World View: Aetna CEO Predicts Obamacare IT Failures Until 2017

World View: Aetna CEO Predicts Obamacare IT Failures Until 2017

This morning’s key headlines from

  • Aetna CEO predicts Obamacare IT failures until 2017
  • Assad says loss of chemical weapons a blow to Syria’s morale
  • EU officials demand more privatization from Greece

Aetna CEO predicts Obamacare IT failures until 2017

Aetna CEO Mark Bertolini
Aetna CEO Mark Bertolini

As I wrote yesterday ( “14-Oct-13 World View — IT systems a continuing disaster”), the Obamacare IT systems are a continuingtechnical disaster, much worse than the “glitches” that theadministration are describing. It now turns out that the technicalissues are much more serious than even I realized. 

Mark Bertolini, the CEO of insurance company Aetna Inc., has beenpersonally involved in the implementation of Obamacare from thebeginning, from both a policy and an IT perspective, and he’s alwaysbeen a supporter of Obamacare, albeit perhaps a reluctant one. 

Bertolini was interviewed on CNBC on Monday, and his technicalassessment of the Obamacare websites is that they’re so bad theywon’t be fully working until 2017. 

Since yesterday, several people have written to me to complain that Iwas being too negative about the Obamacare web sites, and I didn’treally know, since I wasn’t involved in their development. But that’snot true of Bertolini, who knows as much as anyone in the countryabout what’s going on. 

I transcribed the interview. Questions from the interviewers areenclosed in [brackets]. Bertolini was first asked if he knew from thebeginning how bad it would be: 

We were one of the alpha testers. We got prettynervous as we got further along. We helped them build blueprints,on how to put the system together, and as they started missingdeadlines, we were pretty convinced that it was going to be adifficult launch. 

[Did you tell them – don’t do this – move the date?] 

We started to help them prioritize how to move ahead with theproject. They have their perspective on when they wanted to start,so we did our very best to help them get started on time… 

[How long will it take to actually get them fixed to work, get outall the kinks?] 

That is a big question. When you implement a project of thissize, the first thing you do is unit testing, then you doapplication testing, then you do integration testing, and then youdo scalability testing. And that plan is usually a lot longer thansome of the application development itself. That’s happening onthe fly. 

[It wasn’t done beforehand?] 

All of it’s been on the fly. We didn’t get code drops until amonth before the system went live from a user testingstandpoint.

This is already devastating. Yesterday I was criticizing thecontractors who implemented the web sites as incompetent, and thisproves it. For a full-scale rollout of such a large system on October1, any competent IT manager would have provided testable code severalmonths earlier. As Bertolini says below, this should be a careerending mistake for the people involved. 

So if you think about … you don’t know whatscalability issues you have until you have all the functionalityworking, and everybody starts hitting the system, so you’veactually gotta get the functionality up, and the integratedtesting working, cause you don’t know how many files you’re goingto hit, how many people are going to hit them, until you get itworking together. And then scalability is the last thing yousize. 

[What happens January 1 – if people are having troubles now – ifit’s that bad of a situation, is everyone going to be able to signup by January 1?] 

No, and that’s why enrollment is gonna still be open until march31. But I think the bigger issue is whether enough people will beable to sign up to make it work. 

[You need buy-in by a lot of people — need a lot of youngpeople.] 

I think the attention span of the younger generation in usingtechnology – if it doesn’t work the first time, it’s going to bepretty tough to get them back the second time. And so as aresult, with the web site technology, we are actually testing itwith the types of users who we want to use it.

[So there’s not much time to get it right.] 

It’s the law of the land, number one. Number two, publicexchanges are gonna be here to stay, so we need to make them worksomehow. And I think the question is how we get there from here.

[The six months between now and March 31 – that’s not a long time- to do all of the testing and prototyping and evaluation andscalability of the system this large. Is that enough time, inyour judgment?] 

I don’t know. We’re in a place now where there’s so much wrong,you just don’t know what’s broken until you get a lot more of itfixed. And we have to plow through it. I’ve been here one or twotimes in my career, it’s nothing you ever want to repeat, causeit’s very difficult. It’s a career ending event in a lot ofcases. 

[Taking the politics out of it — Are you worried that if it’sdelayed a year – once you get people into an entitlement, younever get them out, so you wanted to get started, right?] 

If the program blows up because people don’t sign up, then theprogram’s not going to move ahead either for all that while. 

So this is gonna be a three year thing. 

[Should they delay it by a year?] 

I would have [delayed it], if I’d been in their seat. So thepolitics got in the way of a good business decision. 

So this is gonna be 2017-2016-2017 before it grows. I think thebigger issue for folks to think about is that private exchangeshave now kicked off, as a result of the private sector innovatingagainst the law. And as these private exchanges move ahead, andthey’re very good experiences in a lot of cases, we’ll belaunching a number of them, we’ll be in 15 this year alone, whatwill happen is that you’ll start to attract people to a differentkind of marketplace. What will do in juxtaposition to the publicexchanges over time, and how will that work?

The important points in Bertolini’s interview are these: Almost notesting has been done; implementation should have been delayed for ayear; it’s going to take three years to get it working. 

I’ve been a Senior Software Engineer for decades, and I’ve been atechnology journalist for almost as long, so I’m very well aware ofwhat’s going on here. I’ve been a personal participant in several ITdisasters, and I’ve been an outsider reporting on several ITdisasters, and I can tell you that this smells to high heaven like anIT disaster. 

There are two kinds of IT projects. One kind is like digging a ditch.You know that if you keep digging, you’ll eventually get the ditchdug. It may take longer than expected, but sooner or later it willalways end successfully, because there’s no real risk. 

The second kind of IT project is like building a bridge, and the riskis extremely high. You can keep building, but if one day the entirebridge collapses and falls into the river, then you have no choice butto either start over or just abandon the project. The Obamacare websites are in this category. 

This project should have cost $10-25 million, as I describedyesterday, but it’s already cost an astronomical $93.7 million. Nowthe Obama administration has to decide whether this “bridge,” which isin the process of collapsing into the river, should be repaired, orwhether the project should be started from scratch. It’s quitepossible that there’s no choice but to start it from scratch. Buteither way, it’s going to cost many more tens of millions of dollarsto get working, if it ever works. And the Obama administration is sodesperate to save Obamacare, they’ll do anything, no matter howdesperate the action. 

There’s one more thing worth noting: Bertolini talks about “privateexchanges” that are springing up in competition with the federalexchanges. This is a very interesting development worth watching.CNBC

Assad says loss of chemical weapons a blow to Syria’s morale

It’s always nice to know that even genocidal maniacs can have a senseof humor, so it’s worth a chuckle that Syria’s president Basharal-Assad said that he should have been a winner of the Nobel PeacePrize. Actually, I’ve made the same suggestion in the past — that hedeserves the prize by exterminating as many innocent people aspossible, so there’s no one left to fight a war. 

However, it’s possibly more interesting that al-Assad, who untilrecently denied that he had chemical weapons, is now saying thatlosing them would be a loss of morale for all of Syria: 

There is no doubt that the loss of chemical weaponshas resulted in a loss of morale and a political loss forSyria. Since 2003, Syria has demanded that the countries in theregion dismantle their WMDs, and the chemical weapons were meantto be a bargaining chip in Syria’s hands in exchange for Israeldismantling its nuclear arsenal. 

The chemical weapons, which have lost their deterrent value overthe past few years, were meant to be used only after Israel usedits nuclear weapons. 

Today the price has changed and we have agreed to give up ourchemical weapons to remove the threat of the US attackingus.

So why are they a loss of morale for Syria? Because “Israel woulddistribute gas masks to its citizens when there was a rise in tensionin the region.” Jerusalem Post

EU officials demand more privatization from Greece

Greece was first bailed out for 110 billion euros in 2010, but whenthat failed, it got a second rescue in 2012 worth 130 billion eurosplus a private sector debt write-off totaling more than 100 billioneuros. But it still isn’t enough. Greece would like to issue bondsin 2014 for 4.4 billion euros to pay for debts that will come duenext year, but Greece’s debt is already 175% of annual output. European officials are refusing to permit Greece to go even deeperinto debt. 

So there’s still a 4.4 billion euro funding gap in 2014 which will have to be made up somehow, and an ECB executive boardmember puts the figure at 6 billion euros. Instead, the ECB isdemanding that Greece sell off more government assets and privatizemore government run businesses. At any rate, European officials willnot make any decisions until December. Kathimerini and AFP

KEYS: Generational Dynamics, Aetna, Mark Bertolini, Obamacare,Syria, Bashar al-Assad, Israel, Greece 

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