting to feed them.

  • Spoonman.||

    Hey, you stole that from me.

    (I don't begrudge it.)

  • some guy||

    My only question is whether this was a failure of politicians to delegate authority or a failure of bureaucrats to properly manage. Or both. It could be both.

    Seriously, program management isn't exactly rocket surgery. It's a pain in the ass, but over the decades we've developed some pretty straightforward best practices that almost always work if executed properly.

  • John||

    Its both. It is the result of the complete breakdown in competence by the governments involved. The progs worship government. But the Progs' own insanity and insistence on things like mandated diversity and tenure and such have made it impossible for government to function.

    The progs of the past believed in crazy ideas and implemented evil and destructive policies. But, the mechanisms of government functioned under them. The trains may have been running off a cliff, but they left on time. Current Progs are not even capable of that level of competence. It is magic thinking and primitivism all the way around.

  • ||

    This is the one saving grace in this situation. The very attitude toward government that statists have, which is that no matter how big it gets, it's great, will also be its downfall. Because they are showing more and more that as soon as you allow the government to get this big and then excuse everything it does, it does nothing right. At all. Of course, in the meantime tons of people will have their lives fucked by falling afoul of the state. But they mean well, really!

  • Invisible Finger||

    As long as random people get fucked according to a quota system, government will consider it a success.

  • LarryA||

    It's recursive. When people grow up with the idea that government should run their lives they never bother to learn how to run their own lives. Without the experience of running their own life, they have no idea how to run everybody else's life. Once government consists of people who don't know how to manage anything, the wheels fall off.

    Like the Occupy movement, which consisted of people who couldn't manage a decent campsite telling us how to run the world.

  • Brett L||

    Eh. No successful business would execute this in a single stage. They would have had checkpoints where they would have aborted or re-scoped the project.

  • Invisible Finger||

    By definition, government = scope creep.

  • Cdr Lytton||

    It's not rocket surgery but look at who you have watching the chickens.

    Kwong, described in the Oregonian article as a Cornell-educated technology analyst, appears to have zero experience in IT operations. His IT experience is strictly doing oversight for the state of Oregon for the past ten years. Prior to that, he was in marketing and R&D after graduating with a PhD in psychics. His adjunct teaching gig was marketing as well.

  • juris imprudent||

    ...over the decades we've developed some pretty straightforward best practices that almost always work if executed properly.

    Oh, you're talking about the private sector best practices, aren't you. The public sector likes to talk about those while studiously avoiding actually doing them.

  • kinnath||

    Money, it's a hit
    Don't give me that
    Do goody good bullshit

    I'm in the hi-fidelity
    First class traveling set
    And I think I need a Lear jet

  • Anonymous Coward||

    Part of what these stories tell us is that you shouldn't always trust the official narratives when it comes to the implementation of large-scale projects like Obamacare's exchanges EVER.

    FIFY, Suderman.

  • Mainer2||

    I work for a smallish manufacturing company, and when I think how we try and try and try to be efficient, and economize to stay profitable, and then I see how millions and tens and hundreds of millions are pissed away with no personal accountability...

    Preaching to the choir I know.

    But then, I'm using the wrong metric. The Oregon exchange was a success at channeling $160 million to the politically connected.

  • wwhorton||

    Bingo. The state exchanges are only failures if you presume that the goal was to actually provide a functioning product. That might have been a bonus, but the real goal was to get federal funds into the hands of state contractors.

    I don't even mean that in the sense of corruption, although I'm sure that's an element. I mean that, quite literally, the strategy for the exchanges seems to always have been:

    1. Come up with broad-stroke design (and I hesitate to use the word)

    2. Send tax money to private contractors along with a general idea of what the site should do, possibly written in crayon

    3. ???

    4. Profit.

    Statism 101 says that anything is possible if you throw enough tax revenue at it, success metrics be damned.

  • Mainer2||

    And since most people are not sociopaths, they actually believe that politicians mean what they say and have your best interest at heart. They refuse to believe that anyone would be so callous and evil as to take $160 million of your and your neighbors money and give it to their friends.

  • LiberTarHeel||

    So, Obamaware gnomes? That means ... holy Hillary!

  • The Late P Brooks||

    Seriously, program management isn't exactly rocket surgery.

    Well, that might be true if you have a specific, clearly defined goal, and a product with known properties and an identifiable useful function.

  • some guy||

    specific, clearly defined goal, and a product with known properties and an identifiable useful function.

    Even rocket surgery requires these things. Without them you're just Sisyphus. Only instead of being set an impossible immortal task by some malevolent deity you've been set an impossible mortal task by your own stupidity. You are the Sisyphus of idiots.

  • Citizen Nothing||

    You are the Sisyphus of idiots


    I laughed.

  • Sevo||

    some guy|1.22.14 @ 2:40PM|#
    I hear California's was sort of ok-ish. I mean statistically speaking at least a few of them should have gotten lucky.

    Depends on what "is" means (posted this in the AM links, late):

    Laissez les bons temps rouler!
    "Spike in Covered California signups pushes total to 625,000"
    Whatever "signups" means, and that compares to the 4M who lost ther coverage courtesy of the hag and that lying POS.
    http://www.sfgate.com/default/.....163950.php

  • some guy||

    I wasn't thinking of the law as a whole, just the functioning of the California exchange. The law as a whole wouldn't work even if all the exchanges functioned perfectly.

  • Brandon||

    Has anyone mentioned that this was entirely the fault of Rethuglican obstructionists?

  • Paul.||

    Part of what these stories tell us is that you shouldn't always trust the official narratives when it comes to the implementation of large-scale projects

    "...shouldn't always trust..."

    Curious language. I would have worded it more like "...shouldn't ever trust..." but that's just me.

  • ||

    What the critics of the CoverOregeon and CoverMaryland doesn't understand is that working or not, these wonderful bureaucratic program paid the right people, and the right people got to work on this wonderful project. Who care if it works.

    Just like the High Speed Rail for California. Who care if a single inch of track was ever build. What's important is that all those billions of bonds (and the Federal matching fund) is spend on the right connected people.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement