Health exchange mulling scenarios for how to move beyond troubled site

After the state severed ties with the contractor that built its problem-plagued health insurance exchange, officials face the looming question of what to do with it — continue throwing money toward fixing it or replace it.

Every option is potentially fraught with more technical headaches and expense.


Exchange officials are mulling five possible scenarios in the wake of the disastrous launch of the exchange, where technical difficulties have thwarted thousands of people from signing up for health insurance.

Maryland could graft onto another state's exchange or form a consortium with other states, though some have had their own problems and such a partnership could be technologically difficult. Maryland officials say they have reached out to Connecticut, Kentucky and other states whose exchanges are working about the feasibility of adopting their systems.


Maryland could also join the federal exchange, which has had its own glitches, or try building a new site, a potentially time-consuming endeavor. Or state officials could fix the one they have — an option that may be the least onerous but one that has rankled critics.

"Insanity is doing the same thing over and expecting a different result," said state Senate Minority Leader David R. Brinkley, a leading critic of the state's exchange, implemented under the Affordable Care Act.

Persistent problems with Maryland's exchange prompted state officials last week to terminate the contract with the prime contractor hired to build and operate the website. Noridian Healthcare Solutions had missed several deadlines for fixing parts of the site, where hundreds of defects have been identified. The company laid at least part of the blame on constant changes sought by the state.

Exchange costs have exceeded projections for this year by $33 million. And last week, officials acknowledged that delays in fixing the site will cost the state as much as $30.5 million to keep residents covered by Medicaid — even though some may not be eligible — because the exchange can't properly screen them.

Once open enrollment is completed at the end of this month, the state must decide how to proceed in time for the next open enrollment period that begins in November.

So far, Maryland's exchange has enrolled fewer than 36,000 people in private plans. That number is far below the 75,000 target, which is half the original goal set by outside analysts, who recently said their original estimate was flawed. The state has exceeded its goal of enrolling 90,000 people in Medicaid, the federal-state insurance program for the poor.

For a better outcome, the most sensible solution may be to team up with another state or group of states, analysts said.

Connecticut's exchange has been so successful that officials there are fielding calls from a half-dozen other states wanting information on its strategy. Interest in Access Health CT prompted them to begin marketing the system to other states. The exchange has beaten enrollment expectations, with 55,000 people signed up for private health insurance.


Kentucky, California and New York also are running successful exchanges.

"If other states have managed to successfully create an exchange website and it works, from the technology perspective, the most expeditious, reliable and cost-effective thing to do is to use the known-working software," said Scot Silverstein, a consultant and adjunct professor at Drexel University's College of Information Science and Technology.

A partnership with another exchange could happen in various ways. Connecticut's exchange officials said they could take over another state's exchange completely, from determining eligibility for subsidies and enrolling consumers to marketing and operating a call center.

Or they could offer a la carte services, such as consulting on how to install its Deloitte-developed software, said Kevin Counihan, CEO of Access Health CT. That $40 million software was paid for with federal dollars and would be free for another state to use, he said.

He couldn't say how much services would cost, but he said there is ample room on Connecticut's servers and enough time to set up a website for another state before the next open enrollment period. He expected to work with one or two other states in the next year.

But the process isn't simple. It would take some customization for one state to serve another's population while accommodating other insurance carriers and meeting different state requirements, analysts said.


"When a state has a successful website, it is mostly because the website is in harmony with issues — such as IT infrastructure and structure of governance — specific to that state," said Tinglong Dai, assistant professor at the Johns Hopkins University's Carey Business School. "Maryland has its own issues different from others. The same factors leading to other state websites' successes could easily lead to a failure at Maryland."

A state consortium could come with similar obstacles, but Silverstein said it also could allow states to collaborate and learn from one another about what works and what doesn't.

On the federal exchange, Maryland would not have as much autonomy, Silverstein said. As with state sites, it would be costly and time-consuming to migrate Maryland data, Dai said.

In January, Maryland had considered using the federal site for certain back-end functions, but decided there were too many risks to switching during open enrollment. The federal site is running smoothly but suffered technical problems early on that hampered enrollment in the 36 states that chose to use it rather than build their own sites.

The federal government charges for using its site, and some states think using their own would prove cheaper. Connecticut officials said states also get more customization for the money by striking out on their own.

Dai believes Maryland's best option is to continue to fix the current site. In the meantime, he said officials should use low-tech methods, such as manual paper applications, to sign up more people.


"The best approach is to continue to improve the state website but set a realistic target level of reliability at a specified target date," he said.

Experts say it is not unusual for large technology projects to fail at first. Consumers often wait to buy the second generation of a device to give companies time to work out the kinks.

"We all know you shouldn't buy the first model of car or smartphone," said Counihan, head of Connecticut's exchange. "That's analogous here."

But private companies typically don't fail so publicly, said Ritu Agarwal, a professor at the Center for Health Information and Decision Systems at the University of Maryland's Robert H. Smith School of Business.

Before a product launch, they usually have more time for testing and tend to roll out products and build upon their functionality over time, resolving any glitches.

"Failures are not accepted under any circumstance, but let's say it's not unusual," Agarwal said. "Many business organizations also experience technical failures and disasters, but they don't want to talk about it."


Several other states, including Massachusetts and Oregon, are also having major website problems. Minnesota's exchange officials have said they're going through the same evaluation process as Maryland.

"We are actively assessing where we stand and in what direction we need to go in terms of next steps, but for the rest of this open-enrollment period — which ends on March 31 — we will continue to improve on and work with the technology we have in place," said Jenni Bowring-McDonough, a spokeswoman for the exchange, called Mnsure.

Bowring-McDonough said officials also are reviewing proposals from a "prime vendor" who would help guide the state's decisions regarding other vendors.

Whatever Maryland chooses to do, it should be the "most effective and timely" way to enroll the state's consumers, said Rep. John K. Delaney, a Democrat who has pushed exchange officials to move to the federal website. He said accepting Connecticut's offer also should be considered.

"The clock is ticking, and when it comes to health care, each day matters," Dulaney said.

"We've spent months trying to fix a product that likely isn't fixable, and I hope that leaders in our state put all options on the table with the singular goal of finding the most efficient way of connecting consumers to providers."


Baltimore Sun reporter Michael Dresser contributed to this article.

Options for Maryland's health care exchange

•Fix existing website


•Adopt federal site

•Adopt another state's technology

•Form a consortium with other states

•Build another site