Healthcare.gov: The Search for Functional Management via Training
September 21, 2015
I read “How Healthcare.gov Botched $600 Million worth of Contracts.” My initial reaction was that the $600 million figure understated the fully loaded costs of the Web site. I have zero evidence about my view that $600 million was the incorrect total. I do have a tiny bit of experience in US government project work, including assignments to look into accounting methods in procurements.
The write up explains that a an audit by the Office of the Health and Human Services office of Inspector General identified the root causes of the alleged $600 million Healthcare.gov Web site. The source document was online when I checked on September 21, 2015, at this link. If you want this document, I suggest you download it. Some US government links become broken when maintenance, interns, new contractors, or site redesigns are implemented.
The news story, which is the hook for this blog post, does a good job of pulling out some of the data from the IG’s report; for example, a list of “big contractors behind Healthcare.gov.” The list contains few surprises. Many of the names of companies were familiar to me, including that of Booz, Allen, where I once labored on a range of projects. There are references to additional fees from scope changes. I am confident, gentle reader, that you are familiar with scope creep. The idea is that the client, in the case of Healthcare.gov, needed to modify the tasks in the statement of work which underpins the contracts issued to the firms which perform the work. The government method is to rely on contractors for heavy lifting. The government professionals handle oversight, make certain the acquisition guidelines are observed, and plug assorted types of data into various US government back office systems.
The news story repeated the conclusion of the IG’s report that better training was need to make the Healthcare.gov type of project work better in the future.
My thoughts are that the news story ignored several important factors which in my experience provided the laboratory in which this online commerce experiment evolved.
First, the notion of a person in charge is not one that I encountered too often in my brushes with the US government. Many individuals change jobs, rotating from assignment to assignment, so newcomers are often involved after a train has left the station. In this type of staffing environment, the enthusiasm for digging deep and re-rigging the ship is modest or secondary to other tasks such as working on budgets for the next fiscal year, getting involved in new projects, or keeping up with the meetings which comprise the bulk of a professional’s work time. In short, decisions are not informed by a single individual with a desire to accept responsibility for a project. The ship sails on, moved by the winds of decisions by those with different views of the project. The direction emerges.
Second, the budget mechanisms are darned interesting. Money cannot be spent until the project is approved and the estimated funds are actually transferred to an account which can be used to pay a contractor. The process requires that individuals who may have never worked on a similar project create a team which involves various consultants, White House fellows, newly appointed administrators, procurement specialists with law degrees, or other professionals to figure out what is going to be done, how, what time will be allocated and converted to estimates of cost, and the other arcana of a statement of work. The firms who make a living converting statements of work into proposals to do the actual work. At this point, the disconnect between the group which defined the SOW and the firms bidding on the work becomes the vendor selection process. I will not explore vendor selection, an interesting topic outside the scope of this blog post. Vendors are selected and contracts written. Remember that the estimates, the timelines, and the functionality now have to be converted into the Healthcare.gov site or the F-35 aircraft or some other deliverable. What happens if the SOW does not match reality? The answer is a non functioning version of Healthcare.gov. The cause, gentle reader, is not training.
Third, the vendors, bless their billable hearts, now have to take the contract which spells out exactly what the particular vendor is to do and then actually do it. What happens if the SOW gets the order of tasks wrong in terms of timing? The vendors do the best they can. Vendors document what they do, submit invoices, and attend meetings. When multiple vendors are involved, the meetings with oversight professionals are not the places to speak in plain English about the craziness of the requirements or the tasks specified in the contract. The vendors do their work to the best of their ability. When the time comes for different components to be hooked together, the parts usually require some tweaking. Think rework. Scope change required. When the go live date arrives, the vendors flip the switches for their part of the project and individuals try to use the system. When these systems do not work, the problem is a severe one. Once again: training is not the problem. The root cause is that the fundamental assumptions about a project were flawed from the git go.
Is there a fix? In the case of Healthcare.gov, there was. The problem was solved by creating the equivalent of a technical SWAT team, working in a very flexible manner with procurement requirements, and allocating money without the often uninformed assumptions baked into a routine procurement.
Did the fix cost money? Yes, do I know how much? No. My hunch is that there is zero appetite in the US government, at a “real” news service, a watchdog entity, or an in house accountant to figure out the total spent for Healthcare.gov. Why do I know this? The accounting systems in use by most government entities are not designed to roll up direct and indirect costs with a mouse click. Costs are scattered and methods of payment pretty darned crazy.
Net net: Folks can train all day long. If that training focuses on systems and methods which are disconnected from the deliverable, the result is inefficiency, a lack of accountability, and misdirection from the root cause of a problem.
I have been involved in various ways with government work in the US since the early 1970s. One thing remains consistent: The foundational activities are uneven. Will the procurement process change? Forty years ago I used to think that the system would evolve. I was wrong.
Stephen E Arnold, September 21, 2015
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