State
Blue Mountain Eagle
Wednesday, August 17, 2016
A7
Insider: Culture, mismanagement doomed Cover Oregon
By Nick Budnick
Capital Bureau
Take a week off, wade
through thousands of pages
of court ilings in Oregon’s
long-running court battle with
software giant Oracle, and
you still won’t have the real
story of how Cover Oregon
failed and wasted more than
$300 million, according to
Tom Walsh, a longtime tech-
nology specialist and veteran
of the project.
Hundreds of thousands if
not millions of words have
been written about Cover Or-
egon in the two years since
the state project to enroll Or-
egonians in ObamaCare im-
ploded. However, an insider’s
account has never been pub-
lished until now. Other top
consultants and former man-
agers have routinely declined
to comment, often citing the
pending litigation.
But Walsh is ready to
speak out because of contin-
ued public confusion around
Cover Oregon.
“I think people should un-
derstand why it failed,” Walsh
says matter of factly, given
how many people worked so
hard on the ambitious project,
and how much was spent.
He’d also like to prevent
another debacle when the state
launches its next big-ticket,
taxpayer-funded IT projects.
“I don’t think Oregon
knows that it (has) a prob-
lem,” Walsh says.
Hint: it has to do with man-
agement.
Both sides in the ongo-
ing litigation have struggled
to explain the massive scope
of the Cover Oregon failure,
which came despite a lengthy
head start and extra funding
from the federal government.
The reality, according to
Walsh? Compared to other
large projects, “It should have
been easy.”
One of the roving breed of
professional consultants who
bounce from state to state
for months or years at a time,
Walsh is typically the top-dog
“systems analyst” who either
leads or troubleshoots large
IT project design or is paid to
watchdog those who do, says
Shari Benkiel, a longtime IT
consultant who has worked
with Walsh on seven large
projects in ive states.
“He is usually the irst per-
son I call” to ill that role, she
says. “I call him ‘The Bor-
derline Genius,’ ” she adds,
because of his insights into
complex health care technol-
ogy projects.
With a Ph.D. in econom-
ics, and a resume that includes
IT expertise as well as a stint
as head of Medicaid for the
state of Illinois, Walsh brings
a level of technical, inancial
and management expertise
that normally requires three or
four hires to match, says Loui-
sa Moore, who has worked on
large technology projects with
Walsh, including in Califor-
nia. “He’s a true professional
and he really knows his stuff.”
‘That’s not going to work’
Walsh heard about it from
a friend. The Cover Oregon
project would be a one-stop
health coverage shopping site
that would allow consumers
to compare health plans, qual-
ify for lucrative tax credits
and enroll in a single sitting.
The federal government was
supplying Oregon with tens
of millions in extra funding
to serve as a model for other
states.
Excited by the vision,
Walsh applied and went to
work on it in April 2012 as a
consultant.
The warning signs were
immediately apparent, Walsh
Pamplin Media Group/Jamie Valdez
Tom Walsh, a veteran IT troubleshooter who worked on the inside of the Cover Oregon project, says the
full story of the debacle has never been told.
says. He moved into a cubicle
with the state’s IT team, in a
Salem ofice building.
Rather than sitting among
the workers, top manage-
ment was rarely to be seen —
which Walsh characterizes as
“very abnormal ... There were
a lot of disputes about how we
should be doing things that
nobody stepped in and took
charge of.”
The project’s top managers
employed a mishmash of proj-
ect development techniques,
adopting multiple methods
over time, but never instituting
the training or changes needed
to make them work, he says.
Walsh came to realize the
dysfunction was mirrored on
the Oracle side, where workers
for the state’s chief contractor
were divided into iefdoms re-
porting to different managers.
In fact, Walsh’s Oracle coun-
terparts sometimes warned
him to be skeptical of the com-
pany’s work in other parts of
the project, he says.
His job was to oversee how
the project tracked inancial
transactions, such as payments
to insurance agents for helping
consumers.
But he and his Oracle
counterparts were repeatedly
rebuffed in 2012 when they
sought information from other
parts of Oracle that they con-
sidered crucial to the project’s
success, such as how massive
quantities of data would it to-
gether under the project’s de-
sign, he says.
The data design would be
ready in two weeks, they heard
over and over.
Walsh began to have his
doubts. “You tell yourself,
‘They can’t be that bad ... I’m
sure they’ve got something.’ ”
After a while, Walsh pur-
sued a separate data design for
his portion of the project to en-
sure his team was not held up.
He credits that decision for his
team’s success, as the inancial
side of Cover Oregon worked
ine and was completed on
time.
In contrast, Walsh still re-
calls the shock his team felt
in July 2013 upon seeing the
design for how enrollment
would work for the project.
A colleague’s muttered reac-
tion: “Well, that’s not going to
work.”
Fatal law in design?
Walsh says it appeared
that Oracle managers felt they
didn’t need to do a ground-
up design, that they were just
modifying existing off-the-
shelf Oracle software.
Walsh was surprised to hear
from Oracle in fall 2012 that
the health insurance system its
staff envisioned had no capaci-
ty to process mid-year changes
in a family’s health policy, pre-
miums or tax credits after they
enrolled.
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Such changes — due to
a birth, death, divorce or a
wage-earner losing their job
— are common, and on multi-
ple occasions Walsh urged Or-
acle to accommodate changes
in its design. The response?
We’ll get to it later.
Not until September 2013,
the month before the project
was supposed to go live, did
Walsh and his team learn that
Oracle’s design for the health
insurance project still did not
allow changes to a family’s
policy or circumstances. This
meant Cover Oregon would
not be able to share data effec-
tively with the insurance carri-
ers it worked with — a basic
problem that caused ripple ef-
fects throughout the project’s
workings.
This, Walsh believes, was
the “fatal law” of Cover Or-
egon, and why the exchange
had to be scrapped. Fixing the
problem would require major
changes at great cost. And the
project’s budget was already
largely expended by the time
the problem became clear.
Walsh’s diagnosis mirrors
congressional testimony given
by Alex Pettit, the state’s top
IT manager, who was brought
in to try and rescue the project
in early 2014, only to realize
it was impossible due to the
“fundamental design error”
concerning mid-year changes
in a family’s policy or circum-
stance.
“The whole thing was go-
ing to have to be rewritten ...
It was truly unbelievable that
it would ever be designed that
way,” Pettit told congressio-
nal investigators, adding that
when he complained to Oracle
about its design, the response
was, “Well, it wasn’t in the
speciication.”
Pettit’s retort: “Well, it
didn’t need to be in the spec-
iication. You knew you had
to keep track of changes to re-
cords, and the system wouldn’t
keep track of it.”
Walsh echoes Pettit, that
because the project’s program-
ming was in Oracle’s hands,
the technical design was argu-
ably the company’s responsi-
bility.
Defects in state IT culture
But Walsh says the state
bears responsibility for other
problems, including delays
and wasteful spending.
For instance, the state spent
months and millions of dollars
trying to perfect a new type of
interface to shift data between
two components of the project.
Walsh urged the use of a stan-
dard Oracle product instead.
In the end, when an Oracle
analyst conirmed to Cover
Oregon managers that Walsh’s
idea would work, a top oficial
asked how long it would take
to set up the solution.
“What time is it?” respond-
ed the analyst, and the ix was
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Chamber Members
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Contact the Grant
County Chamber for
more information
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Jerry Franklin
GRI, ABR, SRES
Broker/Owner
160 E. Main • John Day, OR 97845
Office: 541-575-2121
Home: 541-820-3721
JFranklin@easternoregonrealty.net
www.easternoregonrealty.net
set up later that day, Walsh re-
calls.
For all the criticisms of
Cover Oregon, Walsh says
parts of the system worked
well. And the non-technical
program side of things, such as
the variety of plans offered and
number of insurers participat-
ing, was a great success.
“It wasn’t that the whole
thing failed,” Walsh says, add-
ing that the project’s insurance
design “was one of the best in
the country.”
But while a state consul-
tant’s report on Cover Oregon
highlighted mismanagement,
and Pettit, the top state IT man-
ager, has instituted reforms,
Walsh says he’s not sure either
addresses some of the biggest
management weaknesses he’s
seen in Oregon when it comes
to large IT projects.
Walsh has watched several
Oregon projects play out, and
his account of a larger prob-
lem of management culture
echoes other consultants who
spoke privately with the Port-
land Tribune.
Oregon features a top-
down management style, in
contrast with other states, says
Walsh, who has studied man-
agement. Successful projects,
however, feature communi-
cation lowing up and down
the command chain. On Cov-
er Oregon, this management
style led to an early focus on
schedule rather than design.
Later, management obsessed
on the website’s appearance
while ignoring the details of
how it would work.
Another problem that
seems endemic to Oregon IT
projects is cronyism, rather
than hiring the best-qualiied
staff, Walsh says.
While Oregon oficials
like to complain the salaries
allowed by the state aren’t
large enough to afford top IT
management talent, Walsh
says the real problem is Ore-
gon doesn’t use top consult-
ing talent the way it should.
And while the people running
Cover Oregon had IT experi-
ence, they lacked a record of
success in large IT project de-
velopment.
Because of the cronyism,
accountability suffered. “The
‘in’ people seemed to have
more leeway,” Walsh says.
The weakness in man-
agement led to unnecessary
delays and ineficiencies,
and likely contributed to the
state’s failure to challenge
Oracle on key issues, Walsh
says. And when problems
came up, the state did not re-
place non-performing manag-
ers with better ones.
“They hire people they
know,” Walsh says, “And
then, when things don’t go
well, they hire more people
they know.”
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Grant County Chamber
Monthly Newsletter
Hello Grant County,
August is almost over, and
school will be starting soon. Boy, the
summer went by fast! Labor Day is just
around the corner.
The 107th Grant County Fair just
ended and what a great fair it was!
Thanks to everyone who worked so hard
to make it a success!
Are you tired of hearing about
the 2017 Solar Eclipse yet? Well, we
think it is going to be a VERY big deal for
Grant County, so you will be hearing
about it for the next year! The
countdown begins August 21st. We want
to be prepared when the time comes. If
you are interested in working on one of
the following committees please call the
chamber and let us know. The
committees are: Entertainment,
Transportation, Vendors, Lodging,
Viewing Areas, and Services (water,
trash, etc.).
We would like to welcome our
newest member to the Chamber – John
Day Trailer Park and Laundromat.
The Chamber is doing well and
we are excited about our upcoming
annual Installation Dinner. We haven’t
confirmed the date or all of the details,
but it will be in September and we hope
you will all attend.
Last but not least, I want to
thank our amazing volunteers. They do
a fabulous job and the Chamber is a
much better place because of them!
They are: Dorman Gregory, Sherry
Feiger, Larry Christensen, Nicki Cohoe,
Elaine Husted, Mary Ellen Brooks, Lola
Johnson, Chuck Wilson, and Pam Durr.
Our next Chamber Board
meeting will be Thursday, August 18th at
11:00 AM at the Chamber office followed
by a lunch gathering for our membership
at 12:00 at the Outpost. We hope you
can make it. John Day City Manager
Nick Green will be our guest speaker.
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Chamber Members
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County Chamber for
more information
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Enjoy the rest of the summer!
Tammy Bremner
Chamber Manager
04327