Page 320 - Using MIS

288 Chapter 7 Processes, Organizations, and Information Systems

CASe StUdy 7

A Tale of Two Interorganizational IS

The Affordable Care Act (also known as Obamacare) requires Besides simplifying the selection of health insurance, an-
the creation of healthcare exchanges that necessitate the de- other goal for exchanges is to help consumers navigate the
velopment of interorganizational information systems. States complex array of governmental assistance options and pos-
were encouraged to set up exchanges for their own residents, sibilities. Depending on income, family size, and other cir-
but if they elected not to do so, the states’ residents could use cumstances, some consumers are entitled to Medicare and
an exchange developed by the federal government. About half a variety of other governmental programs. Thus, when using
of the states decided to use the federal exchange. The remain- an exchange, a consumer provides personal data about in-
der developed their own exchanges (and supporting informa- come and family situation, and the exchange uses automation
tion systems). These many parallel development projects give to contact various governmental agencies to determine that
us a unique opportunity to learn from the experience of similar consumer’s eligibility. Given this determination, the exchange
projects that had, in some cases, very different outcomes. then offers insurance products appropriate to that particu-
Consider, for example, Connecticut and Oregon. The state lar consumer’s situation. Exchanges are supposed to pay for
of Connecticut created an exchange named Access CT. It was themselves by charging a modest fee to insurers.
delivered on time and on budget and has been such a success Figure 7-23 shows some of the organizations involved in a
that the state of Maryland stopped developing its own system healthcare exchange. Clearly, an interorganizational informa-
5
and licensed the Access CT solution instead. Other states are tion system is needed. As you know from this chapter, such
considering licensing Access CT as well. On the other hand, projects are difficult to develop and manage, and it is not sur-
the state of Oregon created an exchange named Cover Oregon prising that some states failed.
that was a complete and utter failure. Cover Oregon was never
operable despite costing more than $248 million in U.S. and Access CT
Oregon tax dollars. In May 2014, the U.S. attorney’s office in Access CT is a quasi-public corporation. The chairman of the
Portland opened a grand jury investigation into the project. 6 board is Connecticut’s Lieutenant Governor, Nancy Wyman,
Why were there such different outcomes? The two states who set out in the summer of 2012 to find an appropriate CEO.
started their projects about the same time, they had the same A nationwide searched identified 74 candidates, and in July
scope and goals, they began with about the same funding 2012, the Connecticut governor hired Kevin Counihan.
(Cover Oregon eventually spent nearly twice as much as Counihan had more than 30 years of experience working
Access CT), and they had the same required finish date. There in the insurance industry and had been a key player in the
is no substantial difference in the population of the two states; development of the Massachusetts healthcare system (widely
Connecticut has about 3.5 million people and Oregon about regarded as the model for Obamacare). Most recently, he had
3.9 million. What caused the different outcomes? been the president of a private health exchange in California. 7
Counihan holds a master’s degree in marketing, and it
What Is a Healthcare Exchange? shows. As soon as he was hired, he began a series of press

To begin, a healthcare exchange is an online store that offers conferences to explain the nature and goals of the project to
health insurance products to individuals and small businesses. the public. (See an informative interview with him at www
Choosing medical insurance is a complex process with many .youtube.com/watch?v=8-w4nilpuiQ.) Within a few months,
different levels of coverage and costs, and selecting the right Counihan hired senior staff with deep experience in insur-
policy is difficult and confusing for most people. Exchanges ance, including Jim Wadleigh, Chief Information Officer.
are thus created not only to offer medical insurance policies, Wadleigh had been director of application development for
8
but also to simplify and partially automate the selection pro- CIGNA, a health services organization. Wadleigh’s primary
cess. Exchanges also promote fair competition among health assignment was to hire and manage an outside contractor
insurers. to develop the exchange website and supporting backend

5 accessed July 11, 2014, http://courantblogs.com/ct-insurance/maryland-votes-to-adopt-ct-health-exchange-system-2.
6 Maeve Reston, “U.S. Prosecutors Investigate Oregon’s Failed Health Insurance Exchange,” Los Angeles Times, May 21, 2014, accessed May 25, 2014, www
.latimes.com/nation/nationnow/la-na-us-attorneys-office-probes-oregons-health-insurance-exchange-20140521-story.html.
7 Matthew Sturdevant, “CT Health Exchange Has A New Chief Executive,” Hartford Courant, June 21, 2012, accessed May 25, 2014, http://articles.courant
.com/2012-06-21/health/hc-health-exchange-ceo-20120621_1_health-insurance-exchange-health-care-victoria-veltri.
8 Healthcare IT Connect, “Jim Wadleigh,” accessed May 25, 2014, www.healthcareitconnect.com/jim-wadleigh/.