Grant Bosse: State governments shouldn’t be early adopters of new technology
I’m not an early adopter. Let me know how that iPad Mini works out for you. I might get one in a couple of years. My much hipper wife had to clue me in on Honey Badger, Honey Boo Boo, and Gangnam Style.
You see, I’m a conservative. I don’t just mean someone with a campaign poster autographed by Ronald Reagan and a copy of Parliament of Whores signed by P.J. O’Rourke. I mean someone who assumes that change is bad, unless proven otherwise.
I think it just makes evolutionary sense to let others try new things first. You go see if the ice is safe or if that mushroom is poisonous. You might gain a slight advantage from your risk-taking, but I’ll still be alive either way.
It doesn’t make a lot of sense for state governments to be early adopters, but our politicians get elected by promising to be all innovative and cutting-edge. Makes me shiver just thinking about it.
We’re now paying the price for our pioneering politicians. We’re seven years into building a new Medicaid computer system that was only supposed to take two.
(Warning: The following contains Strong Acronyms and Adult Jargon.)
Back in 2003, the federal government was pushing states to modernize their Medicaid Management Information Systems in order to meet federal standards. Our system run by Electronic Data Systems (EDS) didn’t meet those standards, so state officials sought bids for a new piece of software.
In December 2005, the Executive Council approved a $60 million contract with Affiliated Computer Services Inc. to design, implement, and manage MMIS for New Hampshire. The contract
gave the company two years to build the system and up to five years to operate it. If the company had finished on time, the entire contract would be expiring on Dec. 31.
Last week, Health and Human Services Commissioner Nick Toumpas told the Executive Council the new system won’t be up and running by Dec. 31.
A two-year contract is running more than five years behind schedule. At least everyone has someone else to blame.
Over the last seven years, Xerox bought ACS and Hewlett-Packard bought EDS. HP continues to process New Hampshire’s Medicaid claims using the system that the feds told us was outdated in 2003. The company is getting paid $8 million a year to operate the old software, while Xerox keeps getting extensions to write the new program.
Part of the blame lies with Xerox, for not delivering on time. Part of it with state officials, who kept asking for more bells and whistles. Most of the blame can be placed on the danger of early adoption.
The original contract specified that ACS would adapt an existing Medicaid Management Information System to fit New Hampshire. But before the ink was dry, ACS came back to the state with a new idea. It promised a brand-new, best-in-the-world, cutting-edge, first-in-the-nation software system, and New Hampshire officials fell in love.
Why tinker with the system that Mississippi or Illinois had been using for years when we could have the newest and the best? Why adapt when we could innovate, and other states could follow our lead? Because innovation is dangerous. The ice might be thin. That mushroom might be poisonous. The new software might not work.
Xerox has collected about $16 million for meeting benchmarks in the contract, and has been enrolling Medicaid providers into the new system for the past year. The federal government is picking up 90 percent of the costs of building the MMIS. Toumpas says that if we have to start from scratch, New Hampshire would likely have to pay for the whole thing itself.
Last week, Toumpas asked the Executive Council to extend HP’s contract for another three months, and that Xerox would be ready. There are reasons to remain skeptical, and not because we’ve heard such assurances before.
The Legislature’s adoption of managed care for Medicaid dramatically altered the needs of the MMIS, forcing Xerox back to the drawing board.
While the original contract anticipated testing the system for more than a year, the current timetable squeezes the transition into three months.
HP wants out. Toumpas says it’s getting paid well to continue processing Medicaid claims, but the company wants to transfer its resources into states where it has a future.
Toumpas says we’ll meet the deadline this time. We have to. There is no Plan B.
Meanwhile, other states are learning from our mistakes. If only we’d had the patience to let them make the mistakes first.
(Grant Bosse is vice president for media for the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord.)