What is the overall situation of state-run Exchanges, compared to the federally facilitated Marketplace? Lets talk capabilities and capacity.

Demand and Consolidation

The Federally Facilitated Marketplace has outpaced the state-based exchanges, by stabilizing their technical operations and carrier interfaces leveraging stable Federal funding. It takes money for states to stabilize and as of Jan 1, 2015 state-based exchanges must be fully sustainable. Previously issued federal funding for Planning, Level I, Level II, and Early Innovator grants has come to an end. States could have requested “No-Cost Extensions” to extend an exchange project beyond the first year of operations (Dec 31, 2014) but this doesn’t include costs for on-going maintenance and operations. The affect is state-based and partnership exchanges are consolidating to meet funding restrictions, but not resetting consumer expectations.  This expectations realignment needs to take into account the new depressed funding levels, especially as reduced funding impacts call center response times or the resolution for escalated issues like outstanding QHP and Medicaid verifications which are excessively backlogged in many states. The root causes are typically technology problems with operational symptoms that take skilled resources and the associated funding to remedy.


Journey to Customer Bliss

There are five major functions for an exchange to be successful that include: customer service, a seamless shopping experience (eligibility and enrollment), carrier integrations, plan management and financial management. As federal funding for states ended, states must get creative on how they support these essential functions. We have already seen shutdowns as in the case of Hawaii or heavy layoffs as experienced with the Oregon and Illinois exchanges.  Effective and efficient exchange capabilities are important to enable consumers to enroll and establish healthcare coverage.  When these capabilities are effectively orchestrated, it’s like listening to Pachelbel’s Canon in D, providing a seamless customer experience.  When they are not effectively orchestrated, it’s akin to trying to get the attention of the neighbor’s kid, asking for the stereo to be turned down. You call which feels good, but the effort actually produces no results. Consumers need new expectations.


The Good Stuff

The good news is the customer experience on the Federally Facilitated Marketplace has dramatically changed for the better. The single solution for future sustainability is unclear, but what is clear is the need for an evolution towards shared state services, increased adoption of cloud capacity for scalability and cost containment, and creative leadership approaches for managing the increasing administrative requirements.




NY Times. (2015). The Health Care Supreme Court Case: Who Would Be Affected? (Online Image). Retrieved July 30, 2015, from http://www.nytimes.com/interactive/2015/03/03/us/potential-impact-of-the-supreme-courts-decision-on-health-care-subsidies.html

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Peter is a technology executive with over 20 years of experience, dedicated to driving innovation, digital transformation, leadership, and data in business. He helps organizations connect strategy to execution to maximize company performance. He has been recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice, driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to CIO.com on innovation. Peter has led businesses through complex changes, including the adoption of data-first approaches for portfolio management, lean six sigma for operational excellence, departmental transformations, process improvements, maximizing team performance, designing new IT operating models, digitizing platforms, leading large-scale mission-critical technology deployments, product management, agile methodologies, and building high-performance teams. As Chief Information Officer, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail-oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.