If you go to Carnegie Hall to hear a world class orchestra perform, you have high expectations. Despite the fact that orchestral music can be extremely complex, with many moving parts, you expect to hear a near flawless performance. One in which every musician is playing in unison, hitting the right notes at the right time; a collection of elements all functioning at a high level. But, what if the musicians never got to practice together, didn’t speak a common language, or were presented with a new sheet of music and twenty extra musicians just prior to the concert? Would you still expect perfection?

HealthCare.gov, the web site that serves as the health insurance exchange for the 36 states that chose not to build their own state exchange, is in many ways like an orchestra. Built and maintained by the U.S. Centers for Medicare and Medicaid Service (CMS), it is a very complex integrated set of technologies that for the first time provides a single platform that combines the process of reviewing, selecting and enrolling in insurance and determining insurance eligibility for government subsides, all in one place and in real time.

Now that the first wave of enrollment is technically closed, let’s look a little closer.

Should we be surprised by the technical problems that plagued the initial launch of HealthCare.gov? Was it realistic to expect the debut of HealthCare.gov to be a world class performance? While you may already have answers to these questions, you may take a different view once you understand the massiveness of this endeavor.

High complexity, risk to match

First, let’s consider some known facts about software development. Implementation snags almost inevitably occur on large scale software projects. Failures or delays in schedules, dropped functionality, and budget overruns are the norm, not the exception.  According to a McKinsey consulting report released in 2012, nearly half of IT projects with budgets of over $15 million run 45 percent over budget, are 7 percent behind schedule, and deliver 56 percent less functionality than predicted. According to the Standish Group, the overall success rate for all IT projects is only 39 percent and only 10 percent for projects with budgets over $10 million. These statistics apply to both government and private sector IT projects.

The data hub: HealthCare.gov's conductor

One of the biggest challenges for HealthCare.gov was building a data hub to handle the integrations necessary to validate and enroll consumers in the proper healthcare program. In a sense, the data hub acts as the switchboard or conductor for the entire sign up and registration process; collecting, sending and receiving and validating data to and from all the agencies involved.

To verify an applicant's citizenship and immigration status, the Exchange must first verify the applicant's identity with the Social Security Administration, and then check the applicant’s immigration status with the Department of Homeland Security. The Exchange must also verify that the applicant is not already enrolled in another government health insurance program.  This requires retrieving data from the Veterans Health Administration, the Department of Defense, the Office of Personnel Management, and the Peace Corps. It also means checking with a state's Medicaid and Children's Health Insurance Program (CHIP) agencies to determine if an applicant is already enrolled in one of those programs. The data hub does not house any of this information itself. It purely acts as the intermediary between the HealthCare.gov web site and the other databases involved. What seems like a simple process — signing up for health insurance — is actually a massive effort that requires an inordinate amount of coordination among multiple extremely complex, often legacy systems.

New and complex insurance reform rules

The ACA not only changes the underpinnings for how healthcare insurance is secured, it also creates a new set of rules for how benefit packages are structured and how rates are determined. A new subsidy system was also developed to help low- and middle-income individuals and families not otherwise eligible for public or employer-sponsored coverage to purchase insurance through the Exchange. Individuals that qualify receive an Advanced Premium Tax Credit (APTC) in the form of federal tax credits. In addition to the premium tax credit subsidies, Cost Sharing Reduction (CSR) subsidies are available to individuals and families to help lower the amount paid out-of-pocket for deductibles, coinsurance, and copayments. Establishing systems that take into account these multiple factors was not an easy task.
Modified adjusted gross income, or MAGI, is the figure used to determine an individual’s eligibility for certain Medicaid programs, the Children’s Health Insurance Program (CHIP) and advance premium tax credits and cost-sharing reductions. The new calculations and processes must be completed in concert with the non-MAGI Medicaid programs that use eligibility determinations that have been in place for years and apply very different methodologies.  

Creating and implementing the required benefit packages, obtaining and approving the various insurance company plans and formulating the rules calculations for subsidy eligibility was an extremely complex process, especially when you consider HealthCare.gov had to address this for all states, whether running a state-based exchange or participating in the federal exchange.

Medicaid expansion or not? 

One of the key components of the original ACA was the expansion of Medicaid to include individuals between the ages of 19 and 65 (parents, and adults without dependent children) with incomes up to 133 percent FPL based on modified adjusted gross income. A ruling from the Supreme Court made Medicaid Expansion optional for states. This complicated work for HealthCare.gov by requiring them to work individually with each state to determine their plans for supporting/or not supporting Medicaid expansion. Additionally, HealthCare.gov needed to revamp all Medicaid eligibility determinations using the new MAGI standard. And, although individuals can apply for Medicaid (traditional or expanded) using the HealthCare.gov web site, all applications must be transferred to the state’s Medicaid system which then completes the processing for the actual state Medicaid program. Some states have elected to handle the final determination while others allow HealthCare.gov to make the final eligibility determination. This required creating interfaces to Medicaid systems for each state.

Conclusion

HealthCare.gov is not a simple insurance marketplace. It is a collection of an almost mind-boggling array of technologies, systems, applications, forms, policies, processes and business rules spanning across 36 states, multiple federal agencies, and hundreds of insurance providers. The Washington Post called HealthCare.gov "one of the most complex pieces of software ever written for the federal government." This should not come as a surprise given the Affordable Care Act law is well over 2,000 pages with regulations documented in over 10,000 pages.

HealthCare.gov will undoubtedly go down as one of the most famous and most scrutinized technology deployments in our generation. Unfortunately, government software failures are very public while private industry has the luxury of hiding its failures. Few would be willing to admit that HealthCare.gov's rollout was not vastly different than almost every large scale, Web-based ERP or CRM rollout.  But, unlike private companies, the deadlines for HealthCare.gov were mandated by legislation.

While many expected the launch of HealthCare.gov to be flawless, like an orchestral performance worthy of a standing ovation, it wasn’t. Those who have managed building extremely complex systems from the ground-up realize that maturing this software, the integration, the security and associated operations will take time. But, important steps have been taken to modernize and provide a national integration platform for eligibility and enrollment that can be leveraged beyond healthcare programs to support Supplemental Nutrition Assistance, Child Care, Temporary Assistance to Needy Families, Disability, Unemployment Insurance, and so much more. While the concept and software need to mature a bit, the promise is boundless.