I am Hal’s complete lack of surprise:
By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.
“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.”
These marketplaces often get described as a Travelocity or Expedia for health benefits. While that might be the case for the consumer experience, experts say the underlying technology is hugely more complex, a maze of interconnecting computer systems meant to deliver health insurance to 30 million Americans.
“The reality is, states and the federal government are building something new,” says Pat Howard, who runs state health issues for consulting firm Deloitte. “There’s a rough blueprint in terms of federal regulations, but there’s still a number of decisions that need to happen to operationalize this.”
Read the whole thing, including a lovely chart on the complexity underpinning these exchanges. It’s going to take years and cost immense amounts of money to get these exchanges going. And then we’ll see if it works. I expect the entire thing to fall over at least a few dozen times.
As I said, I’m not surprised at all. It’s difficult enough to build complex insurance markets from the bottom up. Building them from the top down, to borrow a phrase from P.J. O’Rourke, is like building the Great Pyramid from the top down. Right now, Obama is holding up a big pointy piece and the states are scrambling around for two million blocks of stone.
Update: Here’s the graphic of how the exchange system will work. No one could set up something like this on a timescale of months.