What messed up Obamacare rollout? Elementary.

It takes only two words to explain the disastrous start of Obamacare: agency problem. Individuals and organizations have goals achievable only through complex projects that can be implemented only with assistance by others. Those contracted to work on the project are not motivated to put their best efforts as they do not have the same stake in the outcome as those who hired them. 1 There are two ways to minimize the gap between what is expected and what the agents are willing to do. The agents can be offered compensation based on how well and how timely they were in doing their jobs. The other approach is to supervise their actions as carefully as is possible. The difficulty in adequate supervising is that only the outcome can be observed and various types of unobservable factors can create a random variation between effort and outcome. The agent can claim that he put his heart and soul into the job but, due to conditions beyond his control, the outcome was less than desired. It is clear that the compensation offered to the lead contractor, CGI Federal did not motivate them to deliver the software for marketplace on time. The publication of the e-mails released by the congressional investigators shows the inadequacy in supervision.2 The company was missing various deadlines and there was tension between CGI Federal and the company, QSSI, that chosen to test the computer programs. The problems were coming to the surface by July of 2013 but the Department of Health and Human Services considered them as common in large government projects. The officials continued to believe that they will be resolved by November. Now that President Obama and his critics agree that the rollout ran into problems, the discussion of managerial issues can be separated from political controversies surrounding health care reform. Large projects whether in private sector (new product launches in airline and automobile industries) and in the public sector (infrastructure construction projects and military procurement) are known to run into delays and cost overruns. What separates successful projects from those that are not is the response of those in charge to initial failures. As the Head of State, President Obama has taken responsibility and offered apologies. Some accuse him of lying; there is semantic involved in this allegation. If those supervising the rollout of the market place had reported to him that it will be on time and he believed it, then he can be criticized for bad judgment but not of lying. No president can be a micro-manage all the Federal projects, though, given that health care is his signature project, he could have been more critical of reports sent to him.
1

For a general and readable introduction to agency problem, see Opportunities and choice: Understanding our economic decisions (http://www.scribd.com/doc/49513234/Opportunities-and-Choices) pp.195-197. 2 The New York Times, Health Site Infighting is Detailed in Emails, November 13, 2013. http://www.nytimes.com/2013/11/16/us/health-site-infighting-detailed-in-emails.html?_r=0

However he should have known that his claim if you like your plan, you can keep your plan, does not make economic sense. Plan changes for the insured are quite common and those choosing individual insurance face the threat of being dropped whenever they become seriously sick. This is one of the rationales for Obamacare. Just because insured are allowed to keep the existing plan does not mean that the insurance company has incentive to sell it. In fact there are reasons for insurance companies wanting to get rid of old individual plans and President Obama should have recognized it. Secretary Kathleen Sebelius should have been more proactive in addressing the problems noticed in summer of 2013. It was hubris to dismiss the warning signs like missed deadlines and conflict between CGI Federal and QSSI. Of course each group blamed to the other, as it is hard to identify the exact contribution of each to the shortcomings. Dr. Ezekiel Emanuel, Special Advisor to White House from 2009 to 2011 and an architect of Obamacare, said recently in a TV interview that he recommended an appointing a CEO in charge of the rollout but, given the prevailing political opposition to Obamacare, a political decision was made to run it through Centers for Medicare and Medicaid Services (CMS).3 In retrospect it hard not to believe that the political fallout of the appointment of a CEO in 2010 would be more than what is happening now. The managerial problems of rollout of Obamacare can and should be separated from political preferences for a preferable form of health care delivery.

http://nation.foxnews.com/2013/11/14/obamacare-architect-ezekiel-emanuel-blames-fox-news-websites-failure