Who’s to blame for the Cover Oregon failure?

by Dan Lucas

A Congressional panel recently released a report on Oregon’s failed $305 million health insurance exchange, Cover Oregon. The Washington Post reported “Republicans on the [U.S. House] committee said they are asking the Justice Department and state attorney general to conduct criminal investigations into the actions involving Cover Oregon.”

The Washington Post also noted “Democrats on the panel blamed the state’s contractor, California-based Oracle Corporation, for the website’s problems.” Blaming Oracle was also the strategy of a “secretive campaign consultant” for former Democratic Gov. John Kitzhaber, who “by her own admission” “knew virtually nothing about health care reform or the reasons Cover Oregon had crashed.”

But who’s really to blame here?

Regardless of Oracle’s issues in delivering the Cover Oregon website, the problem for Democrats in blaming Oracle is that it’s just an attempt to shift blame from Kitzhaber’s administration.

Who selected Oracle? Who created and signed the contract with Oracle? Who managed and audited Oracle during the development of Cover Oregon?

As I noted back in June 2014, Kitzhaber was “the head of the executive branch that was charged with implementing Cover Oregon. The people in charge of the agencies who were building Cover Oregon were appointed by the governor, including [Rocky] King and [Bruce] Goldberg. The chairwoman of the Cover Oregon Board is still Liz Baxter. Kitzhaber nominated Baxter to the Cover Oregon Board back in August 2011. Baxter came up through the organization Kitzhaber founded in 2006, the Archimedes Movement/We Can Do Better — a progressive organization advocating for health care reform.”

On the question of “who selected Oracle,” the answer is the Kitzhaber administration. And they did so knowing there was at least one less expensive vendor, Exeter, who had already developed a system they were able to demonstrate using Oregon data. Instead, then Oregon Health Authority (OHA) CIO Carolyn Lawson chose to go with Oracle and have them build a system from scratch. Lawson reported to Kitzhaber appointee Bruce Goldberg.

In June 2011, the Oregon Legislature approved the “creation of an Oregon Health Insurance Exchange, a marketplace where residents can buy government-subsidized health insurance.” Carolyn Lawson started as OHA CIO on July 1, 2011, having been hired as someone who was “able to deliver IT projects on time and on budget.” Cover Oregon was supposed to launch on October 1, 2013.

According to a December 2012 legislative hearing, Lawson was in contact with Exeter sometime late in 2011, but favored Oracle. After many months of frustration, then state Rep. Patrick Sheehan (R-Clackamas) wrote to then Gov. John Kitzhaber (D) in December 2012 on the lack of progress on Cover Oregon.

Sheehan wrote “For the past nine months in my Legislative Audits committee I have been frustrated with the lack of progress from the Health Insurance Exchange – asking repeatedly why they insist on trying to build a system from the ground-up rather than leverage existing software that other states are adopting.” He also noted “It is my understanding that we are spending $6 million a month on consulting services with Oracle to build the system from the ground-up,” and that in September 2012 he “was contacted by Exeter – a software vendor who designed the [health insurance exchange] in Massachusetts.” Sheehan further noted Exeter had “demonstrated a live health insurance exchange – using Oregon data – that was almost fully functional (the only element not functional was the communication with a Federal system that is not yet available).”

Sheehan called on Kitzhaber to “take swift and dramatic action to change the course of [the Cover Oregon] project” and to fire Lawson for “lying to a Legislative Committee and wasting millions of taxpayer dollars.”

Sheehan told Kitzhaber he thought Lawson was choosing Oracle over other vendors like Exeter because she was ultimately “in pursuit of a consulting job with Oracle.”

Sheehan’s warning to Kitzhaber was ten months before Cover Oregon was supposed to launch. Kitzhaber did nothing. When KATU later asked Kitzhaber about Sheehan’s warning, Kitzhaber walked out of the interview – which made national news.

On the question of “who managed Oracle during development of Cover Oregon,” the Portland Business Journal reported in December 2013 “[Carolyn] Lawson nixed plans to hire a technology-savvy contractor to oversee the work of Oracle,” and “Lawson argued that the state could handle oversight of Oracle on its own. Critics have since noted that Lawson may have been overly close to Oracle, having served as a featured speaker at the company’s annual trade show in 2012 and 2013.”

The blame for the Cover Oregon failure rests squarely on the shoulders of Gov. John Kitzhaber and his administration. For Democrats to try to blame Oracle is both disingenuous and inaccurate.

To read more from Dan, visit www.dan-lucas.com