What Obamacare could learn from Amazon

The problems with the federal health care website resulted from poor management and implementation, a former policy adviser says.

By MSN Money Partner Oct 25, 2013 1:32PM

CNBCAmazon logo on a warehouse in Bad Hersfeld on May 14, 2013 (© Lisi Niesner/Newscom/Reuters)By Matthew J. Belvedere

 

The technology problems with the federal Obamacare website were a function of poor management and implementation, said Dr. Ezekiel Emanuel, former special adviser on health policy to President Barack Obama.

 

"The people who were in charge did not…assemble a good team and assemble the team that has competency in the exact area you need," Emanuel told CNBC's "Squawk Box" on Friday. The bioethicist was part of the president's health care reform team for two years until January 2011 and is the brother of former Obama Chief of Staff Rahm Emanuel.

 

The goal has to be an "Amazon (AMZN)-like shopping experience," he stressed, as the process moves forward to fix the glitches with Healthcare.gov—the federally operated health insurance online store, serving the 36 states that are not operating their own.

 

"It's a flawed law. What you're seeing now, the IT problems, are just small compared to what we're going to see going forward," said Dr. Scott Gottlieb of the American Enterprise Institute.

"What's going to be most painful in the near-term is the subsidy calculations are wrong," he added. "So people [are] getting the wrong amount of money to offset the costs of these plans, and that's going to be clawed-back from them."

 

Jeff Zients, a problem-solver who served Obama in the past, has been brought in to oversee the so-called "tech surge."

 

"[He's] someone I have worked with at OMB. He's a very good manager. He's an excellent people-person," said Emanuel, referring to the Office of Management and Budget. "He's been a consultant in the health care industry. So I think he has the requisite knowledge."

 

Zients is scheduled to start in January as head of the National Economics Council. "For two months in the crisis he's a very good choice," said Emanuel, vice provost at the University of Pennsylvania. "I think they have to hire a permanent person who's really the CEO of this and go along for the long-haul over the next couple of, or three, years until everything is up."

 

Meanwhile, House Oversight Committee Chairman Darrell Issa has asked Google (GOOG), Microsoft (MSFT), and three other U.S. companies to provide details on their possible involvement in the White House "tech surge."

 

What went wrong was at the center of the first congressional hearing Thursday into the botched rollout, with contractors on the project blaming the Centers for Medicare & Medicaid Services (CMS)—a division of the Department of Health and Human Services. CMS was in charge of pulling together the work of many contractors for the Oct 1. launch.

 

"Assigning this to CMS, which doesn't have experience integrating these complex IT systems, doesn't have experience in e-commerce website development, was not a wise choice. I didn't make that choice," said Emanuel.

 

A CMS spokeswoman acknowledged the issues raised by the contractors—saying "due to a compressed time frame the system wasn't tested enough," but that's changing now.

 

Gottlieb, who served as an adviser to CMS during the George W. Bush administration, said: "The reality is they will get these IT issues sorted out. I think the risk is that the entire market in 2015 gets repriced off the experience in 2014."

 

Emanuel responded: "That's something that Scott and I agree on. If it's a very difficult market within the next five week … it could rebound in 2015."

 

"These are technical problems that are blocking and tackling, and that will be solved," he said. "Over the next year, it's going to be a much better shopping experience. Then we're all going to look back and say, 'Wow, this was a great restructuring of the health care system."

 

Gottlieb disagreed: "I think people are going to be surprised by the very limited choice they have. And the difficulty is once you go outside your network in these plans you're going to be faced with very high co-insurance."

 

Emanuel said the insurance companies learned from the managed-care backlash of the 1990s and they're going to put measures in place to protect against that. He said he has advocated that people who get serious illnesses such as cancer be allowed to get a second opinion out of network for in network costs.

 

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