Healthcare.gov: Private shame, public blame
The glitches that have dogged the government’s universal healthcare site have cast a dark shadow over the presidency and over the Democratic Party as they enter an election year when they could easily lose the Senate. The failure of anyone within the Obama administration to notice in the three long years of preparation that something was seriously amiss is an abject failure of management that has led to a self-inflicted political catastrophe.
The inept rollout has allowed the president’s enemies to claim that that is what comes of allowing the government to interfere in the healthcare market. Obamacare’s troubled birth is cited as irrefutable evidence that the public sector is particularly ill-fitted to deal with something as important as healthcare. Had the process been left to the private sector, they argue, the website would have worked and Americans been better served.
This is not just an example of a public enterprise failing, but the government investing too much faith in the efficiency of the private company that failed to build and deliver an operating site in good time. In the interest of political point scoring, private sector inadequacies are being passed off as inherent faults of the public sector.
The Department of Health and Human Services was in the position familiar to any hapless client when faced with buying software or devising a website. Public servants provided a specification to established web designers, only to find themselves adrift on a sea of incomprehensible technical jargon, mendacity, foolhardiness and obfuscation.
The officials charged with keeping the wayward site on track may be excused for swallowing the reassurances of a fatally flawed firm that took the money but did not do the work. The company paid to construct healthcare.gov was CGI Federal — hardly a hole-in-the-wall operation. It boasted revenues for fiscal year 2013 at $9.8 billion.
Nor was it a stranger to federal government contracts. Among other politically sensitive jobs it has won are the U.S. Nuclear Regulatory Commission and the World Anti-Doping Agency. (Under the circumstances, its nuclear regulation contract is particularly worrisome.) CGI was founded and is run by a Canadian, Serge Godin, who awarded himself compensation of $6,089,507 in 2011 and $4,456,927 last year.
Short-changing the federal government is not proving a good idea for Godin or other shareholders at CGI. Their ineptitude has led to their company’s shares being shorted.
This is a textbook case of the market punishing a sinner. If a company so conspicuously sells a customer a bad product, it will soon find itself with a falling share price as it runs out of suckers to sting. The punishment the market is meting out to Godin and his feckless employees should be welcomed by anyone who believes in the virtues of the free market.
Of course, anyone who has worked with new technology knows that nothing ever goes according to plan. Customers of Time Warner’s paid email service Roadrunner were likely cursing last week that they did not transfer to free Gmail years ago. My own email was not fixed even after I spent four hours over three days talking to 13 agents, mostly in broken Filipino-English, including three impotent supervisors. It took a plea to the Time Warner chairman to achieve that miracle. (I eventually discovered that the fault may have been due to either “migrating servers” or “latency issues” — or various other implausible and incomprehensible excuses.)
Anyone who has dealt with such an outage will recognize the Kafkaesque world into which Time Warner’s cable customers are drawn when anything goes wrong. It is the same when the TV disappears for no good reason. The victim is punished by waiting for hours on the line and obliged to listen to out-of-tune music until the foreign call-center agents — renamed with American names such as “Sharon” and “Hillary” to make them seem more American, but also given long identifying numbers like prisoners in a gulag — politely explain in fractured English that the problem is outside their ability to fix.
For many who live in apartment blocks, Time Warner is a monopoly utility supplier of cable TV and email. They, too, should be punished by the market for treating their customers with such cavalier abandon and contempt. Yet amid the Roadrunner fiasco no one is demanding the head on a platter of the chairman and chief executive officer Glenn A. Britt (compensation last year $17.4 million), nor the scalp of the head of Time Warner Jeff Bewkes (2012 compensation $25.89 million). The public sector, it seems, is held to a higher standard than the private sector, though we the people pay through the nose for both.
Such a spectacular failure to provide a humdrum service should cause politicians to shriek with rage that Americans are treated with such disdain.
But where are the Tea Party House members declaring that the failure of CGI to deliver a workable Obamacare website confirms their jaded view that the elites who run banks and big businesses are treated with kid gloves by the rest of Congress and the press? Where are the papers from conservative think-tank fellows arguing that when poorly run private companies go unpunished and leave their customers in the lurch, they are betraying the spirit of the market and undermining the belief that one of the wonders of capitalism is that it is self-correcting?
Instead, the failures of the Obamacare site have been blamed not on the company responsible but on the principle of universal healthcare. For now, those who think the 44 million Americans who cannot afford healthcare should be treated in the most expensive way possible — in hospital emergency rooms, while the rest of the nation picks up the tab — have had it all their own way. The site doesn’t work so Obamacare is evil.
If, as promised, the Affordable Care Act eventually does provide affordable care, that argument is going to seem like old news at election time in November. Like Benghazi and the president’s birth certificate, it is going to seem like re-warmed pizza.
Meanwhile, it would be good if those who trumpet the merits of commerce running everything show they are not mere shills by holding private companies to account when things go wrong and customers are short-changed. The Tea Party is on to something when charging that America is a corporatist state, which government and big business carve up for their own purposes and profit.
If one of the Republican presidential hopefuls tapped into this rich vein of truth, they would separate themselves from the pack — and arm themselves with an argument that would ring true with voters across the political spectrum.
Nicholas Wapshott is the author of Keynes Hayek: The Clash That Defined Modern Economics. Read extracts here. Follow Wapshott on Twitter @nwapshott.
PHOTO (TOP): A busy screen on the laptop of a Certified Application Counselor as he attempted to enroll an interested person for Affordable Care Act insurance, known as Obamacare, at the Borinquen Medical Center in Miami, Florida, October 2, 2013. REUTERS/Joe Skipper
PHOTO (INSERT 1): Health and Human Services Secretary Kathleen Sebelius takes her seat to testify before a House Energy and Commerce Committee hearing about complications with the Affordable Care Act enrollment website, on Capitol Hill in Washington, October 30, 2013. REUTERS/Jonathan Ernst
PHOTO (INSERT 2): (L-R) Cheryl Campbell, senior vice president of CGI Federal, Andrew Slavitt, executive vice president for Optum/QSSI, Lynn Spellecy, corporate counsel for Equifax Workforce Solutions and John Lau, program director for Serco, testifying at a House Energy and Commerce Committee hearing on the Affordable Care Act website on Capitol Hill in Washington, October 24, 2013. REUTERS/Jason Reed