mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Obamacare Website Doomed by Bureaucratic Inexperience and Fear of GOP


From the day Obamacare was passed, Obama knew that getting the website up and running would be the key to the success of the law, and likely his presidency. Yet for the next two years, he and his team were completely unprepared for the task of actually getting it done, leaving us with the mess we have today.

An excellent new piece in the Washington Post spotlights exactly how the Obama Administration managed to bungle the signature achievement of its first term, painting a picture of management errors, bureaucratic incompetence, and woefully misguided political calculations that ultimately derailed the rollout of the website:

Soon, however, it became evident that the office — with more than 200 people — would not survive on its own. It lacked tools, such as the ability to award grants and outside contracts, that were vital to its mission, said Richard Foster, Medicare’s chief actuary for nearly two decades before he retired early this year. So the office, with a slightly new name, moved in early 2011 into the Centers for Medicare and Medicaid Services (CMS), a large agency spread among locations in the District, Bethesda and Baltimore.

The move had a political rationale, as well. Tucked within a large bureaucracy, some administration officials believed, the new Center for Consumer Information and Insurance Oversight would be better insulated from the efforts of House Republicans, who were looking for ways to undermine the law. But the most basic reason was financial: Although the statute provided plenty of money to help states build their own insurance exchanges, it included no money for the development of a federal exchange — and Republicans would block any funding attempts. According to one former administration official, Sebelius simply could not scrounge together enough money to keep a group of people developing the exchanges working directly under her.

Bureaucratic as this move may sound, it was fateful, according to current and former administration officials. It meant that the work of designing the federal health exchange — and of helping states that wanted to build their own — became fragmented. Technical staff, for instance, were separated from those assigned to write the necessary policies and regulations. The Medicaid center’s chief operating officer, a longtime career staffer named Michelle Snyder, nominally oversaw the various pieces, but, as one former administration official put it: “Implementing the exchange was one of 39 things she did. There wasn’t a person who said, ‘My job is the seamless implementation of the Affordable Care Act.’ ”

The piece is long and makes many points, but on the whole, it looks like the website was doomed by a massive failure of management. Obama clearly identified getting the website right as his top priority. But he was unable to track its troubled progress and unable to ensure that the job got done.

This reinforces our long-held view that Obama would have been a far more effective president if he’d served a couple of terms as governor first. Wrestling with Illinois’ problems would not only have given him a much deeper insight into the limits of blue model governance; it would also have taught him how to manage a large bureaucracy so that he can get it to do what he wants. If this account is accurate, it seems that the absence of this kind of executive experience crippled the rollout of his most important initiative.

The piece also colors the way we look at the Republican Party and its political tactics. The GOP takes a lot of flak from the press about opposition tactics that are supposedly counterproductive, but if this story is right, the GOP has actually got the Administration so frightened and discombobulated that its fear of the opposition infects and degrades its policy process. To quote just one example:

According to two former officials, CMS staff members struggled at “multiple meetings” during the spring of 2011 to persuade White House officials for permission to publish diagrams known as “concepts of operation,” which they believed were necessary to show states what a federal exchange would look like. The two officials said the White House was reluctant because the diagrams were complex, and they feared that the Republicans might reprise a tactic from the 1990s of then-Sen. Bob Dole (R-Kan.), who mockingly brandished intricate charts created by a task force led by first lady Hillary Clinton.

It’s also clear that short term political considerations drove decisions that ultimately made website failure more likely. We suspect that as the finger-pointing and blame games go on, a journalistic paradise will take shape in DC. Insiders will start a war of competitive leaks, each looking for discreditable information that will throw the blame for the debacle on someone else. Since this looks like a royal mess, there is lots of blame to go around and the net effect of all the leaks will be to make the administration as a whole look worse and worse.

In many ways, this report reminds us of nothing more than the NYT exposé of Obama’s mismanagement of the Syria crisis. Here again we see a massive public policy meltdown on a major issue and the President’s fingerprints seem to be all over some of the most important decisions gone wrong.

The White House has plenty of time left and has massive resources on which it can draw; if the President can square the circle in the Middle East and turn Obamacare around, the conventional wisdom about his leadership abilities could change quite quickly. But at some point in a second term the perception of a failing presidency can become decisive. As the clock winds down on any president, power tends to flow away from the White House; bureaucrats and legislators no longer have as much to hope or to fear from a lame duck. If the president is facing low poll numbers and a perception among insiders that he just isn’t very good at his job, then his power declines even faster, and with declining power there are fewer opportunities to reverse the tide of events.

This White House needs to change the momentum, fast, or it may not be able to change things at all.

[Obama photo courtesy of Getty Images]

Features Icon
show comments
  • Anthony

    “The existence of multiple principals is, by the way, one important reason that the public sector often performs much more poorly than the private sector … The public sector, by contrast, is subject to mandates from competing political principals each of which have a degree of democratic legitimacy and therefore authority over the agent” (Francis Fukuyama). The aforementioned quote is in no way to exculpate administration’s ACA fiasco, only insight into Democratic Systems public principal-agent framework.

    • Corlyss

      I agree in general. However, Fukuyama’s private sector envy obscures the fact that often it has the same problem the feds do, but they also possess an agility that allows them to make quicker corrections than the government can. Stove-piping and Congressional oversight often means that people without any ability to aid in moving the project along or solving problems as they arise have extraordinary situational ability to block, delay, and compromise the project. An extreme example of what I’m talking about is the Metro. For 10 years a single congressman (Natcher, D Tenn) blocked its construction because he wanted the 3 Sisters Bridge built across the Potomac from Virginia to DC. Two reasons why Tax Systems modernization took 30+ years were the union and inability of different offices within IRS to agree on an OCR 1040. In the private sector, these issues would have been dispatched quickly or some other way of solving the problem would have been found.

      • Anthony

        Corlyss, I can’t speak to his private sector envy; but, quote came from private/public sector contrast while discussing schematic of Principled Agents (Aug. 2, 2013 – VM). And as I read Quick Take, his thoughts came to mind as reference. Thanks.

  • TheRadicalModerate

    “…Obama would have been a far more effective president if he’d served a couple of terms as governor first.”

    You can’t execute the “blank slate” election strategy if you’re not a blank slate.

  • Pete

    The hypothesis that if only Obama served several terms as governor, he would have learned this-and-that about governance is based on the dubious premise that the man is educationable.

  • phineasfahrquar

    “Fear of the Republicans” is just their self-delusion for what they really fear: the American public who took a sledgehammer to the Democrats in the state and federal elections of 2010. They weren’t concealing this from House Republicans; they were hiding from the righteous anger of the American people.

    “…if the President can square the circle in the Middle East and turn Obamacare around, the conventional wisdom about his leadership abilities could change quite quickly.”

    You will sooner see the sun rise in the West.

  • Fat_Man

    Its not just this project, it is everything the Federal Government does. There have been lots of Federal Technology programs go off the rails. Even the military is not immune, just look at the F35 program.

    Here is another example:

    “Delays, problems plague transition to satellite-based air traffic control system” by Joan Lowy, Associated Press, October 31, 2013

    “After a decade of work and billions of dollars spent, the modernization of the U.S. air traffic control system is in trouble. The ambitious and complex technology program dubbed NextGen has encountered unforeseen difficulties at almost every turn. … By shifting from radar-based navigation and radio communications — technologies rooted in the first half of the 20th century — to satellite-based navigation and digital communications, it would handle three times as many planes by 2025, the Federal Aviation Administration promised.

    * * *

    “NextGen was originally forecast to cost $40 billion, split between government and industry, and to be completed by 2025. But an internal FAA report estimates it will cost three times that much and take 10 years longer to complete, Scovel said. FAA officials have largely stopped talking about end dates and completion costs as the technologies that make up NextGen continue to evolve. The agency currently spends about $800 million a year on the program.”


    There have been lots of others. The problem is that the Federal Government is a very blunt instrument with which to solve problems.

    But, you knew that.

    • Corlyss

      Yeah, that air traffic control system has been in the works for decades now. I don’t know their peculiar problems, but I bet part of is that by the time they go thru the procurement process, which took on average 400+ days from requirements definition to product delivery. It’s much worse for sophisticated data systems. The requirements often have to be completely revised the day after the contract is signed because the RFP requirements statement is obsolete.

  • Corlyss

    “the ability to award grants and outside contracts”
    I’ve said it here several times, esp. in relation to the supposedly “shovel ready” projects just lacking money to get them started. You can always tell if the feds, particularly Congress, is serious about getting an acquisition rolling immediately: they waive the burdensome requirements that have accreted to the federal procurement system over the last 40+ years, particularly the wasteful social provisions supposed to give minorities a chance to compete for contracts (Ali Baba contracts as they have come to be known as but which are really just another form of transfer payments to privileged if not phony minorities like Strong Castle) and the often unproductive competition requirements. Competition is okay for socks and jocks, pencils and paper clips because they are off the shelf commercial items that even the stupid and the blind can supply. But sophisticated turn-key automated systems and systems integration work is not. There’s only a handful of companies that can do that kind of work on the scale contemplated by the ACA. Some commentators have been kidding themselves in their fascination with the CGI award that onerous regulations keep small firms out of the marketplace, small firms that allegedly could have done a much better job on the ACA contract. Pure idiocy. This was never a job for some hard charging kid who sold gelatti as a pre-teen, who founded his own software company in college, and is now looking to start his fourth million-dollar company venture. Nope. This was a job for the big boys, like CGI, EDS, IBM, Lockheed, etc. They should have picked one with a good performance record, waived all the nonsense, and pressed on. But of course that would have required buy-in from not one but many Congressional power centers. In other words, it would have required the original statute to anticipate the contracting playing field and waived them at that time. Congress would never do that short of a national emergency, like a direct attack on the US by hostile forces, if they had the presence of mind to identify it as such.

  • Jacksonian_Libertarian

    What evidence is there that this incompetent man, would suddenly become competent and turn things around?

  • smilsmith

    There is a reason for the Administration’s fear of the GOP and it traces to one of their own biggest mistakes. The Administration’s unwise insistence on passing Obamacare without a single Republican vote is coming back to haunt them. Once they had done that it was impossible to go back to Congress to change anything in the law or to get additional funding, especially after the voter backlash which led to the Republicans taking the House in the 2010 elections.

  • Braincramp

    Mr. Mead:

    How could you have voted for this guy? As smart as you are–and I mean that with all sincerity–you didn’t see this coming?

  • Bob

    I think Professor Mead is right about Obama and a governorship before the presidency. Obama’s inexperience is the most common sincere criticism of the man. He rose too far too quickly to give whatever management and leadership skills he has a chance to be shaped by experience. I wonder, however, if Obama’s ego would have let him serve two full terms as a governor. He couldn’t even finish a single term as US Senator. I also wonder if two terms as governor might not have tarnished his national image by showing his foibles and demystifying his aura and thus made him less electable.

  • Notjack

    Fear of Republicans, Mr. Mead? How about this here, ( A whole lot of reasons why big rollouts fail, not just govt ones.

    Just the tip of the ice berg I’m sorry to say.

  • RedWell

    Poor management and political expediency are common to many if not most presidential administrations, so I’m not sure that’s a unique or interesting argument. Anthony in these comments offers a less exciting but more accurate explanation from Fukuyama.

    Also, not sure why VM is letting Republicans off the hook. I take the point that they feel that the system was hijacked, but on the other hand, back when the law was a bill, they offered little positive input and have relied on dramatic, even scorched-earth, tactics since. And that’s after losing in both the Congress and the (right-leaning) Supreme Court.

    The website is a dud, but the story above suggests that Obama and his team felt like they had to implement a legitimate law in secret. The effort failed. That’s on the Republicans and is a partial victory from their perspective. Give them some credit and blame.

    • avery12

      Your characterization of the Republicans during the legislative process is incorrect. They were shut out of meetings. Their ideas were rejected. The democrats enjoyed a supermajority by rubbing the opposition’s nose in their powerlessness. I down arrow you for rewriting history.

  • Boritz

    Wasn’t the major challenge of this bill the fact that you had to pass it to know what was in it? That’s an exceedingly difficult way to work. You can’t blame people for making mistakes under the circumstances.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service