Could A Tech Giant Build A Better Health Exchange? Maybe Not

Dec 2, 2013
Originally published on December 2, 2013 8:48 pm

Oregon has spent more than $40 million to build its own online health care exchange. It gave that money to a Silicon Valley titan, Oracle, but the result has been a disaster of missed deadlines, a nonworking website and a state forced to process thousands of insurance applications on paper.

Some Oregon officials were sounding alarms about the tech company's work on the state's online health care exchange as early as last spring. Oracle was behind schedule and, worse, didn't seem able to offer an estimate of what it would take to get the state's online exchange up and running.

"It is the most maddening and frustrating position to be in, absolutely," says Liz Baxter, chairwoman of the board for Cover Oregon, the state's online exchange. "We have spent a lot of money to get something done — to get it done well — to serve the people in our state, and it is maddening that we can't seem to get over this last hump."

Falling Back On Paper Applications

Oregon had an ambitious goal: to create a place where anyone, from Medicaid recipients and small-business owners to people in the individual market, could go to shop for insurance. "In hindsight — which is always wonderful — we made decisions that made our system much more complicated to build," Baxter says.

Initially, Oracle promised it could get the job done. But by mid-May, the head of Cover Oregon, Rocky King, had written the company, pleading for "a simple calendar schedule ... to ascertain whether or not we will be able to deliver" a working exchange by Oct. 1.

Five months later, when Oregon's exchange was supposed to go live, the site still didn't work. And as recently as two weeks ago, the state had not yet managed to sign up a single person for private health insurance under the federal Affordable Care Act.

In desperation, Baxter says, Cover Oregon hired hundreds of temporary workers and cobbled together an application based on paper — currently the only way to apply.

"It's very easy try to envision you can automate a paper process," Baxter says. "[But] it's been very complex to take this ... complicated online system that we've been building and turn that into a paper process."

David Kline, an author and freelance journalist with a wife and two young children, is dealing with the fallout. A Portland resident, Kline is self-employed and eager to shop for new health insurance coverage on Oregon's exchange.

"It costs a lot of money to buy your own insurance," he says. "We spend about $25,000 a year on insurance premiums, copays, unreimbursed expenses. That's a lot of money. Some people can live on that."

Kline quickly realized that he could buy better insurance for less on Oregon's new exchange, but signing up hasn't been easy. After realizing that the website was hopeless, Kline tried applying by paper. But he soon realized the paper application had flaws that made reporting an accurate income impossible. Then he wrote an op-ed — and was soon promised a fix — but says he hasn't seen one.

"I just downloaded the [new] application this morning ... it's the same application," he says.

Coming Down Past The Wire

Originally, Oregon had hoped that Kline and tens of thousands of others would be able to do all of this online. The state hired Oracle to make that possible and has paid the company $43 million so far. But Oracle has missed deadline after deadline.

Kline is fed up with the delays for the rollout. "They told us Oct. 1, they told us Oct. 15, they told us Nov. 1, they told us Nov. 30," Kline says. "Come on!"

Oracle declined repeated requests from NPR to comment.

Now, Cover Oregon is telling its citizens who need insurance that they need to get their paper applications postmarked by Dec. 4 — this week — to get coverage by the beginning of 2014. They'll then need to finish the process and pick a plan by Dec. 15.

Oracle is now telling state officials that the website should be up and working by Dec. 16 — one day after the deadline.

King, the executive director of Cover Oregon, announced Monday that he will resign, citing health reasons. But there is little hope the state will get its money back from the tech company.

Baxter says there will be investigations into what went wrong and Oracle's responsibility. But for now, she says, she's trying to focus on Cover Oregon's mission. "We have tried very hard to [be] clear that our goal is about coverage."

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Oregon has spent more than $43 million to build its own online healthcare exchange. It paid that money to Oracle Corporation, a Silicon Valley titan. The results: missed deadlines, a non-functional website and a state forced to process thousands of applications on paper.

But as NPR's Steve Henn reports, there is little hope that the state will get its money back from Oracle.

STEVE HENN, BYLINE: As early as last spring, officials within Oregon's state government were sounding alarms about Oracle's work on the state's ambitious online healthcare exchange. Oracle was behind schedule, missing deadlines, and worse, the company didn't seem able to offer an estimate of what it would take to get the state's online healthcare exchange up and running.

LIZ BAXTER: It is the most maddening and frustrating position to be in.

HENN: Liz Baxter is the chair of the board for Cover Oregon, the state's online exchange.

BAXTER: We have spent a lot of money to get something done, to get it done well, to serve the people in our state and it is maddening that we can't seem to get over this last hump.

HENN: Oregon had an ambitious goal: a one-stop shop where anyone could go to find out if they qualified for insurance.

BAXTER: In hindsight, which is always wonderful, what we did is we made decisions that made our system much more complicated to build.

HENN: The vision was that Medicaid recipients, small businesses and folks in the individual market could all shop for insurance in one place. Initially, Oracle promised it could get the job done. But by mid-May, Cover Oregon's executive director Rocky King wrote the company pleading for quote, "a simple calendar schedule to ascertain whether or not we'll be able to deliver a working website by October 1st."

Five months later, when Oregon's healthcare exchange was supposed to go live, the website still didn't work. And as recently as two weeks ago, the state still hadn't managed to sign up a single person for private health insurance under the Affordable Care Act. In desperation, Liz Baxter says Cover Oregon hired hundreds of temporary workers and cobbled together an application based on paper. Now that's the only way to apply. David Kline is dealing with the fallout of all this. He's an author and a freelance journalist.

DAVID KLINE: I have a wife and two young kids.

HENN: Kline is self-employed and eager to shop for new health insurance coverage on Oregon's public exchange.

KLINE: It costs a lot of money to buy your own insurance. We spend about $25,000 a year on insurance premiums, co-pays, unreimbursed expenses. That's a lot of money. Some people can live on that.

HENN: Kline quickly realized that he could buy better insurance for less on Oregon's exchange, but signing up hasn't been easy. After realizing the website was hopeless, Kline tried applying by paper. But he soon realized the paper application had flaws that made reporting an accurate income impossible. He was publically promised a fix, but...

KLINE: Well, I just downloaded the application this morning, the new application.

HENN: And there is no fix. Originally, officials in Oregon hoped that Kline and tens of thousands of others like him would be able to do all of this online. The state hired Oracle to make that possible and it's paid the company more than $43 million so far. But Oracle has missed deadline after deadline.

KLINE: Right. They told us October 1st, they told us October 15th, they told us November 1st, they told us November 30th, come on.

HENN: Now, Cover Oregon is telling its citizens who need insurance that they'll need to get their paper applications postmarked by December 4th, this week, in order to get coverage by the beginning of the year, and they'll need to finish the process and pick a plan by the 15th. Oracle didn't responds to our requests for comment about delays, but the company is now telling state officials that the website should be up and working by December 16th, the day after the deadline.

And today, Cover Oregon's executive director resigned citing medical reasons. Steve Henn, NPR News. Transcript provided by NPR, Copyright NPR.