Obamacare Contractor With $1.2 Billion Deal Pays Employees to Do Nothing


On September 26 of last year, just days before Obamacare's health insurance exchanges were set to open nationwide, the Obama administration quietly made an unusual decision to expand its contract with Serco, a health care data entry company.

The company's existing $114 million deal, which called for the company to process 6.2 million paper health coverage applications under the law, was topped off to the tune of an additional $87 million. The company had already promised to hire 2,000 workers to fulfill its contract duties. The added funds would probably mean hiring even more.

Why would the Obama administration, on the verge of launching a nationwide system for online insurance sign-ups, decide to spend so much more money on paper processing at such a late date? A few days later, the likely answer became clear: Practically speaking, the federal exchange system covering 36 states didn't work at all. It took another two months to get the system online and usable for most customers, during which time Serco could presumably process whatever paper applications came in.

But by December, the consumer face of the federal exchange was operating relatively smoothly. Not every problem was fixed, especially on the insurer end, but consumers who wanted to submit electronic applications could generally do so.

Serco, meanwhile, kept manning its paper processing centers. Indeed, it still is. But according to one processing center employee in Missouri, nothing is happening. Nothing ever happens anymore.

"The main thing is that the Data Entry side does not have hardly any work to do. They're told to sit at their computers and hit the refresh button every ten minutes—no more than every ten minutes. They're monitored to hopefully look for an application." the unnamed employee told KMOV-TV in St. Louis. "Their goals are set to process two applications per month and some people are not even able to do that."

It's always good to have something to hope for. Maybe one special day hitting that refresh button will actually pay off, and an application will appear, as if by magic. But for now this sounds like the Waiting for Godot of government contractor jobs. At this point, with Obamacare's open enrollment and special enrollment periods closed, the trickle of new paper applications has to be pretty thin. But Serco gets paid for every worker on the clock, so workers keep showing up and hitting the refresh button every 10 minutes—but not more often than that.

When stories about tax-funded workers who don't do any work show up in the media, there's often a partially-in-jest debate amongst libertarian types: Considering the alternative—that they do something that contributes to government's problems—isn't it better that they sit around and do nothing? In this case, because Serco's data staff aren't government employees, there's an even better alternative: Cancel the contract and stop paying for outside services that clearly aren't needed. The company's Obamacare contract is worth at least $1.2 billion over the next decade, according to The Washington Post, and its British parent company has been in trouble for shady practices before, when an investigation found that it had overbilled the U.K. government by "tens of millions of pounds." Sounds like, contrary to the Obama administration's approach, we could use less of Serco's services rather than more.

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  1. You know who else had to push keys on a keyboard at set intervals of time?

    1. Homer Simpson’s little mechanical bird?

      1. Dam fine, Schweizer, dam fine.

    2. Desmond Hume?

      1. I’ll process your application in another life, brotha.

      1. Oh, good one!

        + warp factor 5

      2. I don’t think he satisfies the “set intervals of time” part.

        1. I dunno, maybe he does. Someone should watch the entire series at once, measuring the intervals between him pushing buttons on the helm.

          1. This sounds like work for one of our interns. Did I mention we need to get some interns?

    3. Herbie Hancock? NO! Wait…George Duke (RIP)?

      No, I know – Chick Corea? Umm, wait – no – RAMSEY LEWIS! Yes!

  2. Palin’s Buttplug?

  3. You know what part of the story makes the least sense?

    The fact that the contractor is keeping the extra staff.

    Why not fire all the staff and increase your profit?

    Unless…it’s a cost-plus contract.

    1. Some contracts specify that you have to have so many employees doing a certain function. So they may be contractually obligated to have X number of employees.

      1. Considering the administration’s focus on “shovel-ready” jobs, I wouldn’t be at all surprised if this were a requirement.

        1. Remember, jobs are an end result, not a cost!

    2. Contractors bill the government in man hours.

  4. I had a job like that. The CIO quit and my client-boss (I was a staff-augmentation contractor) decided he wasn’t going to do anything until a new CIO came in. Not even let the inertia of the department carry on. Also, the IT department was shitting all over “non-job-related internet use”. I read a bunch of novels. And Wikipedia. And then went back to school and did homework. I still only lasted two months before I quit. Turns out that doing nothing for eight hours in the same chair is too hard for me.

    1. My first job out of college was the same thing. A DOD contractor Murtha fraud job in Johnstown PA, AKA Floodmethtown. There was a big banner on the wall proclaiming us to be a SOFTWARE CENTER OF EXCELLENCE. We produced no software. My job was to collect a paycheck and sit on my ass.

      I played a lot of Rome: Total War and looked for other jobs on company time. I eventually stopped coming in before noon. No one cared. Everyone started to quit, and we began having weekly Please Don’t Quit meetings. We were exhorted to stay For The Troops. When I finally quit, it was the last straw for my boss’s bosses. My boss suffered the ultimate penalty: he was promoted to a job with no responsibilities.

      I lasted just slightly less than three months. To this day, the memory of when John Murtha came to talk to us about For The Troops chills my blood. I sat quietly and didn’t throw one rotten tomato or dead cat at him. I’ve never been so ashamed of myself.

      1. You should have used that time to write some dungeon porn. Murtha could have been a character.

      2. Hahaha you worked at CTC?

        1. It doesn’t sound like he worked there.

        2. DRS. “Worked”. It was educational.

          1. DRS. Hmm, not familiar with it, but I know there are a pile of people in Johnstown living in nice gated houses with heavy security systems who have grown fat on the Murtha pork. There’s a guy near my mom’s house that has a fricking compound worthy of a U.S. embassy (but better guarded than Benghazi). I used to go to church, many years ago, with a family named Kucera or Kuchera that made fucktons of cash making circuit boards for something, probably avionics for missiles.

    2. My job can be like that… interspersed with moments of sheer anxiety…

      so it’s either feast or famine – and rarely anything in-between. The only reason I stay here is for the flexible schedule which allows my wife to have her law practice and one of us can be home to be there for the kiddo.

      1. I’ve never been side-lined for two months before. Sure, two weeks of very little to do, two months of desultory work, but never two months of literally telling people that I couldn’t work on their issues.

      2. Mine is the same….panic/calm/panic/calm/panic/calm. If I comment here more than one day running, you know it’s a calm.

    3. When I was in college I had a engineering internship with a DOE contractor on a construction site once 20+ years ago. There was a vehicle pool for the site, but our group had a truck of our own. In order to keep the truck and not release it to the vehicle pool we had to prove that we needed it. We supplied that proof by putting miles on the truck. Yes, that was my job – once a week to spend the bulk of the day just driving around the (330 sq. mile) area putting miles on the truck.

  5. So who in Serco went to school with who in the Administration? I’m guessing the CEO with Michelle.

  6. An administration about nothing.

    1. I tell ya Jerry, it’s government GOLD, Jerry! Government GOLD!

  7. Good work if you can get it.

    1. Not really. Not having anything to do but having to be there is torture.

      1. I once had a 10 week internship at a pharmaceutical company’s manufacturing plant. It turned out they wanted me to process a bunch of Excel data they had about quality stuff. I got sick of that by lunchtime, so I spent about a day writing a VBA script that would process it for me. Then I spent about 5 minutes running it on all the files they had given me.

        It turns out that data was all they wanted me to do all summer. The next 9.5 weeks were awful.

        1. It turned out they wanted me to process a bunch of Excel data they had about quality stuff. I got sick of that by lunchtime, so I spent about a day writing a VBA script that would process it for me. Then I spent about 5 minutes running it on all the files they had given me.

          So you were too smart to be an Industrial Engineer?

        2. I use excel VBA to improve my efficiency all the time, and then with the extra time I’ve made myself, I split part of it into doing more work, and part of it goes to additional blog reading time. 😛

          The internet isn’t going to read itself, afterall!

          1. Unfortunately that place had really tight internet controls. I did end up reading multiple Dune novels that summer.

        3. This is when you use the company’s time and resources to teach yourself a new skill so you can get a higher paying job elsewhere.

        4. Be happy you didn’t work anywhere near me.

          “Oh, you know VBA? And no one else is giving you anything to do? Enjoy your next 9 weeks as my slave.”

          1. That would have been a lot more enjoyable.

      2. You mean like how Warty keeps you in that kennel 22 hours a day?

        1. It does hit close to home, it’s true. But he gave me a wheel to exercise on. He doesn’t want me fat.

      3. Actually, isn’t this pretty much the definition of prison?

        1. Prison ain’t so bad. You can make sangria in the toilet. Course, it’s shank or be shanked.

          1. Of course! *cries*

      4. I used to lifeguard at a gym. I would have shifts that could last 6 hours where I was the only one on duty, with just intermittent bathroom breaks and a lunch break. No one ever need rescued. It was just geriatrics and annoying kids. My mind went to some shockingly dark places after a couple hours of that…

        1. I used to lifeguard at a YMCA in rural Indiana. Same experience. Sometimes hours without a swimmer. I just swam laps to kill time. Man I was in shape.

          I’m going down to the beach and take a swim.

        2. When I was lifeguarding I wasn’t supposed to do anything but watch the pool if there was a single person in it, but that was so boring I’d still read while checking on anyone in the pool every few seconds.

          1. Same here. Now summer outdoor lifeguarding — man, that was a nice job. More people, more frequent breaks, hot coworkers, working noon–8pm all summer long. In some ways that is still the best job I’ve had. Of course, someday skin cancer will eat me alive. I used to bet on someone finding a cure by that point. Fuck you Obamacare.

  8. See how this private corporation wasted all that money?

    *Now* will you admit we need single payer?

  9. This government is all about paying people to do nothing. By the million. What’s a few more?

    1. And then they discovered there actually were a couple hospitals that were fully staffed but had no patients. NHS for the win.




        1. When did the comments section here become the parrot sketch writ large?

          “No, no, he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!”

  11. Peter, I hope you have a gig lined up at Reason for when the kinks are all ironed out of the ACA. You have covered its sorry-ass rollout well though.

  12. Hmmm…

    – Employees collect government-funded paycheck to make government work less efficiently?
    – Employees leak news story about how inefficient government can be?
    – Employees sit in front of a computer all day with nothing to do but surf the internet?

    Wait a minute…is the entire Reason commentariat working for Serco?

  13. I imagine this happens on the rare occasions when an application actually needs to be processed.

  14. Employers only exist to hand out paychecks on Friday. Productivity and value added are right wing nutjob myths.

    This is the feelgood success story of the week. The Campaigner-in-Chief should definitely have a big event there. With banners. Lots and lots of banners.

  15. Well, no body said to whom “affordable” applied.

  16. When I was installing an intercom system in a MS public school, I remarked to the principal that late at night, some lights were still on in classrooms. His answer is that if their electric bill was too low, they would get LESS govt. money budgeted the following year, so that is why the lights were left ON!

    There is no hope, with govt!

  17. Where in the Constitution does it allow for the Government Socialization of Medical Insurance?

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