After the federal health exchange faltered, President Barack Obama pointed to Maryland's Obamacare site, the Maryland Health Connection (MHC) as an example of a successful rollout. The president promised Obamacare's rollout would be smoother in "places like Maryland where governors are working to implement it rather than fight it."
Indeed, Maryland Gov. Martin O'Malley — a likely presidential candidate in 2016 — even promised Maryland would "lead the nation" in making Obamacare work. But Maryland is doing no better than its federal companion and might even be doing worse, if that's possible. While 16,000 people have submitted applications, only 1,120 have enrolled in an insurance plan. And most of those are applications for Medicaid sent by mail.
Governor O'Malley had hoped to use Maryland's health exchange as a launching pad for his 2016 campaign. He might want to make other plans. Mr. O'Malley's administration had no direct experience in building exchanges. Like President Obama, the governor ignored firms with the capability, knowledge and experience in managing large IT projects. Instead, the business went to firms adept at the legal and political maneuvers needed to land big government contracts.
That may explain why the O'Malley administration gave a $67 million contract to Noridian Healthcare Solutions. Noridian is not an IT company. It processes claims for medical equipment like wheelchairs and lab results for Medicare and Medicaid. It also administers North Dakota's BlueCross BlueShield Plan.
Noridian Administrative Solutions rebranded itself as Noridian Healthcare Solutions in 2013. Chief Executive Officer Tom McGraw stated that Obamacare would be a big source of future revenue growth. The name change was a signal, Mr. McGraw said, that "We're more than a claims administrator and ready to help states, the federal government and businesses meet the new challenges they face in health care information, systems and support. Noridian's capabilities have evolved from the complexity of health care delivery."
The fact is, Noridian had to hire contractors to do everything it promised. None of Noridian's executives have experience actually building and maintaining information systems for consumer or service-oriented enterprises.
If Maryland Health Benefit Exchange executives were concerned about Noridian, they didn't show it. On the contrary, at a health IT conference last year Maryland was cited as an early innovator state and well down the path toward being prepared to successfully implement a health information exchange. But as late as April 2013, Noridian had yet to think about the systems and hardware needed for the connectivity required for that purpose.
Noridian executives told MHC officials that an "entire solution will be housed at one site by a collocation vendor yet to be determined. Which components will communicate in close to real time and which will use a batch process is yet to be determined."
Last week Rebecca Pearce, MHBE's executive director stated she is not happy with the "performance of Maryland's health insurance website, or with the pace of improvements to the site" and promised that Noridian would be "increasing the resources devoted to the project." And Maryland's health secretary Dr. Joshua Sharfstein continues to tell people that Noridian is falling down on the job.
But that begs two questions. Will the exchange be fixed, and will the state and Noridian go into the red fixing the enrollment system before it even deals with the even bigger job of verifying eligibility for tax credits and sharing all this information in real time?
Not to worry. Exchanges can assess fees on health plans to pay for cost overruns. That means higher taxes or higher premiums on top of a failed system. Other states should learn from O'Malley's Obamacare fiasco. If they don't, the rollout of Obamacare will continue to be the program's own worst enemy and a political liability.
Robert Goldberg is founder and vice president of Center for Medicine in the Public Interest, a nonprofit that receives some funding from the pharmaceutical industry. His email is firstname.lastname@example.org.To respond to this commentary, send an email to email@example.com. Please include your name and contact information.