Thursday, October 10, 2013

The Obamacare Website Follies

Just when you thought that Republicans could not communicate effectively House Speaker John Boehner cut to the heart of the problem with the Obamacare website.

On the House floor yesterday, he said:

“How can we tax people for not buying a product from a website that doesn't work?

By now everyone knows what a disaster the Obamacare site is. Readers of this blog had advance notice from commenter Dennis. Before the stories started appearing in the press Dennis explained the problem in the comments to this linked post.

Given that I am not remotely competent to explain the story, for today I leave it to Andrew Couts, a self-proclaimed supporter of Obamacare, someone who wants the site to work, to tell the story.

Writing in Digital Trends Couts explains:

It’s been one full week since the flagship technology portion of the Affordable Care Act (Obamacare) went live. And since that time, the befuddled beast that is has shutdown, crapped out, stalled, and mis-loaded so consistently that its track record for failure is challenged only by Congress.

The site itself, which apparently underwent major code renovations over the weekend, still rejects user logins, fails to load drop-down menus and other crucial components for users that successfully gain entrance, and otherwise prevents uninsured Americans in the 36 states it serves from purchasing healthcare at competitive rates –’s primary purpose. The site is so busted that, as of a couple days ago, the number of people that successfully purchased healthcare through it was in the “single digits,” according to the Washington Post.

What’s the problem? Couts continues:

The reason for this nationwide headache apparently stems from poorly written code, which buckled under the heavy influx of traffic that its engineers and administrators should have seen coming. But the fact that can’t do the one job it was built to do isn’t the most infuriating part of this debacle – it’s that we, the taxpayers, seem to have forked up more than $634 million of the federal purse to build the digital equivalent of a rock.

Ought we to conclude that the experience shows us yet again that, in many areas, government bureaucrats, being accountable to no one, tend to waste enormous sums of money? Couts suggests that the answer is Yes:

Given the complicated nature of federal contracts, it’s difficult to make a direct comparison between the cost to develop and the amount of money spent building private online businesses. But for the sake of putting the monstrous amount of money into perspective, here are a few figures to chew on: Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $600 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.

Naturally, Couts feels a need to defend government workers. He blames it on the procurement process, as though some wicked genie had invented this process against the best judgment of the bureaucrats:

… the failure of isn’t because the people in our government are inept mouth-breathers who regard the work as a meaningless burden, but because the factors that play into which companies receive government contracts, a process called “procurement,” are fundamentally broken.

“Contracting officers – people inside of the government in charge of selecting who gets to do what work – are afraid of their buys being contested by people who didn’t get selected,” writes the author. “They’re also afraid of things going wrong down the line inside of a procurement, so they select vendors with a lot of ‘federal experience’ to do the work.”

As you suspected, when things go wrong, government bureaucrats throw more money at the problem. What could be wrong with that? For one, the people who receive the money are the ones who caused it:

And when things still go wrong, they simply throw “more money at the same people who caused the problem to fix the problem.”

TheWashington Post arrives at the same conclusion:

 “The episode is all too typical of how government creates IT services,” said Tom Lee, director of Sunlight Labs, the research arm of the Sunlight Foundation, which advocates for more government transparency. “The procurement process tends to select for firms that are good at navigating the procurement process, not providing good IT services for the dollar.”


David Foster said...

Well, we will see---was the problem *too much* bureaucracy, or *too little bureaucracy and too much political influence*?

Peter Drucker explained the problem back in 1969:

Whether government is “a government of laws” or a “government of men” is debatable. But every government is, by definition, a “government of paper forms.” This means, inevitably, high cost. For “control” of the last 10 per cent of any phenomenon always costs more than control of the first 90 per cent. If control tries to account for everything, it becomes prohibitively expensive. Yet this is what government is always expected to do.

The reason is not just “bureaucracy” and red tape; it is a much sounder one. A “little dishonesty” in government is a corrosive disease. It rapidly spreads to infect the whole body politic. Yet the temptation to dishonesty is always great. People of modest means and dependent on a salary handle very large public sums. People of modest position dispose of power and award contracts and privileges of tremendous importance to other people–construction jobs, radio channels, air routes, zoning laws, building codes, and so on. To fear corruption in government is not irrational.

This means, however, that government “bureaucracy”— and its consequent high costs—cannot be eliminated. Any government that is not a “government of forms” degenerates rapidly into a mutual looting society.

My comment: If government operations are fully proceduralized, to the point of eliminating individual employee and frontline manager discretion, they will be cumbersome and inefficient. If they are not fully proceduralized in this way, then they will be subject to widespread corruption and tyrannical behavior.

Hence, the expansion of government into all aspects of human life leads to increasing inefficiency, eventually resulting in sluggish performance across the entire economy–while the increasing frustration with bureaucracy results in a widespread demand to “make government more responsive” by giving more discretionary authority to administrators and to their political superiors. This, in turn, results in a government which is not only a looting society but a tyranny. Yet at the same time, there will still be enough baroque proceduralization (selectively enforced) to ensure high levels of inefficiency and very high government administrative costs.

Stuart Schneiderman said...

Thank you, David, for the Drucker remarks and for clarifying these points.

Anonymous said...

"Discretion" is a luxury government can't afford. Look at the IRS.

What I find missing in the debate about all these government programs is the simple fact that government is a terribly inefficient way to utilize resources. It's cumbersome by design.

As I've often said in my comments here, the true scandal is institutionalized higher education and the elitism and entitlement that it breeds in people. It's become a status symbol, with all the attendant problems that come with status symbols.

People who have college degrees think they're smarter than everyone else, and they apply their "learning" in very strange ways that reflect their own personal philosophy more than any deep critical thinking or citation of empirical evidence. It's a status thing.

The level of elitism in the civil service is astounding, and nowhere is it more on display than these IRS intimidation hearings. I still don't understand why Lois Lerner hasn't been compelled to testify after her asserting her innocence in an opening statement and then taking the Fifth.


Dennis said...

I believe most contracts are still "best industry practices." Try defining that if you are a contracting officer or otherwise a technical representative. Another problem is the there are other considerations laid on any government contract. I don't know enough about this particular contract except that there are two prime contractors, one for the front end and one for the backend. Apparently they don't talk to each other about how they interface.
I am not sure who the subcontractors are in this situation.
For your edification:
David makes a number of salient points that ought to have occurred to any number of people.

Anonymous said...

Dennis, I see where you're going, but I still think the crux of the issue is that government is a terrible, terrible way to allocate society's resources. For those Lefties whose highest value is equality, it is the only way to "fairly" allocate resources. That's the pickle we're in. Meanwhile, the more government intervenes, the less equal things become. It's a scam by the political class to centralize power in Washington and make pronouncements about what's best for other people while exempting themselves and living high on the hog. It's disgraceful.