One Lesson of Obamacare: The Government Isn't Good at Developing Software



One all-too-apparent lesson from the launch of Obamacare's health insurance exchanges last year is that the government isn't very good at building software technology.

The federal health exchange portal, HealthCare.gov, was essentially unusable for two months after launch last year, despite repeated outside warnings that the project was in trouble and repeated administration assurances that all was under control. The biggest issues on the consumer side of the system were at least temporarily patched by December, but much of the back end that communicates with and pays insurers remained—and remains today—incomplete. Insurers are using imprecise manual workarounds instead. Last week, the Inspector General for the Department of Health and Human Services reported that there were 2.9 million "inconsistencies"—situations in which the data hub was not able to verify submitted information, mostly regarding citizenship and income—in the applications sent to the federal exchange. The vast majority, about 2.6 million, remained unresolved.

It's not just the federal government. The state exchanges remain a mess. Some were never functional and had to be scrapped. And even those being held up as model systems, like Covered California, have problems. As The Wall Street Journal reports, thousands of people who purchased health coverage through state exchanges "still don't have coverage due to problems in enrollment systems. In states including California, Nevada and Massachusetts, which are running their own online insurance exchanges, some consumers picked a private health plan and paid their premiums only to learn recently that they aren't insured."

The experience overall with the exchanges has not been good. As The L.A. Times reports, even highly educated, tech-savvy young adults had serious difficulties using the site. In a study, researchers found that people between the age of 19 and 30 were often stymied by the system. When asked how it could be better, they said they'd like it to be more like commonly used, privately developed websites and applications—things like Yelp or TurboTax.

Obamacare's exchanges were not inexpensive projects, built on the cheap with skimpy resources. As of February, the federal health agency had budgeted about $834 million for the exchange. By the end of the year, it is expected to have spent $1 billion. That's relatively cheap compared to the price tag for all the state exchanges, which cost some $4.7 billion.

In contrast, the first iPhone—a marvel of usable, accessible design which, in addition to its hardware, included a brand new touch-screen operating system that spawned a slew of competitors and has now fundamentally reshaped Apple's business, the handheld device market, and millions of daily lives in its image—cost about $150 million to develop before its release in 2007.


This is obviously not a perfect comparison: Apple was building a consumer gadget, not a highly regulated, health-focused, government-run shopping portal; Apple wasn't coordinating and connecting multiple government agencies and insurer computer systems, nor was it relying on an army of outside contractors; and Apple was not building a product that, by law, had to launch and had to have certain specifications.

Even still, those difference are not quite so extreme as they might sound: Apple's project required coordinating with mobile carriers, first AT&T and then others, and, in the year after the first generation phone launched, building a unique platform (the app store) for a wide array of mobile software to sell their wares. And while Apple was not bound by law to complete the iPhone and make it a success, it had spent so much on development that it would have destabilized the entire company. It too was bound to complete its product. (And it's worth remembering that former HHS Secretary Kathleen Sebelius explicitly compared Obamacare's exchanges to the iPhone during the early days of the rollout.)

And at the same time, those differences also suggest the inherent advantages of the private sector. It's less restricted by bureaucracy and regulations, more flexible in terms of deadlines and partnership decisions, and able to do its work quickly and effectively in house. It is motivated by competition and by consumer demand. It's also, as a market leading company, able to hire the most productive and innovative workers, and pay them more. (One of the reasons why military R&D is generally more successful is that it takes place in a lab-like environment where project deadlines and specifications, not to mention political pressures, aren't always as restrictive as on a big domestic-policy project like the exchanges.) 

These advantages are built in, and while it's certainly possible and desirable to improve tech management and administration in the public sector to some extent, those advantages are never going to go away. It's never going to be a level playing field.

The trick, then, isn't to determine, as we have, that the government isn't very good at software development and put a lot of energy into trying to make it better. It's to recognize the government's limited capabilities and built-in disadvantages, accept them, and work to avoid project and programs that might require the government to play software developer. 

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    1. U mad, bro?

    2. I assume this? http://www.foxnews.com/politic.....tion-site/

      Oh, Republicans. There is a metaphor here.

      1. I should have figured you'd beat everyone to this.

    3. I think the GOP feels they don't win the white house without Ohio and they're probably right.

    4. Its perfect.

      Because you know the GOP is going to let us down. And I for one hope that this is the one last time.

      1. "You have failed me for the last time"!

        /Force Choke

    5. Are we taking bets on how many delegates Warty can fit in his basement rapetorium?

      Or would that be tacky?

      I think 11, 17 if he dismembers and applies some tetris skills.

      1. Provided a Christie type isn't included.

        1. With or without limbs attached?

          1. How about 7 with, and 8 without?

  1. Some great alt-text on this article, props.

    1. Can't see it on mobile. Care to share?

      1. Obama, walking a team of senior advisers through the process of opening a WoW account.

      2. Second picture: TOTALLY JUST PWNED THAT N00B

      3. Thanks guys, those are good.

  2. DOD seems to have a pretty good record at developing software. The lesson of Obamacare is that Obama and the people who brought into his administration are fucking morons who are not good at much of anything beyond smelling each other's farts.

    1. I've told everyone my story about working at the fake Murtha company, right? The DOD is sure good at paying people to pretend to develop software.

      1. Of course. But it does get done, even if it costs too much. That is more than you can say for Obamacare.

        1. There are real consequences if a jet fighter's avionics don't work. Planes crash, and even worse, politicians look bad. What's the consequence of Obamacare not working? Absolutely nothing, as we've seen.

          1. There is that. Kind of makes people live in the real world instead of fantasy world.

          2. What's the consequence of Obamacare not working? Absolutely nothing, as we've seen.

            Not true. Sebilius was forced to resign. Eventually. AND, she's been suffering ever since:


            Trigger Warning: don't read the blurb if you're eating.

            1. Oh ho ho. This is too good not to paste.

              Kathleen Sebelius was sworn in as the 21st Secretary of the Department of Health and Human Services in 2009. Her accomplishments include leading improvements to America's health and enhancing the delivery of human services to the nation's most vulnerable populations, as well as implementing the historic Affordable Care Act, which has ended the insurance industry's worst abuses and will help millions of uninsured Americans get health coverage. Sebelius served as governor of Kansas from 2003 until her Cabinet appointment. She also served for eight years as Kansas Insurance Commissioner and was a member of the Kansas House of Representatives.

          3. Wrong. The consequence is worse health care and more people dying.

        2. I think John is right. DoD software is more slow and expensive than it "should" be. But they don't lie to themselves and pretend otherwise. And it does eventually get there.

      2. The DOD is sure good at paying people to pretend to develop software.

        That's what I do all day.

    2. There have definitely been some real innovations to come out of military R&D, but that's a very, very different environment from the political process that gave us the exchanges: Here's a huge pot of money and no deadlines! Try to come up with something we can use!

      At the same time, from what I hear from people who work on this stuff, a lot of the large scale organization and resource management software is just a huge, sprawling mess, with outdated systems that can't be taken offline, constant glitches and headaches etc. About what you'd expect from a giant bureaucracy.

      1. Peter I actually work with govrenment data bases and information sharing. I could have told you years ago this wasn't going to work. And so could have anyone else who works in the field.

        The problem is that you can't change the code to make these databases compatable. All of them have real time functionality that can't be stopped and they are designed to do important things. The IRS databases cover the taxes of over a hundred million taxpayers. You can't just go in and change those to make them compatible with the HHS databases. If you can't change the code, then writing a program to make them talk to each other and cross index and such gets very difficult very quickly.

        1. Once they put a CCB in charge, it's over. When every miniscule change down to fixing a misspelled word must be deliberated by a committee, no work gets done. All the money is still spent, but the software may as well go into stasis because no one is allowed to work. No bureaucrat wants to approve changes that might cause something else to break, so nothing is approved. It's a fucking joke.

          1. That too. In fairness, if you were the nug in charge of the IRS database, how keen would be on fucking with your system to help out a bunch of political assholes at HHS? It is not like they are going to get blamed if something goes wrong.

            1. As a nug in a different department, supporting software on which Healthcare.gov depended, we did change things. We deferred maintenance. We generally observed enterprise-level change management processes to ensure a high-priority system rollout worked as well as possible. Government actually is one team, even if it doesn't always feel that way.

        2. Technical compatibility is the least of the problems.

          Even if by a few million miracles the technical problems were all solved in seconds for less than ten cents, there's still the fact that the system - in its basic design - makes no economic sense and is therefore doomed to fail anyway.

          Economic nightmares, if not mere technical nightmares, are God's way of telling you your idea is stupid.

          1. What he said!

      2. Well, the glaringly obvious solution is more funding. Duh.

      3. A relative works on a project that is related to the failed Oregon website and he was telling us it was a disaster really early in. He said that managers would talk to the tech people and the techs would tell them they can't do what they were asking for. The managers would tell them sanctimoniously "The governor has already decided this is what we're going to do." or "It isn't IT's job to say we can't do things." Every other person on my dad's team quit or took early retirement. BTW, my relative, lifelong Democrat, quit the Democratic party and has become quite the Ron Paul fan. I keep telling him, "No, you actually aren't a Republican..." We'll see where that goes.

    3. No. They have a pretty awful record.

  3. Is there anything other than force the government is good at?

    1. Beat me to it.

    2. They're not even good at force, they often get the target itself completely wrong, for one thing.

  4. Its only a lesson if you didn't already know it.

    And I think we already knew the feds are bad at software development.

  5. OT:

    Hey Reason, nothing interesting happening lately near the Southern Border?

    Or is it just an inconvenient time to hold the view that open borders has no negative consequences and is all cotton candy and balloons.

    1. I believe the response is 'Derp.'

    2. What's happening? Too lazy to google.

      1. Children's Crusade, Part Deux, La Raza Edition.

        1. Obama issued a press release today that they were going to be deported.

          I doubt anybody believed him.

      2. There are children sleeping in cages at the border. Somehow I think if a conservative was in office, this might be a bigger deal.

    3. Lonewacko was chased away long ago, if you're not him. I never understood why either, FWIW.

    4. It must be Reason's shoddy reporting, but I don't remember Congress repealing Title 8 or the massive layoffs at ICE/CBP.

    5. Mexican ass weed?

    6. Well, feel free to adopt a chunk of border and defend it to the death.

      We have these adopt-a-highway programs for litter, I'd think adopt-a-stretch-of-border would work too.

      Be sure to give us an update of your kill-count.

      1. "How can you kill women and children?"

        "It's easy, you just don't lead 'em as much."

    7. Don't you know that libertarians are for open borders? They are all thrilled. Dummies.

  6. As a lad I took a glance at some of the software source code to the Aegis combat weapons system. It was, at the time, written in an algorithmic language called CMS-2. The code was written by now defunct RCA, not the government. That's probably how most USG is developed. Anyway, the snippets of code I saw were stellar.

  7. One all-too-apparent lesson from the launch of Obamacare's health insurance exchanges last year is that the government isn't very good at building software technology.

    Squirrels that live in glass houses shouldn't throw stones.

    /I know gubmint vs private

  8. HHS subcontracted the exchange - not that they could have done it in-house anyway.

    When I worked in the business AMS was big in government contracts.

    In 1999, the state government of Mississippi terminated an $11.2 million contract with AMS to modernize the state's tax system and sued the company for $985 million in damages.[3] A jury awarded the state $474.5 million in actual and punitive damages in August 2000, causing a drop in stock price from 44 3/8 to 14. The company subsequently settled the suit for $185 million.


    1. So who wrote the contracts that didn't include massive penalties for failure to perform? It's never the government's fault, except when Team Red is in the White House, is it?

      1. I don't see how "I hired a bad contractor" is any better of an excuse than "I fucked it up myself".

      2. It is 100% the fault of HHS.

        Or in the case of Oregon's contract with Oracle it is fully the state's fault.

        Designing the RFP is probably beyond the competence level of government.

        1. Wow, I think that's the first thing you've ever said that I agree with.

      3. CGI, the HHS contractor, bought AMS by the way.

    2. http://en.wikipedia.org/wiki/A.....nt_Systems

      Oh! Oh! A wiki link! Could this be a post from turd?

      1. Conservapedia is pretty fucking lame, Sevo.


        I know you wingnuts need your own version of everything but they always suck (Fox News, Washington Times, Liberty University, etc)

        1. I don't know, FoxNews seems to be kicking the crap out of all of the other cable providers in ratings...oh, I forgot, you guys don't like to measure things in terms of outcomes. Speaking of which, did you hear that liberals suck at Obamacare? It's in the article.

        2. Not as lame as you, moron.

    3. Feds contract software projects out for two reasons: 1. lack of enough expert staff, and; 2. dumping a hot potato. In this case, I suspect both.

      CGI had on ongoing relationship with the Obama Whitehouse prior to being selected for the contract, and the strong rumor is that CGI was the only bidder entertained. Note, incidentally, that none of the big contractors that you'd expect to see got involved with this. No Booz Allen, no CSC, no Accenture. Just this one Canadian company with a reputation for missing deadlines and failing to meet contractual obligations.

      Funny. Almost like a perfect storm of an agency not wanting to tackle a project that was doomed from the start and a sub-standard contractor with ties to the Obamas. Surely a coincidence.

  9. One Lesson of Obamacare: The Government Isn't Good at

    1. ...most anything.

  10. Y.T.'s mom pulls up the new memo, checks the time, and starts reading it. The estimated reading time is 15.62 minutes. Later, when Marietta does her end-of-day statistical roundup, sitting in her private office at 9:00 P.M., she will see the name of each employee and next to it, the amount of time spent reading this memo, and her reaction, based on the time spent, will go something like this:

    ? Less than 10 min.: Time for an employee conference and possible attitude counseling.
    ? 10-14 min.: Keep an eye on this employee; may be developing slipshod attitude.
    ? 14-15.61 min.: Employee is an efficient worker, may sometimes miss important details.
    ? Exactly 15.62 min.: Smartass. Needs attitude counseling.
    ? 15.63-16 min.: Asswipe. Not to be trusted.
    ? 16-18 min.: Employee is a methodical worker, may sometimes get hung up on minor details.
    ? More than 18 min.: Check the security videotape, see just what this employee was up to (e.g., possible unauthorized restroom break).

    1. Y.T.'s mom decides to spend between fourteen and fifteen minutes reading the memo. It's better for younger workers to spend too long, to show that they're careful, not cocky. It's better for older workers to go a little fast, to show good management potential. She's pushing forty. She scans through the memo, hitting the Page Down button at reasonably regular intervals, occasionally paging back up to pretend to reread some earlier section. The computer is going to notice all this. It approves of rereading. It's a small thing, but over a decade or so this stuff really shows up on your work-habits summary.

      1. great stuff

        1. While I know there's no way they could do a movie right, I've always wanted to see Y.T. busting out of the Fed building on the big screen.

      2. There's a good movie in there somewhere.

        Who would you cast for Hiro?

        1. Steven Yeun wouldn't look bad in dreads. (Glenn from The Walking Dead.)

    2. What is this from? Sounds interesting.

      1. Snowcrash, by Neal Stephenson. I just finished Diamond Age (fantastic) and am reading Cryptonomicon. I'm normally a horror guy, but I dig Stephenson's style. He's a good storyteller, his characters are great, and he keeps things technical enough to be interesting but not too technical that he alienates non-geeks.

  11. Generally speaking - of course - the ERP software I've worked with all sucks to a certain degree.

    Most of it, however, has been around long enough that the major kinks have been worked out. We're talking decades here. Most of the add-on and additional modules are buggy too and require a few releases to clean up. Another reason not to upgrade to the latest version, unless it is one that has the needed fixes.

    I used to work for a small software house and you would not believe the garbage they put out the door. My department - customer support - had the task of fixing it all and making it usable in the real world. Somehow we were paid less than the programmers.

    1. I'm in a similar environment except I'm a p/a. I try to keep shit from going out the door but sales (and top mgt) insists on shipping before QA is 100% finished so they can say they met deadlines and get paid by the customer, especially their commissions and bonuses. If a customer complains they give 'em 40 free consulting hours.

  12. Making a check of $48500/month with online working,, you make money $81/hour from laptop in free time.My neighbour's sister has been averaging $15750/months now and she works about 20 hours a week. i make $13900 last month, it is realy easy and trustful ,

    ======= W?W?W?.?MONEYKIN?.?C?O?M?

    1. Your math is....fuzzy, anonobot. HHS says you are hired!

  13. "This is obviously not a perfect comparison: Apple was building a consumer gadget, not a highly regulated, health-focused, government-run shopping portal; Apple wasn't coordinating and connecting multiple government agencies and insurer computer systems, nor was it relying on an army of outside contractors; and Apple was not building a product that, by law, had to launch and had to have certain specifications."

    That's funny, most people have underestimated the difficulty in building the exchanges. Here you manage to overestimate it. While the exchanges are very complex it is a rather straightforward task. Building an entirely new computing platform with a new operating system and UI is actually far more complex.

  14. Apple was building a consumer gadget, not a highly regulated, health-focused, government-run shopping portal; Apple wasn't coordinating and connecting multiple government agencies and insurer computer systems, nor was it relying on an army of outside contractors; and Apple was not building a product that, by law, had to launch and had to have certain specifications."

    I would say its an excellent comparison, as the differences that you call out between Apple and the HIEs go a long way toward explaining the different outcomes.

  15. The government isn't any good at developing software because the government isn't any good at systems analysis.

  16. This is not news. In California alone, we've watched Westinghouse design the first buggy software for our mass transit system 'BART', the defective DMV system, our Court docket system (which is now unused) and many others. While working for Child Support Systems, we had to use 4 prior and 1 present system to follow cases, because none of them talked properly with the prior.

    However, remember, the Obamacare site was actually developed not by the government, but by private enterprise, as were all the above systems. It isn't that the government can't develop a good system, so much as they can't adequately get the hired programmers to produce a good system, and normally, these hired guns are down the road after their contract period expires, leaving the mess they made to be cleaned up by someone else.

    To fix this, we shouldn't hire 'refrigerator manufacturers' to produce our software (BART), nor an unproven program company in a market that it has no real world experience (Obamacare), and each company should be on the hook for free fixes after their contract expires..Then they might actually give a sh*t if it works properly or not.

    1. or we should plagiarize mercilessly from systems that are working properly. Boston, NY, and DC all have pretty good metro systems - anyone look at adopting their IT systems? How many court systems or child support systems are there in the country? why haven't those systems been adopted/adapted? Particularly in situations where many government entities (or health care, or transport, or...) there's a real responsibility to hunt down existing, working solutions.

  17. I'm still in shock that the O'care train wreck was ever allowed to get to the House floor.

  18. The government is no good at creating software. What exactly is the government good at other than to waste money, tax us to death, kill people all over the world and things like that.

  19. The private sector isn't very good at developing software either. Before the iPhone there were blackberries, palm pilot/treo, Newton, windows mobile devices, etc. etc. Most of the contenders can now be found on the digital scrap heap. iOS happened to have the right ethos, to meet the right hardware, at the right point in the market. Apple also doesn't get it consistently right - the Newton was an apple product. The Touch never got much uptake.

    One of the problems government has is the perception that it must get everything right, every time, the first time. Government has not left itself room to engage in the creative destruction of the market place - and if it did, then government would be harangued for 'waste and abuse'.

    So - a good reason for government to be small, cautious, and only intervene where absolutely needed. But not a reason to bash government as inherently evil - a reason to recognize the expectations we (collectively) place on government.

  20. I do not agree with the post saying that government is not good for making softwares.Check out some apps developed by professional app developers .

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