by Mitch Kokai
Senior Political Analyst, John Locke Foundation
So why did 36 states refuse to create their own health exchanges? One reason is that Obamacare turned out to be massively unpopular. Another is that conservative policy experts argued it would weaken the law.
Most important, setting up health exchanges is hard to do. Government doesn’t handle information technology well, here or around the world.
The State Department’s visa system is currently offline for weeks, keeping businessmen, tourists and exchange students from entering the country. The FBI had to abandon a massive IT project after spending hundreds of millions of dollars.
These bureaucracies did a good job of delivering passports and maintaining files in the industrial age. But they can’t keep up in the information age. Moore’s Law says that computer capacity doubles in two years or less. Government procurement cycles are a lot longer than that.
Governors and legislators had reason to fear that state health exchange IT wouldn’t work well (as it hasn’t in about half the states that tried), and they would get blamed. And blamed for being associated with an unpopular law.
All of which suggests a broader lesson. Government was reasonably good at replicating the bureaucratic processes of large corporations in the industrial age. But it’s not very good — it’s often downright incompetent — at replicating the IT processes of firms like Walmart and Amazon.
Markets work better than government ukase in the information age. The Medicare Part D prescription drug program, with many market components, has produced high satisfaction and costs lower than projections. Obamacare has not done as well.