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United States Government Medicine The Almighty Buck IT Politics

Cost of Healthcare.gov: $634 Million — So Far 497

Posted by timothy
from the oh-c'mon-what's-a-sevenfold-increase-among-friends? dept.
First time accepted submitter Saethan writes "Healthcare.gov, the site to be used by people in 36 states to get insurance as part of the Affordable Care Act, has apparently cost the U.S. Government $634 million. Not only is this more than Facebook spent during its first 6 years in operation, it is also over $500 million above what the original estimate was: $93.7 million. Why, in a country with some of the best web development companies in the world, has this website, which is poor quality at best, cost so much?" That $634 million figure comes from this U.S. government budget-tracking system. Given that this system is national rather than for a single city, maybe everyone should just be grateful the contract didn't go to TechnoDyne.
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Cost of Healthcare.gov: $634 Million — So Far

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  • simple (Score:5, Insightful)

    by slashmydots (2189826) on Thursday October 10, 2013 @09:32AM (#45090511)
    Money != contractor knows what it's doing
    • Re:simple (Score:5, Insightful)

      by SirGarlon (845873) on Thursday October 10, 2013 @09:38AM (#45090587)

      Or to put it another way, the procurement process selects contractors who thrive in the presence of bureaucracy, not those who actually deliver quality products on time and on budget. This is a well-known and long-standing problem.

      • Re:simple (Score:5, Insightful)

        by alen (225700) on Thursday October 10, 2013 @09:40AM (#45090619)

        the government has lots of conditions you have to meet if you want a contract and you have to prove that you meet these conditions

        preference is given to women, minorities, veterans, small businesses, etc. its not a lowest bidder deal

        • Re:simple (Score:5, Insightful)

          by Anonymous Coward on Thursday October 10, 2013 @09:53AM (#45090799)
          That's a lot of discrimination.
        • Re: (Score:3, Insightful)

          The government tit is about the opposite of an efficient operation. You have a nominal bid process, but that's the only throttle on the spending.

          Everything else after that is how cleverly you can whine and obfuscate and exaggerate. There is no investor looking for a return. Oddly, some view that as a feature. Fair enough, but don't expect efficiency.

          It's not just a little wasteful, but wasteful by a magnitude. There used to be a joke in the farm bureau where a local manager would exclaim, "Oh no! My f

        • Re:simple (Score:5, Funny)

          by Anonymous Coward on Thursday October 10, 2013 @09:59AM (#45090885)

          So all government contracts go to female African-American small business owners who are veterans? No wonder the government doesn't get anything done, the poor women must be totally overworked.

        • by Kagato (116051) on Thursday October 10, 2013 @10:11AM (#45091055)

          That's a part of it. The largest part in the evaluation is education of work force. Not a lot of rank and file programmers in the US get more than a bachelors degree. Why would they? Unless you're doing work with advanced algorithms or some sort of management there aren't a lot of drivers to have the additional education.

          Because of the weight contracts have on education you see a lot of folks with unrelated degrees and foreign diploma mills. That leads to poor final output.

          On a campaign level the administration knows how to put together software quickly. But that's not the way the law allows the gov't to operate. Large contractors have been gaming the bidding process for three decades.

        • Re:simple (Score:4, Interesting)

          by aaarrrgggh (9205) on Thursday October 10, 2013 @10:21AM (#45091219)

          Government contracting is a bear and adds at least 30% inefficiency to the process for a small project; can't say on a large project but I imagine the percentage remains fairly constant. Just dealing with the timesheets and accounting is a nightmare.

          BUT, to the GP's point, successful government contractors are the ones that have project managers whose sole purpose is to bastardize scope to justify additional services along every step of the way. They trap you into the additional work; it is an art in a way.

          As to the WMBE participation, it does lead to abuses, but the idea is that it keeps *everything* from being centralized into a company like Lockheed Martin or Northrop Grumman, and instead makes them spread things out at worst, and gives competition at best.

        • Re:simple (Score:5, Informative)

          by girlintraining (1395911) on Thursday October 10, 2013 @11:11AM (#45091993)

          the government has lots of conditions you have to meet if you want a contract and you have to prove that you meet these conditions preference is given to women, minorities, veterans, small businesses, etc. its not a lowest bidder deal

          Notice how everyone points out their favorite political cause as the reason for the failure, while the actual one dwarfs them all by comparison yet goes unnoticed? Anyone who has worked with the government before knows that the main reason everything is so expensive is bureaucratic red tape and auditing.

          This is why an LED that costs less than a penny winds up costing the government $50 over its total ownership. I've looked at military contracts; Every LED in the system is individually serialized and tracked. You can't just order a bin of them, and put them on a shelf like you would in a normal factory. Even a ten cent screw has to be vetted through approved vendors, assigned its own serial number, etc. And that's just the screws for the toilet paper holder in the Pentagon. You don't wanna know the kind of process screws destined for fighter jets are subjected to.

          So don't say "oh noes, it's because minorities are given preference!" ... which is a patently stupid thing to say anyway since they're paid the same as the non-minorities. That adds very little to the cost -- maybe a .1% bump due to the extra recruiting needed -- unlike the stuff I mentioned, which balloons it to many multiples of what you'd see in the same project in the private sector.

          • Re:simple (Score:4, Interesting)

            by Laxori666 (748529) on Thursday October 10, 2013 @11:47AM (#45092485) Homepage
            I think the actual one is a step beyond yours - it's that they have no reason to keep costs down. If the budget gets too large, they can get allocated more money. If there isn't more money, they can raise taxes. If they can't raise taxes, they can create money by issuing bonds that unconditionally get bought by the Federal Reserve. There's no profit motive, so there's no reason to keep costs down. Thus everyone along the way can balloon expenses to either make themselves more important or make more money for themselves in the process. This means the ridiculous costs and operating procedures that you cite can exist and flourish in such an environment.

            Note that this also tends to happen with huge corporations - they waste a lot of money - but they have a sharper limit than the government because they can't do the taxing & money-creation thing.
      • by cayenne8 (626475)
        Perhaps because they gave the job to a company whose worker pool isn't generally comprised of US citizens, but instead populated with *ahem* engineers formerly employed by the Quickie Mart [liberalamerica.org]?
      • And the process is set up so that the person who actually makes the decision is never heald responsable when they go over budget by 1000% or skip town in the middle of a project.
      • by jythie (914043)
        Ironically, much of this bureaucracy came out of pushes to reduce corruption and waste. It is the same basic pattern as those programs that kick people off welfare if they test positive for drugs, the push is for stopping the certain behaviors at the cost of increased, well, costs, associated with implementing the policies, well beyond the amount of money they save.

        As with many things, the government ends up doing stuff like this because the public pushes for it regardless of the consequences, and then c
    • by raymorris (2726007) on Thursday October 10, 2013 @09:45AM (#45090695)

      It seems to me that the larger the bill and the larger the company sending that bill, the lower the competency.

      Our three-person company handles web sites serving hundreds of thousands of users per day for a few thousand dollars. We could easily handle a few million users by adding a few more database servers at a cost of around ten thousand.

    • Re:simple (Score:5, Interesting)

      by ZahrGnosis (66741) on Thursday October 10, 2013 @10:09AM (#45091037) Homepage

      Plenty of talented developers and teams get crushed by government red tape, bureaucracy, and the simple inability of most government agencies to manage their contracts. I can't figure out why but there is an enormous attraction for government program managers to micro-manage. Having worked on a handful of very expensive, very large government programs I can tell you that either side can make a project a disaster. But I've been on teams that can roll out a successful commercial project in 3 months that takes 3 years for nearly identical functionality in the public sector (DoD in my case). It's not incompetence at the individual level, either, in my experience; it's something institutional. Too many regulations that cause inflexibility and twisted risk/reward feedback for both costs and personal performance, and the antithesis of an evolution-as-improvement driven culture to match changing development standards.

      • by ZahrGnosis (66741) on Thursday October 10, 2013 @10:42AM (#45091601) Homepage

        Ars has a great article up going into more depth of why this happens so often here: http://arstechnica.com/information-technology/2013/10/why-us-government-it-fails-so-hard-so-often/

      • Re:simple (Score:4, Interesting)

        by GodfatherofSoul (174979) on Thursday October 10, 2013 @11:48AM (#45092509)

        That website isn't blowing up because heroic contractors are being stifled by government regulations. It's a pretty crappy UI. It took me forever just to find the actual plan costs and the filtering all (powered by Solara) blows. I'm sure overregulations also aren't the reason they can't handle the traffic they're getting and logins send you to blank pages. The site is so busy trying to explain everything that it obfuscates the 1st things that people want to know; what does it cover and how much does it cost. Try navigating that site to find the difference between the metal plans to see what I mean.

        I talked to Experian which is involved in user validation (and where I bet a lot of that $634M is going) and it turns out that on failed validation attempts (which must be another bug in their code) aren't even being submitted to them manually for about a day. So, when it invariably blows up, you've got to wait that long to complete your application.

        I'm not saying there's no government red tape driving the website design, but I think the whole site has major problems on the macro- and micro-levels that I can't imagine are because "that's how the law said to do it."

        • by Fjandr (66656)

          Except it is. The red tape prevents many of the more competent contractors to not even bother.

          Yes, the direct result is not caused by red tape, but indirectly the red tape certainly had an enormous affect on the pool of available talent.

      • by tibit (1762298)

        It's really, really simple, in a way. The rules and their interactions form a basis of a more complex set of behaviors that emerge when you start executing them.

        It's like with ants: a single ant is pretty dumb. But put them together, and you've got beautiful emergent behavior. In case of bureaucracy, you've got a bunch of "intelligent", "well meaning" simple rules. Put them together, and the emergent behavior is a pile of crap. It's like why IP internetworking won over X.25.

        Both the behavior of ants and the

    • by Nikker (749551)
      When you have that many people who all know the value of the all mighty dollar don't kid yourself. Do you really think some contractor waltzed in threw a number like that out for just the software and got it? It's just like any company, the CXO might not have any clue what Java, HTML or the Internet is for that reason but try asking him or her for a couple million with just a smile and see what happens. There is no way 600+Million USD was given directly to a bunch of code monkeys, it went through many,
    • $600 million doesn't seem that much to me for something like this.

      I recently worked on a project that cost >$40 million for a site which is never going to have more than about 20 thousand users.

      Cost depends on the the complexity of the business logic, the number of systems that need to be integrated, the amount of hardware that is required to perform complex calculations and algorithms, etc.

      Comparing it to the early days of facebook is spurious - facebook is just a messaging and photo-sharing site,
      • by Fjandr (66656)

        I guarantee you FaceBook uses more complex logic than required for the healthcare site.

  • Why was 90+ million dollars budgeted for the development of one freaking website?

    • by Latent Heat (558884) on Thursday October 10, 2013 @09:42AM (#45090641)
      In light of the importance of this project, the thing is cheap at 600 million -- if they can get it to work. A pretty big if, it seems right now.

      In other words, the issue right now is not the cost of the thing but whether any amount of money can make it healthy in the required time.

      If this thing doesn't get right, "they" might have to wave the fine/penalty/tax to be payed by people who didn't sign up, which is why there is a political fight right now "shutting down the government"?

      • In light of the importance of this project, the thing is cheap at 600 million

        No, it is still overpriced for the job it is doing. Other businesses have built websites of greater complexity, with heavier loads for a lot less money.

        • by tylikcat (1578365) on Thursday October 10, 2013 @10:12AM (#45091069)

          I'd be curious about this greater complexity assertion. A large part of the project requirement is that it effectively and securely pulls data from a large number of already existing government systems. In my experience, dealing with those kind of externalities is most often neither easy nor cheap... and certainly pretty darned complex. What are you comparing it to?

      • Re: (Score:2, Insightful)

        by operagost (62405)
        This is why the Democrats in the Senate should just accept the bill waiving the individual mandate for a year. People who really, REALLY need insurance will be the only ones hitting the beleaguered sites, and the Dems will come out smelling like a rose. But they won't, because they are petty and obstinate, and far past caring about their constituents.
        • by tylikcat (1578365)

          Well and that if the only people who buy insurance are the ones who "really, REALLY" need insurance (i.e. those with major health problems) the whole system will go into a death spiral. Rather more serious than pettiness or obstinancy.

    • They could have hired some friends of mine, who are expert web database interface programmers, plus me (I'm fantastic at proper HTML and CSS styling and future-proof coding) for about $500,000. Where $90+ mil came from is beyond me and the $600+ mil should put some people in jail for fraud. Heads better freaking roll over this atrocity, which is probably now covered by health insurance.
      • Re:What the hell (Score:5, Insightful)

        by i kan reed (749298) on Thursday October 10, 2013 @10:19AM (#45091179) Homepage Journal

        It came from middle-middle-middlemen. We've privatized the hell out of a lot of important tasks that the federal government does in the name of making them cheaper, but I think every single person in our industry can tell you that contractors are expensive as hell, and add nothing but immediacy.

        So, we pay full time people in the government to review contract bids. Those contractors are specialists in winning government contracts, and do nothing other than hire sub-contractors. Those subcontractors hire actual employees, but only a trickle of the money they make goes to paying for the work. They take a huge overhead for legal, HR, actual overhead, and profits. The parent contractor takes a similar huge cut before passing things on to subcontractors.

        We've already multiplied the actual costs by 10 or more, without having even brought "overruns", "missed requirements", and real QA into the picture.

    • by mu51c10rd (187182)

      Most of the cost is probably salaries and infrastructure equipment. It appears they should have spent more on developer time.

    • Re:What the hell (Score:5, Insightful)

      by Sarten-X (1102295) on Thursday October 10, 2013 @09:46AM (#45090711) Homepage
      One website, that's expected to have incredibly heavy loads, will handle personal medical and financial information, and must play suitably well with a ton of third-parties' services while being the target of severe attacks from any foreign government or script kiddy who doesn't like it..
      • Re:What the hell (Score:5, Insightful)

        by MozeeToby (1163751) on Thursday October 10, 2013 @09:58AM (#45090857)

        One website, that's expected to have incredibly heavy loads[...]

        Well here's the rub. In regular operation, the loads aren't going to be incredibly high. They'll be "very" high, but not ridiculously. You could argue that their single largest mistake was trying to do a massive roll out to everyone in the country all at once. They should have rolled out to a small number of people, worked the kinks out and come back in a month with a slightly larger roll out. Rinse and repeat until it's available for everyone and you have some idea what your actual day to day usage numbers are going to be.

        • Re:What the hell (Score:4, Interesting)

          by Sarten-X (1102295) on Thursday October 10, 2013 @10:08AM (#45091027) Homepage
          Agreed. That would likely have worked out much better... but politically, it's impossible. Why does district X get access, but not district Y? That particular random criterion is slightly correlated with this obscure trait, so clearly the politicians in charge are working for or against those people, and don't deserve to be reelected...
      • Versus Facebook, Slashdot, Digg, Reddit.
    • by Cimexus (1355033)

      It's not just 'one freaking website'. There's a HUGE backend with financials, a full customer management system, integrations with dozens of other systems and data sources etc. The public facing website part of it is like 5% of the work, if that.

  • The site had how many people try to sign up in the first day? If you want to compare it to facebook (a popular metric here no doubt) the number of people who attempted to access and sign up on healthcare.gov in the first day dwarfs the first several years of enrollment at facebook. If they had attempted to build a website to handle the load they faced (which will of course taper off quickly once the first wave of enrollees are signed up and done shopping) we would be bitching that they overbuilt the site because they would have tons of servers sitting mostly idle after the initial surge is done.

    We need to wait until it has been up for a while before we go around calling it a failure.
    • It's called 'The Cloud', you can buy additional instances that first month and get rid of them when you no longer need them.
    • by Anonymous Coward on Thursday October 10, 2013 @09:45AM (#45090693)
      When a site loads 50+ .js files after you click an 'Apply' button, something is wrong with the design.
      • How many of those were 304 not modified? And how large were they? I don't know but no one else seems to except one guy who does web design, and apparently knows little to none about servers.

        All of that happens client side, making his DOS comment ridiculous. He did not say that caching was disabled, and did not give a byte count. I'm discounting the whole report until I have time to look myself.

        • by Yakasha (42321)

          How many of those were 304 not modified? ...

          All of that happens client side, making his DOS comment ridiculous.

          First, 304 headers are generated by servers when a client requests a page that has not been modified since the last access date reported by the client. Clients don't generate those headers themselves, so, no, its not all client side.

          Now if you understand how DDOS attacks work (All they do is open a LOT of connections), then you'll understand that having 50 or 75 separate links in your page, even if they ALL get cached, will still cause 50 or 75 separate connections just so your server can tell the client "

    • Re: (Score:3, Insightful)

      by Flozzin (626330)
      Almost 7 times over budget. And it didn't handle the load placed on it. 8 days later and it's still having problems. And you want to defend it? Oh it's ok that it's a huge steaming pile of crap because why exactly? Do you work at CGI Federal? I could see if it came in on budget. But even then, they obviously did not do any research into how many people would be interested in the site.
      • Re: (Score:3, Insightful)

        by Anonymous Coward

        Just wait until they actually start managing your health care.

    • by sudnshok (136477) *

      Except that there are services nowadays SPECIFICALLY built for this type of scaling, like AWS. You can spin up extra servers for temporary high traffic - especially high traffic that was absolutely foreseen. Funny how Amazon's website can handle the traffic on black Friday just fine.

      Sorry, but I've been doing web development for 15 years and have worked on large projects. I can't see the cost for this project being more than $20-30M for up-front development (that includes planning, documentation, meetings,

    • by mu51c10rd (187182)

      I have insurance through my employer and they have no intentions of cancelling. That said, I was curious about plans and premiums and chose to check it out. It has now been a week, and I have only been able to get to the Contact Infomation screen before i get the Unknown Error message. It took me 3 days to create an account alone without error. I have tried IE, Chrome, and finally caved into trying Firefox as well...and the site problems are not browser-related. They are coding-related. As of today, I am st

      • The plans are too expensive for poor people. This government healthcare stuff has made healthcare much, much more expensive. I mean back in the day I had a $10 deductible with full coverage for everything and I paid $348/mo. Now I'm paying $20/mo for my employer-supplied CDHP that gives me an HSA I can add $3500 per year to pre-tax, meaning I save about 30% on everything from bandages and antihistamines to Target clinic visits and emergency surgery. On top of that, the HSA covers anything beyond a $3,50

  • I see opportunity here. Once this beast is _somewhat_ operational it will need to be fed and cared for. That responsibility, like most US government functions, will fall to US citizens. If a security clearance is required even better. Lemons from lemonade I say.
  • Complete nonsense (Score:5, Insightful)

    by ardmhacha (192482) on Thursday October 10, 2013 @09:42AM (#45090649)

    This figure is not just for building a website.

    It is for all spending with CGI Federal over the time that they have been doing business with the Federal government, including payments from fiscal years before Obamacare was even passed.

    The figure is now being regurgitated by various right wing websites without anything that even passes for thinking.

    And also now slashdot, which is disappointing.

    • by retech (1228598) on Thursday October 10, 2013 @09:54AM (#45090819)
      Slashdot stopped covering fact and started the corporate fear mongering the minute it got sold. Even if the articles aren't padded or misdirections by corporate shills, there's no one in charge anymore (at least not with a calm objective eye). So any hashtaggable buzzword, kneejerk reaction gets sent right to the top.

      Car analogy. Reference Katrina. Site other blogs. Media fear words. Kittens.
    • It's not all their Federal work. It's all work for the Centers for Medicare and Medicaid Services, which is the group implementing and managing healthcare.gov.
    • This figure is not just for building a website.

      It is for all spending with CGI Federal over the time that they have been doing business with the Federal government, including payments from fiscal years before Obamacare was even passed.

      The figure is now being regurgitated by various right wing websites without anything that even passes for thinking.

      And also now slashdot, which is disappointing.

      If you chase the links to the original treasury website, half of the $634 million was paid after the passage of the 'Affordable' Care Act, so I'm especially interested in the specifics of those contracts- which are still more than triple the $93 million dollar original ACA website contract.

      So perhaps it's a $300 mil website instead of $600 mil. That's not really much of an improvement, to be honest.

      "No, it's all lies! The website only cost a bit over a quarter-billion dollars!"

      We do have to find out m

  • That figure covers 114 separate contracts (see http://usaspending.gov/explore?tab=By+Prime+Awardee&fiscal_year=all&idvpiid=HHSM500200700015I&typeofview=transactions [usaspending.gov] ) Not to suggest that it still wasn't overly expensive, but consider the fact that the system is a national transaction application that has to dip into numerous other federal data sources - and has a mission criticality above and beyond facebook. Still, many of us could have done it better and cheaper, but then again very few of us would actually enjoy working for the federal government and conducting our business the way any federal contractor is required to.
    • a national transaction application that has to dip into numerous other federal data sources

      This statement alone is scarier, than whatever was leaked by Mr. Snowden. Surprisingly, the President's cheerleaders — normally so suspect of government's invasions into our privacy — ignore this implication.

      has a mission criticality above and beyond facebook.

      Gravity of the mission, whatever it is, has little to do with the cost of implementation. First step on the Moon was a gravely important mission, b

      • by kestasjk (933987) *

        First step on the Moon was a gravely important mission, but it was easy for Neil Armstrong to do it...

        Great point. You win.

  • by Hozza (1073224) on Thursday October 10, 2013 @09:44AM (#45090679)

    The solicitation number linked to actually refers to the HITECH act, part of the American Recovery and Reinvestment Act, to quote health it.gov:

    The Health Information Technology for Economic and Clinical Health (HITECH) Act seeks to improve American health care delivery and patient care through an unprecedented investment in Health IT (HIT).

    And it certainly sound like they've achieved an unprecedented investment at least.

  • by nimbius (983462) on Thursday October 10, 2013 @09:44AM (#45090681) Homepage
    Facebook as a privately held corporation for its first six years can cherrypick the cost of its infrastructure as it sees fit. cheap and powerful infrastructure is always a very warm prospect for a market that may be keen to see returns from a soon-to-be public company.
    Facebook doesnt take into account the fact that its final cost is spread across the backs of millions of FLOSS developers its never known, whereas the US government is literally developing a system, an open market, that has never existed outside of a single state in its union. The government also doesnt attract facebook-level talent and as such is forced to contend with best practices as it outsources development to well-established industry players. the government began much larger and more fiscally sound than Facebook in its first year, so the purse strings are of course looser.

    you're comparing a private company with independent autonomy in the software lifecycle to a government agency beset with lobbyists and average, but not astounding talent. in some cases edicts instituted by governing bodies of the program which may mandate outsourcing to specific vendors regardless of cost; this is how politics works in both private and public sectors. im also certain the signup rate for facebook in its first six years is dwarfed by the healthcare site in its first six hours, which may help explain some of the cost of the program overall. keep in mind the estimate of ~90 million may have been an intentional underestimate as the reform had to be sold to a congress that would rather see the president dead than re-elected.
  • Everything done by the government costs 3-4x more because government contracts are a way to grease the hands of people who favors are owed to

  • The US government is not known to be thrifty when it comes to spending. Big guns, deep pockets, no fucks given.

  • I would like to know if there are any connections between contractors and those awarding the contracts - ie Family ties, business connections, etc... in this day and age there is absolutely no way a website should cost this much. I team of around 20 proficient Web professionals should be able to make almost anything in around 1-2 years max, with a max cost no more than 10 million. Half a billion? Follow the money, this is at best gross negligence on the part of those awarding the contracts, at worst misapp
  • Several reasons (Score:5, Informative)

    by Salgak1 (20136) <salgak@s[ ]keasy.net ['pea' in gap]> on Thursday October 10, 2013 @09:54AM (#45090809) Homepage

    One: Schedule Fail. Compounded by late award of the contracts to develop/influence:

    Contracts Awarded Dec 2011 [wsj.com]

    Two: massive requirements base to develop specification for development and implementation: The PPACA was 1800+ pages, and the associated regulations are 10,000+ pages, and are STILL changing. Can't develop without a spec and design, with big parts of requirements still changing.

    Three: inadequate testing. The above-referenced link states that security testing BEGAN in August 2013, less than two months before rollout. There's no mention of load testing

    Four: Integration issues. The Obamacare Exchange system combines data from numerous agencies and systems, and integrating between them is always a difficult task

    Five: Identity-management. This is in parallel to Integration, somehow all identities need to be federated into a single overarching system.

    Twenty-three months, even with a top-flight team, would simply not be enough to do this: this is a 5-7 year job. . .

  • by cold fjord (826450) on Thursday October 10, 2013 @09:59AM (#45090879)

    Exchange launch turns into inexcusable mess: Our view [usatoday.com]

    Park said the administration expected 50,000 to 60,000 simultaneous users. It got 250,000. Compare that with the similarly rocky debut seven years ago of exchanges to obtain Medicare drug coverage. The Bush administration projected 20,000 simultaneous users and built capacity for 150,000.

    That's the difference between competence and incompetence.

    The too-much-demand excuse also is less than the full story. In addition to grossly underestimating demand, the administration and its contractors seem to have made mistakes in building the websites. The system for verifying consumer identity has had persistent problems, as have pull-down menus.

    Nor were problems confined to the 36 state health exchanges run by the federal government. Sites run by 14 states and Washington, D.C., bogged down because they have to refer to federal databases to verify consumers' identity.

  • The comparison to Facebook is complete BS.

    Even though (as somebody already pointed out) the $634m number doesn't represent just Healthcare.gov, the comparison to Facebook is completely fallacious. Facebook has money coming in other than just their investments; the investment money that is referenced in the Crunchbase page is in addition to any other income that they had. In other words, Facebook spent way more than $634m in that period of time.

    Lazy journalism at its best.

  • by TimHunter (174406) on Thursday October 10, 2013 @10:03AM (#45090949)

    Here's a nice overview of just what's going on with the ACA website. The chart from Xerox illustrates why the system is a just a teensy bit more complicated than Facebook. http://www.washingtonpost.com/blogs/the-switch/wp/2013/10/09/heres-everything-you-need-to-know-about-obamacares-error-plagued-web-sites/ [washingtonpost.com]

  • Pure Beuaracracy (Score:4, Insightful)

    by onyxruby (118189) <onyxruby@@@comcast...net> on Thursday October 10, 2013 @10:13AM (#45091085)

    This is pure bureaucratic inefficiency work at it's finest. Some examples if this is like a typical Federal contract would include things like:

    Changing specs on what your asking for multiple times throughout. You start building to one spec and part way through things change to another spec requiring expensive redesigns. Case studies have been written and college courses taught about the sheer number of design changes on why certain federal programs that have run billions of dollars over.

    Too many chiefs calling the shots which requires too many chiefs answering for the shots being called. For political purposes you can have people from any number of agencies and or divisions within an agency all trying to design the thing. Almost none of them have a clue what their doing, but they'll pretend to be a designer just because they can. The resulting quagmire can cause committee upon committee just to get things approved at any given level and in case you missed someone that feels overlooked they can bring the whole thing to a grinding halt just to remind everyone not to overlook their office.

    If your the Federal Government your allowed, in fact your - required - to use racism and sexism when bidding things out. Anyone that is involved with government contracts is well aware of this and as a result contractors that meet the discrimination guidelines get selected over those that don't even when they cost significantly more. When your guaranteed to get a job even when your charging more money, do you think someone is going charge the market rate or their chosen rate?

    Politics, don't forget about politics as the new administration gets in and typically wants to kills anything that was a signature of the old. If you think life is difficult with inter office politics, imagine having powerful senators and governors doing everything they can to run interference on your project.

    This is only a small smidgen of reasons why these things run costs that are sky high as they are and part of the reasons why you see Republicans want to cut government spending. They look at something like this and say, the private sector would do this in a fourth the time for a fourth the cost (not taking sides, just explaining their logic).

  • by Jabrwock (985861) on Thursday October 10, 2013 @10:54AM (#45091771) Homepage
    Before it was scrapped, the Canadian government had shelled out over a billion dollars to pay for the federal gun registry. It was initially budgeted to cost a few hundred million. Why the bloat? Because they didn't factor in the cost of every single department and major player having a different computer system, and wanting integration with their systems, and they didn't want their individual departments to pay for it, or have to change their own internal systems. So it all got added into the registry's budget instead.
  • by quantaman (517394) on Thursday October 10, 2013 @06:41PM (#45096941)

    The summary is misleading to the point where I think it's deliberate:

    "Healthcare.gov, the site to be used by people in 36 states to get insurance as part of the Affordable Care Act, has apparently cost the U.S. Government $634 million. Not only is this more than Facebook spent during its first 6 years in operation, it is also over $500 million above what the original estimate was: $93.7 million. Why, in a country with some of the best web development companies in the world, has this website, which is poor quality at best, cost so much?"

    Lets look at "Not only is this more than Facebook spent during its first 6 years in operation"

    This is worded like it's comparing the cumulative cost of Facebook's first 6 years to the ~3 years that Healthcare.gov has been in development. But they're actually talking about the annual cost of Facebook compared to the cumulative cost of Healthcare.gov. As for Facebooks annual cost Facebook spent 449M in 2010, 1.1B in 2011, and 3.19B in 2012 [marketwatch.com]. FB also has the advantage of a far slower rollout, dealing with far less sensitive data, and needing far less integration with other systems so it's unclear if it's a valid comparison for things other than load.

    There's another whopper in "it is also over $500 million above what the original estimate was: $93.7 million". So lets look at what the article actually said:

    Take that out, and you’re left with roughly $363 million spent on technology-related costs to the healthcare exchanges – the bulk of which ($88 million) went to CGI Federal, the company awarded a $93.7 million contract to build Healthcare.gov and other technology portions of the FFEs.

    So Healthcare.gov was never supposed to cost $93.7 million, only the contract to CGI to write the code was $93.7 million, the rest of the numbers had nothing to do with that.

    There's certainly issues with Healthcare.gov but this story looks like a partisan plant to me.

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