Streetwise Professor

December 2, 2013

PotemkinVillage.gov

Filed under: Economics,Politics,Regulation,Russia — The Professor @ 12:27 pm

The administration is declaring victory in the battle to fix Healtcare.gov.  I declare BS.

Note the metric of success: the administration claims 100K people have “selected plans.”  Never mind that this is 1/8th of the target by 12/1.  The question, framed in futures-speak, is: How many out-trades?

An out-trade is where a buy is not matched by a sell.  Since the backend that communicates information from users to insurers isn’t fixed-and some parts aren’t even built yet-and since there are also bottlenecks in communications between the government and insurers and users regarding eligibility for and amount of subsidies, the number of actual matched buys-and-sells is a fraction of the 100K.  How big a fraction?  Don’t look to the administration for answers.

No, don’t look to them, because they are in full obfuscation mode.  They are engaging in a Potemkin Village strategy.  They are pointing to the newly spruced up facade of the Healthcare.gov system-the user interface, which is now less crappy than it used to be (a very low standard, indeed)-and saying: “See! Look! It is fixed!  Isn’t it beautiful?  The procession can now move on!”  The hidden message: “Pay no attention to the fact that behind the somewhat improved facade, your personal information necessary actually to match you with an insurer so you can actually buy the policy may well be screwed up, or not get to the insurer, or just disappear into the ether.”

Out-trades are messy, costly, and risky: the biggest problem is that you don’t know your risk position because you don’t know whether you have a trade or not.

It is reasonable to surmise, based on what insurers are saying, that the number of out-trades is substantial, and is only likely to increase both absolutely but also as a fraction of applications, as more traffic moves to the site.

The web interface is not the deal.  That is just the facade of PotemkinVillage.gov.  Behind it is nothing, or ramshackle construction.  Sort of like this village in Siberia that adopted the Potemkin strategy in anticipation of a visit by Putin.

And that’s not the worst of it.  Behind that, assuming everything gets working, is a set of horrid, expensive policies.

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4 Comments »

  1. Street WP:

    Why so negative? Has Barry Soetero ever lied to the American public before I mean, since he changed his name.

    Really?

    Never mind.

    Vlad

    Comment by Vlad — December 2, 2013 @ 1:26 pm

  2. That’s not Siberia, that’s one of the ancient capitals of what was to become Muscovy after the Mongol invasion:

    http://encyclopedia2.thefreedictionary.com/Rostov-Suzdal+Principality

    Comment by Ivan — December 2, 2013 @ 2:08 pm

  3. @Ivan. I stand corrected. I’ll change.

    @Vlad. I am a vortex of negativity when it comes to Barry Soetero-AKA BS :-P

    The ProfessorComment by The Professor — December 2, 2013 @ 3:18 pm

  4. Sort of like this village in Siberia that adopted the Potemkin strategy in anticipation of a visit by Putin.

    Great find!!

    Comment by Tim Newman — December 2, 2013 @ 9:13 pm

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