5 Companies Integral to Fixing the Obamacare Website
The numbers are in... and they're ugly.
According to internal memos released by the House Oversight Committee late last week, Obamacare's website, Healthcare.gov, managed to successfully enroll just six people on the first day it went live. After two days, only 248 people had successfully completed enrolling for health insurance. Keep in mind these aren't figures for a single state -- we're talking about a network of 36 states where only 248 people successfully managed to navigate a number of glitches and enroll for health insurance.
If that weren't enough, the administration has previously stated that 4.7 million unique people visited the site on the first day of its launch for an enrollment success rate, based on this internal memo, of a paltry 0.00000128%.
Of course, it should also be noted that things have improved somewhat since Healthcare.gov launched with the combination of state and federally run exchanges totaling 700,000 applications (not to be confused with enrollments) in just under the first four weeks. This doesn't tell us how many of these applications are completed, but it clearly shows growing interest by the public in obtaining health insurance, as well as improving awareness of the law.
Priority No. 1 right now, though, is fixing Healthcare.gov. According to spokesperson Jeffrey Zients, the end of November is the current timetable officials are targeting as to when Obamacare's website will be running smoothly for a majority of people. That might seem like an eternity away, and it's certainly increasing calls for delaying the full implementation of the individual mandate which is set to go into effect on Jan. 1, but a pushback is probably not needed given that sign-ups were expected to be very back-loaded toward the coverage cutoff date of March 31, anyway.
Instead, every able body appears focused on fixing millions of lines of source code and getting as many forward-thinking companies on the job as possible. That's why I felt it important to take a look at five companies that will be the most integral to fixing the numerous glitches currently plaguing Obamacare's website, Healthcare.gov, and see if their involvement in this process could be a boon, or bust, for shareholders.
Just in case you thought CGI Group was going to get a free pass, think again. Canada's CGI Group is the primary architect behind Healthcare.gov and, as such, can probably contribute more than anyone to fixing its many errors.
On one hand, CGI Group's revenue received from this project may only climb despite the inherent screw-ups, given how little time it claims the Department of Health and Human Services allotted for testing of the website prior to launch. According to NBC News as of two weeks ago, the cost to build the Obamacare website had already skyrocketed to three times more than the original estimates by May! The assumption is that we could be well beyond five or even 10 times the original estimates by the time the website is functioning properly.
But there's a downside to this debacle for CGI as well. The ongoing glitches could be a blow against the company's reliability which has obviously been put under a microscope over the previous couple of weeks. Last year, CGI had a diabetes registry contract pulled that it was originally awarded by eHealth in Ontario, for reportedly failing to meet numerous deadlines. If CGI doesn't fix things quickly, it could translate into the possibility of lost future orders.
Quality Software Services
Quality Software Services, better known as QSSI, which is owned by UnitedHealth Group , isn't getting off scot-free, either. QSSI is already an integral part of Healthcare.gov's build-out, as it's responsible for ensuring that all of the health insurance plans being offered remain in compliance with the laws of the Patient Protection and Affordable Care Act (which you probably know better as Obamacare).
Just two weeks ago, though, we learned that QSSI will be taking the reins from the Department of Health and Human Services and directly handling the technical oversight and implementation of all fixes. In other words, this is QSSI's show to win or lose. Being a division of UnitedHealth's subsidiary Optum, UnitedHealth shareholders are unlikely to see any direct share price action from QSSI's involvement, but clearly getting the Obamacare website working is going to be good news for all insurers who are eager to sign up new members.
The three (tech) amigos: Oracle, Google, and Red Hat
Finally, we have what is being referred to as the "tech surge," whereby representatives from Oracle , Google , and Red Hat have officially been identified as companies called upon to assist in the fixes.
I believe Google is being brought in for its out-of-the-box thinking. Google is a genius when it comes to rolling out network fixes across its entire network, and it's incredibly smart when it comes to security. It's a rare day when Google's network has gone down -- and when it's happened, it rarely lasts longer than a few minutes.
Oracle and Red Hat are going to serve a similar purpose, working toward improving system reliability and scalability. Both Oracle and Red Hat are well known for their middleware software that allows them to deploy and manage applications via the Internet or the cloud.
For Google, joining the Obamacare website fix probably isn't a big deal, but for the struggling Oracle and Red Hat, this news could be just what these two companies need to boost sales and enterprise confidence in these two middleware developers.
Rumors abound as to which company could be called upon next to help fix Healthcare.gov. Two weeks ago, USA Today commented that Verizon was going to be next in line to help out, yet no official word has come from regulators as to whether that's going to come to fruition.
Instead, I would look to companies with enormous databases such as Facebook or even Netflix to be called upon to offer their expertise in the immediate future. Understand, this is pure speculation on my part, but both Facebook and Netflix have demonstrated success in rolling out global upgrades to a network that's considerably larger in size than Healthcare.gov.
Moving forward, it's very unlikely that Oracle, Google, and Red Hat are going to be the last high-profile companies called in to help fix Healthcare.gov. I'd also contend that it's probably going to take the entire month of November to get the system running smoothly, given the scope of the problems that have been detailed up until now. In other words, the Obamacare website waiting game continues.
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The article 5 Companies Integral to Fixing the Obamacare Website originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends Facebook, Google and Netflix. It also owns shares of Oracle and recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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