	Generational Dynamics
	Forecasting America's Destiny ... and the World's

\| HOME \| WEB LOG \| COUNTRY WIKI \| COMMENT \| FORUM \| DOWNLOADS \| ABOUT \|

Generational Dynamics Web Log for 23-Aug-2015
23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history

Web Log - August, 2015

23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history

A report on Obamacare and the Obamacare web sites

This morning's key headlines from GenerationalDynamics.com

Fraud and subversion in Healthcare.gov - the greatest IT disaster in history
Introduction to the Healthcare.gov debacle
The Massachusetts Health Connector web site
Other Obamacare exchanges
Obamacare's Medicaid and 'Nixon-Obama Price Controls'
About the Author

Fraud and subversion in Healthcare.gov - the greatest IT disaster in history

Typical Healthcare.gov home page

Typical Healthcare.gov home page

For three months I've been investigating the Heathcare.gov disaster -- the federal web site and multiple web sites all failed disastrously on launch day, October 1, 2013. It can't be a coincidence that so many software development projects all failed disastrously in the same time frame, so there has to be a core reason.

My investigation has shown that the core reason was that the Obama administration poured a tsunami of money into these projects -- so much money that the contractors hired thousands of incompetent programmers in order to spend that money, with the result that the software projects failed. Spending the money became more important than getting the web sites working. As the projects failed, the coverups, corruption, lies and fraud began, and continue to this day.

I also expanded my investigation into Obamacare in general, and found that almost every aspect is thoroughly drenched in corruption and fraud. The Obama administration took the money in the $710 billion Medicare fund and used the money to fund one disastrous Rube Goldberg component after another. These components, such as the "risk corridors," the "co-ops," and the state-run "Obamacare exchanges," were all supposed to be self-sustaining by now, but instead they're all financial disasters. And now that the confiscated Medicare money is running out, they'll have to be shut down.

The Obama administration has confiscated the $710 billion dollar Medicare fund that millions of people worked for decades to create, and essentially thrown it into the garbage. The contributions of those millions of people have all been lost, with nothing to show for it.

Many of the state-run Obamacare exchanges are working today, but only barely. Since they were implemented with thousands of incompetent programmers, where the objective was simply to spend money, they're technological dinosaurs with billions of lines of code that's now almost completely unsupportable. In addition, they're financial disasters, and will have to be thrown out.

This World View article is a summary of two lengthier articles on my web site:

"Healthcare.gov -- The greatest software development disaster in history" -- a journalistic report, based on three months of research, on Healthcare.gov and Obamacare.

"For academics: Dysfunction, subversion, sabotage and fraud in software development projects" -- an academically-oriented report on software development disasters in general, including "lessons learned" from the Healthcare.gov disasters.

Earlier this month, I wrote "5-Aug-15 World View -- Britain's National Health Service (NHS) faces existential financial crisis". In that article, I described how both the NHS and the Veterans Administration health care system were quickly becoming financial disasters. The same is true of Obamacare.

Introduction to the Healthcare.gov debacle

On October 1, 2013, Healthcare.gov went "live," and was soon revealed as the biggest IT (information technology) and computer software disaster in history. That it was a disaster was clear, as President Barack Obama was completely humiliated after announcing that the slow response was because millions of people were signing up for insurance.

Two months after the launch, I wrote "1-Dec-13 World View -- Obamacare: 500M lines of code, $500M, only 60% completed". In that article, I said that the reported number of 500 million lines of code was impossible. It was impossible to develop a working web site with 500 million lines of code, and anything that size would be unsupportable anyway. I added:

"I get a picture in my mind of 1,000 monkeys sitting at computers typing code, without worrying about whether or not it works. Given the size of the catastrophe, some variation of that must have happened."

I was thinking "criminal fraud" when I wrote that article, but I didn't use those words without any proof. Now, almost two years later, we finally have reports coming out that provide evidence of criminal fraud. There weren't thousands of monkeys typing random code, charging $200/hour each, but there might as well have been.

We now know exactly why Healthcare.gov was such a disaster:

Healthcare.gov, as well as each of the state healthcare exchanges, was a fairly simple web site that a team of 10-20 people could have developed for around $10 million.

But the Obama administration granted $150-$500 million to software development contractors for each of the web sites.

As a result, the primary objective of the contractors was NOT to develop the web site; it was to find ways to spend $150-500 million.

In order to spend that money, each contractor hired hundreds of programmers for each web site, many of whom were unqualified. Among other problems this violated Brooks' Law from the 1960s: "Adding manpower to a late software project makes it later"

The hundreds of hired programmers were not monkeys, but they might as well have been. They didn't have the required skills, and so even simple documentation tasks weren't completed on time, or completed at all.

In order to keep the money flowing, contractors lied and cheated on tests, effectively committing fraud. And because of the amount of money involved, the fraud was undoubtedly criminal fraud.

There's little doubt in my mind that if the Obama administration had granted $20 million per web site instead of $150-500 million per web site, then they would have gotten working web sites to start with. By pouring out a tsunami of money, they got a disaster and major humiliation, which is what they deserved.

The above conclusions were based on a detailed examination of the Massachusetts Health Connector project, and briefer looks at other Obamacare exchange projects.

In the case of the Massachusetts Health Connector project, there was development contractor, CGI Corp., and an overseer contractor, the University of Massachusetts Medical School. The evidence from the whistleblowers indicates that both these contractors allegedly committed criminal fraud, and furthermore that they were allegedly in a criminal conspiracy to defraud the government.

This story is full of criminals and a few heroes. The heroes are the ones who told their bosses that the project was in trouble, and were ordered to keep quiet, or were treated abusively and fired. The criminals are the ones who lied and cheated, committed fraud, and conspired to commit fraud.

The Massachusetts Health Connector web site

Now let's turn to what happened to the Massachusetts Health Connector web site. Much of the following depends on extensive research done by by Josh Archambault at the Pioneer Institute. (See Josh Archambault's report).

There were two contractors involved. CGI Corp. was responsible for coding and implementation, and the University of Massachusetts Medical School (UMass) was hired to do oversight on CGI's work.

"Dave" was the Interface Manager at UMass early in the Mass Connector development. He ended up being a whistleblower, and he asked me not to use his real name. He said that a small team could have done the Mass Connector for very little money:

"One of the last conversations I had with the program managers was that I said I wanted to take this over. I said that we don't need 200 or 300 people that CGI is using. You can't herd information through 300 people fast enough for them to develop anything. They'll never get it done. Give me six people, and we'll get it done, and it will work. I was fired the next day."

This is an important statement, and it explains why I wrote the comment about the "1,000 monkeys" typing random code in my original article. It's literally impossible to spend the kind of money that the Obama administration was pouring out to its supporters to get a technical project done. As Dave says, "You can't herd information through 300 people fast enough for them to develop anything."

Like Dave, I could have developed the Mass web site or the federal web site within a few months, working with a team of five to ten people. And it would have actually worked.

The following is a brief summary of what happened, omitting many technical details. The full story, including technical details, can be found in the lengthy article "Healthcare.gov -- The greatest software development disaster in history".

In the fall of 2012, CGI was missing deadline after deadline. More importantly, CGI was unable even to provide any technical specifications of what it was doing. CGI had hired hundreds of programmers in order to spend all the money they'd been given, and it was becoming clear that in order to hire so many programmers, CGI had had to lower their standards substantially, with the result that many of the programmers were too incompetent even to produce technical specifications. And if CGI was too incompetent to produce any technical specifications, then they certainly were too incompetent to produce usable code.

In the aftermath, UMass claimed that they didn't know that CGI had been missing deadline after deadline. However, Dave says that that claim was completely untrue:

"I was reporting to management, calling meetings, and we had a JIRA [problem reporting] system set up. Report in JIRA, escalate it, escalate it. So when UMass said they didn't know that CGI was missing deadlines, that's absolutely not true - there were meetings and JIRA reports."

UMass had been hired to provide oversight over CGI. But instead of being an overseer, the contractor became a collaborator.

In December 2012, CGI had to perform a live test that required sending test messages back and forth between CGI's software and the servers in Washington. CGI proposed to cheat on the test, and then lie to government officials. Dave refused to approve the fraudulent test, despite intense pressure from his bosses at UMass. Dave was removed from his job and fired shortly thereafter. The fraudulent test was approved by UMass's management.

After Dave was fired, CGI continued to miss deadlines and fake tests, and lie to government officials. When launch day came along, October 1, 2013, the web site didn't work at all.

According to Archambault's report, problems just continued. In the Spring of 2013, CGI faked tests by using dummy screens on its web site, and claimed that it had performed a valid test. By that time, CGI knew that the project would fail, but refused to tell anyone. CGI never ran the end to end tests that it had committed to, and by the October 1 launch date, the software was completely untested. Indeed, it was not working at all, as they knew, but they lied and claimed that it was working, and accepted hundreds of millions of dollars in payment for software they knew wouldn't work. UMass was fully informed about the lying and fraud, but collaborated with it.

CGI and UMass had violated one of the oldest and most important rules about software development projects: Brooks' Law: Adding manpower to a late software project makes it later. This is discussed in detail in my full-length article.

CGI and UMass had spent hundreds of millions of dollars to produce a piece of garbage, and as bad as that is, there's one more completely disgusting thing that happened.

By the beginning of 2014, it was clear that CGI Corp.'s development effort was a total disaster, and the State of Massachusetts transferred the project to a new consultant firm, Optum Inc. CGI was paid $17 million for the task of turning the work they had completed over the Optum But when Optum received CGI's code, they unable to use any of it -- it was complete garbage. So CGI had already spent close to $200 million for a $10 million project, and with that money they produced nothing but garbage. And they were paid ANOTHER $17 million to turn the garbage over to Optum. As cynical and jaded as I am, this is almost too much to bear. It illustrates the level of corruption and fraud throughout the Healthcare.gov project.

What happened here, based on years of experience as a Senior Software Engineer and as a tech journalist, is that the cause of the disaster was that the Obama administration paid CGI and UMass had been paid hundreds of millions of dollars for a $10-20 million software development project. If they'd paid only $10-20 million, then the project would have been completed successfully. This was a major humiliation to the Obama administration, and they got what they deserved.

Other Obamacare exchanges

What's remarkable is that similar disasters occurred in one state Obamacare exchange after another, with different contractors, but always with the same problem: Being given $150-500 million for a $10-20 million project.

In my full-length article, I discuss Covered California, the Vermont Health Connector Obamacare exchange, the Cover Oregon Obamacare exchange, the Nevada Health Link Obamacare exchange, and the Maryland Health Connection Obamacare exchange.

All of these were disasters, and they were all drenched in corruption, fraud and criminality.

There were four state Obamacare exchanges that ran reasonably well on launch day, October 1, 2013: Connecticut, Kentucky, Rhode Island and Washington State. What those four had in common was that the contractor was Deloitte Consulting.

I made repeated requests to Deloitte Consulting for technical information on how they had accomplished this, but they just made non-credible excuses and refused to provide any information, so I'm unable to report whether Deloitte accomplished this through technical expertise or because of some corrupt relationship with the Obama administration. However, Deloitte does prove one thing: Whatever they did could have been done by the contractors for the other Obamacare state exchanges, so any excuses the other contractors give are sure to be phony.

Obamacare's Medicaid and 'Nixon-Obama Price Controls'

Long-time readers are aware that from the day it was first proposed in 2009, I've referred to President Barack Obama's health care plan as a proposal of economic insanity, because it's a repeat of President Richard Nixon's price controls, which were an utter, total disaster for the economy. What I now refer to as the "Nixon-Obama Price Controls" have been equally disastrous.

As part of my research on the Healthcare.gov software development projects, I investigated other aspects of Obamacare. Here's a summary of my findings:

The Medicaid expansion made millions of new people insured, creating a major financial crisis in Kentucky and other states. Obamacare imposed what I call "Nixon-Obama price controls," to emphasize the fact that the imposed Medicaid price controls are as destructive to our economy as Nixon's price controls in the 1970s that destroyed the economy for a decade.

Obamacare confiscated the $710 billion Medicare insurance fund that workers have been paying into for decades, and used it to fund a bunch of Obamacare entities. These entities were supposed to be self-sustaining by now, as the Medicare money runs out, but they're almost all financial disasters: Obamacare exchanges, Obamacare risk corridors, Obamacare co-ops, and Obamacare web sites. In the endgame, these will all have to be thrown out.

The $710 billion Medicare insurance fund, that millions of people contributed to for decades, has essentially been thrown into the garbage, with almost nothing to show for it.

The number 12 million of "newly insured" people is essentially fraudulent because it doesn't take into account the many millions of people who are effectively uninsured, either because they're on Medicaid and can't find a doctor who takes Medicaid, or because they're on a standard "bronze" plan with a $10,000-12,000 deductible, and have to pay all their medical bills anyway.

Before Obamacare, any uninsured person could get medical care in a hospital emergency room. The Obamacare endgame is that the only place where a Medicaid patient will get medical care is in a hospital emergency room, where they'll get $50 worth of medical services, since that's the Medicaid reimbursement to the hospital. As before, only people with private health insurance will get good medical care.

These are all discussed in detail in my full-length article "Healthcare.gov -- The greatest software development disaster in history".

About the Author

I'm very passionate about this story because I've been a Senior Software Engineer for decades, and I well understand how software development efforts work, and how criminality would have brought about the Healthcare.gov disaster.

As far as I know, I'm the first journalist to write at length about the massive corruption, fraud and criminality in Obamacare, but I'm hardly considered mainstream. There should have been thousands of stories about this in the mainstream media by now, but there have been almost none. But almost no mainstream reporter would dare to criticize Obamacare in any way, because they know they would face massive retribution from the Obama administration, just as would happen to an Iranian reporter who criticized the Supreme Leader.

I'm perhaps uniquely qualified to do this Healthcare.gov analysis. I'm an apolitical, non-ideological, highly analytical writer. My background is both as a Senior Software Engineer and a technology journalist. The following is a very brief summary: Over the years, I've successfully developed hundreds of software applications for dozens of employers, from operating systems to compilers to web sites to complex enterprise-wide systems, working as both a consultant and an employee. (Resume: jxenakis.com/resume) I was Boston Bureau chief for InformationWeek magazine for two years, and Technology Editor for CFO Magazine (part time) for ten years, and I've interviewed hundreds of CEOs, CIOs, CFOs software developers and managers. (Examples: http://ww2.cfo.com/author/john-xenakis/).

(Comments: For reader comments, questions and discussion, see the 23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history thread of the Generational Dynamics forum. Comments may be posted anonymously.) (23-Aug-2015) Permanent Link
Receive daily World View columns by e-mail
Donate to Generational Dynamics via PayPal

Web Log Pages

Current Web Log

Generational Dynamics Web Log for 23-Aug-2015 23-Aug-15 World View -- Fraud and subversion in Healthcare.gov - the greatest IT disaster in history