How to Criticize Obamacare Without Really Trying

by Gene Giannotta

The Obamacare rollout has been a study in how not to introduce a major web service to the world. From reports of the debacle, there seemed to be a lack of proper coordination  as well as adequate testing. For a system so complex, that was obviously a recipe for disaster.

But while much of the rhetorical whirlwind out of Washington has centered around the question of who’s to blame for the mess, the “who” is largely besides the point. The question we should be asking is why. Just like the other October failure of government - the shutdown - the reasons for HealthCare.gov not working are not a simple matter of finding a person or two who screwed up and firing them, as cathartic as that might be for politicians and others looking for symbolism rather than solutions.

Any entity as large as the federal government, with as complicated a system of intertwining bureaucracies and competing interests both within that network as well as outside, in the realm of public opinion and congressional oversight, is probably more likely to end up with some wires crossed when a project as massive and high-profile as HealthCare.gov goes live.

After all, this isn’t the only botched IT project the federal government has presided over. The Post’s Walter Pincus, a longtime observer of the national security complex, pointed to a recent example under the Defense Department’s purview:

In this case, it was the Air Force. In 2005 it began a program designed to integrate into one system about 240 outdated computer networks at 600 locations that didn’t communicate with each other. It was to manage things such as equipment inventories, contracting, financial administration and personnel assignments.

The Air Force first estimated that the Expeditionary Combat Support System would cost $5.2 billion. On Nov. 14, 2012, it said it was canceling ECSS after spending up to $1.03 billion. The system “has not yielded any significant military capability,” according to an Air Force statement e-mailed to reporters. The Air Force estimated it would need $1.1 billion more to complete one-quarter of the originally designed program. Even so, it would not be ready until 2020.

2020!

So imagine if the Obama Administration had delayed the opening of the site until it was “ready.” In that alternate reality, we might be seeing hearings full of politicians wondering where the heck it is…in 2016.

Big bureaucratic entities, whether the federal government or private corporations, tend to face many of these kinds of issues. And in the case of the ACA, implementation requires federal, state, and private organizations all working together, with the added scrutiny of hyper-partisan politicians in Congress waiting to pounce on any slip-up as a sign of its fated implosion.

So in many ways, when commentators and critics point out HealthCare.gov’s flaws, they miss the real phenomenon we should be focusing on.

Just like the shutdown, the Obamacare rollout lays bare the simple fact that unlike a lean startup or small businesses that can afford to wait to release their product when it’s “ready,” government is dictated by political forces that can be far less patient or forgiving. To be sure, politics abounds in private industry as well. The business world is as rife with tensions between competing interests and personalities as the world of governments. But the ACA combines those two atmospheres together to create a uniquely problematic mess.

Consider these points, from Ezra Klein, when he addressed Republican demand for someone to point the finger at:

How about Senate Republicans who tried to intimidate Sebelius out of using existing HHS funds to implement Obamacare? “Would you describe the authority under which you believe you have the ability to conduct such transfers?” Sen. Orrin Hatch demanded at one hearing. It’s difficult to imagine the size of the disaster if Sebelius hadn’t moved those funds.

How about congressional Republicans who refuse to permit the packages of technical fixes and tweaks that laws of this size routinely require?

How about Republican governors who told the Obama administration they absolutely had to be left to build their own health-care exchanges — you’ll remember that the House Democrats’ health-care plan included a single, national exchange — and then refused to build, leaving the construction of 34 insurance marketplaces up to HHS?

Now, this isn’t meant to pin the blame on the GOP, but rather to point out that Obamacare’s implementation - including the construction and reliability of the exchange web sites - hinges on the same sort of politicking that has made it impossible to craft long-term budgets and nearly brought the United States to the brink of default on multiple occasions over the past couple years.

But that also isn’t meant as an indictment of government-run projects, either. After all, it didn’t work out too well when the DoD outsourced the “systems integrator” role on several of its own projects.

TechCrunch’s Gregory Ferenstein, meanwhile, has plenty of criticisms, one which gets to the heart of my point about politics:

The company hired to build HealthCare.gov’s failing database, CGI Global, is an established government contractor (established enough to have actually lobbied Congress on the Affordable Care Act). Even though Canada had previously fired the firm for a botched $46.2 million medical registry system in 2011, CGI Global was still contracted to the build the technical keystone of the U.S. healthcare law.

“I think procurement in the federal government is broken. It favors incumbents and the status quo over the lean start-ups in terms of its archaic procurement rules and regulations,” Vivek Kundra, former U.S. chief information officer, told The Washingtonian.

Startups simply don’t have the knowhow to get around the oddly complicated procurement rules—or the congressional ties to curry favor. As a result, a mediocre contractor charged an astounding $93 million for a botched job.

Yes, but how to “fix” the system? Those large contractors, relying so much on government dollars, won’t just let go of their clout without a fight. And if smaller firms and start-ups could gain access to a more competitive procurement system, the results probably won’t be immune to the same logic of the existing reality. The very nature of competition (and rational human behavior) means that once one reaches the goal, they’re likely to try to hang on, preferably with the least amount of effort (i.e., the least costly route).

Evan Burfield, co-founder of DC startup incubator 1776 and formerly in charge of the company tasked with creating Recovery.gov, was also critical of the procurement system, in an op-ed this week. But while he holds up Recovery.gov as an exemplar of how government can work with startups on smart, effective web site projects, it was not without criticisms in its early days.

Burfield concludes by saying:

The best result that could come from the attention on HealthCare.gov is if Congress seeks to reform how the government procures IT contracts. Americans of all parties want an effective government that costs taxpayers less. Procurement reform would be a win for all of us.

A few weeks ago, I referred to “collective action problems” when discussing the politics of the shutdown and whether it was a “rational” outcome:

Essentially, it means that individuals, by pursuing their own self-interest, will in turn collectively harm the good the group as a whole. For example, lots of individuals thinking “well, what I do won’t make that big an impact, so what the heck” and going ahead with bad investments or irresponsibly getting rid of waste could end up causing terrible effects on the economy or the environment.

What this means is that individual rationality does not necessarily translate to social, or group, rationality. It might be in my best interest (benefits outweigh the cost, and hence “rational”) to litter, or waste a negligible amount of money (to me) on a bad financial bet. But taken together, all of those bad bets and tossed wrappers pile up.

The same logic can apply to procurement. After all, one man’s “cronyism” is another man’s “sticking up for my constituent.” Or fundraiser, as the case may be. The point is that Congress, as a body of 535 individuals with separate incentives, policy ideas, and interests, probably won’t use this moment as an excuse to streamline a process that probably works pretty well for each individual. Contractors know how to divvy up their processes to align what’s good for them with what is good for multiple members of Congress. The classic examples are in Defense contracting, but they exist everywhere.

In other words, we may agree with one part of the problem but the processes involved are so complex that they defy the kinds of easy solutions those diagnoses imply. But we prefer simplicity, so answers that make things sound easy are far more palatable. Like saying the administration should have relied more on startups, a more competitive contracting system, a more centralized approach, or some combination of these.

Or comparing Obama’s government with Obama’s campaign. My Votifi colleague Matt Sarge touched on this earlier this week, saying, “The consensus seems to be that the ACA website is an undertaking unrivaled by anything attempted on the campaign trail.”

The Post’s Brian Fung also tackled this problematic comparison:

Yet political campaigns are geared to do one thing, and that’s to win. Everybody who’s involved in a campaign shares a common interest, and to the extent that their tasks vary, staffers and volunteers nevertheless operate as a team. As the president’s critics often point out, however, governing is different from politicking. All agencies are supposed to work toward the common goal of providing for the public’s welfare. In reality, it’s a messy landscape of cross-cutting political interests and battles over pride and budgets. That makes coordination a lot more difficult. Even when the agencies themselves have agreed to cooperate, their infrastructure might not.

It’s a good sign that we all agree on the need for a more agile, responsive, and coherent process when it comes to government projects generally and contracting in particular. But that doesn’t mean we’ll agree on how to get there. And so maybe we can get those processes more agile, responsive, and coherent, but in order to do so we’ll have to make peace with the fact that they - and the system they exist within - will continue to be annoyingly imperfect and inherently complex.

 

1776: The Second Wave of the Internet Revolution

Great interview by Evan Burfield on Bloomberg TV this morning about the DC startup scene and how to harness Washington DCs unique characteristics to promote entrepreneurship. Watch and learn: 

What most schools don’t teach (by CodeOrg)

The Tech Agenda Under Obama: The Next Four Years

By Ian Rosoff

President Obama was a start up candidate; he had a great original pitch at the 2004 democratic national convention, and from there he quickly gained momentum toppling the Clinton candidacy and shutting down popular Senator John McCain to become the first African American President in history. The President’s victory in 2008 and again on Tuesday is partly due to the superior quality of his ground game and his ability to harness technology to strengthen his campaign and volunteer efforts.

As someone who knows firsthand the power of technology in our post-industrial economy, we can continue to expect aspects of his 2nd term agenda to focus on the role technology plays in creating jobs, fostering energy security, and ensuring that America stays on the cutting edge of innovation.

The startup community can hope for a few things in particular:

The biggest specific policy initiative is the Startup 2.0 Act, which would increase the work visa availability for foreign science, tech, engineering, and math grads from American universities, as well as increase entrepreneurship visas for foreigners. Tech Crunch believes this reform is in the pipeline for next year. 

Todd Park, the Chief Technology Officer, a position created in Obama’s first term, has been rolling out the President’s open government policy, which is designed to help businesses that need or use government data. The Health Data Consortium is using the open government data to help draw crime maps and create apps like WeMakeItSafer.

The government will also play a role in regulatory matters regarding technology and the Internet. Two bills, SOPA and PIPA were already heavily contested in the president’s first term, and issues about copyright and Privacy on the Internet are, depending on how Congress addresses these issues again, possibly the defining tech issue of Obama’s second term. Regulation of the online marketplace is still in its infancy, and it is apparent that government has a lot of catching up to do on developing a strategy that balances the interests of startups and tech companies as well as established media corporations.

Another controversial government project is the government’s early stage innovation fund. The government has had its share of failures investing in individual companies, with the Solyndra scandal being the most notable. But the government has some successes as well, like the veterans start up incubator to help vets start new high growth businesses, or a company like Cabulous who credits the capital gains exclusion in president Obama’s 2011 budget for their growth. The innovation fund is also committed to investing in clean energy companies.

Green jobs are likely going to be an important part of this administration’s innovation agenda, but the administration should not be myopic in only looking to invest in green tech or the most cutting edge tech coming out of Silicon Valley. The innovation fund will focus on infusing capital into less conventional startup areas so small businesses from outside places like California will get more exposure.

The Startup America partnership, which we are big fans of, is another avenue for funding and mentorship for startups.  We are actually pitching today at the Reboot America summit, where former and first White House CTO Aneesh Chopra will be speaking. He talked about the goals of Startup America last year in an article he wrote while serving as Chief Technology Officer of the United States. Access to capital and mentorship for high growth startups are key aspects of the initiative and Startup America has partnerships with the NYSE and the Case Foundations as well as other influential institutions to help foster entrepreneurship education. 

It’s an exciting time for Startups and many college graduates who feel the traditional corporate path is not for them are taking their talents to startups. New programs at top universities are being created to cater to the startup culture and prepare students to start their own companies out of college.  

The President’s commitment to encouraging startups and expediting the growth process for new businesses in the tech industry could be critical to his economic legacy. 

In the last two years, Washington, D.C., has developed a vibrant startup community. Michael Mayernick, founder of the social startup website, Proudly Made in DC, said that tech meet-ups in the nation’s capital have grown to rival those of New York City. His website has grown to feature more than 300 startups in the area that come together to share ideas about how to re-vamp government services.

Graduating from college, unemployment, internships and student loans

By Andrew Beilein

Four years ago I dreamt I would fall into job with a hefty, annual salary of around $60k. I could use that to repay my loans and start building my life as an adult. Isn’t that at least part of the reason why American families work so hard to put their kids through college - because there is a clear return on investment? Studies show that on average, a college degree is worth $1.2 million in lifetime income over a high school diploma. 

A few days after graduating from one of the top universities in the world, I’m blogging with a sense of anxiety about the future. My expectations of a $60k job have been dashed with a summer internship, which is the stark reality for thousands of college graduates in the current economic environment. I will soon descend upon Washington DC with thousands of other disappointed college graduates, not to mention the hordes of undergraduates, to do the summer in DC internship thing. After work we’ll all find places to commiserate on how little (if at all) we are paid and what we are going to do with our lives. 

Read More

Peer pitch

Edwin Rios, a journalism and psychology student at Northwestern University, just posted his feature story of me at the TechCocktail Spring Startup Showcase. Eddie found us online when he was researching tech startups from Chicago that are working on issues related to politics. We had a great conversation at TechCocktail and met again for hot chocolate on a chilly day in Hyde Park.  The article generally quite flattering even though I’m not thrilled about the hairline part.  

Couple of useful bits: 

Ahmad describes Votifi as a peer-to-peer recommendation engine where users find others that share their political view and engage with others on the other side of an issue. The idea arose in 2008. Votifi CEO Lou Aronson was waiting at his children’s bus stop with other parents. He heard them complaining about the automated calls they would receive during the upcoming election season. One neighbor wasn’t because he didn’t have a landline, just his cell phone.

And my favorite:

But when he winds up for his pitch to the people, the delivery is smooth. He changes up his explanation of what the company is with each person he talks to, staring into their eyes through his thick glasses. A young woman in a track jacket returns a glare. After a 10-minute conversation with Ahmad, she leans on her back heel and crosses her arms. “I’m sold,” she says.

Read the rest here and you can follow Eddie on Twitter at @onestoryglory

We are at the TechCocktail Spring Showcase in Chicago tonight with a bunch of cool companies. The event was hosted partly by Cars.com. We heard speeches from the folks at TrunkClub, Power2Switch, and BrightTag

I had a great time talking to Eddie (@onebigstory) from Northwestern University who was working on a story about Chicago Startups and politics. 

There was also some serious negativity expressed about this post on PandoDaily which compared the startup cultures of Chicago and Silicon Valley. Personally I’m tired of every other region in the country trying to make it the Silicon-something of somewhere. Chicago is Chicago. Silicon Valley is Silicon Valley. I’m sure if people in Silicon Valley tried to start making Fords and Chevys they would get laughed at for sipping too many lattes and riding bicycles all the time. The point is that America is big enough and economically diverse that the economies that produce a GroupOn vs Google vs. whatever else are precisely what makes the overall economy so dynamic. 

Crazyegg shows some love for Votifi

The folks over at CrazyEGG posted today on a list of hard-hitting startup-website designs. They mentioned small companies like Dropbox, Evernote, Dojo, Squareup, Mint and AirBnb. Which is why its uber-cool that we also got included in their list (at the top!). Thanks CrazyEgg and thanks also to the Design Offices of Mark J Maloney for being awesome in general.

See the full list here

Website Design