Sebelius testifies on federal health insurance exchange ‘debacle’

Published: October 31, 2013

CONGRESSContract AwardsEOPHHSHealth CareHealth ITPolicy and Legislation

In a much-anticipated Capitol Hill hearing on Wednesday, Secretary of Health and Human Services Kathleen Sebelius testified before the House Energy and Commerce Committee on the failures of the federal health insurance exchange website.
The hearing, which veered far from the infrastructure of the website to the larger structural failures of the Affordable Care Act, took on a predictable tenor with incredulous Republicans grilling the defensive former governor of Kansas, as her fellow Democrats on the committee took a more conciliatory tone. For anyone who has been following the Obamacare saga, the secretary’s testimony offered limited new information. Here is a synopsis of what we learned at yesterday’s hearing:
  • The buck stops with Sebelius, as she advised both Congress and the American public to hold her responsible.
  • The secretary found the entire website experience a “miserably frustrating … debacle,” for which she apologized to the populace while advising them that no delay in enrollment is necessary as the website is fixable.
  • Sebelius believes that when it is judged “by any fair measure,” the Affordable Care Act is working.
  •  Privacy and security concerns are legitimate and are being addressed by the fix currently underway for the website. 
  • HHS spent $118 million on the contracts to develop the website, with another $56 million in IT spending to support the website.
  • HHS has a total obligated contract in the amount of $197 million with CGI through March 2014.
Aside from those above, one more revelation seemed to expose the root of the website’s problem. The secretary reported that QSSI was brought in as the systems integrator after the website launched. Sebelius reported that the company had done excellent work with the Federal Data Hub and she believed it would repeat that performance in fixing the structural problems plaguing the system. This begged the question: Who was the system integrator in charge of the project during the run-up to the exchange launch?
Sebelius revealed, after intense questioning from a Republican congresswoman, that a team from the Centers for Medicare and Medicaid Services (CMS) operated as the system integrator at the time of launch. The team, headed by CMS Chief Operating Officer Michelle Snyder, was quite obviously deficient in this role and was rightfully replaced by a proven contractor.
Analyst’s Take
Politics runs rampant in any discussion of the Affordable Care Act. As one of the most sweeping and contentious pieces of legislation in modern history, this comes as no shock. In the nearly five years since insurance reform became a topic of conversation, not a single elected Republican on the national level has expressed support for the ACA. Some provisions have gained Republican approval in the states, but the thrust of one-half of the political system has clearly been to scrap the law and start over.
Enter October 1, 2013. The website launch was a bust. Millions of individuals with insurance on the individual market realized, as the Fact Checker Column in the Washington Post points out, that they could not in fact keep their plans. With that as the backdrop, it is no wonder that many lawmakers are out for blood. Still, through all this noise emerge concrete lessons for governments and vendors alike.
  • The alignment of system implementation deadlines around a political calendar often hinders success. Since the passage of the law, the vendor community knew the deadline for exchange implementation on the state and federal level was unrealistic. Yet, absent a more plausible explanation, it seems politics dictated a steadfast deadline of October 1, 2013, for the exchanges to be operational. 
  • The micromanagement of the website launch by the CMS team, ostensibly unqualified for such an involved task, was a poor move with such tight deadlines. Though needing more time for an excellent product delivery, the private sector could have grudgingly met the stringent deadline with, at the very minimum, a functioning website. 
  • The criticism of the cost of the contracts to implement the website has gained traction only because it doesn’t work. Had the website worked on day one, those who criticize the amount paid to vendors for the build would have been neutered by the success of a signature feature of the ACA. The large amount of taxpayer dollars required to build such a complex infrastructure is understandable only if the infrastructure is a success. Absent that success, greater spending scrutiny occurs from politicians and journalists to accentuate tales of failure. 
Finally, it is clear the website will be fixed, eventually. The question becomes: To what end does all this bad press prevent the overall success of the ACA? From the perspective of state government, it seems clear that this debacle is not going far to convince the reticent majority of governors who rejected a state-run exchange. As time goes on, we will see if those leaders will use the federal experience as a warning shot of the perils inherent in implementing a flawed system, or as inspiration for how not to proceed as they take up the exchange mantle.