State of Denial

Were the problems at heathcare dot gov predictable?

That’s what many are saying. Lost passwords, reset identities, servers crashing—the web-site’s problems have been the talk of the tech world ever since it launched on October 1st. Did anyone see this coming?

They should have. Large software roll-outs are often fraught with problems. Remember Windows Vista or Apple Maps? Having millions of users putting a new product through its paces in unexpected ways is bound to raise unforeseen issues—just consider the Mustang II or Chevy Vega—and new web sites are always problematic. But government is especially ill-suited to deliver a new tech product. Rules designed to prevent fraud and abuse also make effective innovation almost impossible.

For example, the DEA still uses Windows Server 2003 in its network architecture. Back in the ‘90s, when new PCs would come pre-loaded with Windows, they would get reformatted back to DOS—because that was approved. With a byzantine organizational structure, any mass product the Feds design and deliver will likely be equally convoluted. Indeed, Conway’s Law virtually guarantees it.

The system will be fixed—indeed, it must be fixed—but no one should be shocked that 55 major contractors working under legislative deadline and myriad federal rules produced a confusing, bug-ridden product. In the meantime, several large State-run exchanges are working fine, and consumers can always go to Plan B: sending in an application on paper.

Douglas R. Tengdin, CFA

Chief Investment Officer

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