After disastrous rollout, Oregon considers health exchange options


Oregon Gov. John Kitzhaber (D) (Don Ryan/AP)

Oregon Gov. John Kitzhaber (D) has fired the head of the state’s online health-care exchange — the second to leave the organization in three months — after chronic technical issues that left uninsured residents unable to purchase insurance mandated by the Affordable Care Act.

Plagued by technical issues, breakdowns in supervisory management and shoddy work by an outside vendor that received tens of millions of dollars in state funding, Cover Oregon, the state’s online health insurance exchange has been one of the worst in the country. Oregon has spent more than $150 million on outside contractors to build the Web site, though it still cannot process online enrollments.

Despite the Web site failures, Oregon has signed up 157,000 residents for health-care plans, including 49,000 in commercial plans, Kitzhaber said. The state had to hire or reassign about 500 employees to process all those applications by hand.

A report released Thursday by Kitzhaber’s office cited poor and often contentious communications between Cover Oregon, the Oregon Health Authority and the Oregon Department of Human Services; a lack of clear decision-making documentation; and lackluster information technology development by Oracle, the chief contractor tasked with building the Web site among the problems that led to such a bad breakdown.

A key official responsible for implementing the exchange also decided against using a system integrator to develop and configure the overall project. And though Cover Oregon built contingency plans, those plans only envisioned system outages; they did not plan for the possibility that the entire Web site would be unfinished by the Oct. 1 implementation date.

“Oregonians deserve accountability for the public investment made in this technology,” Kitzhaber said in a statement, released along with the 77-page report [pdf]. “My longstanding goal is to ensure that every Oregonian who needs insurance coverage has the opportunity to enroll through the exchange or directly with a health plan. I am equally committed to ensuring that the problems we have experienced here do not happen again.”

Oregon is one of several states in which Democrats who backed the 2010 Affordable Care Act decided to build their own insurance exchanges only to run into major technical problems. Maryland, Minnesota, Hawaii and Massachusetts have also had to deal with troublesome technology.

At a news conference in Salem, Kitzhaber also left open the possibility that the state could join the federal exchange, through the HealthCare.gov portal.

Asked if that was a possibility, Kitzhaber spokeswoman Nkenge Harmon Johnson said the governor had convened a team of health-care experts from the private and public sectors to advise Cover Oregon on IT options.

“All options are on the table for how we proceed with getting more Oregonians enrolled in quality, affordable health care plans,” Harmon Johnson said in an e-mail.

A spokeswoman for the federal Department of Health and Human Services declined to comment on whether Oregon could join the federal exchange.

Kitzhaber had requested the report, compiled by First Data, along with a review by the Government Accountability Office. In February, a report by the Centers for Medicare and Medicaid Services found fault with the way Oracle handled the
Web site launch. Kitzhaber said Thursday he is forwarding the report to Oregon Attorney General Ellen Rosenblum (D), who will consider legal avenues open to the state.

Oregon has moved to sever ties with Oracle. Earlier this year, the state legislature passed new laws that strengthened oversight of Cover Oregon and to help those who couldn’t obtain insurance online.

And Kitzhaber said Thursday he has accepted the resignation of Bruce Goldberg, the executive director of Cover Oregon. Goldberg is the second executive director of the organization to resign. In December, Rocky King, the first director, went on medical leave; he resigned a month later.

More than 60 candidates applied to run Cover Oregon after King quit, and the organization’s board of directors is leading the search for a new executive director. Goldberg will continue to run Cover Oregon until a new leader is found.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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