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Why Healthcare.gov Broke: Two Competing Story Lines

Inside the Obama administration, political considerations slowed development of the health care exchanges. Or was it a blanket of Republican opposition around the country?

This weekend brought more than a modicum of clarity to what happened behind the scenes in the run-up to the Oct. 1 launch of Healthcare.gov.

In a devastating story, Amy Goldstein and Juliet Eilperin of The Washington Post dissected how politics trumped policy when it came to the Affordable Care Act. In two key paragraphs, they wrote:

Based on interviews with more than two dozen current and former administration officials and outsiders who worked alongside them, the project was hampered by the White House’s political sensitivity to Republican hatred of the law — sensitivity so intense that the president’s aides ordered that some work be slowed down or remain secret for fear of feeding the opposition. Inside the Department of Health and Human Services’ Centers for Medicare and Medicaid, the main agency responsible for the exchanges, there was no single administrator whose full-time job was to manage the project. Republicans also made clear they would block funding, while some outside IT companies that were hired to build the Web site, HealthCare.gov, performed poorly.

These interwoven strands ultimately caused the exchange not to be ready by its Oct. 1 start date. It was not ready even though, on the balmy Sunday evening of March 21, 2010, hours after the bill had been enacted, the president had stood on the Truman Balcony for a champagne toast with his weary staff and put them on notice: They needed to get started on carrying out the law the very next morning. It was not ready even though, for months beginning last spring, the president emphasized the exchange’s central importance during regular staff meetings to monitor progress. No matter which aspects of the sprawling law had been that day’s focus, the official said, Obama invariably ended the meeting the same way: “All of that is well and good, but if the Web site doesn’t work, nothing else matters.”

The Post also posted online a May 2010 letter written by David Cutler, a Harvard professor and health adviser to Obama’s 2008 campaign, to Larry Summers, director of the White House’s National Economic Council. In it, Cutler wrote:

My general view is that the early implementation efforts are far short of what it will take to implement reform successfully. For health reform to be successful, the relevant people need a vision about health system transformation and the managerial ability to carry out that vision. The President has sketched out such a vision. However, I do not believe the relevant members of the Administration understand the President’s vision or have the capability to carry it out.

Another piece worth a read: “What’s Really Obstructing Obamacare? GOP Resisters,” by Michael Tomasky of Newsweek/Daily Beast. Tomasky writes that while media reports have focused on the problems of Healthcare.gov, not enough attention has been paid to the efforts by Republicans to obstruct the law. He wrote:

All across the country, Republican governors and insurance commissioners have actively and directly blocked efforts to make the law work. In August, the Obama administration announced that it had awarded contracts to 105 “navigators” to help guide people through their new predicaments and options. There were local health-care providers, community groups, Planned Parenthood outposts, and even business groups. Again—people and groups given the job, under an existing federal law, to help people understand that law.

What has happened, predictably, is that in at least 17 states where Republicans are in charge, a variety of roadblocks has been thrown in front of these folks. In Indiana, they were required to pay fees of $175. In Florida, which under Governor Rick Scott (who knows a thing or two about how to game the health-care system, you may recall) has been probably the most aggressive state of all here, the health department ruled that local public-health offices can’t have navigators on their premises (interesting, because local public health offices tend to be where uninsured people hang out). In West Virginia, Utah, Pennsylvania, and other states, grantees have said no thanks and returned the dough after statewide GOP elected officials started getting in their faces and asking lots of questions about how they operate and what they planned to do. Tennessee issued “emergency rules” requiring their employees to be fingerprinted and undergo background checks.

America, 2013: No background checks to buy assault weapons. But you damn well better not try to enroll someone in health care.

I suspect in the weeks ahead, we will see more reporting on both story lines: how the administration mismanaged the rollout of the law and how Republicans have tried to ensure its failure. But let’s not lose sight of consumers, whose lives will be directly affected by the act and what’s happening now.

It will not be completely broke, until they find out the young kids are paying the penalty instead of the fine. $95 vs $2000 for someone who maybe goes to the doctor once per year.

Most people under the age of 50 only need catastrophic coverage, because they are not chronically ill.

George Schwarz

Nov. 4, 2013, 12:41 p.m.

Also flying below the radar is one of the firms contracted with to work on the website, CGI, got money from Rick Perry’s technology fund. How do we know Perry didn’t also pressure them to sabotage the website?

http://www.texastribune.org/2013/10/25/perry-backed-company-behind-federal-exchange-websi/

Charles Lo Presti

Nov. 4, 2013, 4:08 p.m.

Two stories: Flawed IT implementation, and obstruction and possibly sabotage.

How about the backstory?  ACA is a politically expedient kluge, and a giveaway to insurance companies.  It does little to contain health care costs.  The good things about the ACA is that it gives us some essential consumer protections   But the consumer protections could have been enacted separately early on with a lot less fuss and bother. 

I do hope we can replace ACA with an effective single-payer system, along the lines of Medicare for all, which also treats medical care providers fairly, implements tort reform, and either preserves or eliminates the need for the consumer protections.

Wallis parnell

Nov. 4, 2013, 5:05 p.m.

Bush yesterday called Rick Perry, a chickens—t, of a little man.
If a war criminal hates Perry, doesn’t say much for either of them.
LOL…. Of course, most half intelligent people in this country, already knew this about both of them.
Nice to have it in the open now. Seems, any ACA problems, may be blamed on th GOP.
Remember this in the next 2elections. The GOP, is not an American representative party, it’s a parasitic bunch of chickens—t white hacks.

Bruce J Fernandes

Nov. 4, 2013, 5:17 p.m.

Charles,

I have worked as a CPA specializing in healthcare for 33 years.  I no longer have any healthcare clients because all of my clients had to merge with bigger entities or else face extinction.  So I no longer have anything in the game and can simply respond based upon my many years.

Medicare has been systematically cutting back payments to providers since 1986.  It started with a new charge system for nursing homes called DRGs (diagnostic related groups) and continued into all areas of healthcare.  Long and short, provider payments have gotten so low that many doctors are forced to curtail treating Medicare patients.

Fortunately, the big health systems like Kaiser in CA, SMA in NV and many others in most of the states will continue to treat Medicare patients but they are of a size and scale they can survive on lower payments.  Kaiser and SMA have a common thread of being both the insurance company and health provider and that will be key for high quality care for seniors under Medicare.

But to suggest that single payer will work is not realistic.  And to suggest medical providers are treated fairly is not true.

There are a lot of Medicare patients in a lot of states where they do not have this characteristic of a Kaiser or SMA in their state.  Retirees in these states have a difficult time finding providers that take Medicare patients.

You say you want an “effective single-payer system”?  Then the government should contract with these mega-providers like Kaiser and SMA that are also their own insurance providers.  The government can contract with all of the other “Kaisers and SMAs” in as many states as they exist as possible and then encourage such a setup of mega providers in states that do not have these kind of mega-providers who are also their own insurance operations.

But to suggest that government can set up an effective single-payer system….. not possible.  Keep in mind that European systems had the origins of their single-payer systems out of the immediate aftermath of WWII when Europe was in a shambles.

In the US, our government is in a shambles and in no position to assume any new responsibilities.  If Kaiser had been asked to set up this website for ACA.  I can guarantee you it would be working to the full specification on day one and would have been rigorously tested and I know that because I know people who worked on Kaiser’s internal systems for years and they do things right.  When you hear how stupidly ACA was launched you realize you can’t look to the government to effectively run a lemonade stand.

Charles Lo Presti

Nov. 4, 2013, 8:11 p.m.

Bruce Fernandes, your views need to be heard.  Thank you for posting to educate us about this stuff.  I wonder if your approach with mega-providers was considered even a little bit when the ACA was proposed.  Part of the problem may be that health care is not a commodity in the same sense as apples and pork bellies, that is, demand is inelastic (pay any price, not the “efficient” price), and so market-based solutions therefore don’t work well.  My guess, and I do not know the history, is that Medicare was trying to hold the line on costs by initiating its cutbacks after 1986.  We see how that approach has been going down.  And I suppose we got this kluge - the ACA - precisely because the US government today is indeed a shambles.  There’s gotta be a better way.

If we’ve learned anything from this entire episode it is that most people who demand single payer have no idea how it is actually structured.  They use it as a generic term for walking in, receiving medical treatment and not having to go broke to pay for it.  They barely understand our existing system.

I would not trust their judgment when it comes to deciding which system would actually be best for our country.  That’s a decision that should be based on extensive research into the different models, as well as careful consideration of the effort involved in transitioning from the system we have now.  We are not starting from scratch and face a very large transition.  I have no confidence that our federal government has the ability to handle such a move at this point.

Gun background checks have no relevance to insurance “navigators”.

Hundreds of thousand of highly intelligent people have not been able to find what is the best ACA policy for them. Should we not get even the most rudimentary information about the navigators who will help people make that choice?

Do you approve of disgraced, dishonest community organizers from Acorn again advising poor people on how to cheat the government. It is clear that the purpose of navigators ( unilaterally created by the Democrats who passed the law) is to get as many people as possible enrolled. In this chaotic situation there will be little time and effort to
weed out mistakes in advising or fraudulent enrollments. A semblance of oversight is certainly warranted.

I’d love to say that Kaiser is the answer, but the reality is that in Oregon, they are one of the most costly health plans here. A “non-profit, integrated” plan that has been here since the 50’s… and yet it can’t seem to make health care affordable!

The secret sauce for insurance companies is the new medical loss ratio (MLR) equation. It’s supposed to measure administrative efficiency—the higher the MLR, the less administrative waste (if you will). Divide claims by premiums. >80% for small businesses and individuals; >85% for large businesses—unless they were grandfathered by the Affordable Care Act (ACA).

In the era of the loophole-ridden ACA, EHR is the DNA inserted in the healthcare delivery system. EHR = electronic health records.

The costs of EHR is expressed in the numerator of the MLR… because, after all, we will derive “meaningful use” from all the integrated data! From there we will see all the value added, measurable in much better outcomes!!! That the costs of of BIG DATA puff up the numerator as EHR (rather than count as administrative) recklessly shifts our care from doctors to computers. Viva virtual health care!

To make matters worse, the MLR does not account for cost-sharing (co-pays, deductibles and co-insurance).

We must take “personal responsibility” for our care with higher out-of-pocket costs—many of which are off-the-books. For example, you might be forced to buy a cheap bronze plan because its the only one you can afford. If your premiums costs are less than 8% of your income, you are mandated to buy it.

The bronze plans are an actuarial shift of the cost of care. 40% of the cost of care is borne by the insured member.

That plan may not include many doctors. Those out-of-network doctors will probably not count toward your out-of-pocket maximum.

It would make far more sense that the MLR denominator be the sum of premium (including federal subsidies) and cost-sharing. Then it would be a better calculation of administrative waste.

Advertising the exchange as a “marketplace” where you can compare apples to apples is nonsense. You need to look at the fine print of your plan for all the “essential benefits” and coverage. Try getting that before December 15th.

The (Un)affordable Care Act is a disaster! The Ds should do all they can to distance themselves from it. They risk getting trounced in November when former Ds like me will vote for the independent progressive who wants single payer.

Alfreda Weiss

Nov. 5, 2013, 2:10 a.m.

Instead of the media jumping all over the new law with planted misinformation, some reporting in Kentucky shows the law is working well.  This is a state led by a Governor who wanted the law to work and had the support he needed.  California is also working well.  As usual the red states did all they could to sabotage the plan including dumping their exchanges on the government at the last minute.  The health care cartel rushed to sign up those who could not continue their junk insurance before they could access the new plan and shop.  Our health care system is inflated 50% over other countries due to the profit motive.  “Medicare for All” will someday work, but cutting out 50% immediately would have bankrupted the existing system.  Or Republicans can gain power and make sure only the special people have health care while the elderly,sick and poor magically disappear.

To the author

Excellent snide parting comment that completely tarnishes a quality piece of reporting. Way to set aside personal bias and keep the reporting focused and clear.

To all,

Where in the Constitution does it say anything has to be affordable, and how do things become affordable, when we move from bleeding edge technology to bleeding edge technology.

America can provide a basic level of Healthcare for all, that level, however is the 1980’s level of care, not a 2010’s level of care, with all the latest bells whistles, procedures and treatments.

Alfreda Weiss

Nov. 5, 2013, 3:57 p.m.

I have had two friends in the UK for 40 years.  One is doing well on stem cell treatment.  In contrast I rarely allow myself health care afraid of putting a condition on my record that would be grounds to kick me out.  Even on medicare my max for co-pays is $6000 on my gap insurance.  Not affordable for me, but I will run it up to the edge and accept I will be thrown under the bridge.  They think the US always puts money and profit over people and they are correct.

Single payer is viable and becoming a clearer option. Why? For the first time, the ACA has exposed ‘true’ medical costs to consumers. And now for the firs time, consumers can compare the ACA insurance company system with single payer, dollar for dollar. For example, if your monthly ACA payment is $700, getting the same coverage under single payer would be 30% less, or $480.

Single payer would also eliminate Medicaid and Medicare as these would no longer be needed.

Single payer doesn’t eliminate private insurance. Gap coverage provided by insurance companies is available today, and will be so into the future.

Seems to me that the convoluted way ACA will work is not efficient or practical, and over time it will have to simplify the ‘formulas’ for healthcare. Which really means moving closer to single payer. Meaning, take the profit motive out of healthcare. You know HC is the most expensive in the world in the US, and ranked 37th by the WHO last time I looked. After Nicaragua, as I recall.
I’m so jealous of the Euros in the movies I watch- ‘girl with dragon tattoo’ for instance; people get hurt/go get fixed and just stop at the window as you leave. In the US, you stop at the window as you enter, bleeding. And you stay there… unless of course you have coverage, or work for the military, or are a member of Congress. I hyperbolize, but it’s the truth.