Oracle Documents: Politics Sabotaged Oregon Healthcare Website

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Amid calls for a federal investigation of Oregon's health insurance exchange -- the most dysfunctional state project of its kind -- Oracle reportedly is fighting to avoid taking the blame for the failed exchange by arguing that its software worked but wasn't allowed to go live for political reasons.

In documents provided to the US House Energy and Commerce Committee, Oracle claimed the website could have gone live in February "but that the state of Oregon pulled the plug on it for political reasons," reported TV station KATU, based on a PowerPoint presentation and other correspondence it obtained that was provided to the committee. InformationWeek has requested from the committee, but not yet received, copies of the same documents. An Oracle spokeswoman declined to make the materials available or to comment on its dispute with the state of Oregon.

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The state is preparing to sue Oracle to recover money paid for a Cover Oregon health insurance exchange website that never opened to the public. The health insurance exchanges established under the Affordable Care Act were all supposed to go live on Oct. 1, 2014, and many -- from the federal Healthcare.gov website on down -- experienced problems at that time. Oregon delayed the launch of its website and just kept delaying it through the end of the open enrollment season in April of this year.

The state of Oregon released a portion of the website in February, but to insurance agents only. The stated reason was that the Oracle software was too unstable to be exposed to the general public. The Oracle documents tell a different story, KATU reports.

According to the KATU report, Oracle complains of unfair treatment by state leaders and Deloitte, the consulting firm hired to evaluate whether the Cover Oregon project could be salvaged at a reasonable cost. Deloitte concluded the website would cost $78 million to whip into shape, versus the estimated $5 million cost of scrapping the website and redirecting citizens to the federal HealthCare.gov site. The state opted to kill the website project and move to HealthCare.gov.

"Oracle can only conclude that the Governor's unwillingness to release the website is because doing so doesn't fit with his re-election strategy of blaming Oracle for his own mistakes," Oracle argued, according to KATU.

Furthermore, "Deloitte's analysis ignores the fact that the system is ready for release, and has been since February 2014," Oracle maintains, and "Deloitte's estimate to complete the existing exchange is grossly inflated and appears to be based, at least in part, on Deloitte's lack of experience with certain functional areas and their desire to replace those portions of the existing system with their own custom approach."

Several investigations of the project's collapse have blamed an excessive reliance on Oracle as one factor -- though there's plenty of blame to go around. The state elected to act as its own systems integrator rather than hire one, meaning Oracle never took on that role and responsibility, instead providing contract labor while others set priorities and schedules. Still, state officials charge that Oracle did shoddy work and missed deadlines.

The office of Oregon Gov. John Kitzhaber gave KALU a statement reiterating that he made the decision to pull the plug on the state exchange in consultation with Cover Oregon's management and governing board, based on "failures of the website to perform at minimal levels."

Deloitte was recruited to evaluate the project based on a relatively successful record of implementing health insurance exchanges for other states, including one for Connecticut that has become a model for other states like Maryland seeking to retool their own exchanges.

Has meeting regulatory requirements gone from high priority to the only priority for healthcare IT? Read Health IT Priorities: No Breathing Room, an InformationWeek Healthcare digital issue.