Arnold Kling on the problems with the health insurance exchanges

by on October 25, 2013 at 7:02 am in Law, Medicine, Uncategorized | Permalink

Somebody who had experience with creating a health insurance brokerage business would know that the systems problems are more complicated than just putting up a web site. In the background, the system needs to communicate with the systems at several government agencies and at the insurance companies. That changes it from a simple technical project to a complex, time-consuming, project involving business and technical staff.

You build a complex, mission-critical system through a process of continual negotiations among business units and technical people. You do not treat it as a procurement process. You cannot just write up a spec, put it up for bid, and parcel it out to dozens of contractors.

The development of the computer system probably would fall under operations, but you would want a project executive with a lot of authority to negotiate with all of the business units and to make project decisions. When conflicts arise, the project executive should be able to go straight to the CEO and get them resolved.

The project executive’s main focus is keeping the project’s complexity from getting out of control. The project executive must have the authority to trim features in order to meet deadlines.

You go through a lot of analysis and many painful meetings before anyone writes a line of code. The technical staff have to be able to challenge the business units, because sometimes the business unit asks for something to be done in a really complicated way, when a much simpler solution is available to solve the business problem.

One of the worst things that can happen on a systems project is to find yourself revisiting the business-technical negotiations process after writing a lot of code. If that is what is happening now, this project is in an unbelievable amount of trouble.

5. I suspect that the technical problems are mere symptoms. Probably what is fundamentally messed up in this health insurance brokerage business is the org chart.

There is more here.

1 anonymous October 25, 2013 at 7:50 am

The scary risk isn’t whether or not the system gets enough people to enroll in the first year to avoid the so-called ‘death spiral’. That can be fudged around by changing rules and spending money — not pretty or cheap , but probably more-or-less workable in the short term…

The scary risk is that in the rush to get the system fixed, bugs that seriously compromise data security are introduced and ignored in the rush to get something sort-of-kind-of working out the door.

If millions of detailed identities – SSN, address, family, citizenship/visa, tax, and employment data all nicely tied up together – are stolen, it’s a nightmare problem for a decade or more….

2 Dan Weber October 25, 2013 at 8:22 am

There’s a faction of security professionals who think the government should simply publish everyone’s social security number on It would totally destroy SSNs usefulness in identity theft, because now everyone has yours.

3 John Mansfield October 25, 2013 at 11:13 am

I would prefer that to the present situation. It’s been weird to watch SSN turned into indentity, and then turned into secret identity.

4 ThomasH October 25, 2013 at 8:08 am

All those people who favored a single payer are having their “I told you so” moment

5 8 October 25, 2013 at 8:13 am

To their friends on the left, sure. But Obama may have now killed single payer once and for all.

6 mike October 25, 2013 at 8:44 am

yes i’m sure this display of pathetic government ineptitude is proof of need for more government control of life or death industries, in some circles

7 anne October 25, 2013 at 9:22 am

EXACTLY. Gosh, government screwed this up so badly that clearly the only solution is to give them more power and tell them to keep doing the same stupid, disproven shit harder! That will work for sure.

8 derek October 25, 2013 at 9:27 am

But the children! Think of the children! Do you not care about the children?

9 derek October 25, 2013 at 9:26 am

Why? Because the core competency of government is cutting checks?

As bad as this mess is, it doesn’t affect everyone. Those going to the exchange are those who don’t have insurance from other sources. Some states have their own exchanges.

10 Jody October 25, 2013 at 10:15 am

well, if you extend “the mess” beyond the website to the entire piece of legislation, more people have had their existing insurance plans canceled due to the legislation than have enrolled in the exchanges (much less gotten insurance through the exchanges).

11 Jay October 25, 2013 at 12:10 pm

Or the people getting cut from their current individual plans that don’t meet the coverage requirements, this isn’t a trivial number.

12 Harold October 27, 2013 at 11:53 am

By one estimate, there are 16 million people who are losing their old plans because the grandfathering is so strict. One source said “had a plan before 2010, but your deductible only went from $1,000 to $1,500? Not grandfathered.”

Now, they don’t have to use an exchange to get a new plan, but the Federal exchange is currently the only system allowed to handle subsidies, including the state exchanges and insurers (who I don’t think can currently query it for that).

13 Alan Coffey October 25, 2013 at 8:10 am

All those people who said the poor needed healthcare, not health insurance are having their “I told you so” moment.

14 mike October 25, 2013 at 8:49 am

The poor and everyone else were already getting medical care, so it’s hard to see how people saying that would have any kind of point.

15 Uninformed Observer October 25, 2013 at 8:17 am

Who could have seen this coming?

16 8 October 25, 2013 at 8:17 am

The bad people.

17 john personna October 25, 2013 at 9:51 am

Current eCommerce players? Think about when you go to an automaker’s site, and decide you like a model. I think the current model is that you enter all your information, and then “you will be contacted.” Kling is absolutely right that backend communication to make a “results page” makes this a huge coordination problem. That could have been avoided with more modest goals. Enter your info, and then expect separate email promotions from area providers.

18 Tarrou October 25, 2013 at 10:49 pm

Nobody but us racists!

19 8 October 25, 2013 at 8:18 am

What’s even funnier is that if they fix the code, young people are going to find out their healthcare costs will double or triple.

20 Kyle October 25, 2013 at 8:29 am

Actually, I’m 26 and my health insurance costs will be cut in half with the plans available in the exchange. My employer based healthcare costs over $700/month.

21 mike October 25, 2013 at 8:37 am

If you were paying $700/mo at 26, you were just flushing money down the toilet.

22 mike October 25, 2013 at 8:47 am

Hey, I was throwing ten thousand dollars into a bonfire on the beach every year, but now that Obamacare exists, I’m going to stop acting like a dumbass! Thanks Obamacare!

23 Bill October 25, 2013 at 8:50 am

No, Kyle is right. My brother in law owns a small business with 11 or so young employees. As a 60 year old with eye problems and diabetes, and a heart issue, he would be unable to get health coverage, but for the fact, as an owner, he was able to negotiate a group rate for all his employees, himself included. Health insurance, by the way, is a mandated benefit at his business.

Next year he is opting for the exchange, and giving his employees money yo buy a bronze plan.

24 mike October 25, 2013 at 9:00 am

So it’s the employer who is going to stop acting like a dumbass. Thanks Obamacare!

25 Rusty Synapses October 25, 2013 at 12:47 pm

This is an often overlooked point – in the current system, not only is there a huge subsidy for employer provided plans (tax-free to employee), the subsidy is, depending on how you look at it, MUCH larger for the old than the young, because the true cost of coverage (the benefit provided) varies. Not sure why all companies (afaik) charge the same rate to every employee (not aware of any law that requires that, but maybe there is one, or maybe just management is generally older), but because price is flat, in many companies, it doesn’t make sense for the young to buy (even worse than Obamacare 3 to 1 limit – in effect it’s a 1 to 1 limit).

26 lxm October 25, 2013 at 4:55 pm

Rusty is 100% correct.

Health care is already subsidized.

If you think Obamacare is bad because it subsidizes health care, then it is only proper that you also fight to remove current health care subsidies – employer provided medical insurance should be included as taxable income and taxed!

If I see Obamacare’s critics vote for removing this subsidy, I might have some sympathy for their arguments. But as far as I can see they want it both ways. You know the old standard: subsidies for me but not for thee!

Makes you think that the Obamacare critics are defense contractors.

27 mike October 25, 2013 at 7:22 pm

There is a difference between subsidizing a class of product for whoever buys it, and subsidizing some peoples’ purchase of that product and not others. The former (however well-intentioned) is merely a neutral attempt to encourage people to buy more of that product, the latter is stealing from Peter to bribe Paul.

28 JonFraz October 25, 2013 at 7:34 pm

Re: Not sure why all companies (afaik) charge the same rate to every employee

This is how group plans work (and there may be laws requiring that, else they would not be group plans). Everyone in the group pays the same premium (though nowadays small surcharges for smoking and obesity are becoming common) and the premium is based on the healthcare costs of the entire group. It’s the whole point of insurance after: pooling risk. Individual health rating has only been possible for less than a lifetime. In the earliest days of health insurance (Pre WWII when it was offered mainly as a benefit to members of lodges and other fraternal organizations) community rating was universal in the industry.

29 David October 26, 2013 at 8:28 am

“If I see Obamacare’s critics vote for removing this subsidy, I might have some sympathy for their arguments. But as far as I can see they want it both ways. You know the old standard: subsidies for me but not for thee!”

Pretty much everyone I know who opposes ObamaCare is also in favor of putting individual and employer-provided group insurance on an equal footing by allowing individuals to pay using pre-tax dollars (Medical Savings Accounts, mainly). So in fact they are entirely consistent, and any accusations of hypocrisy are misplaced.

30 Chip October 25, 2013 at 8:39 am

Thanks to a government subsidy. Your price may call but not the cost of care.

31 anne October 25, 2013 at 9:25 am

At 26 (in 2003) I was paying $35 a month with a Young Blue BCBS plan. You are a moron for paying that much. Especially since you are a man and can’t get pregnant.

32 Dan Weber October 25, 2013 at 9:32 am

It’s possible mike has some very significant chronic medical issue, although the problem of that would more likely be that insurance companies wouldn’t cover him at all, not that they would quote him $700/month.

33 Dan Weber October 25, 2013 at 9:32 am

doh I meant Kyle. Sorry.

34 Kyle October 25, 2013 at 10:00 am

$700/mo is for me and my wife. She has asthma and high blood pressure so we couldn’t get insured through the private market before Obamacare. I’ve signed up for the exchanges and I’ll be able to get a plan to cover both of us with the same deductible and coinsurance for $350/mo starting January 1.

35 mavery October 25, 2013 at 11:58 am

Shut up, Kyle! You’re ruining the narrative they had about your high healthcare costs being due to stupidity rather than that you’re not single and in perfect health!

36 mike October 25, 2013 at 12:59 pm

To be fair, he’s the one who offered himself as a young man whose premiums went down. Then it turns out his high costs were due to his gimpy wife. So it’s his fault for misleading.

37 john personna October 25, 2013 at 10:41 am

Ah, but we men ride mountain bikes, etc. and break our bones. (In a sane world I’d have a “mountain bikes, peak bags” premium on my health insurance, but frankly I’m glad I do not.)

38 Ray Lopez October 25, 2013 at 10:24 am

Kyle, dude you were paying too much. I am older than you, and with California Blue Cross for my business I pay 150 a month, not an HMO either, with a high (I think it’s 1500) deductible. I understand Virginia is more expensive than California, but 700/mo? Unless you have HIV and are a smoker with preexisting health problems, that’s a rip off. Try raising the deductible–chances are you won’t get sick at your age anyway.

39 john personna October 25, 2013 at 9:54 am

For what it’s worth, my Kaiser (California) rates pre-Obamacare are smack in the middle of post-Obamacare options. I don’t know why an organization like Kaiser, with longstanding costs management, would “double or triple.”

40 charlie October 25, 2013 at 10:05 am

Healthy, 40 year old in DC. My rate went from around 105 a month to 400. No subsidy, and my cheap plan just got canned.

Sure, it had a 10K deduticble but 100 payment after that. Now I get a 6000 but a 20% copay after that. Basiclaly if I have a serious injury I am even more fucked.

41 john personna October 25, 2013 at 10:11 am

I am amazed at $105 at 40. I think I paid more than that when I was 30, 20-some years ago. Was that just catastrophic or something?

42 charlie October 25, 2013 at 10:50 am

Yes, 10K deductible.

And even at that price a waste. I haven’t had a single medical expense in that period.* I did scrape up by knee once, and strained my arm in the gym. Neither required anything.

* I did pay for my own flu shots.

43 john personna October 25, 2013 at 10:58 am

Acknowledged, but of course the bulk of the emergency room deadbeat loss is from people who did not have <$10K, when they needed it.

44 Jay October 25, 2013 at 12:15 pm

Agreed john personna, nobody is arguing against that, but to revamp and arguably ruin the entire system just to eliminate (attempt to of course, Mass has not reduced indigent care losses since their law) a ~5% of the total cost problem is beyond me.

45 john personna October 25, 2013 at 1:29 pm

Well that Jay, and the “I was uninsurable” stories.

46 Jay October 25, 2013 at 3:54 pm

Again, there are a thousand ways to solve the “uninsurable” problem that don’t involve creating a new bureaucracy, taxes and entitlement and have the government in the website business.

47 Tom West October 26, 2013 at 1:40 pm

> And even at that price a waste.

How odd. I don’t consider my house and car insurance a waste, even though I’ve never made a claim. I got the service I purchased.

48 CPV October 25, 2013 at 8:40 am

Why would you expect a not-for-profit monopoly to get this right? And, it didn’t.

49 Max Factor October 25, 2013 at 9:33 am

Good blog post on how the failures are due to inept Indian programmers. The Government appears to have outsourced most of the project and it’s a big fail:

50 Dan Weber October 25, 2013 at 9:56 am

That article is a bunch of crap. The only Indians mentioned are testers, not programmers.

The problems with are very likely not due to bugs, but the management. Imagine someone who has never owned a house or done construction hiring 55 contractors to build his dream home, trying to manage them directly without a general contractor. Even if every individual person does their job as you asked them to, you probably didn’t ask them to do the right things. The things they do don’t line up with each other.

51 Ray Lopez October 25, 2013 at 10:40 am

@Dan Weber – *you* are a bunch of crap. Max Factor is right, see this:

As a skilled programmer, I, Ray Lopez, can tell you what is wrong with JAVASCRIPT

Anybody who has written server side code like HTML/ASP/Javascript/Ajax knows that it takes about 10 times longer to do the same thing you can do in Adobe Flash or Microsoft Silverlight (I prefer the latter). At least 10x. That’s because HTML server side code is stateless, and requires a different mentality, and makes it much harder to debug. Ajax attempts to introduce state, as does the use of session variables and cookies, but the truth is, only Flash/Silverlight are truly suitable for object oriented programming on the web. I can and have spent one-tenth the time and frustration building a better website with Silverlight than I could have with ASP.NET. And HTML5 will also be a disaster (it will try and ape Silverlight). Why HTML5? Because of the anger from irrational Microsoft haters, but that’s a topic for another thread.

Further, of interest to me was the comments in the link above about “Fill In this with actual content. Lorem Ipsum” Lorem Ipsum! HAHAHAHAHA! Do you know what that means? If you are a real programmer, you would, it’s a bit of an inside joke. It means this project was not ready for prime time. Quick explanation: for avoidance of copyright issues, so programmers years ago started a convention where they would use nonsense Latin as a placeholder when doing mock websites (or anything requiring text, even a regular app). But you should be stripping out this stuff in your final release. More info here:

52 Dan Weber October 25, 2013 at 10:49 am

Where are the Indian programmers working on

Naturalnews is a really really funny site. You should check out this article, too:

53 Ray Lopez October 25, 2013 at 10:54 am

Cold Fusion is not yet proven, but this year New Scientist, a reputable science magazine, reported it is making a comeback. And is indeed funny! 🙂

54 Ray Lopez October 25, 2013 at 10:49 am

Just to clarify: “And HTML5 will also be a disaster (it will try and ape Silverlight).” – HTML5 will be a disaster because it will try and ape Silverlight and fail, until such time it mimics and becomes Silverlight. Also reading the Lorem Ipsum site, it seems the text in Lorem Ipsum is from Cicero, so it’s not nonsense Latin as I had assumed. The rest of my post is 100% right and gospel–trust me on this. HTML/Javascript coding is an absolute nightmare and not scalable like Object Oriented Programming. That’s one reason teenage coders do web pages and grownup programmers do the rest. Web pages, except as a front end to a SQL or Entity Framework / Linq backend, is for teens. Real programmers don’t do web pages and Javascript (not to be confused with Java), nor Perl for that matter. No it’s not a holy war flame bait. It’s the gospel truth.

55 Steve J October 25, 2013 at 11:12 am

Ray you just can’t be serious… blaming the technology is rarely the correct answer.

56 john personna October 25, 2013 at 11:32 am

Personally, when any programmer says “my software stack is the only one to use” I downgrade my trust in that programmer.

57 dead serious October 25, 2013 at 12:31 pm

+1024 to john personna

58 Andre October 25, 2013 at 1:33 pm

The technology stack isn’t going to be the real fundamental problem ,but it is huge. Coming in with late requirement changes is always the death of complicated systems. The business stakeholders start seeing the real, almost working, system and they can’t help themselves. They come in with all sorts of what they think of as small changes and the whole thing goes down the tubes. That is where the java script and stuff comes in. You can’t make changes because you have real business logic buried in little java script snippets in separate pages all over your app. A more object oriented design lets you put the business logic in individual modules that are just referenced all over the place.

then at least you have a shot at making changed, but you still can’t do it fast, or test it fast, or expect it to really go well.

59 whatever October 25, 2013 at 1:43 pm

I’ve downgraded my trust in Ray Lopez in quite a few occasions already.

60 john personna October 25, 2013 at 11:11 am

As a reader of I know that people use a great variety of technologies to build solid and high growth web solutions (though they do typically enjoy a beta period, and do not go big bang with millions of day-one users.)

The end-run would have been to change the specification, and to require insurance companies to turn over rate tables (updated frequently on the backend, sure) but that wold mean a simple database lookup for exchange-level rates comparison.

61 Dan Hanson October 25, 2013 at 2:13 pm

The front end technology is not the problem here. It would be nice if it was the problem, because web page scaling issues are known problems and relatively easy to solve.

The real problems are with the back end of the software. When you try to get a quote for health insurance, the system has to connect to computers at the IRS, the VA, Medicaid/CHIP, various state agencies, Treasury, and HHS. They also have to connect to all the health plan carriers to get pre-subsidy pricing. All of these queries receive data that is then fed into the online calculator to give you a price. If any of these queries fails, the whole transaction fails.

Most of these systems are old legacy systems with their own unique data formats. Some have been around since the 1960’s, and the people who wrote the code that runs on them are long gone. If one of these old crappy systems takes too long to respond, the transaction times out.

Amazingly, none of this was tested until a week or two before the rollout, and the tests failed. They released the web site to the public anyway – an act which would border on criminal negligence if it was done in the private sector and someone was harmed. Their load tests crashed the system with only 200 simultaneous transactions – a load that even the worst-written front-end software could easily handle.

When you even contemplate bringing an old legacy system into a large-scale web project, you should do load testing on that system as part of the feasibility process before you ever write a line of production code, because if those old servers can’t handle the load, your whole project is dead in the water if you are forced to rely on them. There are no easy fixes for the fact that a 30 year old mainframe can not handle thousands of simultaneous queries. And upgrading all the back-end systems is a bigger job than the web site itself. Some of those systems are still there because attempts to upgrade them failed in the past. Too much legacy software, too many other co-reliant systems, etc. So if they aren’t going to handle the job, you need a completely different design for your public portal.

A lot of focus has been on the front-end code, because that’s the code that we can inspect, and it’s the code that lots of amateur web programmers are familiar with, so everyone’s got an opinion. And sure, it’s horribly written in many places. But in systems like this the problems that keep you up at night are almost always in the back-end integration.

The root problem was horrific management. The end result is a system built incorrectly and shipped without doing the kind of testing that sound engineering practices call for. These aren’t ‘mistakes’, they are the result of gross negligence, ignorance, and the violation of engineering best practices at just about every step of the way..

62 john personna October 25, 2013 at 3:06 pm

I transfer my +1024 to Dan Hanson

63 Ray Lopez October 26, 2013 at 12:46 am

+1 to Dan Hansen, but it also reinforces my point: if you code with HTML/ASP/PHP and other such ‘scripting’ languages, you cannot write true OOP (object oriented) code. Actually even SQL queries cannot be object oriented, hence in Microsoft Visual Studio they came up with Entity Framework, which allows OOP style. I am not surprised that the government is still writing ‘procedural’ style code, which was popular in the 60s through 1980s. What is surprising is that they cannot handle 200 requests a second, which is not that great (many commercial databases get 1000x more hits than that).

Finally, for you people that don’t “trust” me–you can run what I say through Google/Bing and verify it. Often I even provide links. I’ve also concluded that, contrary to what I thought initially, many of the readers here are not that smart or well-informed and you cannot be too clever by half”, rather, as with Wikipedia, you must stick to a first order approximation (that is a rudimentary or ‘basic” explanation) and not get too derivative, since the readers here are noobs who often don’t understand the basics. “Trust” in comments or even elsewhere is an intellectual crutch for the weak–that would be you, reading this, who trusts in Santa Claus and the Tooth Fairy, without verifying for yourself.

64 MoebiusStreet October 28, 2013 at 9:37 pm

Again, Mr. Lopez, you’re mistaken.

One can easily create a true OO system using HTML and javascript. You are mistaking languages, platforms, and programming paradigms. Silverlight is not a language, it’s a platform that you program using a language like C# of VB.Net. HTML doesn’t go in the same set as ASP and PHP: the former is a means of expressing content, while the latter are frameworks for generating content.

The model for an OO web application is commonly javascript on the UI side in the browser. It will communicate with a backend server (yes, statelessly, as you said) that might be running C# code in ASP.Net, or maybe even javascript on the server using node.js. It’ll probably communicate with a format like XML or JSON. And it’ll use a programming paradigm like MVC so the developers can think Object-Oriented. This is all quite standard stuff these days. It’s done all the time this way, to great success.

The only thing that the javascript here is doing (assuming ASP.Net on the background, as you do correctly advocate) is wiring together the incoming JSON/XML data from the RESTful requests to the server, transforming it into changes in HTML DOM.

Sorry for the buzzword bingo; my point is to demonstrate that there exists well-proven technologies that utilize javascript in the browser, and achieve a real OO programming paradigm.

65 Komori October 26, 2013 at 10:27 am

There’s enough potential issues with security as it is (network security is my field, btw), and now you want to add *java*, of all things, into it?

And the last thing the federal government needs to do is lock people into a single technology vendor by using Silverlight. Especially not a convicted monopolist. Although since Balmer doesn’t appear to be as buddy-buddy with the Obamas as Cook is, I guess that was never really a risk.

66 Ray Lopez @ Komori October 26, 2013 at 1:55 pm

Yes, you are quite right for all the wrong reasons. It’s true that the government would never lock people into Silverlight, for political reasons, even though Silverlight, as an OOP language (via the CLR .NET family), is perfect for the front-end, and SQL on the backend, either MS-SQL Server accessed via the OOP Entity Framework or Oracle’s OOP offerings would cut maintenance by 90% or more and speed up development by 10x (Java might be one of these OOP Oracle offerings, I don’t know as I don’t follow Oracle–btw I don’t do Java at all. See here though how hide-bound SQL programmers are, only 1% are OOP!: “Even though commercial object-oriented programming languages have been on the market for several years, systems written with object-oriented languages comprise less than 1% of systems today.”

67 ShardPhoenix October 26, 2013 at 10:13 pm

You’re full of shit here. Plain Javascript is perfectly capable of handling (what should be) a simple frontend and using Silverlight would be nuts. As others have said the complexity is in the backend, not the frontend. Also, there’s nothing magical about object oriented programming, which is also something that Javascript is capable of if you insist (in its own oddball way).

68 Dan Weber October 27, 2013 at 9:49 am

I almost think the comment is a joke, since it means that Google, Bing, Amazon, Wikipedia, Reddit, Twitter, LinkedIn, eBay, and a few hundred more are all built “wrong.”

In any event, don’t argue with crazy.

69 MoebiusStreet October 28, 2013 at 9:27 pm

Mr. Lopez is mistaken. Or, more likely, he’s as much of a zealot about programming languages as he seems to be about political ideology.

I’ve been a web developer since The Web was invented. I’ve got Object Oriented credentials as long as your arm (C++, C#, etc.), and I’m co-author of a book about web development.

Take it from me that client-side javascript is a perfectly legitimate platform choice. It is no less efficient, development-wise, in the hands of a competent developer than is Silverlight or ActionScript (aka Flash). With numerous off-the-shelf development frameworks available for javascript (like jQuery, for example), much of the work is already done for you. And there are countless websites running smoothly on this platform, many of them with as many moving parts as the thing.

Moreover, both of Mr. Lopez’s suggestions are non-starters the needs of this project. Because it’s critical to reach the young customer (as Megan McArdle points out), the site *must* support platforms like iPhone and iPad – neither of which can be had with Silverlight or Flash. Javascript, however, is a standardized, cross-platform solution that’s available on any reasonable browser, from desktops to tablets to phones.

70 Bob October 30, 2013 at 1:34 pm

To take Ray’s comments on programming as those of an expert is like taking those of Ron Paul as an expert in economics.

71 AVX October 25, 2013 at 4:35 pm

That was quite an ignorant and racist post. Let me point out a couple of things:
It links to another site on, which itself is a Xenophobic rant.
Let me start with the javascript code these sites seem to refer to, but never appear to mention it (probably because anyone else seeing the code will see through their BS)

The statement “Two of the site language translations are Gujarati, a language from India, and Hindi, also an India language. Yet Hebrew, Japanese, Arabic and Russian are not available as language translations of the site.” … Oh My God, they are translating to an Indian language!!!
Firstly: The translation is done for Japanese, Arabic and Russian ALSO. That is because Gujarati, Hindi, Japanese, Arabic and Russian all belong in the top 19 of most common languages used by people in the United States:
There .. that alone was the basis of the whole post that it is written by Indians alone.. who wanted to for some reason, translate the site in their own language (Apparently Indians like to do this for every site they write? LOL)

And typos in the comments .. wow! If that was a basis of figuring out a well written code, then I’m speechless.

72 Dan Weber October 25, 2013 at 5:48 pm

Thank you for wading into the filth enough to write that up report. Real code reviews contain, y’know, code.

73 Errorr October 26, 2013 at 12:48 am

Um, if this were true, and not ridiculous farce, then the contractor would be investigated, fined, and excluded from government contracts. It is illegal to outsource work (one of the major reasons federal IT costs so much). Although a company can develop a COTS product with overseas programmers they are not allowed to outsource any jobs after they get a contract.

74 Neil S October 25, 2013 at 10:48 am

Mr. Kling is exactly on point. The mythical man-month reference goes far in explaining both why this project did not succeed, and why it is not likely to get better any time soon.
The coordination problem involved in throwing more programmers at a problem results in negative productivity at some point.
Likewise, when I hear that people are working 24/7 on a problem, that is a sure sign to me that exhausted coders are introducing more defects than they are correcting.
Finally, the most accurate predictor of unidentified defects in a section of code is the number of defects found to date. At some point, the right solution is to scrap the defective code and rewrite from scratch.
But enough hope and I am sure that we will change the rules that have governed software development for over 40 years…

75 Dan Weber October 25, 2013 at 10:50 am

Every time I hear NPR say that there are daily briefings on why things are behind schedule I’m not sure whether to laugh or cry.

76 Yancey Ward October 25, 2013 at 11:20 am

Laugh, laugh, and laugh.

77 john personna October 25, 2013 at 11:31 am

If the briefings only tie up the managers, they are a good thing 😉

78 Tom West October 26, 2013 at 1:48 pm

> If the briefings only tie up the managers, they are a good thing

If my experience is any guide, it’s usually people higher and higher up the hierarchy saying “you’ve got to fix it now” and “we need a report as to why it’s not fixed”, which as one might guess, doesn’t speed things up a lot.

You often *do* get more access to resources, but quite frankly, in most cases by the time you’re in crisis mode, there simply *aren’t* any resources that can be used to fix it faster.

Sometimes it feels like upper management feels you could fix it faster if you were just sufficiently motivated. At least with high level programming professionals, I’ve never seen motivation as a factor in speed in fixing a crisis. Everybody is already working at top speed.

79 Dan Weber October 27, 2013 at 9:56 am

Sometimes it feels like upper management feels you could fix it faster if you were just sufficiently motivated

Well, it’s what works for factory workers, right?

To a first approximation, the contractors are probably at least decent at managing software developers in normal circumstances. Who knows if we are in normal circumstances now. The big problem is figuring out what the problems are, and then assigning people to fix them, and then leaving them the hell alone until they fix it.

80 zbicyclist October 27, 2013 at 2:00 am

Daily status meetings are to programmer productivity what detention is to middle school education.

81 James October 25, 2013 at 11:05 am

Tyler Cowen,

Next to the title of this blog it says “small steps toward a much better world”.

Is the future world you describe in ‘Average Is Over’ the “much better world” that you are trying to take “small steps toward”?

82 Max Factor October 25, 2013 at 11:57 am

I wonder the same thing

83 Uninformed Observer October 25, 2013 at 11:16 am

The patient is still unresponsive, and seems to be suffering from a combination of strokes and congestive heart failure. But have no fear, the patient is in surgery 24/7 with a thousand of the best surgeons operating around the clock to get him well again.

84 Eric377 October 25, 2013 at 11:29 am

The Kentucky patient seems in good shape. Too bad for those states run by jackasses trying to make a point instead of getting on with serving their populations.

85 Uninformed Observer October 25, 2013 at 3:35 pm

Good point, Eric. It looks like Kentucky’s doing great – 26,000 signed up so far! But 82% of those are Medicaid enrollments. I suppose if that’s what you mean by “serving their populations,” we can declare the patient cured and send him on his way. But if you expect our patient to still be on his feet this time next year, ol’ Kentucky’s gonna need at least a few people to sign up to actually contribute a little something to the pot.

86 Eric377 October 25, 2013 at 11:25 am

ACA is definitely going to have winners and losers. I would not challenge anyone who believes they benefit, since it is that is their calculation to make. But a lot of folks must be losers – in an immediate sense – since the risk pool had to have gotten riskier and insurance companies have to get the money somewhere. For this system to work I think that millions of relatively healthy Americans need to stay a bit blind to what is going on to their options (shrinking) for insurance, or everyone needs to develop a sense of social solidarity whereby enjoying good health is recompense for spending more on excess insurance, or the penalties need to be higher and very credibly collectible.

87 mike October 25, 2013 at 11:35 am

Oh, so all we need to do to get Obamacare to work is lie to everyone and completely change human nature? Why didn’t we think of that before!

88 Eric377 October 25, 2013 at 11:46 am

Hence the final mention of large and credible penalties. If the penalties are near what your premiums would be and not easy to dodge, you may as well take the insurance. If you can dodge the whole thing for $500 bucks and only are at much risk between enrollment periods, that is probably not going to work. I would think that by now Massachusetts would have some valuable experience along these lines of what it takes to actually get a mandate enforced to a high enough degree to handle the higher expenses of a riskier risk pool.

89 mulp October 25, 2013 at 6:10 pm

So, you are arguing that the only system that works is tax funded single payer.

Or else you are arguing that EMTALA needs to be replaced with a “doctor’s lien” to enable quick no hassle euthanasia to resell body parts to pay of medical bills.

You keep expecting a free lunch. Pay for lunch – define the system that actually eliminates free riders.

90 Mr. Lynch October 28, 2013 at 1:07 am

Perhaps you have forgotten that Justice Roberts ruled the way he did because the personal reponsibility payment (aka the fine aka the tax) was too small to matter! (He said so, directly.)

If it were large enough to be coercive, it would be unconstitutional, IIRC.

91 Tom West October 26, 2013 at 1:53 pm

> Oh, so all we need to do to get Obamacare to work is lie to everyone and completely change human nature?

I don’t know. Universal health care pretty popular in most countries, and highly beloved in many.

Personally, I’m fortunate enough that I’m probably paying in taxes 3-4 times what my Canadian health-care actually costs and you couldn’t pry it out of my cold, dead hands, waiting lists and all.

92 Jay October 25, 2013 at 3:59 pm

It would be great if the initial debate were framed as such then the two parties could have argued the details. Instead it was pitched as the greatest thing in the world, lower the budget deficit in 10 yrs, lower annual premiums by 2500 for everyone, you can keep your plan/doctor you have, etc. If it was honestly pitched as “most young people will pay a lot more now to subsidize old/sick people” then an honest debate could have ensued.

93 mulp October 25, 2013 at 5:44 pm

You are arguing that healthy individuals are always able to correctly predict the future better than insurance actuaries.

Do you really believe that?

Do you really believe the conservatives will make the uninsured who guess wrong pay the total price of being wrong when conservatives argue no one needs health insurance because no one is denied health care because they don’t have insurance or health insurance?

The conservatives are basically arguing that no one needs to pay taxes or any fees for a fire department or other emergency services or for property and disability insurance because no one will ever suffer from their house burning down or from any emergency because fire, EMT, and post disaster help will always be provided even if you have no means to pay for it because you just wasted your money on fun and games, sex, drugs, rock and roll.

We have had a number of Republican governors who could have established individual responsibility as the Republican brand by declaring “if you don’t flee the coast, well, god have mercy on your soul because no one is coming to get you when Sandy hits and no one will help you afterward because you are totally on your own”, or the similar messages where wild land fires were sweeping into and through residential and business districts, or where tornadoes roam free.

94 Steve J October 25, 2013 at 11:33 am

If people understood why software projects fail they wouldn’t be failing anymore. It worries me that even the simple data entry type parts of are having problems. You would think any part of the site that was provider independent should have been thoroughly tested. The problems with are making me question my support of Obamacare (and possibly government solutions in general). Not sure if that is a rational conclusion but it is difficult to think rationally (even for people who don’t need to use layaway).

95 Andre October 25, 2013 at 1:47 pm

I think we can understand why this particular web portal failed pretty well, and it really is an economics problem. The person paying for a system wants late changes and nobody has an incentive to say no. People coming up with requirements don’t know what is realistic to ask for or not. None of the assorted contractors would since more features probably means more money for them. You burn the midnight oil making the changes, bill extra, don’t test them and hope for the best. A system like this especially when you are sending requests to outside systems to verify identity and income,and dependent on those requests to actually return in a timely fashion – Death.

Unless a very smart project manager says no early or a very empowered QA Lead steps up and says no late, things are going to go badly. But if either of those people do that they are probably going to get fired. When people come with late changes you can only keep two of three things: Features, Release Date, or Quality. They clearly chose the first two. This same thing is happening EVERY day at private software companies all over the world.

96 mulp October 25, 2013 at 11:38 am

Given Obamacare is a total government takeover of the entire US health care one-sixth of the economy, what I heard from the private contractors is finger pointing at the failure of the government to takeover the entire operation of Obamacare.

I worked in the computer industry for three decades and 99% of the people doing the work, and managing the projects, get wages equivalent to civil service jobs. The money spent on IT contracts should be reallocated to a single department of information technology headed by a cabinet level officer who has the power to change every government IT system to meet, first, citizen service needs, and second, government personnel needs, and third the government nobody.

The idea that corporations with significant IT needs, do not need thousands of people who do the “grunt” work which involves showing up day after day after day for the same eight hour day is just the myth of the lone genius or two. As if Steve Jobs and Tim Cook single handedly delivered the iPod, iTunes, iPhone, iPad without thousands of nameless employees. As if everyone at is making millions of dollars per year. As if UPS and FedEx employees earn ten times government workers.

No way would Apple, Amazon, UPS, FedEx outsource their computer systems and software development, or their IT operations, to anyone else.

(Yes, there are “commodity” goods and services you buy off the shelf, and they are constantly becoming more capable, but if Apple were simply reselling the commodity goods, like RCA, GE, and the other consumer electronic companies did in the 70s and 80s as they outsourced their product production and then development – they had to exit that business – the brand names are owned by foreign corporations.)

And employees at Apple, Amazon, UPS, FedEx operate under very constrained procedural rules that do not allow changes without high level review and the rogue employee who “fixes” things without following the rules of hierarchy is hammered down or erased quickly.

And the idea that government employees are always incompetent because of the rules and low pay and lack of bonuses and stock options as advocated by conservatives who basically has made it mandatory to always go up to government employees of a certain class and say thanks for doing your job with the phrase “thanks for your service”. And calling them “heroes”. Talk about a rigid work environment, low pay, and no reward for US military. Militaries historically allowed soldiers to profit personally by rape, pillage, and plunder to give the top performers real bonuses and rewards for being ruthlessly effective.

Of course, I do see conservatives like to outsource the military stuff that has no risk but that is primarily boringly stupid operations to private for-profits who perform horribly and at grossly excess costs.

97 john personna October 25, 2013 at 12:01 pm

I know I’m wasting 10 second of my life here … but “a total government takeover” would really be “nationalization” and conversion to single-payer.

98 Dan Hanson October 25, 2013 at 2:25 pm

“No way would Apple, Amazon, UPS, FedEx outsource their computer systems and software development, or their IT operations, to anyone else.”

You have to be kidding. How do you think SAP makes a living? Or Oracle? Or PeopleSoft? Or IBM, which has become little more than an IT service provider to other companies?

Everyone outsources large portions of their IT, and they should. It’s called specialization and division of labor. If FedEx’s core competence is not in IT, they should outsource their IT to people who know what they are doing.

In fact, the failure of Obamacare’s web portal can be more reasonably blamed on the government’s unwillingness to outsource the key piece of the project – the integration lead. Rather than hiring an outside integration lead and giving them responsibility for delivering on time, for some inexplicable reason the administration decided to make the Center for Medicare and Medicaid services the integration lead for a massive IT project despite the fact that CMS has no experience managing large IT projects.

Failure isn’t rare for government IT projects – it’s the norm. Over 90% of them fail to deliver on time and on budget. But more frighteningly, over 40% of them fail absolutely and are never delivered. This is because the core requirements for a successful project – solid up-front analysis and requirements, tight control over requirements changes, and clear coordination of responsibility with accountability, are all things that government tends to be very poor at,

The mystery is why we keep letting them try.

99 Dan Weber October 25, 2013 at 5:43 pm

Amazon is who a lot of people outsource their IT to.

The government clearly needs more in-house expertise, even if it is going to keep on buying stuff from other people, just so they can know what the heck they want to buy. From what I’ve learned so far it was on CMS to integrate all the contractors’ work, which was a nightmare anyone could see coming a mile away if they heard about it.

100 Ryan Vann October 25, 2013 at 6:38 pm

It’s actually more simple than that: massive IT, especially when we are talking system to system integration, is a nightmare, and very few people/companies are really good at it.

101 CVP October 25, 2013 at 2:59 pm

Example to those who think the policies under ACA are as good as previous policies.

Catastrphic (10k deductible HSA) insurance with 0% co-pay are no longer available after ACA kicks in in Colorado. This is really bad. This is what self-employed people really need.

Other states finding HSAs disappearing?

102 Mogden October 25, 2013 at 4:01 pm

One of the objectives of ACA is to make HSA’s illegal. Onward in union, comrades!

103 AndrewL October 25, 2013 at 6:28 pm

I still have my HSA and I love it! I think it is the greatest health insurance innovation. It gives people tremendous incentive to save for their own healthcare AND to find the most cost effective healthcare. The patient does all the hard work! and has incentive to do so.

It is also non-disruptive to other health insurance models, and self sustaining.

Please don’t take away my HSA!!

104 CVP October 25, 2013 at 6:59 pm

The real issue is that HSA policies have zero copay after deductible (ie true catastrophe insurance) where the new ACA policies don’t and force you to pay for excessive use of mundane health care by others. I have already received notification from Anthem in CO that their HSAs are being terminated.

I appreciate the goals of the ACA but they have bungled it.

How about subsidized HSAs? Zero premium and partially funded accounts – you decide if you want to spend the money.

105 AlanW October 25, 2013 at 11:37 pm

I don’t understand all of the issues around HSAs in the ACA. Part of the idea seems to be to increase tax revenue by eliminating tax-free HSAs and part of it seems to be avoiding adverse selection within the plans by ensuring that the gold and silver plans remain attractive choices for relatively healthy people who would otherwise buy a bronze and then load up an HSA. There may be other factors going on, too, and maybe I’ve misunderstood the ones I’ve cited.

Anyway, neither of those problems seem insurmountable and I would love to see some ideas to open up the ACA to HSA-friendly innovation. It seems like something worthwhile that conservatives could actually win in a compromise that also fixed other problems with the ACA.

106 cthulhu October 26, 2013 at 3:30 pm

The problem with HSAs and Obaminablecare is that HSAs came out of Republican / free market think tanks (the research dates back to the early ’80s) and is therefore doubleplusungood thoughtcrime.

107 David N October 26, 2013 at 11:23 am

The ACA will not make HSA’s illegal. In fact, I think it may boost the growth of HSAs.

My NY 11.6k deductible / 100% coinsurance HSA small group plan will not be renewed. However, there appears to be some growth in individual HSA compatible plans in both New York and New Jersey. The deductible is lower and there is 50% coinsurance, but the out of pocket is capped at $12,600, so the coinsurance is really a non-issue for ex-high deductible people. HSA compatible bronze plans are still a good deal.

The important part is that rates in the individual market (in New York and New Jersey) are now in line with small group rates. They used to be at least 30% higher. The ACA has cured a serious problem for individual plan shoppers, at least in these states.

108 Ryan Vann October 25, 2013 at 3:37 pm

This episode has been humorous/painful for us who have worked in the tech industry. Big DooDoo aka Big Data, always seems to be hijacked by carnival barker executives pompous in their certitude about the feasibility of their schemes, meanwhile all the sys admins, programmers, and competent ones collectively shake their heads vigorously. And apparently, the administration still seems to think the exchange problem is a management issue, and not that the goals are too lofty. Massive exchanges like these are simply enormously optimistic.

For the better part of a year and a half, I worked on a project that coordinated a multitude of brokerages using the OFX/GFX format; eventually we got a working product together, but it was a Pyrrhic as we had hemorrhaged RandD funds, and constantly missed key dates. I suspect this administration will continue in its conceit that this can all be done without an army of 75k-100k pay level programming and IT specialists, and just needs that one super genius leader, until billions are squandered, and they just start over.

109 Ray Lopez October 26, 2013 at 1:01 am

Nice observation. I wish this blog had a better comments section, where we could post, Usenet style, in threads that could be expanded by a newsreader or browser, so we could continue this conversation. But, like the government health insurance website disaster, this state-run university blog uses old, obsolete technology, lol. I guess it’s better than nothing.

110 mike October 25, 2013 at 7:34 pm

As a coda, I just want to add that I had been having some joint issues this past week and on my quite reasonably priced individual market pre-ACA insurance I was able to schedule an appointment online and be seen by my doctor the same day. You see why someone like me, like the 90% of people pre-ACA who had insurance and were happy with it, does not want some new 2000 page law micromanaging health insurance from top to bottom to deal with the small minority who are unhappy with the current system? All those who don’t give a second’s thought about taking that away from me will die slow painful deaths and then spend eternity in Hell, I hope.

111 AlanW October 25, 2013 at 11:31 pm

I understand what you’re saying and at some level, sure, your needs are important to consider. But one of the law’s major goals was to provide insurance to the uninsurable, and to do it through the private market. That’s what’s driving a lot of this mess. To those people who receive the coverage, though, it is a much bigger deal than whatever inconvenience this may be causing you. These folks aren’t “unhappy” with the current system – the current system failed them and ruined their lives.

You can say that there are simpler, cheaper ways to get those people insurance, and I’m sure that’s true and I wish that we had tried some of those ideas, but nobody had the willpower to bring those solutions to a vote. If the system is failing a significant number of people, you can’t expect them just to sit there and take it because it’s convenient for you.

112 Errorr October 26, 2013 at 1:05 am

At the heart of it I generally agree with the criticisms the point that Kling is missing is that the solutions he is describing are ILLEGAL! Anyone who has even a passing understanding of the FAR (Federal Acquisition Regulations) would understand that many of these proposed solutions are near impossible. Acquisition people are not answerable to the functional people or the CEO (whoever fills that role) because the losing contractors would challenge the award and win.

In many ways the problem is just like the TSA. We spend massive amounts of money for no seeming marginal improvment. The laws are a reaction to government “waste” and a way to ensure the “peoples taxes” are spent prudently. However, the money actually spent to prevent the waste often exceeds what could have been wasted.

Knowing a lot of what went on early in the development od the exchanges I am shocked that it is a far done as it is. CMS never had the institutional knowledge to create such a system and never had the money or headcount to hire people who did have the skills necessary even though they scraped up every spare dollar they could in all of HHS to fund the program. The PMO is powerless in the face of an intransigent acquisition department who has no stake in success or failure of the project.

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