By Francis M. Miller
We are now at a crossroads in the implementation of Obamacare. The exchange can either continue to promote a fantasy version of what recently happened or it can double down and make real, substantive changes.
The recently published feel-good statistics suggest the focus is on pay raises and bonuses for the staff. If the legislative oversight committee and the board buy it lock, stock and barrel, little change will be forthcoming.
Right now Connect for Health is flush with cash. It has one last, best chance to make programmatic changes before the candy bars in their backpacks have been consumed. Once the exchange is dependent on its new austerity funding source, administrators will be down on the 16th Street Mall with begging cups.
So, where should they focus? First order of business should be to rename the organization Disconnect for Health. The linkage between the advanced tax credits and Medicaid should be severed.
PEAK is hopeless and cannot be reformed. If an application suggests Medicaid, ship it over to PEAK and be done with it. If the stated income is above the thresholds, process it as an ACA subsidy and let the IRS discipline the person if he has overstated the situation.
It strikes me as bizarre that the exchange administrators could have spent millions on systems design and come up with a 27-page application form. Are they serious?
Ivy League colleges such as Harvard, Cornell and Princeton use the Universal College Application form and it is only six pages long. If you really focus on what is necessary to enroll someone in an insurance plan, a well-designed form should be no longer than three pages. Ideally one page.
The fishing expedition being carried on by government with the idea of building a big data warehouse is absurd. The board of directors and executive director of Connect for Health should be held accountable for this disaster. It takes more work to design a one-page form than a 27-page form. This is sloppy thinking.
The issue with the form is a microcosm for the larger problem. There are dozens of process flows that need to have their wrinkles ironed out. Poor process flow leads to excess telephone calls, which jam the system and frustrate users.
For staff members to assert that they had 99 percent uptime and availability when the outside world was put on hold for hours on end suggests someone just doesn’t get it. Connect for Health can’t measure the number of people who simply would not call or hung up because they refused to be humiliated by the petty tyranny of a poorly designed system.
Twenty years ago it became obvious that most in-house designed software projects were doomed. Innovations in hardware and operating systems had simply outpaced the ability of most organizations to design and program. So, vendors and consultants responded by coming up with parameter-driven software that the user could implement.
The problem was that this software was not amenable to customization and it lacked an interface with the humans in the organization who compensated for what the system could not do.
Organizations managed by non-system bureaucrats eliminated their in-house professionals and turned to system integrator contractors. Systems were installed and vendors were paid, but the state of the art did not really advance. This perversion in management thinking is what led to mega-failures like CBMS (the notoriously problem-plagued Colorado Benefits Management System).
On the surface, it appears that exchange managers did what would reasonably be expected. They took a couple of hundred million dollars and put the project out to bid. They contracted with a large vendor that no one would dare to criticize to “design-build” their software.
But, that also turned the exchange staff into purchasing agents and procurement officers. They became spectators. When amateurs oversee experts and hold money in the sway, it always creates a tension-filled, hostile co-dependency with the vendor.
The Hopi Indians call it the “blind” following the “paralyzed.”
If the software has problems, Connect for Health can hold back payment. But, then CGI will cease to make changes or deliver the product. This is what happened in Oregon with Oracle. It inevitably leads to legally imposed solutions.
It’s really a pissing match where in the end only the attorneys will get what they want. But, it did something else even more profound.
When an organization de facto becomes a mere pass-through for other people’s money, it creates a different kind of organization.
Connect for Health simply cannot design or build anything with its staff. Oh sure, it can prepare specifications based on federal rules and it can work with outside attorneys on contracting. It can serve as a liaison with the contractors and send them checks through the accounts payable system. But, it is not a systems architecture firm.
It does not have the capability to perform detailed design-build or system integration tasks. It lacks the requisite skills to do much more than use Microsoft Office to prepare the year-end report to the General Assembly. It is impotent.
To build an organization comprised of highly skilled people in the modern technological world is the trade stock of organizations like Amazon, Google, Facebook, Apple, Federal Express, UPS or Hertz. These organizations derive a force-multiplier effect from their technology. It is at the heart of their success.
Amazon simply would not have allowed a debacle such as occurred with the exchanges because it would go out of business. Amazon doesn’t have subsidies and penalties as a carrot and stick to create a false demand for its services.
Amazon and its kindred spirits must add real value to the market by lowering per unit costs and making things more convenient. Their customers must feel and see a value proposition that is real and voluntary, not imposed.
It is the opposite effect of what Connect for Health and its sorority sisters have created. The voters as parents of these children have allowed them to come of age ill-equipped to survive on their own. They will likely perish or become financially dependent on subsidies from us.
Two hundred years ago, Ralph Waldo Emerson said that a great organization is the long shadow of a single man. If you look at GE, it is the shadow of Thomas Edison; Ford Motor, the shadow of Henry Ford; and Apple is the shadow of Steve Jobs.
The exchanges are the mud children of companies like Accenture, Oracle, CGI and Deloitte. They are the lengthened shadow of a committee of bureaucrats and a confederacy of dunces. They have demonstrated an immense ability to spend vast amounts of money, all the while creating substandard websites and service organizations.
We know that insanity is defined as doing the same old thing over and over again, hoping to get different results. Organizations rarely change unless governance informs management and the organization’s composition is reconstituted.
Boards of directors have a tendency to engage in social and political masturbation. They hire executive directors who carry out their will in return for large salaries. In turn the executive director surrounds herself with equally overpaid mandarins who carry on without really questioning. Lacking an externally imposed force to create a discontinuity in the stream of consciousness, little changes.
These organizations rarely succeed and eventually complete their life cycle without acclaim. Something else has to be conjured up to replace them.
Obamacare is profound in its implications. It will change the landscape of the health care market. It will not be repealed, but it will be changed at the margins.
We have only seen the first in a round of legislative acts and rules-making. The states have a huge stake in Medicaid and they regulate insurance. Once they figure out they have been duped, they are sure to weigh in.
Health care represents the biggest sector of the economy, more than education, highways and defense. A never-ending series of ripples in the system will create unintended consequences.
I surmise the exchanges are transient organizations, like some biological species unable to survive the long haul. They simply do not have the expertise and requisite skills to do what a dynamic, technologically-driven market demands.
In the end, the insurance companies and employers will conspire to create private exchanges that will eclipse what we now see as public organizations. Or, maybe unseen entrepreneurs like Bill Gates or Steve Jobs will emerge and seize the day.
We can only pray.
Francis M. Miller is the past president of the Colorado Business Coalition for Health and the vice chairman of the Colorado Health Data Commission. He founded the first consumer cooperative for health care called the Alliance and is the current president of Health Smart Co-op.