Soapbox: JPM’s Dimon takes the 50,000 foot view on the JP Morgan Chase-Berkshire Hathaway-Amazon health joint venture

Mr. Jamie Dimon, the chairman and CEO of JP Morgan Chase, had a few thoughts about the JPM-Berkshire Hathaway-Amazon healthcare JV for all three companies. You’ll have to fill up the tea or coffee mug (make it a small pot) for it’s an exceedingly prolix Annual Shareholder Letter you’ll have to sled through to find those comments. Your Editor has taken her punishment to find them, towards the end of the letter in ‘Public Policy’. 

They demonstrate what this Editor suspected–an headache-inducing mix of generalities and overreach, versus starting modestly and over-delivering.

  • Point #1 sets up what has gone wrong. Among several, “Our nation’s healthcare costs are twice the amount per person compared with most developed nations.” Under point 2 on how poor public policy happened, an admission that Obamacare fixed little:

Here’s another example: We all know that the U.S. healthcare system needs to be reformed. Many have advocated getting on the path to universal healthcare for all Americans. The creation of Obamacare, while a step in the right moral direction, was not well done. America has 290 million people who have insurance — 180 million through private enterprise and 110 million through Medicare and Medicaid. Obamacare slightly expanded both and created exchanges that insure 10 million people. But it did very little to fix our broken healthcare system and has, in fact, torn up the body politic over 10 years — and this tumult may go on for another 10 years.

  • Point #7 is about fixing the deficit and the ill effects if we don’t. In Mr. Dimon’s view, healthcare is a major part of this through the uncontrolled growth of entitlements, with Medicare, Medicaid and Social Security leading the pack–skipping over the fact that nearly all Americans pay into Medicare and SSI well in advance of any entitlement collection. Healthcare is also an offender through unnecessary costs such as administrative and fraud (25-40 percent),  and six mainly chronic conditions accounting for 75 percent of spending.
  • The experts–specifically, their experts–will fix it! “While we don’t know the exact fix to this problem, we do know the process that will help us fix it. We need to form a bipartisan group of experts whose direct charge is to fix our healthcare system. I am convinced that this can be done, and if done properly, it will actually improve the outcomes and satisfaction of all American citizens.”
  • The generalities continue with
    • The JV “will help improve the satisfaction of our healthcare services for our employees (that could be in terms of costs and outcomes) and possibly help inform public policy for the country.” 
    • Aligning incentives systemwide ‘because we’re getting what we incentivize’
    • “Studying the extraordinary amount of money spent on waste, administration and fraud costs.”
    • “Empowering employees to make better choices and have the best options available by owning their own healthcare data with access to excellent telemedicine options, where more consumer-driven health initiatives can help.”
    • “Developing better wellness programs, particularly around obesity and smoking — they account for approximately 25% of chronic diseases (e.g., cancer, stroke, heart disease and depression).”
    • “Determining why costly and specialized medicine and pharmaceuticals are frequently over- and under-utilized.”
    • “Examining the extraordinary amount of money spent on end-of-life care, often unwanted.”
    • “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked”).

This Editor has observed from the vantage of the health tech, analytics, payer, and care model businesses that nearly every company has addressed or is addressing all these concerns. So what’s new here? Perhaps the scale, but will they tap into the knowledge base those businesses represent or reinvent the wheel? 

A bad sign is Mr. Dimon’s inclusion of ‘end of life care’. This last point is a prime example of overreach–how many of the JV’s employees are in this situation? The ‘attack’ tactics? We’ve seen, heard, and many of us have been part of similar efforts.

Prediction: This JV may be stuck at the 50,000 foot view. It will take a long time, if ever, to descend and produce the concrete, broadly applicable results that it eagerly promises to its million-plus employees, much less the polity. 

Scary Monsters, Take 2: Amazon, Berkshire Hathaway, JPMorgan Chase’s addressing employee healthcare

Shudders through the US financial markets resulted from Tuesday’s Big Reveal of an Amazon-Berkshire Hathaway-JPMorgan Chase combine. Ostensibly they will be “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” This and the Warren Buffett quote about ballooning healthcare costs being a “hungry tapeworm” on the American economy have gained the most notice. Mr. Bezos’ and Mr. Dimon’s statements are anodyne. The company will initially and unsurprisingly be spearheaded by one representative from each company. The combined companies have 1.1 million employees. Release. CNBC.

There is a great deal in those lead quotes which is both cheering and worrisome. To quote a long time industry insider in the health tech/med device area, “What this tells me is finally, enough pain has been felt to actually try to do something. We need more of this.” This Editor notes the emphasis on ‘technology solutions’ which at first glance is good news for those of us engaged in 1) healthcare tech and 2) innovative care models.

But what exactly is meant by ‘technology’? And will they become an insurer?

What most of the glowing initial comments overlooked was the Absolute Torture of Regulation around American healthcare. If this combine chooses to operate as an insurer or as a PBM, for starters there are 50 states to get through. Each state has a department of insurance–in California’s case, two. Recall the Aetna-Humana and Cigna-Anthem mergers had to go through the gauntlet of approval by each state and didn’t succeed. PBM regulation varies by state, but in about half the US states there are licensing regulations either through departments of insurance or health. On the Federal level, there’s HHS, various Congressional committees, Commerce, and possibly DOJ.

Large companies generally self-insure for healthcare. They use insurers as ASO–administrative services only–in order to lower costs. Which leads to…why didn’t these companies work directly with their insurers to redo health benefits? Why the cudgel and not the scalpel?

Lest we forget, the Affordable Care Act (ACA, a/k/a Obamacare) mandated what insurance must cover–and it ballooned costs for companies because additional coverages were heaped upon the usual premium increases. Ask any individual buyer of health insurance what their costs were in 2012 versus 2017, and that’s not due to any tapeworm. Forbes

Conspicuously not mentioned were doctors, nurses, and other healthcare providers. How will this overworked, abused, and stressed-out group, on whose shoulders all this will wind up being heaped, fare? And what about hospitals and their future? Health systems? The questions will multiply.

Disruption is now the thing this year. Of course, shares of healthcare companies took a beating today, many of which do business with these three companies: CNBC names Cigna, Express Scripts, CVS, Aetna (themselves partnering for innovation), and UnitedHealthGroup. Amazon uses Premera Blue Cross (a non-profit). 

Because of Amazon’s recent moves in pharmacy [TTA 23 Jan], there is much focus on Amazon, but the companies with direct financial and insurance experience are…JPMChase and Berkshire Hathaway.

An Editor’s predictions:

  • Nothing will be fast or simple about this, given the size and task. 
  • The intentions are good but not altruistic. Inevitably, it will focus on what will work for these companies but not necessarily for others or for individuals.
  • An insurer–or insurers–will either join or be purchased by this combine in order to make this happen.

Hat tips to Toni Bunting and our anonymous insider.

Action This Day in US healthcare, coming to pharma, insurance, home care and innovation

Action This Day, in Churchill’s words. Today’s news of President Trump meeting with the CEOs of US pharmaceutical companies– Novartis, Merck, Johnson & Johnson, Lilly, Celgene, and Amgen–along with the PhRMA association head, indicates the speed of change that this two-week old Administration intends in healthcare. Trump’s points to the Pharma Giants: drug prices need to be brought down, especially for Medicare and Medicaid patients, through competitive bidding not price-fixing; bringing home production to the US; and that there is ‘global freeloading’ on US drugs. This last is a bit vague, and the pricing part may stir some Standard Republican Resistance, but what Trump also came down firmly for is speeding up the drug approval process. In return, the execs asked for tax reform.

Notable here is this quote:  “I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market,” Trump said. “That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening.” The Hill, Business Insider

Does this mean an open door and encouragement for healthcare technology?

Certainly many startups, early-stage companies, and Grizzled Pioneers are eagerly anticipating a more open healthcare business environment than the many dictates, restrictions and the constant changing of goalposts they have faced for the past eight years. The hope is an openness of the Powers That Be on the Federal side (CMS, HHS, FDA) to innovation, patient-centered care and a change away from hammering constantly on lowering cost through a multitude of controls and top-down diktats on what Healthcare Should Be.

This Editor has seen companies straining to hang in there, playing the niches, moderating their equity raises, merging, projecting profitability sometime in the future. Some have not made it. One is the pioneer telehealth company Viterion Corporation, which was quietly dissolved by its parent company in Japan for various reasons at end of last year. (Editor’s disclaimer: I was marketing director for the company.)

Already innovation is reaching long-neglected areas like home care. Home support for the aging population isn’t buzzy, analytic or sexy, but it’s ready for change. The Financial Times takes a look at this $40 bn US market, focusing on the Hometeam caregiving service presently in New York, New Jersey and Pennsylvania, which has over $43 million in investment after only three years (Crunchbase); Honor, which has over $65 million in funding, operating California and Texas. Their points of difference from traditional home care agencies involve models and technology. Hometeam employs carers who are full employees with benefits and an average of $15/hour pay, double that of the usual minimum wage paid to independent contractors. They equip carers with iPads to track what happens in the home, and to report daily to families. Honor has an algorithm to help it scale up from the 100 or so carers who are the ‘break point’ in matching carers with patient needs. In contrast, the UK is far behind in development. The article looks at Vida which uses a mix of carers and technology for its private pay clients. Now approved by the Care Quality Commission, Vida is already in talks with local councils across London and Brighton. But funding is thin: £400,000 of start-up funding and planning to raise £1 million. Tech start-ups try to fix ailing US elderly care sector. If paywalled, search on the title. Hat tip to Susanne Woodman

Action Next Days? Predictions have been all over the place since the election. Many have been overheated (and highly political), but others explain the complexities of undoing the past six years. A reminder: the PPACA did not go into effect until 2010 and most of the provisions kicked in during 2011. Health tech law firm Epstein Becker Green trotted out its crystal ball (more…)

Breaking: Aetna-Humana merger blocked by Federal court

Breaking News from Washington Judge John B. Bates of the Federal District Court for the District of Columbia ruled today (23 Jan), as expected, against the merger of insurance giants Aetna and Humana. Grounds cited were the reduction in competition for Medicare Advantage plans, where both companies compete. “In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges.” The decision could be appealed in the US Appeals Court for the DC Circuit, or could be abandoned for different combinations, for example a rumored Cigna-Humana merger, or smaller companies in the Medicare/Medicaid market such as Centene, WellCare, and Molina Healthcare. Certainly there is money about: Humana would gain a $1 bn breakup fee from Aetna, and Cigna $1.85 bn.

No decision to date has been made in the Anthem-Cigna merger, but the general consensus of reports is that it will be denied by Federal Judge Jackson soon. [TTA 19 Jan]

Healthcare DiveBloomberg, Business InsiderBenzinga

Of course, with a new President determined to immediately roll back the more onerous regulatory parts of the ACA, in one of his first Executive Orders directing that Federal agencies ease the “regulatory burdens” of ObamaCare on both patients (the mandatory coverage) and providers, the denial of these two mega-mergers in the 2009-2016 environment may be seen as a capital ‘dodging the bullet’ in a reconfigured–and far less giving to Big Payers–environment. FoxNews

2016: will telehealth catch on or stagnate, due to factors out of control?

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2015/11/Robert-Graham-Center-logo.jpg” thumb_width=”150″ /]Updated. Reviewing the Robert Graham Center study summarized by Editor Chrys last week, René Quashie of Epstein Becker Green, perhaps the leading law firm in the health tech area, opines that despite the great progress made by telehealth (telemedicine/virtual consults, but also remote patient monitoring), “state legal and regulatory issues, reimbursement, and provider training and education continue to be serious barriers to wider adoption of telehealth. And until the landscape evolves to address these barriers, telehealth adoption is likely to stagnate despite the great promise of telehealth holds as a tool to improve quality and access.” Yes, that old FBQ* (actually the top two) continues to be as true now as five years ago. While in closing Mr Quashie puts his trust in the ‘pull’ factor of consumers and patients “who will continue to demand better access and more innovative delivery models outside the conventional office visit,” this Editor is far less sanguine, despite having used a virtual consult app recently. It was turned to more out of sheer frustration–time pressure (work, travel), being unable to secure a timely visit with a specialist (no one seems to be taking new patients!) despite good (non-Obamacare) medical coverage, and a condition which was eminently photographable (plus $40 at hand). National Law Review  * The Five Big Questions (FBQs)–who pays, how much, who’s looking at the data, who’s actioning it, how data is integrated into patient records.

Then again, if you read Health Populi and believe Gallup’s polling (based on a slightly skewed question), a majority of Americans aren’t thinking about delivery models or telehealth at all. They’re unhappy, and would like to hand the whole hot mess over to the government when asked if “government is responsible for ensuring that people have health insurance.” Yet the Affordable Care Act, now two years in, was supposed to do exactly that by forcing everyone to pay for a healthcare policy or else pay a punitive tax. Too many did the math; the tax penalty was cheaper, especially for those Young ‘n’ Healthy Invincibles with slim purses and other things to spend on. They were the ones who were expected to pony up premiums, use few services and generally prop up the system.

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2015/11/shockedshocked.jpg” thumb_width=”150″ /]Now the American populace are shocked, shocked to find that out-of-pocket costs are way up and access is down. The same Health Populi article cites Fair Health’s spring 2015 consumer survey, finding that 33 percent of American patients felt that their out-of-pocket costs were ‘much more than expected’, with an additional 17 percent in the ‘somewhat’ category–a total of 50 percent. The contradiction of government control versus spending (and actuarial) reality is, in this Editor’s opinion, not going to be solved easily or well.

As to the wisdom of government involvement, there’s another developing and embarrassing ACA Big Fail(more…)

What can the US learn from the UK’s approach to healthcare?

The Guardian article recently published an article entitled “What the NHS can learn from the US Obamacare system” which disappointingly spends almost all of its text talking about the challenges of implementing Obamacare, and just a few sentences espousing three very weak lessons, the first of which  is:

…Obamacare had a clear overarching goal: reduce the number of uninsured. Who can stand up and make such a clear case for the Health and Social Care Act 2012?

The rest are (go to DHACA website to read more)

Dr Topol’s prescription for The Future of Medicine, analyzed

The Future of Medicine Is in Your Smartphone sounds like a preface to his latest book, ‘The Patient Will See You Now’, but it is quite consistent with Dr Topol’s talks of late [TTA 5 Dec]. The article is at once optimistic–yes, we love the picture–yet somewhat unreal. When we walk around and kick the tires…

First, it flies in the face of the increasing control of healthcare providers by government as to outcomes and the shift for good or ill to ‘outcomes-based medicine’. Second, ‘doctorless patients’ may need fewer services, not more, and why should these individuals, who represent the high-info elite at least initially, be penalized by having to pay the extremely high premiums dictated by government-approved health insurance (in the US, ACA-compliant insurance a/k/a Obamacare)–or face the US tax penalties for not enrolling in same? Third, those liberating mass market smartwatches and fitness trackers aren’t clinical quality yet–fine directionally, but real clinical diagnosis (more…)

FDA tells 23andMe genomic test to stop marketing (US)

Quantified Selfers and the D3H (Digital Health Hypester Horde) are in a swivet. This past Friday, FDA slammed the door shut on the 23andMe Personal Genome Service (PGS) saliva test. This past summer, the company broadly marketed to US consumers, including a TV campaign [Charles Lowe, TTA 7 Aug]. The FDA cease-and-desist letter cites that 23andMe never provided requested data on their July and September 510(k) filings, which are now ‘considered withdrawn’, and cites that “after these many interactions with 23andMe, we still do not have any assurance that the firm has analytically or clinically validated the PGS for its intended uses, which have expanded from the uses that the firm identified in its submissions.” The danger is that people will make medical decisions based on the testing information and that the results produced may be faulty. It appears from FierceHealthcare that the kit has actually been marketed for five years. According to MedCityNews, it is backed by Google Ventures (the CEO/co-founder is the estranged wife of Google head Sergey Brin), New Enterprise Associates, MPM Capital and the Moscow billionaire Yuri Milner. A private citizen is petitioning the White House to overrule the FDA (as if that extra-legal move would be possible, but who knows with the influence of the Googlesphere?) and states that the agency ‘grossly overstates the risks’ (also MedCityNews). As of 2 Dec there are 3,306 signatures of the 100,000 needed; one suspects this administration has bigger slices of uncooked turkey on its plate such as Obamacare and a kind-of-achieved 30 Nov deadline on Healthcare.gov, which is now clearly seen as just one problem.

The 23andMe website is still fully up and still selling kits.

Editor Donna sorts through the noise for possible reasons why:  (more…)

Fast takes for Friday

Changes at Center for Connected Health, DecaWave’s chip, Happy Hackers  Healthcare.gov

Center for Connected Health executives to head Portuguese ‘body dynamics’ company in US. Associate Director Joseph Ternullo, who over the years was one of the key organizers of the Connected Health Symposium, is leaving Partners HealthCare/CCH after 17 years to lead the US subsidiary of Kinematix (formerly Tomorrow Options) located in Boston. This was announced by email to CCH contacts today. Kinematix in October raised $2.6 million in Series B funding from Portugal Ventures. Heading the US board is another Partners HealthCare alumnus, Jay Pieper, formerly CEO of Partners International Medical Services. Kinematix’s two products focus on sensor-based monitoring for foot health assessment and to prevent pressure sores and falls.  Release. Boston Business Journal….ScenSor senses you to 10 centimeters. A 6 x 6 mm chip (more…)

The train, plane and car wreck that is Healthcare.gov and Obamacare

If the ACA and Healthcare.gov were Boeing or Airbus aircraft–they would have been grounded on 3 October.

Wherever you reside in the over 150 countries TTA is read in, if you need more convincing that the US Government is unable to be successful (and Editor Donna is being restrained and charitable) at 99 percent of everything contained in this misbegotten Act, all one needs to do is read our previous coverage and this latest update in the Daily Mail along with their links to their own previous coverage. Are you sure it’s going to be fixed within weeks, Mr. President? This is Obamacare website riddled with garbled messages today

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/11/article-2491576-1943076800000578-829_634x378.jpg” thumb_width=”600″ /]

Except in the minds of White House and HHS planners, the obvious solution would be to STOP: halt the enrollment process, suspend the ACA implementation, restore the right to current coverage for the millions who have been blocked from renewing their current individual coverage and take the entire website down. Rethink all the elements including the coverage structure and the website, send it back to Congress for relegislating and implement a program that works sometime in 2015 IF a way can be found. But no, Americans get piecemeal fixes on a website and system that increase the vulnerability of personal information to hackers and identity theft–and coverage they cannot afford. (And this is only in the individual and small group market. Wait till it applies to large employers–other than unions which have been exempted.) (more…)

Healthcare.gov’s broken UX guidelines

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/10/now-panic-and-freak-out.jpg” thumb_width=”150″ /]Given the broken Healthcare.gov website, perhaps a silver lining lesson some of us can take from it, as we (in the US) wait and wonder, is what user experience (UX) usability guidelines it broke. From UX research/consultancy Nielsen Norman group is a ‘count the ways’ to ten. (A difference–the pictures of real people have been removed and replaced with cartoons, with wags bemoaning the loss of the anonymous ‘Obamacare girl’ on the home page, not depicted here.) The contention here is that the account setup is unnecessarily complex and may be contributing to the backend technology failure. HealthCare.gov’s Account Setup: 10 Broken Usability Guidelines  Hat tip to former EIC Steve Hards. (more…)

700+ cybersquatters on Healthcare.gov, state exchanges

The Washington Examiner estimates that there are 700 or more ‘cyber-squatters’–the dodgy websites that have URLs close to a well-known name–on the Obamacare Healthcare.gov and the 14 state (plus District of Columbia) sites. Identity theft moves to a new and obvious level when it’s no hacking required. All thieves need to is to put up a legitimate-appearing website with the appropriate language and forms that ask for your name, address, income, date of birth and Social Security number, which is apparently what Obama-care.us does. “[Obama-care.us] is so well deceptively designed that I had to research the owner to verify that it wasn’t a government site,” said a retired cybersecurity industry expert.” According to the article, 3,000 people have visited it. What is normal for major sites is to ‘buy around’ the name in multiple domains, alternate search terms and even misspellings and using them to redirect. This is another standard business practice that somehow they neglected to check off the list at HHS. Example: a long-established and legitimate site, Healthcare.com, is so close in name that it alone is capable of siphoning off 30 percent of normal traffic–and they never were approached to sell. Which considering that the real website doesn’t work….  Obamacare launch spawns 700+ cyber-squatters capitalizing on Healthcare.gov, state exchanges  And more on the Lucky Men ‘laughing all the way to the bank’ behind Healthcare.com from VentureBeatPreviously in TTA: The sea of security ‘red flags’ that is Healthcare.gov

150 Health 2.0 presentations online

Last month’s Health 2.0 three-day conference in San Francisco appears to be almost totally on video, with presentations ranging from 5 minutes to over 1/2 hour. The 15 pages include demos, keynotes and interviews. Warning–don’t use the categories at the upper right hand corner or the sidebar to try to sort through them, because these group together multiple meetings by topic. Everything you wanted to know about Quantified Selfing, patient communities (PatientsLikeMe, Medivizor), HIT, EMRs, employer wellness programs (Keas), discussing end of life care (Blaine Warkentine’s Vimty) as well as other ‘unmentionables’ like vulnerability, caregiving, social support, death, sex, taxes. Quite a few on the US health insurance exchange which was going to lead Americans to The New Healthcare Jerusalem in a few days. Somehow GetInsured.com manages to calculate possible individual insurance savings in two-three screens, though you have to call about insurance. Tim Kelsey, the NHS National Director for Patients and Information, announces £1 billion in a technology fund hereHealth 2.0 San Francisco 2013.

The sea of security ‘red flags’ that is Healthcare.gov

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/10/120306.png” thumb_width=”170″ /]It’s just a fact of life
That no one cares to mention
She wasn’t very good
But she had good intentions

—Lyle Lovett, ‘Good Intentions’

Confirmed by experts to the more-than-mainstream Christian Science Monitor are the layers of insecurity completely feasible on the current Healthcare.gov website–and the 14 state (plus DC) websites feeding into the Federal health insurance exchange and up into the mysterious hub linked to other Federal agencies. Healthcare.gov is supposed to adhere to NIST standards but these are no guarantee–and the state sites are not required to. ‘Red flags’ cited by experts (aside from ‘Wildman’ John McAfee) make for interesting reading:

  • Cross-site request forgery
  • ‘Clickjacking’–an invisible layer over the legitimate website
  • Cookie theft, and not by the Cookie Monster
  • Problematic verification from state to Federal, from legitimate third-party assistance, from brokers and so on
  • Log in fraud–the happy hunting ground of hackers and DDOS attacks

Warnings were apparent as early as 2 October [TTA 8 Oct]. And as our later coverage has explained, undoing all of this is near-impossible even with funding, in the less-than-a-month window till the crash time deadline in mid-November and then early January. Obamacare website security called ‘outrageous’: How safe is it? (+video)

Our 11-14 October compilation is a narrative and summary of major articles on the failure of the Healthcare.gov website and its consequences like none you will see elsewhere.

Non-functional Obamacare exchange websites? $500 million estimated to date. 2014? Priceless. (US)

Updated/Revised for breaking news and analysis, 12-14 October (US). Much new information noted in dark blue. (Grab your tea or coffee…this is a long one as this story rolls on.)

The mainstream reports continue to build that both the Federal HealthCare.gov site, which provides health exchange enrollment for 36 states, and many of the state-run health insurance exchanges (14 plus District of Columbia) are a nightmare of programming glitches and simply don’t work. It is not the demand–which has been high but not unanticipatedly so with an initial 8 million hits–but more disturbingly, the programming appears to be is unsound.  “Computer experts” quoted by CBS This Morning are making statements like “It wasn’t designed well, it wasn’t implemented well, and it looks like nobody tested it,” going on to say ” It’s not even ready for beta testing for my book. I would be ashamed and embarrassed if my organization delivered something like that.” A more technical dissection of the site’s multiple system architecture problems is provided by Reuters here, with the best quote “The site basically DDOS’d itself,” he said. (DDOS–distributed denial of service, a hacking technique but here, the website overwhelmed itself!) 

Counting the cost

A rough calculation of the cost has been made on a tech website, Digital Trends. Andrew Couts (who is pro-Obamacare) ran some public numbers on the IT cost of setting up the Federal part of the exchanges and add in associated 2012-13 costs, and arrives at $500 millionnot including the $2 billion to build out and operate the exchanges in 2014 (General Accounting Office). Larger numbers north of $600 million have been bandied about, but this Editor will go for now with Mr. Couts’ perhaps low estimate which has been supported by more mainstream reporting. (more…)

Data insecurity in Obamacare insurance exchanges (US)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/10/keep-calm-and-enter-at-own-risk-3.png” thumb_width=”175″ /]The warning that should appear as the main page of 50 state health exchanges.

Subsumed under the ‘government shutdown’ (affecting in reality a distinct minority of Federal government employees) is the significant concern that the state-based online exchanges now selling individual insurance, effective 1 Jan 2014, much trumpeted under the Affordable Care Act and baked into it two years ago, already present significant vulnerabilities in securing the vital data of millions: Social Security number, date of birth, addresses, tax and earnings information. These state-based exchanges are also dependent on information from a Federal data ‘Hub’ which “acts as a conduit for exchanges to access the data from where they are originally stored.” (HHS Office of Inspector General report August 2013, page 2) If improperly secured, this opens up other Federal agencies to further upstream identity theft mayhem.

Already information is in the hands of thousands of call center staff and so-called ‘navigators’ who may or may not have gone through security verifications. Insurance customer information has already leaked outside of exchanges (see below). (more…)