DIGITALIZATION CHALLENGE: LESSONS LEARNED FROM HEALTHCARE.GOV PROJECT

Executive Summary

The purpose of the Healthcare.gov project was to provide an easily accessible, web – based platform for U.S residents, allowing them to compare prices of different health care plans, identify if they qualify for federal subsidies, and ultimately enroll in Obamacare as required by Affordable Care Act (ACA). Of March 23, 2010.

The centers for Medicare and Medicaid (CMS) services was appointed to superintend the implementation and management of the Healthcare.gov project and tasked with the responsibility of ensuring the functionality of the website. On October 1, 2013 the Healthcare.gov was launch as scheduled. At its launch, it was obvious that the project was a disastrous failure as consumers were met with website outages and technical malfunctions.

The purpose of this research study therefore, is to examine and analyze the Healthcare.gov project challenges, identifying the factors that contributed to the website’s breakdown at launch, and the lessons learned that may help future government projects and project managers avoid such catastrophic failures.

 

 

INTRODUCTION

The Affordable Care Act (ACA) of March 23, 2010 was designed to bring affordable health care to U.S residents who otherwise would go uninsured. At the heart of the program is the Healthcare.gov project created to be the official marketplace that connect the buying public with private institutions offering insurance policies through the project. The Affordable Care Act also gave the States the right to design their own healthcare exchange or opt-in to the healthcare.gov project.

The healthcare.gov project was launch officially on October 1, 2013 as planned. Inundated with interested consumers, the project encountered problems from slow responses, access denied errors and other inexplicable glitches that hindered some users from finalizing their transactions. It is easy to observe that the launch of the healthcare.gov project was a calamitous failure with only six consumers signing up for health insurance on the first day. The disastrous start and near implosion of the healthcare.gov project provide stakeholders with lessons on what went right, what went wrong, and what never to do again. However, after numerous research and investigation on the roll-out of the project, many experts identified lack of project management fundamentals as a key reason behind the failure. This research study therefore, is to analyze the project challenges, factors that cause the failure and the lessons learned that may assist future government project avert such monumental failure.

 

HEALTHCARE.GOV PROJECT CHALLENGES     

                                                                          

The Centers for Medicare and Medicaid (CMS) services was charged with the responsibility of designing and implementing the invention of HealthCare.gov project, however, CMS was bombarded with a barrage of political and programmatic complication from the genesis of the project from lack of senior leadership, project complexity, abrupt policy changes, compressed timeframe and high-risk contract setup with website developers.

• Lack of Senior Leadership
  • • From inception Healthcare.gov project – President Obama’s signature domestic initiative suffered from lack of central leadership and involvement from Centers for Medicare and Medicaid (CMS) services top administrators. According to “U.S House of representatives committee on oversight and Government Reform” (2014) report, it was discovered that the White House chief technology officer was not involve in the planning of the Healthcare.gov system. As a result, the project management team find it exceedingly difficult to steer the compounded technical and political landscape.
• Project Complexity
  • • Healthcare.gov system was developed in a comparatively short period of time in spite of its complex nature. Despite the fact that, CMS has broad experience in designing and managing healthcare programs like Medicare and Medicaid, screw up Healthcare.gov project as their project planning was practically ineffective to deal effectively with high complexity of the Healthcare.gov project.
• Abrupt Policy Changes                                                                                                                  
  • • Abrupt policy changes are instrumental to a high level of unpredictability, which importantly affected Healthcare.gov project and the capacity to plan effectively. Considerable amount of time was equally invested by CMS in resolving policy issues instead of focusing on project implementation. To worsen the predicament, uncertainties surrounding the funding of the project made it more strenuous to determine and prioritize the project scope during the contract setup, staffing, and the direction of the project in general.
• Compressed Project Timeframe
  • • The funding for the contract was awarded since September 2011, unfortunately the contractors did not receive reasonable website specifications so as to start designing the software until March 2013, few months before the launch of the project. As a result of the delay, the contractors had very little time to design, build, and test the system.
• High-Risk contracts setup
  • • The CMS commitment into business partnerships with developers on cost-reimbursable contracts hampered effective contracts management, as well as financial restraint and control over their contractor partners. “A major problem for these contracts according to U.S Government Accountability Office (GAO) is that they “create additional risk because agencies like CMS are required to pay the contractors’ allowable costs regardless of whether the project is completed”. This account for the overall cost of the Healthcare.gov project skyrocket to over $2.1 billion.

 

KEY FACTORS CONTRIBUTING TO HEALTHCARE.GOV FAILURE AT LAUNCH     

                                  

Tasked with a colossal responsibility of designing and implementing Healthcare.gov project, CMS made initial blunder that overtly affected the website development and functionality.

• Poor project scope management and system requirement analysis
  • • Managing the project scope is primarily concerned with defining and controlling what is and is not included in the project (PMBOK Guide, Sixth edition). It’s obvious that the Centers for Medicare and Medicaid (CMS) services at the initial stage of the project did not understand the Healthcare.gov project scope enough to assess the website’s technical and operational tasks required, which consequently led to underestimating operational requirements, not assessing the project’s IT needs intensively and their inability to secure technology competent enough to increase website capacity.
• Insufficient risk management
  • • It is obvious that teething problems with complex projects are virtually inevitable, the designing of contingency plans for high impact risks was practically nonexistent prior to the disastrous failure of the Healthcare.gov project at launch. Exigency planning probably would have created the opportunity to identify prospective risk mitigation strategies in advance. Eventually, the intentional refusal of the CMS’s management to adjust implementation plans upon this problem due to inadequate risk planning compounded the adversity and consequently, led to catastrophic failure. 
• Lack of clear leadership                                                                                                           
  • • There was no formal assignment of responsibilities in place between the various government department involved in the project and the Centers for Medicare and Medicaid (CMS) services failure to assign a clear project leader was exceptionally troublesome for Healthcare.gov project. Effective and clear leadership single-handedly may have transformed and ameliorate many of the Healthcare.gov project deficiencies and probably would have enabled an extensive view across the project to better evaluate the progress, identify problems, and determine the project priorities.
• Mismanagement of project time
  • • The final months of development and implementation for Healthcare.gov project was in the state of complete confusion and disorder for CMS staff and contractors. The compressed timeframe by CMS impacted the design and project implementation as they make unplanned changes to system requirements and technical specifications. This last-minute change coupled with shortage of resources left little time for system developers to sufficiently test website functionality and security, and ensuring adequate capacity for consumers.
• Delay in policy development                                                                                                   
  • • Formulating policy programs that can have significant effect on people must incorporate diverse economic, cultural, social, and political values and Healthcare.gov project required significant policy development and decision-making to apprise technical design and implementation of the project. This involve writing regulations to exercise control over marketplaces, establishing partnerships with other departments, States, and issuer who have a stake in the project. This policy formulation was made more strenuous and prolonged by lack of certainty in respect to the mission, scope, and federal marketplace and website funding, which was of course cause in part by varying degree of marketplace expectations and controversial political environment.
• CMS resistance to bad news
  • • The Centers for Medicare and Medicaid (CMS) services leadership and staff were aware of the problems prior to the launch of HealthCare.gov project, with reports from outside entities hired to assess the project and internally, through meetings and emails.  They took minimize action to respond to warnings, remaining overly optimistic about the launch, and developing few contingency plans.  As the project degraded further and troubles became apparent, they appear to have become desensitized to bad news about progress.  The problems were layered and complex, and information became unwieldy and difficult to prioritize.
• Project management fundamentals                                                                                              
  • • The Centers for Medicare and Medicaid (CMS) services were unable to execute promptly an established project management practice. The reports from the software Engineering Institute as well as the Government Accountability Office (GAO), confirm that CMS leadership rejected well-established project management practices such as robust schedule development, comprehensive budget estimate, data management monitoring practices, as well as milestone project reviews.

 

RECOMMENDATIONS/LESSONS LEARNED FROM HEALTHCARE.GOV PROJECT FAILURE

In an attempt to implement and manage information technology enabling national policy goals and government missions, analysis of the Healthcare.gov project reveals lessons learned that can be useful and help future governments and project managers avoid such a colossal and catastrophic failures. From my analysis, I observed that it is critically important to ensure the disciplined execution of project management principles such as leadership, alignment, change management, vigorous testing, disciplined decision-making, and proper vendor management. My observations and recommendations are discussed below:

• Clearly define leadership roles                                                                                             
  • • Absence of clarity about roles and project structure led to CMS staff working at cross-purposes and leaders receiving poor and incomplete information. It is obvious that in a multiplex project like Healthcare.gov it’s not easy to clearly define senior leadership roles. This is because various institutions are involved in the project execution and many stakeholders may perhaps have a politically motivated interest in the outcome of the project. Regrettably, the Healthcare.gov could not overcome this challenge. Clearly defined project leadership can provide clarity to project decisions, and enhance project coordination, consistency, and provide cohesion across tasks and extensive view of progress 
• Align project and organizational strategies with available resources
  • • Effective planning for a complex project begins, at its earliest stages, with an analysis of project needs and how best to align them with the organization and resources. CMS’s attempt to align resources with needs and mercilessly categorize was necessary to improving problems with HealthCare.gov.  Enhancement required leadership to have clear and precise information about costs and benefits, and make good use of the limited time and resources available and insert prioritization decisions in all aspects of planning, execution, and measuring results.
• Manage change with discipline                                                                                             
  • •  Even though it’s necessary to accommodate important requirement changes, the project management team should endeavor to avoid major changes in the later part of the project without fully understanding their impact. Healthcare.gov project suffered from this challenge as the last-minute change to the method of creating a user account metamorphosed into a substantial increase in the simultaneous website users and the volume of network traffic. This impact, unfortunately, was not fully understood by the project team.  If there is any need to incorporate a major change in later phase of the project, a careful analysis of its impact on system performance should be conducted.
• Identify and address factors of organizational culture that may affect project success
  • • When CMS was charged with the responsibility of implementing and managing Healthcare.gov project, inadequate attention was paid to the cultural shift needed to expedite a new type of program and development approach.  CMS’s cultural preference for established structures, contained groups, and inflexible procedures was often at odds with the needs of a major technological start-up project, which required more creativity and flexibility.  An established clear project leadership, would made a cultural shift toward improved communication and transparency, quick assessment of problems, and openness to change and this will involve incorporating these values in daily work.
• Never take a shortcut in software testing                                                                          
  • • The Healthcare.gov development team took a shortcut by testing the website with a small scale of data rather than using a realistic and large volume of data. As a result, the system that worked perfectly fine in a lab setting could not endure the larger volume of network traffic. A disciplined project team should resist this and ensure software system is thoroughly tested with a real-world data to ensure a successful launch.
• Manage service provides effectively
  • • A huge number of service providers was a contributing factor for the failure of Healthcare.gov project launch. As the number of external service providers increases, the complexity of coordinating them increases exponentially. Homogenization of the task perform by different providers is often challenging; therefore, it is important to put in place communication and coordination processes that enable all participating institutions to work efficiently.

Conclusion

The Healthcare.gov project was perhaps one of the most crucial and publicized failures in the history of government software development project. The bungled launch excites American public about their government’s capabilities, and as a result, compelled President Obama to tender multiple apologies. Although Healthcare.gov project faced daunting challenges, effective project management would have prevented the catastrophic failure. The lessons learned from this project should be utilized to improve the outcome of future government projects for the benefit of the public and to assist project managers avoid such devastating project failure in the future.

Biography:

Mr. Ekpe is the operation/project team leader at United Airlines, Inc. He is a certified project manager, PMP. Ekpe is currently an MBA student with concentration in Business Analytics from Montclair State University, New Jersey, United States. He earned his BS in Marketing from the University of Calabar, Nigeria. Learn more about the author here: http://www.linkedin.com/in/edet-ekpe

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