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What Vermont Health Connect Could Learn From the State's Previous IT Blunders 

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It takes hard-won votes to change government policy. But these days, changing government practice takes something that seems even harder to find: information technology that works as advertised.

That’s a real and pressing problem for Vermonters in the inaugural month of Vermont Health Connect. Week three of the state’s new health-care exchange may be going better than the first two, but complaints about access delays and other technical difficulties continue. Some Vermonters have resorted to signing up for health insurance with paper forms and bypassing the website. Opponents of health-care reform have had a field day with the symbolic value of a poorly functioning government-run system. Meanwhile, state officials repeatedly reassure the public the glitches are minor and being addressed.

Richard Boes, Vermont’s chief information officer and commissioner of the Department of Information and Innovation, characterized VHC last week as a “hugely complicated project” that remains a “work in progress.” But, he added, it’s up and running and “getting better every day.”

“Have we had a few performance problems? Yes,” Boes acknowledged, placing those problems in the past tense. “Did we get through them rather quickly? I think we did.”

Whether or not those snafus ultimately prove to be a “nothing-burger,” as Gov. Peter Shumlin initially described them, some Vermont taxpayers may be asking themselves how this could have happened. Is VHC headed down the same road as VT DRIVES, the Department of Motor Vehicles’ $18 million failed computer-system overhaul — a six-year saga that resolved last December? What about JustWare, the Vermont judiciary’s $4.3 million electronic case-management system, which ended up being scrapped one year ago?

Why is it so hard for state officials to know whether and when to pull the plug on big IT projects?

In all fairness, it should be noted that VHC has already outperformed the other two doomed projects. Neither VT DRIVES nor JustWare ever went live; they were designed to replace old systems that ended up outlasting them. Furthermore, the IT contractors who failed to deliver did offer some reimbursement. It took a gubernatorial visit to settle on a figure, but Hewlett-Packard refunded Vermont $8.37 million for the DMV system; New Dawn Technologies gave the state back $700,000 for JustWare.

Where do those precedents leave other state agencies and departments as they, too, consider upgrading their information systems? Besides the DMV and the courts, many departments still rely on “legacy” systems — computer mainframes built in the 1970s or 1980s — to manage such vital public services as food stamps, child-support payments, Medicaid benefits and low-income heating assistance. While those IT systems function now, state officials warn that it’s only a matter of time before the people with the know-how to maintain them retire or die.

“We’ve got to accept the reality that we are vulnerable,” says Sen. Jane Kitchel, who chairs the Senate Appropriations Committee. “Some of these workhorse systems are getting pretty elderly.”

The pressure is mounting on Vermont to move its IT systems into the 21st century. David Bradbury, president of the nonprofit Vermont Center for Emerging Technologies, recalls working with the Institute on Government Effectiveness on a series of recommendations for improving the state’s delivery of services through better IT. Those recommendations went to then-governor Jim Douglas — back in 2005.

What’s changed in eight years? After its rash of recent IT failures, has the state of Vermont learned anything from its mistakes? Interviews with officials in several different departments indicate that yes, three lessons emerged from those painful experiences. Now the question is, can VHC implement them?

Lesson No. 1: Don’t be the first to buy a new and unproven computer system.

When Robert Ide became DMV commissioner in August 2009, he inherited an IT modernization project that was already several years behind schedule. Even before the ink was dry on the deal, in June 2006, Covansys Corporation, the original contractor, was sold to Saber Corporation. A year later, Saber was purchased by EDS, the company founded in 1962 by Ross Perot. Hewlett-Packard bought EDS in August 2008.

Despite the rapid corporate turnover, Vermont decided to go ahead with the project, in part because at least nine states were modernizing their DMV computer systems at the time. None had yet successfully implemented a new system.

“When I first got there, everybody still believed that we were going to succeed,” Ide recalls. “After a while, however, the questions moved from ‘Will it succeed?’ to ‘Can it succeed?’ to ‘We need to stop this and move in a different direction.’”

Ide’s “light-bulb moment” came during a meeting with senior HP executives — one of “many over the three and a half years of my time working with them,” he notes.

“I asked the question, ‘Will you replicate the Vermont product in any other jurisdiction going forward?’ And they said, ‘No,’” he recalls. “That said to me that even if they succeeded, we’d have an orphan child as a product that would be very difficult for us to maintain. I left work that day thinking, Wow! That’s a significant answer to my question.

According to CIO Boes, Vermont took that lesson to heart. One of the guiding principles outlined in DII’s five-year IT strategic plan, adopted this past January, calls for Vermont to “leverage” IT successes from other states rather than reinvent the wheel.

Of course, Vermont couldn’t do that with the new health care exchange, as no other state had such a system up and running. But Boes says that, whenever possible, DII’s goal is to adopt proven technologies to support state agencies and departments “and not become a software developer.”

Lesson No. 2: Hire a project manager to oversee progress and spot small problems before they become huge ones.

Tom Hurd is chief information officer for the Vermont Agency of Transportation, of which the DMV is a part. He’s been with the agency for more than 44 years, but wasn’t CIO when the VT DRIVES contract was signed; he took over shortly thereafter.

Hurd agrees with Ide that corporate ownership changes contributed to the project’s failure, as did Vermont leaders’ desire to be the first state “out of the box” with a new system.

But Hurd also suggests that the DMV might have averted some problems by hiring a full-time project manager to oversee the work. Such a manager keeps the project on track to meet its deadlines and operational goals and assesses the severity of technical glitches that arise. In fact, Hurd says, limited resources forced many DMV employees to wear “multiple hats” on the project. VT DRIVES had an IT project manager who was also responsible for maintaining the existing DMV mainframe — itself a full-time job.

On the business side, too, VT DRIVES had a part-time project manager — the same person responsible for overseeing the DMV’s day-to-day business operations. With state staff spread so thin, Hurd suggests, it’s no wonder problems escaped notice.

HP didn’t supply that vigilance, either. “They had very poor quality control and very poor background in programming,” Hurd says. “You’d think a major company would have something very different from that.”

Hurd isn’t suggesting that a full-time project manager would have caught all the mistakes, such as coding and design errors caused by miscommunications with the contractor’s programmers. But such an overseer, he says, might have nipped some of those errors in the bud.

Boes agrees. Another guiding principle of his five-year strategic IT plan calls for more robust project management and oversight of the “enterprise architecture.”

“Everyone has heard the saying, ‘Measure twice and cut once,’ and that also applies to technology projects,” Boes explains. “There is extensive research [showing] that appropriately planned and architected solutions result in lower total cost of ownership and have less cost or schedule overruns.”

Boes says his department is keeping an eye on the technical issues related to Vermont’s new health care exchange, which does have its own full-time project management. Some of VHC’s IT contractors were hired before the 2013 adoption of legislation that boosts DII’s oversight of the state’s big digital projects.

The goal of the new statute? To make sure such IT contractors can no longer walk through a “one-time gate” of state approval of their contracts, according to Boes. Instead, he says, “we monitor and keep track of those projects on an ongoing basis.”

Lesson No. 3: Don’t try to do everything at once.

By any measure, VT DRIVES was an ambitious endeavor. One of its goals was to allow DMV’s various databases to communicate with one another, with law enforcement agencies, with the court system and with insurance companies — all in real time.

“I’ve always been a believer that you start small,” Hurd says. “You do a pilot project, and then you grow with it.”

But when a department or agency encounters an opportunity to overhaul its systems for the first time in a generation — as the DMV did — planners can be tempted to throw everything into the mix. The result is mission creep.

“Programmers can program anything you want,” Hurd says, “but if we haven’t provided them the proper workflow, that’s where we get into a lot of program changes.”

Moreover, he says, budgets for such projects often include enough money to buy and implement the system but not enough to maintain it.

“That can make or break you,” Hurd continues. “We could have implemented VT DRIVES, but it would have been deathly slow. And it would have been almost impossible to maintain.”

Currently, DMV plans are more modest. The department will keep using its legacy system for the foreseeable future. Ide says his staff is still in the “mourning process” and has chosen to take “small bites” out of existing problems in the current system. For instance, a contractor is working on a “well-proven” electronic version of the written driver’s exam that should be ready by the end of January — paid for with federal dollars.

“Admittedly, it is a very small bite,” Ide adds, “but we need a success.”

Vermont’s IT failures may seem like massive gaffes, but they’re far from rare exceptions in the tech world. Bradbury of the Vermont Center for Emerging Technologies cites an insiders’ “rule of thumb” for large-scale projects like VT DRIVES and Vermont Health Connect. Generally, he says, about a third of them fail outright, a third experience serious time and cost overruns, and a third come in both on time and on budget according to their specs.

While a batting average better than .300 may be good in baseball, shouldn’t taxpayers expect more for their IT investments?

“There are probably a thousand IT systems that have to work right every day, and we’re just hearing about a handful that don’t,” Bradbury points out. “There’s a lot more that goes right than wrong.”

Where does that leave VHC? Three weeks in, it may be too soon to tell. But it’s worth noting that the project planners have already failed to heed much of the wisdom articulated by veterans of the DMV disaster.

Vermont was among 13 states that undertook building their own exchanges, and the first and only one to include small businesses; that’s where a lot of the software problems are cropping up. VHC has designated project management, but that hasn’t stopped the vendor, CGI Group, from missing multiple deadlines in building the exchange. To date, the state hasn’t imposed any penalty or asked for a refund.

One could argue, too, that VHC is trying to do everything at once. Integrating the website with those of insurance companies and the IRS has led to some of those “bumps in the road” the governor warned about. Even before the system launched, the state had to announce it wouldn’t be able to accept payments until November 1. Paper forms sure weren’t part of the plan.

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Ken Picard

Ken Picard

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Ken Picard has been a Seven Days staff writer since 2002. He has won numerous awards for his work, including the Vermont Press Association's 2005 Mavis Doyle award, a general excellence prize for reporters.

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