Project Management Lessons From the HealthCare.gov Launch

Article ID: 688686

Released: 1-Feb-2018 12:05 PM EST

Source Newsroom: University of Virginia Darden School of Business

By Yael Grushka-Cockayne

Newswise — When the Patient Protection and Affordable Care Act was passed in 2010, the government announced its vision for getting access to health care to millions of people. The goal of the HealthCare.gov project was to provide an easily accessible, web-based platform for U.S. residents to enroll in “Obamacare.” The site would allow people to compare different health care plans and ultimately enroll in one. The project was defined by the Secretary of Health and Human Services and was overseen by the Centers for Medicare and Medicaid Services, which would hire numerous outside contractors for the various supporting systems of the site. Over the course of the project, 60 contracts were awarded to 33 different companies.

Expectations and Risks

The initially declared budget of the project was $85.7 million. Early in 2012, the project deadline for launching the website was set to be 1 October 2013. This completion date was set with the goal of providing all U.S. residents six months to enroll without penalty. The official deadline was set to 31 March 2014.

As the project progressed, the timeline was updated and squeezed. Planning decisions aimed at saving time introduced significant risks to the scope of the project. A McKinsey report released in early 2013 highlighted some key risks the project was facing, in particular the insufficient time for testing and major concern surrounding the lack of a shared definition of success. In addition, there was an overall sense that further delays were expected, and that the exact requirements were still not properly defined.

Throughout the project, key milestones — such as the deadline for each state to declare partnership with the federal exchange and the establishment of regulatory guidelines — were postponed. The implications of such delays meant lack of clarity regarding the project scope.

Meanwhile, while timelines were updated and adjusted, deadlines surrounding the development and testing phase and the implementation phase of the project were not. The time allocated for these tasks was compressed from nine months to six months and from seven months to one month, respectively, essentially implying that if the project was to be complete by the 1 October target, there was little chance of achieving its full scope.

After years of planning and much political attention, millions tried to access the HealthCare.gov site the first week after its launch. The website suffered from thousands of defects and failed to handle the traffic in what nearly brought a quick end to the Affordable Care Act. And with a final cost of around $300 million[i], the rollout of HealthCare.gov cost more than three times its original budget.

How could this have been avoided?

The Fix

Project management frameworks can help shed light on the unfortunate launch of the site — and on its eventual fix.

In the planning and execution of projects, attention should be paid to the triple constraint principle of project management: Successful completion of a project depends on effective management of the connected traits of cost, time and scope.

Monitoring of the project progress and reflecting on the tradeoffs and priorities among the project’s objectives can offer project decision-makers improved capabilities. Given the clear warning signs, a project management framework suggests those leading the HealthCare.gov project should have either compromised on scope or time. A compromise on scope would have meant a staged rollout of the website, either by state or process phase. A compromise on time would have extended the deadline to a later date.

The site’s functionality was steadily improved post-launch, thanks to a dramatic change toward an agile approach to project management. Daily standup meetings and shorter development cycles, aimed at addressing bugs and gaining clearer understanding of the actual requirements, provided the developers and the project leaders the autonomy and motivation necessary for working toward a common goal.

Despite disappointing initial figures, when Health and Human Services released its May 2014 enrollment report, HealthCare.gov showed a significant uptick in enrollments, which was largely attributed to the site’s improved functionality and to increased awareness of the service. Between the site’s launch and the end of the open-enrollment period, approximately 8 million people selected a plan.

The above is based on the cases HealthCare.gov (A) (Darden Business Publishing), by Yael Grushka-Cockayne and Brian Ward (MBA ’15) and HealthCare.gov (B) (Darden Business Publishing), by Yael Grushka-Cockayne, Elizabeth Carnahan (MBA ’17) and Hyeongjin Kim (MBA ’17).


[i] “HealthCare.gov: Ineffective Planning and Oversight Practices Underscore the Need for Improved Contract Management,” United States Government Accountability Office Report to Congressional Requesters, July 2014, https://www.gao.gov/assets/670/665179.pdf.

 

About the Faculty

Yael Grushka-Cockayne

Grushka-Cockayne’s research and teaching activities focus on decision analysis, forecasting, project management and behavioral decision-making.

As an expert in the area of project management, she has served as a consultant to international firms in the aerospace and transportation industries. She is the secretary/treasurer of INFORMS Decision Analysis Society, a U.Va. Excellence... Learn More

 

About the University of Virginia Darden School of Business

The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D. and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.


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