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If you watched Thursday's monkey court -- sorry, heath care hearing, you didn't learn much save this: Democrats have a policy interest in fixing HealthCare.gov's problems but a political interest in downplaying their severity. Republicans have no interest in fixing the problems but a strong interest in publicizing them. The result is that the party that wants to talk about what's wrong with HealthCare.gov doesn't want to actually figure out how to fix it while the party that wants to fix it doesn't want to talk about it.
The assembled contractors weren't any more informative. They retreated behind a haze of acronyms and finger pointing and uncomfortable silences.
So for Wonkbook this morning, I spoke to someone who actually is more informative. Fred Trotter, the author of "Hacking Healthcare," is a pioneer in the health IT world. He's someone who actually does the kind of cutting-edge software development using the kind of cutting-edge techniques that people feel HealthCare.gov needed. A lightly edited transcript of our conversation follows.
Ezra Klein: Are you surprised by the rollout of HealthCare.gov?
Fred Trotter: I’ve been in health IT for years. I have this data set where I look at the health-care system as a whole and model it out. I have experience as a government contractor working on VISTA for the VA. So it doesn’t surprise me at all. What you need to run a massive consumer web site is the latest in horizontal scaling and that’s hardly approved software for the federal government. The federal government has very conservative mechanisms for purchasing off-the-shelf software and creating new software. That puts a lot of constraints on them.
EK: Explain what horizontal scaling is.
FT: When you get a certain amount of traffic going to any site on the internet a single computer can’t handle it. In order to handle tremendous amounts of traffic you have to have more than one computer sharing a task. At modern sites like Amazon and Ebay and Google, the main innovation they’ve pioneered is using lots of computers at the same time to answer one query to the web site.
But it’s a different problem for different tasks. If the federal government wanted to sell billions of books online that’s fairly understood. They could just look at Amazon. But they’re trying to do something entirely new. And that means that what they’re talking about is the invention of something new. The way Congress looks at software is that there are these sites that do these amazing things and we should do that, too. They don’t realize that a tremendous amount of invention has gone on at these scaled web sites to handle these processes.
EK: I’ve been reading the new biography of Jeff Bezos, as he is now my master and overlord, and an ongoing theme is that Amazon’s tech had to keep being reinvented as the site grew. And that process, it’s clear, was really hard, and getting it right was really important to why Amazon and not some other e-commerce site won. How much more difficult of a problem did the federal government give itself when they tried to unveil a single piece of tech that could handle huge traffic on day one?
FT: They screwed themselves twice. The first thing they did that was very foolish was to go at scale. Usually when the government understands the problem of that they do things in phases. They didn’t draft everyone for Vietnam all at once. That’s the model they should’ve used. They should’ve said people born in January can now get health insurance. Then it should’ve expanded to everyone born in the first quarter. And so on. But they presumed scale was easy. That was the first mistake. The second was assuming invention was easy. And scaling something that hasn’t been invented yet -- that’s technological suicide.
EK: Tell me a bit about your experience as a government contractor.
FT: I worked with the VA innovations lab. My company partnered with a local VA hospital to build this new amazing thing. But in the second contract to deploy the thing we built the VA changed the definition of the kind of company that could go for the contract -- potentially excluding us. So they did this thing to encourage innovation but as soon as the innovation was done they went back to this very traditional process.
I realized I could figure out how to develop these very complex, very new software programs or I could figure out how to contract with the government. And so I chose to do the thing that was innovative. I have thousands of hospitals that want to use my software but if I become a government contractor and they don’t want to use what I’m using I’m out of a job.
The farce of today’s testimony is Congress is basically saying that we created this ridiculous structure in how the government relates to technology and you contractors developed the expertise to jump through our hoops -- why didn’t you also develop the expertise to be a great technology company?
EK: How would you fix the way government relates to technology?
FT: One of the jokes we have in health IT that doctors have no idea what they want and we’ve been giving it to them for years. And I think that’s a fair assessment of technology procurement. The government has no idea what it wants and contractors have been giving it to them for years. There needs to be a much more balanced approach to saying that when the federal government understands that it doesn’t understand a problem it needs to act very differently. When you’re doing a procurement and you know you don’t actually know how to solve the problem you need to take a much more organic, evolutionary, and open-source approach. Hire four vendors and require all of them to release the code as open source so you can see who is solving the problem how and then compare approaches.
NHS has just gotten tremendously burned by a rollout of electronic health record systems. It’s probably the biggest catastrophe before HealthCare.gov. They also had a big bang, all-at-once, one-big-vendor strategy. That did not work. And now they’re going with an innovative approach and creating an open-source ecosystem and allowing multiple vendors to go in so they can not just solve the problem but learn how to solve the problem. I think the U.S. government will have to learn the same lesson. When you don’t know what you’re building hiring a black-box vendor doesn’t work. That’s just rolling the dice.
EK: One thing that happens in these contracts though is that Congress and agencies wants to be able to specify what they’re getting. That’s in tension with this iterative, evolutionary, organic approach to development that can drive towards many different possible outcomes. So how do those balance?
FT: Right now they should be in a position to say they hired five vendors to work on the web site five ways. That sounds like it should be more expensive but in reality you reduce the size of every one. You intentionally create a resource-constrained environment. Being risk tolerant when you look at an ecosystem means being okay with some of the contractors failing. What you’re saying is this contractor must succeed in order for the government to succeed. And by letting contractors fail you let them become more risk tolerant because they know they’re in a competition they may not win and so they need the best solution, not just a solution, that makes them much more technologically aggressive about getting things done.
EK: One of the problems on the other side of this is that these processes are run by the government and the government’s IT departments just aren’t very good and the people in them aren’t very up on modern software development principles.
FT: There’s a problem in government IT departments in general where you get somebody who got a job in their 20s and didn’t really have any reason to improve their skill set or change their approach over 20 years but now they’re in charge of a department. People think if you are a geek and a technologist and that’s the way it is. But if I knew what I knew four years ago today and that’s all I knew today I’d be out of a job. Technology moves so fast that you need to either be job hopping or learning the way you do when you’re job hopping. Otherwise you just get left behind. But in government there’s no good incentive to keep up. And that’s a very difficult problem.
Wonkbook's Number of the Day: 94 percent. That's the share of large federal IT projects over the last decade that went wrong. Great job, guys.
Wonkbook's Graph of the Day: Banks have racked up $95 billion in fines for the housing crisis. But is that enough? (From Know More, which you should all be visiting.)
Wonkbook's Top 5 Stories: 1) three weeks of HealthCare.Gov dysfunction; 2) the quiet ratchet of financial regulation; 3) a small fiscal deal if they want it; 4) Obama's immigration rally; and 5) in search of a lost energy policy.
1) Top story: Obama's dot-com bust
Full testing of HealthCare.gov began too late, contractors say. "In their first public remarks since the debut of the problem-ridden insurance exchange, executives of the main IT companies told members of the House Energy and Commerce Committee that full tests of the Web site that should have been carried out months in advance, but began just two weeks before its rollout...“This system just wasn’t tested enough,” Julie Bataille, director of CMS’s office of communications, acknowledged to reporters. She repeatedly cited what she called “a compressed time frame” without explaining what that meant or the reasons for it." Sandhya Somashekhar and Amy Goldstein in The Washington Post.
Super helpful explainer: Everything you need to know about Obamacare’s problems. Sarah Kliff in The Washington Post.
In hearing, a startling agreement on who to blame for HealthCare.gov. "Everyone at the Energy and Commerce hearing this morning came to an agreement on who caused the problems with HealthCare.Gov: Somebody else. "Our portion of the application worked as designed," CGI Federal Vice President Cheryl Campbell testified...[B]oth CGI and QSSI threw a lot of blame at the Center for Medicare and Medicaid Service, mostly for three key issues: the short time left for end-to-end testing, the decision to go live on October 1 and ditching a feature allowing consumers to window shop shortly before the site went live." Sarah Kliff in The Washington Post.
Bite-sized: This tweet perfectly summarizes today’s Obamacare hearing. Ezra Klein in The Washington Post.
The biggest fight at the Obamacare hearing was over these 47 lines of code. "About an hour and a half into this morning's Energy and Commerce hearing, Rep. Joe Barton (R-Tex.) showed off a slide of code he said was from the HealthCare.gov site, and which he believed was a violation of HIPAA heath privacy rules." Sarah Kliff in The Washington Post.
The bright spot in Obamacare's tech woes. "For all the problems with HealthCare.gov, one very big, very important piece of Obamacare technology seems to be working well. It's called the "data services hub"—and it's not nearly as boring as it sounds. When the law's critics raise fears of security breaches, they're talking about the data hub. The hub transmits massive amounts of information about people seeking health insurance, drawing from several federal agencies and communicating with every state's insurance marketplace. It was initially seen as one of the most likely places for problems to arise in the enrollment process. So far, though, the reviews are positive." Sam Baker in National Journal.
@morningmoneyben: Those of you who believe Obamacare is destroying jobs: what are your favorite data points to support that claim?
Kay Hagan calls on White House to extend health insurance enrollment deadline 2 months. "Hagan joins a growing chorus of Senate Democrats — several of whom are up for reelection next year — who are lobbying the Obama administration to make concessions in light of the glitches still affecting the federal health insurance marketplace and HealthCare.gov...In a statement, Hagan said extending the enrollment period for two months and waiving the tax penalty for the same period of time could help "make up for time that is being lost while the website for the federal exchange is not functioning."" Juliet Eilperin in The Washington Post.
@davidfrum: Got notice that I'm one of the Carefirst customers who'll be shopping for a new plan on the DC Obamacare site. I'll let you know how it goes
Government did a poor job on HealthCare.gov. A private firm might’ve been worse. "Some people, like New York University contracting expert Paul Light, think keeping the management in-house was a key point of failure. So would it have made sense to have one contractor actually in charge of pulling the whole thing together? The problem is, the federal government has tried outsourcing that role before — with equally disastrous results." Lydia DePillis in The Washington Post.
In White House pitches, a rosy view of HealthCare.gov. "Just days before HealthCare.gov went live with disastrous results, top White House officials were excitedly briefing lawmakers, reporters, Capitol Hill staff members and Washington pundits on their expectations for the government’s new health care Web site. Led by David Simas, a senior communications adviser in the West Wing, and sometimes joined by Denis McDonough, the White House chief of staff, and others, the fast-paced PowerPoint briefings showed images of a shiny new Web site that was elegantly designed, simple to use and ready for what officials hoped would eventually be a flood of customers on Oct. 1." Michael D. Shear and Sheryl Gay Stolberg in The New York Times.
@KipPiper: Obamacare price quote errors in now-pulled window shopping feature raise concerns about accuracy of prices, subsidies for applicants.
For presidents, link between the power to fire and their inclination to do so can be tenuous. "As the kinks in the government’s health-care Web site have multiplied, the question being asked across the partisan divide in Washington is: Who will the president fire? The answer for President Obama is that punishing underlings for administration mistakes is not as simple as it may seem...When Obama has fired senior officials, his reasons for doing so appear to fall into three general categories: obvious incompetence, a change in policy direction or a mistake by an otherwise admired appointee that makes keeping the job untenable." Scott Wilson in The Washington Post.
Plus, a special supplement on health policy:
Study: Surgery rate higher when implants purchased from doctors. "A government study provided ammunition Thursday to critics who argue that allowing surgeons to profit from implants they insert in patients leads to higher rates of surgery. The rate of spinal surgery at hospitals that purchased implants from physician-owned distributorships, or PODs, grew more than three times as fast as it did at hospitals overall, the Office of Inspector General of the Department of Health and Human Services said in a report to Congress. The agency also found hospitals that purchased implants from PODs performed 28% more spinal surgeries than hospitals that didn't." John Carreyrou in The Wall Street Journal.
CBO finds much less savings from raising Medicare age. "The CBO now says that raising the Medicare age slowly to 67 from 65 would yield just $19 billion over 10 years. In 2012, the CBO had estimated the move would yield $113 billion in the first 10 years. The CBO estimate could reduce any incentive lawmakers, especially Democrats, have to take the politically treacherous step of raising the Medicare age...The main reason for the shift in the CBO estimate is that the CBO now projects 65 and 66-year-olds will be healthier and have greater access to employer coverage than previously thought. This means that they would cost the federal government less." Erik Wasson in The Hill.
Primary source: The CBO report.
New Obamacare regulations finalized. "The Obama administration has finalized additional regulations for new health insurance marketplaces under ObamaCare. The 236 pages of regulations released by the Centers for Medicare and Medicaid Services (CMS) on Thursday set out oversight and financial standards for the marketplaces, called exchanges...They finalize some details about when people can enroll in insurance through the exchanges, as well as standards for vendors conducting satisfaction surveys about insurers on the exchanges." Julian Hattem in The Hill.
FDA proposes new limits on pain drugs. "The Food and Drug Administration Thursday recommended imposing far more severe restrictions on the prescribing of the most commonly used narcotic painkilling drugs in the U.S., an effort to combat their widespread abuse...The decision by the federal agency follows a recommendation given to it by an advisory committee earlier this year, which voted 19-10 to limit the amount of such medicines that can be prescribed without a new prescription. The move covers pills containing hydrocodone...[T]he change in classification will reduce to 90 days the amount of medicine that can be supplied without a new prescription. Currently, the pills can be refilled five times and can cover a 180-day time period." Thomas M. Burton and Timothy W. Martin in The Wall Street Journal.
Music recommendations interlude: Ray Charles, "Come Rain or Come Shine," 1959.
JOHNSON AND REED: Why the government never gets tech right. "[A]ccording to the research firm the Standish Group, 94 percent of large federal information technology projects over the past 10 years were unsuccessful — more than half were delayed, over budget, or didn’t meet user expectations, and 41.4 percent failed completely...Government should be as participatory and as interactive with its citizens as our political process is. A digital candidate will never be able to become a digital president if he can’t bring the innovation that helped him win election into the Oval Office to help him govern." Clay Johnson and Harper Reed in The New York Times.
BARRO: What is going wrong with HealthCare.gov? The White House ought to start tell us now. "The administration is still behaving like it is trying to get Obamacare enacted, and therefore its top public relations task is to bury negative stories about the law and emphasize the upside, like heavy consumer interest. But this is a mistake. Obamacare is already the law, and its long term political success is going to be determined by its substantive policy success — including whether consumers are able to sign up and get the health coverage they want. There's no reason not to level with the public right now, unless the truth is so horrible and the website is so un-fixable that Obama administration officials can't bring themselves to discuss the matter publicly." Josh Barro in Business Insider.
YORK: IRS tax-credit scandal a bad omen for Obamacare. "Under Obamacare, the Internal Revenue Service will determine who is eligible for health insurance subsidies, and it will deliver those subsidies, in the form of tax credits, to millions of individual Americans. It's a huge job, and a critical one, involving hundreds of billions of taxpayer dollars. So it should go without saying that the subsidies go only to people who actually qualify for them. But a new scandal within the IRS casts serious doubt on whether that will happen." Byron York in The Washington Examiner.
KRUGMAN: Addicted to the apocalypse. "[T]here are two remarkable things about this kind of doomsaying. One is that the doomsayers haven’t rethought their premises despite being wrong again and again — perhaps because the news media continue to treat them with immense respect. The other is that as far as I can tell nobody, and I mean nobody, in the looming-apocalypse camp has tried to explain exactly how the predicted disaster would actually work." Paul Krugman in The New York Times.
COHN: Marijuana, America's next wedge issue. "We’ve reached the point where there should be no surprise if a major national politician embraces marijuana legalization. Without any large-scale campaign on its behalf, surveys show that approximately half of Americans now support marijuana legalization, including 58 percent in a recent, but potentially outlying, Gallup poll. Regardless of the exact support today, marijuana is all but assured to emerge as an issue in national elections—it's only a question of how and when...[I]t’s hard to imagine Democrats staying on the sidelines for too many more election cycles." Nate Cohn in The New Republic.
SEGAL: A liberal-libertarian alliance? "While we must harbor no delusions about our differences, sometimes partisans on the left and right agree about some things — if not always for the same reasons — and they can pressure the institutionalists who run both parties. Let’s have some antiwar bipartisanship instead of the usual pro-war bipartisanship...We cannot cover up harms perpetrated by our government just because pointing them out might make some people more inclined to distrust the state. If we hope to maintain enough credibility with voters to one day win progressive majorities at the ballot box then we must not shy away from naming state overreach and corruption where it is transparently manifest." David A. Segal in Salon.
Not even the watchmen are watching the watchmen interlude: OSHA chief warns rules are 'dangerously out of date.'
2) Quietly but surely, U.S. financial regulation ratchets tighter
Fed proposes brand-new liquidity requirements for big banks. "The proposal subjects U.S. banks for the first time to so-called "liquidity" requirements. Liquidity is the ability to access cash quickly. The largest banks — those with more than $250 billion in assets — would be required to hold enough cash and securities to fund their operations for 30 days during a time of market stress. Smaller banks — those with more than $50 billion and less than $250 billion — would have to keep enough to cover 21 days." The Associated Press.
Initial claims aren't dropping as quickly as hoped. "Initial claims for state unemployment benefits fell 12,000 to a seasonally adjusted 350,000, the Department of Labor said...Separately, the Commerce Department said the nation’s trade deficit rose 0.4 percent to $38.8 billion in August. Economists had expected the deficit to rise to $39.5 billion in August." Reuters.
Watch: Is America becoming Downton Abbey? And more from the Wonkblog Debates. Neil Irwin in The Washington Post.
Space trash is a big problem. These economists have a solution. "In a recent paper, three economists argue that orbital debris is just a standard "tragedy of the commons" problem. Space is a precious commodity, and people tend to overuse it, since users don't pay the full price for the mess created by satellites. Similarly, no one country has the incentive to clean up the entire mess all by itself. Economists typically solve this problem with what's known as a Pigouvian tax or user fee to better align those incentives. So, they ask, why not place a user fee on orbital launches to help pay for clean-up?" Brad Plumer in The Washington Post.
Too much Moneyball? "Michael Lewis's canonical Moneyball, about the Oakland A's use of statistical modeling to make the most of a tiny payroll, has become perhaps the most overused literary reference of our generation...[A]nything that uses rigorous data analysis to improve upon intuition, conventional wisdom, and traditional logic in making decisions. Which is how all smart industries, businesses, and government entities ought to operate...Now, if you're not "data-driven," using analytics to exploit inefficiencies created by a lack of the right information, you might as well give up and go home." Lydia DePillis in The Washington Post.
Wonkblog debates interlude: Hey, New York-based wonks! Come to our live event!
3) Why the chances of a small fiscal deal are rising
It's agreed: The deal will be small. But the deal? No agreement yet. "In de-emphasizing the likelihood of a larger deal, both parties appeared to be looking for limited areas of agreement in order to bypass the next round of the automatic spending cuts known as the sequester and buy time to deal with tax reform, entitlement cuts and other big-ticket items next year...Though their goal to avoid the sequester overlaps, the two parties are still sharply divided on how to proceed. They face a relatively small gap in how much money they want to appropriate for federal agencies to spend in the year that ends Sept. 30, 2014. But their split over whether to raise taxes as part of any agreement is proving so polarizing that neither side is optimistic a deal is within reach." Damian Paletta in The Wall Street Journal.
Lawmakers now focusing on replacing sequester spending cuts. "One week after concluding a bruising battle over the federal budget, Washington policymakers began lowering expectations for the next round of talks, with both sides proposing Thursday to concentrate simply on replacing sharp spending cuts known as the sequester...Ryan held out hope that the panel would strike a deal to replace the sequester for fiscal 2014 and perhaps beyond — averting another shutdown in January and a fresh crisis over the debt limit sometime next spring." Lori Montgomery in The Washington Post.
Jack Lew and the White House want a deal -- and badly enough that they may be willing to accept no new revenue to get one. "Jack Lew, the US Treasury secretary, set a conciliatory tone in advance of the next round of budget talks, saying that across-the-board expenditure cuts could be replaced with other spending reductions. Mr Lew’s comments suggested a possible softening of the Obama administration’s position, in that the White House has long held that the “sequestration” cuts should be supplanted by a mixture of spending cuts and higher revenue...The lack of an explicit link between sequestration replacement and higher revenue could pave the way for a limited deal with Republicans." James Politi in The Financial Times.
Does the Tea Party make America a less safe investment? "In recent weeks Wonkblog has spent a lot of time working through the question of whether America's political system is changing in ways that make America a worse investment long-term. But we want to open the question to you. Hence the Wonkblog Crowdsourced on the topic. Go there and give us your answers. We'll publish and comment on the best of them next week." Ezra Klein in The Washington Post.
Oh my god this is so great interlude: The New York Times produces another multimedia masterpiece story on the geopolitical conflict over the Spratly Islands.
4) Obama's immigration talk
Obama tells immigration advocates to keep pressure on House Republicans. "President Obama hosted dozens of immigration advocates at the White House on Thursday, imploring them to keep the pressure on House Republicans even as prospects are dimming for a comprehensive reform bill to pass Congress by the end of the year. Obama addressed a room packed with civil rights, religious, business and labor leaders who have formed a broad coalition to support one of the president’s top domestic priorities. After demanding that House leaders back a reform bill approved by the Senate or propose their own ideas, the president paused to thank those gathered for their persistence." David Nakamura in The Washington Post.
Transcript: President Obama’s Oct. 24 remarks on immigration reform. The Washington Post.
Pressing House GOP, Obama evokes George W. Bush in immigration speech. "For the second time in two weeks, President Obama called on House Republicans to support a broad overhaul of immigration laws, invoking his predecessor George W. Bush in a bid to restore momentum to a key second-term priority. Obama didn't mention Bush by name, but he reminded his audience of immigration advocates in the East Room that the former president championed a similar, though ultimately unsuccessful, comprehensive immigration plan in 2006 and 2007." David Nakamura in The Washington Post.
NYC interlude: 100 ways to improve the subway, on a Tumblr blog.
5) In search of a lost energy policy
Energy secretary sees Capitol Hill thaw on climate change. "“I believe that we are, including in our Congress, really past the issue of whether we need to respond,” Moniz said at the Center for Strategic and International Studies. Instead, he said, the debate has turned toward what types of policies should carry the day. Moniz touted the second-term White House climate change plan, which rests on executive actions like carbon emissions standards for power plants and stepped up appliance and equipment efficiency standards." Ben German in The Hill.
Interview: EPA chief Gina McCarthy. Jeff Goodell in Men's Journal.
Obama's former climate czar predicts president will reject Keystone XL. ""Whether or not he will say no — well, you know how the White House functions," [former White House energy and climate czar Carol] Browner said at the liberal think tank Center for American Progress (CAP) anniversary meeting in Washington. "At the end of the day he is going to say no but there will be some more twists and turns before we get there."" Laura Barron-Lopez in The Hill.
States team up to support electric cars. "In an effort to spur lackluster sales of electric cars, California, New York and six other states said on Thursday that they would work jointly to adopt a range of measures, including encouraging more charging stations and changing building codes, to make it easier to own an electric car...The states, which represent more than a quarter of the national car market, said they would seek to develop charging stations that all took the same form of payment, simplify rules for installing chargers and set building codes and other regulations to require the stations at workplaces, multifamily residences and at other places." Matthew L. Wald in The New York Times.
Reading material interlude: The best sentences Wonkblog read today.
Michael Lewis is a genius. But Moneyball has jumped the shark. Lydia DePillis.
Everything you need to know about Obamacare’s problems. Sarah Kliff.
Court withdraws restriction on cellphone wiretaps. Joe Palazzolo in The Wall Street Journal.
Officials alert foreign services that Snowden has documents on their cooperation with U.S. Ellen Nakashima in The Washington Post.
The diplomatic costs of the NSA's surveillance are rising. Alison Smale in The New York Times.
Wonkbook is produced with help from Michelle Williams.