Obama speaks about market technology

October 21, 2013

The U.S. government’s website Healthcare.gov was launched on October 1 in the middle of the government shutdown.  The site is meant to be a portal to the market for health insurance in fulfillment of the Affordable Health Care Act. It was supposed to allow U.S. consumers to brows and purchase insurance plans offered in their area.

The story here is fascinating. A market technology must be constructed for a mass consumer market, brought into being by federal law, for the provisioning of a required insurance product, that covers a complex and necessary service.  The design of the insurance exchange platform will reflect relationships between insurance companies, government mandates and federal agencies, numerous sources of technical tools, as well as user demands. It will contain within it complex actuarial, pricing and profitability calculations and it will also be able a place where consumer choice is formatted and transactions happen.

So far, there’s been nothing but technical trouble. Journalists have had a field day reporting on their own inability to sign up for a plan.

Obama addressed the issue of technical failure in a press conference today. His point was to change the conversation which has so far revolved around the difficulties of implementing new internet-based mass market technology. ‘Let me remind me you the Affordable Care Act is not just a website,’ he said. He then pointed out that 85% of Americans who are already insured through their full time employer do not need to go to the exchange to purchase a plan.

Despite Obama’s pleas to stay focused on the bigger impact of US health insurance reform, the stakes of this market technology as it struggles to get off the ground are high. And unlike technologies where scholars dig deep to rediscover a history of controversy, the divisive partisan contest between Republican and Democrats will expose all the guff as the insurance exchanges develop. Every visible operating hiccough will be noted and discussed. This is a market building process that is in many ways unusually visible.

But surely there are also angles to discover that will remain unnoticed precisely because there’s so much media racket. That’s why I think these health insurance exchanges are perhaps the hottest research project social studies of finance can tackle. The challenge is not to generate a story for this technology, because there’s plenty of story already here. The problem is to use the tools of SSF to generate another story about this market that’s political salient yet original.

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