A recent NPR story (‘If A Tech Company Had Built the Federal Health Care Website‘) on the disastrous rollout of the online health exchanges for Obamacare brought up an assumption that has become deeply ingrained in this country: namely, that the private sector can do things more effectively, efficiently and quickly than the government. In particular, the report talked about how companies like Facebook know how to roll out web-based services on a massive scale, whereas the government does not (ironically, Facebook has been having some technical issues today). The belief that if a Facebook or a Google were in charge of Healthcare.gov these glitches wouldn’t exist isn’t merely one shared by conservative Republicans; it’s something that many Americans have come to take for granted. Obviously the wizards of Silicon Valley can do it better!
So guess who actually built HealthCare.gov? Here’s a hint: it’s not Uncle Sam, but rather a private contractor, the global technology conglomerate CGI, that, according an article in The Guardian, is responsible for “the bulk of [the website’s] execution.” Wait a minute! What’s going on here? It turns out that the government has been increasingly outsourcing work to private contractors. In fact, according to the same article in The Guardian, titled ‘Obamacare website woes: another sign of out-of-control private contractors,’ “Government outsourcing to private contractors has exploded in the past few decades. Taxpayers funnels hundreds of billions of dollars a year into the chosen companies’ pockets, about $80bn of which goes to tech companies.”
There are several problems with the outsourcing model. First, it turns out to be wasteful: “While the stereotype is that government workers are incompetent, time-wasters drooling over their Texas Instruments keyboards as they amass outsized pensions, studies show that keeping government services in house saves money. In fact, contractor billing rates average an astonishing 83% more than what it would cost to do the work in-house.” As a case-in-point, the CGI contract was initially for $93.7 million but has since ballooned to almost $300 million, even as the project for which it was paid has been a failure. And second, outsourcing kills off good paying government jobs without necessarily leading to a concomitant increase in private sector jobs. This is because companies like CGI are multinational and often outsource their work to other countries.
Look, I’m not saying that the government can do everything; there are clearly areas where the private sector is more efficient. But as taxpayers it is our right and duty to demand that our money is spent in a way that best serves the public interest. Unfortunately, the obsession with the private sector and the miracle of the free market–as well as the power of for-profit companies that lobby for sweetheart government contracts with little accountability–has created a situation in which we get less value for our tax dollar. As the article in The Guardian argues, “Why couldn’t we, the taxpayers, have just directly hired the finest minds in tech to build Healthcare.gov?”