Oregon exchange considers new solutions
Dec 18, 2013
By GOSIA WOZNIACKA and JONATHAN J. COOPER
Of the Associated Press
PORTLAND — With its struggling health insurance exchange still not working, Oregon is back in touch with a technology vendor it considered but spurned multiple times last year while sticking to an ambitious plan to build a complex online portal from scratch.
Three months after the failed launch of its online health-insurance enrollment system, the state's renewed discussions with outside vendors show its desperation to find a solution. Cover Oregon has had to rely exclusively on paper applications and had to hire more than 400 workers to process them manually.
A Cover Oregon spokesman confirmed officials have recently heard from Exeter Group Inc., a Boston-based software company that says it's already built an exchange that can plug into the existing technology the state is using.
With the primary information technology contractor, Oracle Corp., missing deadline after deadline, the state also hired a law firm to review its contract with the company. Officials said they've withheld about $20 million in Oracle payments.
“There are a lot of vendors in IT that have contacted us with what they feel are potential solutions,” said Michael Cox, a spokesman for Cover Oregon. “We'd be foolish not to listen to them.”
As Cover Oregon tries to solve its problems, the state official who oversaw most of the exchange's development and who considered and rejected Exeter's offers has resigned. A memo sent by the Oregon Health Authority and the Department of Human Services to staff on Thursday says Chief Information Officer Carolyn Lawson stepped down for “personal reasons.”
In a pitch made last year to Lawson, Exeter said its OneGate product is built on an Oracle technology stack, which the state is already using, and ties Oracle products together into a working exchange. Exeter designed the consumer part of the exchanges in Vermont and Hawaii, which are up and running and enrolling people, though not without glitches.
It's not clear whether Oregon is considering the company's software as a potential quick-fix solution. Cox declined to say what role Exeter or other vendors might play. Matt Cahir, Exeter's senior vice president of global sales, declined to comment.
Emails obtained by The Associated Press show the state flirted with bringing Exeter on board at least three times during 2012, including a push by legislators who were angry to find out they hadn't been told sooner about the company's offering.
In early 2011, Oregon received $48 million from the federal government to start working on an exchange. The state had been preparing to modernize the internal computer systems for the Oregon Health Authority and the Department of Human Services, so the projects were blended. Oracle was selected to provide the technology.
At the end of that year, Exeter approached Lawson to present its proposal for the whole project.
Oregon had already made progress on the technology's foundational pieces, Lawson said in an interview earlier this month. But the clock was ticking and the state had just a year and half until the exchange was to launch.
Exeter offered to speed up the process.
Oregon seemed receptive at first. Emails show Lawson was considering plugging Exeter's software into work that Oracle and Oregon had done. I'm “thinking of it as an accelerator,” she wrote.
Exeter also worked with Oregon's Oracle team, and in March 2012 Oracle's Hamza Jahangir emailed Lawson his assessment: “The technical architecture for the OneGate solution is a partial fit for Oregon's Oracle technical architecture.”
Exeter sent a formal proposal to Lawson, and the state scheduled another demo for the first week in May 2012. But the state backed out. Lawson wrote to a colleague: “I think there is more available in the Oracle already than we anticipated. I no longer see the need for Exeter.”
Seven weeks later, at a DHS Modernization Executive Steering Committee meeting, Lawson introduced the concept of implementing Exeter as a “bridge solution” while the modernization and the health insurance exchange projects progressed.
Exeter officials flew to Oregon and performed two demos for the state.
The committee chose not to go with Exeter and to continue relying on Oracle. Lawson later wrote: “detailed questioning made it apparent the application (Exeter) was not yet refined enough...”
She declined to tell the AP why she lost interest in Exeter, then went back to them.
That fall, legislators on a technology oversight committee raised concerns about the slow progress and the costs of the exchange and modernization, and then learned about Exeter.
After seeing demos by Exeter and being told the cost would be just a fraction of what the state was paying Oracle, several legislators were incensed.
Bob Cummings of the Legislative Fiscal Office said at the time he'd conduct an evaluation of Exeter's proposal.
“Exeter feels that much of what Oregon currently has is a ‘shell’,” Cummings wrote Lawson. And “DHS/OHA feels that much of what they have is merely a ‘shell.’ Frankly, I suspect that you both may be right.”
One of the legislators, then-Rep. Patrick Sheehan, R-Clackamas, told the AP that Lawson denied numerous times the availability of an off-the-shelf solution — existing software that could provide a working exchange.
“She's looked us into the eye and lied to us every time about the lack of existence of any software that does this,” Sheehan told AP.
Lawson told The AP she didn't believe Exeter was capable of delivering the larger vision Oregon's governor and Legislature had approved.
“We needed to be so much more complex because of the direction we had chosen, it really wasn't out of the box for us because there was so much more we wanted to do,” Lawson said in the interview earlier this month. Bringing in Exeter “would have been a do-over.”
The evaluation was never finished, Cummings said, because Exeter didn't provide sufficient access to its documentation. Emails show Exeter was concerned about handing over the company's intellectual property.
Lawson did not want to comment on whether she regrets not bringing Exeter in last year.
“They came in the door a year late,” Lawson told the AP.
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