by Steven Brill
6 Ignagni complained to the White House and Baucus’s staff that this would cause chaos: Ignagni and Zirkelbach, confirmed by a member of the White House healthcare policy staff.
7 “I hate that company,” she said during one staff meeting: Recorded in the journal of someone who was at the meeting.
8 Park had quickly and quietly put a team together to design and build HealthCare.gov (story of Park building the initial Healthcare.gov website): Chopra, confirmed by Park and Bryan Sivak, who replaced Park as chief technology officer of the Department of Health and Human Services.
9 Kentucky events: Everyone mentioned in the text spoke on the record at all times and provided or confirmed all of the information in the text. Dates and subsequent expense and enrollment figures were all checked against state records.
CHAPTER 14: AN OFFICE BECOMES A CENTER—AND IT MATTERS
1 “Once OCIIO became CCIIO, implementing [Obamacare] became pretty much impossible”: Everyone involved at the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, and the White House was happy to talk about this, as if this kind of bureaucratic dance was as routine as talking about the weather.
2 Number of welfare recipients in 1980 and 1997: See this chart compiled by the Department of Health and Human Services: http://aspe.hhs.gov/hsp/indicators04/apa-tanf.htm#AFDC
3 Non–civil servants were walled off from choosing contractors: This explanation of the contracting process and the fact that there are 26,000 contracting officers is from an interview with Daniel Gordon, associate dean of government procurement law, George Washington University Law School.
4 It was clear to Chopra and Park that CGI was one of those usual-suspect government contractors: Chopra and Park.
5 Chopra and Park tried to talk about all that to Sebelius and Tavenner and tried to go to meetings: White House staff member’s journal entries, confirmed by Sivak, Chopra, and Tavenner.
6 Sebelius focused on drafting the rules that would govern the insurance sold on the exchanges: DeParle, Zeke Emanuel, Ignagni, and Gary Cohen (who became head of CCIIO).
CHAPTER 15: MEANTIME, OUTSIDE THE BELTWAY …
1 a patient I’ll call Steven D.: I had full access to all of Steven’s medical bills, to his billing advocate Patricia Stone, and to his wife, Alice. Although it has been updated, most of this information on Steven D.’s case was first included in my Time special report.
2 UPMC-Highmark suit: I reviewed all of the documents in the UPMC-Highmark case, as well as the transcript of the legislative hearing in which Romoff and others testified about the dispute.
3 An eighty-eight-year-old man whom I’ll call Alan A.: I had full access to Alan A. and to all of his medical bills. Most of this information about Alan A., as well as Sloan Kettering, was included in the Time special report.
CHAPTER 16: WAITING FOR OBAMACARE
1 Although a poor communicator, who often left non-techies wondering how to translate what he had just said: Three of his colleagues at CMS. Chao declined repeated interview requests made to him through the CMS press office.
2 Chao assured his boss, CMS head Marilyn Tavenner, that he and his team would be able to get the project done on time: Tavenner.
3 Rebecca and Scott S.: I had full access to all of Scott S.’s medical bills, to his billing advocate, and to his wife. Much of the information about his case was included in the Time special report.
4 About $65 billion would be spent on these tests: This is the shakiest number in the text. The actual number is probably higher. Current, reliable numbers were impossible to find, in part because hospital lab tests are usually attributed to hospital costs in most spending surveys. But here is why I think this estimate is on the low side of the actual number: This report—https://www.futurelabmedicine.org/pdfs/2007%20status%20report%20laboratory_medicine_-_a_national_status_report_from_the_lewin_group.pdf—prepared by the medical industry consulting firm the Lewin Group for the U.S. Centers for Disease Control and Prevention, estimated lab test spending in 2007 to be $52 billion, or “2.3% of all U.S. healthcare expenditures.” By 2012, total healthcare spending in the United States had reached $2.8 trillion, and 2.3 percent of $2.8 trillion is $64.4 billion. Moreover, this report from the Health Care Cost Institute found that spending for services such as lab tests have been increasing at rates exceeding 5 percent a year. A 5 percent increase per year from 2007 (when Lewin reported $52 billion) would yield a 2012 expenditure of $66 billion. So I chose $65 billion, though even that number is probably low.
5 Cutting the over-ordering and overpricing of these tests might have easily taken $20 billion a year out of that bill: Multiple studies and reports that I have seen, including the McKinsey reports cited above, have estimated that 30 to 50 percent of all lab testing is unnecessary and that most of it is overpriced by 20 to 50 percent. Thus, achieving $20 billion (30 percent) in savings off the national $65 billion bill would, indeed, be “easy” if moderate cuts in volume and in pricing were achieved.
6 Hospital-affiliated in-house labs accounted for about 60 percent of all testing revenue: This comes from a description of the laboratory testing market in the 2013 Quest Diagnostics annual financial report.
7 Sean Recchi, a forty-two-year-old from Lancaster, Ohio: I had full access to the Recchis and to their bills. Much of the information about Recchi’s case was first included in the Time special report.
8 MD Anderson probably gets a volume discount: Three cancer specialists, including one at MD Anderson, and three hospital chief financial officers.
9 Bruce Folken, sixty-three, went to the emergency room: I had full access to Mr. Folken and his bills.
10 David Cramer, a graduate divinity student at Baylor University in Texas, and the $28,000 ambulance: As indicated in the text, David Cramer shared his story with me, as well as his correspondence with his insurance company and the ambulance company.
11 Liz Fowler sat with Max Baucus in the front row of the spectator seats: Fowler.
12 the initial read at the White House was that most states, even those run by the most conservative Republicans, were likely to sign on: DeParle, Zeke Emanuel, and a journal entry by a member of the White House staff.
13 Cohen couldn’t resist the challenge of going back to run the launch of the federal exchange: Cohen.
14 He was soon told by higher-ups at CMS and the White House that he should take his time: Cohen.
15 when it comes to hospitals, antitrust laws are complicated: In this evaluation of antitrust laws, I was helped by talking with and reading the scholarship of several lawyers, particularly a discussion with and paper presented by William Sage, a University of Texas law professor who specializes in healthcare law and antitrust regulation.
16 Liz Fowler was ready to leave government again (Fowler’s decision to take the Johnson & Johnson job and her reaction to the Greenwald attack): Fowler.
CHAPTER 17: A GUY IN JEANS, RED LIGHTS, AND A “TRAIN WRECK”
1 Gunderson-Sivak meeting and their project to build the homepage: Gunderson and Sivak.
2 Sivak and Gunderson’s cool-looking home page—which the president loved: Park, Chopra, and Sivak.
3 Park convinces HHS secretary Kathleen Sebelius that McKinsey & Company, the blue ribbon consulting firm, should be hired: Sivak and Tavenner. (Park would not discuss this with me.)
4 Snyder—along with Sebelius and Marilyn Tavenner, the administrator of CMS—also sat in: The House Energy and Commerce Committee subpoenaed the list of attendees at the McKinsey briefings and made it publicly available.
5 Snyder, who was strong-willed and turf conscious, was not surprised by the report: A senior CMS colleague of Snyder’s, Sivak, and Tavenner.
6 Sivak and Park, who sat in on the McKinsey meetings, had hoped the report would be a wake-up call: Sivak, Chopra.
7 Baucus and staff had heard nothing about the McKinsey report: Baucus staffers Sch
wartz, Clapsis, and Neary.
8 Background of Enroll America: Anne Filipic and David Simas.
9 Going into 2013, the group had raised $5 million: A breakdown of Enroll America’s funding sources was provided by Filipic and checked partially by reference to Enroll America’s IRS form 990 filings.
10 Joshua Kushner and his partners made a set of crucial decisions: Information on the development of “Oscar” from Joshua Kushner, Mario Schlosser, and Kevin Nazemi. In addition, I had access to all of the planning and financial projection documents they presented to potential investors.
CHAPTER 18: TWO MONTHS TO GO
1 Everyone involved had been tied in knots trying to figure out how the names, Social Security numbers, hours worked, and details of insurance coverage for every American worker could be assembled and made to flow efficiently: This comes from multiple journal entries from a member of the White House staff, as well as from DeParle, Zeke Emanuel, Kocher, and assistant Treasury secretary for tax policy Mark Mazur.
2 Gary Cohen … did not know about the decision: Cohen and an HHS communications official.
3 Cohen’s boss, CMS chief Tavenner, was not told until two days before: Tavenner.
4 a series of panicked emails: As noted, I have seen the full text of any email that I quote. The decisions, therefore, about what portions to quote in order to ensure that the quotes are in context are mine. Most of the emails in this section can be found in a voluminous set of documents subpoenaed by the minority staffs of the Senate Finance Committee and Senate Judiciary Committee. They can be found online at http://www.hatch.senate.gov/public/_cache/files/d84dafa1-9d91-46ae-ba89-a1b38a25ef1f/HealthCare.gov%20EXHIBITS.pdf.
5 The highest ranking official who saw that email chain was Chao: This is based on my examination of all the addressees on the email chain and interviews with many of those listed. I am assuming but cannot be sure that someone did not send the email separately to higher-ups and that for some reason those emails were not included in the documents given to the Senate committees in response to their subpoena. Additionally, Gary Cohen told me he never saw the Grant email.
6 Simas, who now had the title of White House deputy senior adviser for communications, made the rounds of major news outlets: Simas and the resulting stories that I read or saw televised.
7 Content of regular meetings Obama had about the rollout: Simas, another member of the communications staff, and Chief of Staff Denis McDonough.
8 “Or perhaps you could just delay everything a month? What are your contingency plans?”: Ignagni, Zirkelbach, one senior HHS official, and one senior CMS official.
9 Generation Opportunity, which was funded largely by conservative billionaires David and Charles Koch: See, for example, this report from the Center for Responsive Politics: http://www.opensecrets.org/news/2014/05/genopp-too-another-group-almost-wholly-funded-by-koch-network/.
CHAPTER 19: THIRTY DAYS TO GO
1 there was “no way” the launch was going to succeed, Sivak was whispering to friends: Two friends of Sivak’s. Sivak later confirmed this and that he talked with Sebelius and others at HHS about his concerns.
2 the abnormally high percentage of American workers employed in the healthcare industry—about 16 percent versus less than 10 percent in France: This is taken by extrapolating from the respective percentage of gross domestic product attributable to healthcare in France, compared to what the U.S. Bureau of Labor Statistics reports is the total percentage of the American workforce working in healthcare-related jobs, as cited in “The Anatomy of Healthcare in the United States,” Journal of the American Medical Association, January 5, 2014. As such the comparison of percentages is only an estimate.
3 In 1936, Social Security enrollment had been delayed: See, for example, The New York Times, May 17, 1937: “25th Million Card in Security Files.” The article reported that there were one million more numbers still needed.
4 Lyndon Johnson got Congress to delay the deadline for signing up for Medicare: “Great Salesmanship,” Time, April 8, 1966.
5 The president was not trying to underplay what he suspected would be a disaster: Although it is debatable which constitutes a greater failing, I cannot emphasize enough that the president and his White House staff were clueless, not deceptive, about the launch’s prospects. This is what all of my reporting before the launch and after indicates. Indeed, it defies logic that the president or his staff would have gone forward with the October 1 launch if they had had any idea of what was going to happen.
CHAPTER 20: THE CRASH
1 Marilyn Tavenner was sitting by the phone: Tavenner.
2 The first challenge at the Department of Health and Human Services and its CMS unit: Information on this and other events that day is from Tavenner, Julie Bataille (CMS communications director), Cohen, Cohen deputy Chiquita Brooks-LaSure, and three other staff people at CMS.
3 At the White House, there was also frenzied activity: A senior White House communications staff person, plus news reports that day from multiple sources.
4 Sebelius had assured chief of staff Denis McDonough: Simas, and a senior HHS official.
5 lights flickered on and off: Tavenner, Bataille, Sivak, and a CMS communications official.
6 Anne Filipic … was furious: Filipic.
7 Filipic’s Ohio director had been a legal aid lawyer: Enroll America Ohio director Hugh “Trey” Daly.
CHAPTER 21: MELTDOWN IN D.C., DANCING ON EIGHT TOES IN KENTUCKY, AND FRUSTRATION IN OHIO
1 The White House meeting that Saturday, October 5, like those during the three days before: This account was provided, consistently, by four White House staff members, and later confirmed by chief of staff McDonough.
2 Bryan Sivak replied to an email from an executive at Amazon’s Web services division: The correspondence with Amazon was first reported by Reuters. I later confirmed it with Sivak.
3 McDonough reached out to Jeffrey Zients: McDonough and Zients. Much of this narrative was first reported in a story I wrote for Time that was published on March 10, 2014.
CHAPTER 22: THE RESCUE
1 Dickerson agreed that weekend to join Burt in a rescue squad: Although it should be apparent from the text, I had full access to all of the members of the rescue squad depicted here. If the narrative depicts them doing something or thinking something, it is because they told me. Again, much of this narrative was first published in the March 10, 2014, Time article.
2 McDonough and the current communications team first asked Lambrew about the cancellations: Two senior members of the communications team and one staffer working in Lambrew’s office.
3 For Sean and Stephanie Recchi, Obamacare became good news: Parts of this story were published in a January 16, 2014, article I wrote for Time.
4 Slavitt started taking various members of the Silicon Valley surge team aside and attempted to recruit them: Mikey Dickerson and Jini Kim.
CHAPTER 23: THE FINISH LINE
1 Obama, wanting to make sure he was not burned by another exchange-related crisis, repeatedly asked about this: Jeffrey Zients, Park, and a White House senior adviser.
2 And then there was Joshua Kushner from Oscar, who told the investor crowd that Obamacare had enabled his company to exist: Kushner. I also reviewed the deck he presented.
3 Between Two Ferns, the online mock interview show hosted by comedian Zach Galifianakis: Politico’s report of the effort to get Obama on Between the Ferns was posted on April 2, 2014.
4 I now counted nearly $100 billion in negative changes: Removal of CLASS Act: $70 billion; delay of employer mandate: $19 billion; miscellaneous changes in various rules and deadlines (including the cost of allowing so many people to avoid the mandate penalty because exemptions were extended to them following the “grandfathering” firestorm): $5 billion. This does not count the cost overruns associated with implementing HealthCare.gov.
5 For example, suppo
se a couple we’ll call the Johnsons: I asked Ohio insurance broker Barry Cohen (who helped the Recchis enroll in Obamacare) to provide hypothetical examples of premium costs and deductibles on a spreadsheet, then selected the ones I wanted to use and rechecked them.
6 “O-Care Premiums to Skyrocket”: The Hill, March 19, 2014.
7 Obama made a surprise call into the speakerphone at the command center: Park and White House press aide Jessica Santillo.
8 They toasted themselves with champagne outside the Smile Center: Park.
9 They had hoped to get to a medical loss ratio (Oscar expenses and MLR): Schlosser and Kushner.
10 Mitch McConnell of Kentucky told a reporter for Louisville newspaper LEO Weekly: Can be found at http://fatlip.leoweekly.com/2014/05/23/mitch-mcconnell-says-kynect-is-unconnected-to-obamacare-dodges-questions-on-nsa-spying-and-coal-making-us-sick/.
CHAPTER 24: STUCK IN THE JALOPY
1 From 2011 to 2013, the median physicians’ and surgeons’ income in the United States rose 1.4 percent: The Bureau of Labor Statistics: http://www.bls.gov/oes/current/oes291069.htm for 2013 and http://www.bls.gov/oes/2011/may/oes291069.htm for 2011.
2 increases still seem to have averaged about 8 percent: As footnoted, the estimate of average premium increases on the exchanges for 2015 comes from a study released by PricewaterhouseCoopers on August 12, 2014. Other studies have projected higher and lower averages; this one was in the middle. Also, the increases found in all the studies vary widely by state and even among regions within states.
3 Medicare would have paid a total of $60,000 to $70,000 to cover this $150,000 bill: The process by which I applied the appropriate “DRG” is described in the explanation for the material in chapter 2, regarding what Medicare would have paid for Emilia Gilbert’s treatment. New York–Presbyterian Hospital later confirmed this estimate.