Academic journal article Journal of Information Systems Education Opportunity out of Disaster

Academic journal article Journal of Information Systems Education Opportunity out of Disaster

Article excerpt


Andrew Slavitt, group executive vice president of Optum, had just hung-up the phone with Marilyn Tavenner. Marilyn was the US Centers for Medicare and Medicaid Services (CMS) administrator. He had called Marilyn to offer his company's assistance in repairing the, which had continued to unravel weeks after its disastrous rollout.

The troubled launch of the U.S. federal government's healthcare information exchange was a high-profile example of a failed outsourced IT project. The $400 million dollar endeavor was intended to be a one-stop, online shop for Americans seeking health insurance. It made headlines for its bugs and glitches. Even Jay Leno quipped: "I tried to log on to today. I don't think I'm doing it right. I lost 300 bucks playing Texas Hold 'Em."

Aside from the launch being the brunt of late-night talk show hosts opening lines it was endorsed by the highest executive in the world, President Barak Obama, and was a key driver of his performance ratings. The project was afforded plenty of lead time and a relatively straightforward mandate, but deadline after deadline was missed on the multi-contractor project. From government agencies slow response times to address specification questions to last minute changes to the Healthcare. gov's primary features. The project was problematic to say the least.

As he sat in his office, Andrew wondered if he had made the best decision. He also knew his parent company; UnitedHealth Group (UHG) had been wary from the beginning of embracing the rollout which meant Optum might not be able to rely on any of UHG's resources to assist should they need it. Or his efforts may even hinder UHG plans of expanding with the new reform around the Affordable Care Act. Additionally, there were concerns regarding public conflicts of interest related to Steve Larsen. Steve had been a former top regulator with CMS. He was now working for OptumInsight, the UHG subsidiary that had purchased QSSI, a small company that had responsibility for one of the few components of the website that worked on the October 1 rollout. If Optum were granted the contract opportunity, QSSI would be a critical executor of the work given its exchange experience.

Andrew was confident in his company's capabilities; however, if granted the contract to fix there would be a lot of visibility and added pressure. There was a lot at stake, but there was also a lot of potential upside too. This could open the door for Optum to receive large federal or even international contracts in the future. It would also open the door to other government contract opportunities working with individual states agencies on mimicking the federal healthcare exchange rollouts. If successful this relationship with Optum and the U.S. Government would also allow for future service opportunities for UHG administering healthcare benefits for government employees, a market of which UHG had minimal penetration.

The downside was also significant. Should Optum fail, they could seriously damage their reputation and the reputation of UHG which has consistently been ranked at the top of the industry. Given the amount of press on the website launch there was a lot at stake for Slavitt and his team.


In March 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (ACA). It was the culmination of a protracted, partisan political battle so affiliated with the President himself that it was more commonly referred to as Obamacare by both supporters and opponents. The ACA included provisions on healthcare exchanges, subsidies, and insurance mandates for individuals and businesses. States could create their own exchanges; if they did not, their citizens could find insurance through the federal ACA system (in the end, 36 states relied on the federal system). …

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