Oracle Corporation (ORCL), Red Hat Inc (RHT): Will This Obamacare Move Be Its Smartest or Dumbest to Date
Being that it was already a highly politicized and majority-opposed law based on various polls conducted by Gallup over the past three years, Obamacare’s health exchanges have had nothing short of a disastrous start since they went live October 1, and it’s only fueled the opposition’s calls for repeal.
Technical glitches have been the name of the game for both the federally run Healthcare.gov and select state-run health exchanges such as Oregon and Vermont, which have spent far more time under construction than in actually processing applications. Through the end of November, just shy of 365,000 people had fully signed up for health insurance on state and federally run health exchanges, placing enrollment well short of the Department of Health and Human Services 7 million person target.
Things are improving
However, definitive improvements have been noted in recent weeks that demonstrate how far the Obamacare website has come in recent weeks. For example, more than 1.9 million people have now completed the arduous application and identification process but have yet to select a plan. While I don’t want to count my chickens before they’re hatched, it seems unlikely that 1.9 million people would waste their time going through this process if they had no intention of signing up for health insurance. I see this as nothing more than people waiting till the end of the coverage cutoff period before completing their enrollment.
In addition, Healthcare.gov is finally functional for the vast majority of people in the 36 states that it covers for the first time since its launch. Healthcare.gov spokesperson Jeffrey Zients had placed an end of November deadline on the fixes in late October, and the so-called “tech surge” that pulled on the likes of Oracle Corporation (NYSE:ORCL) and Red Hat Inc (NYSE:RHT) for their middleware expertise, and Google Inc (NASDAQ:GOOG) for its mastery of source code, worked perfectly!
But are these good times about to end right as everything starts to fall into place?
Will this be Obamacare’s smartest or dumbest move?
Earlier this week, we received word from the government that Zients will be stepping down from his position as overseer of the Obamacare website and taking a position as director of the National Economic Council next year. Replacing Zients, according to the White House, will be former Microsoft Corporation (NASDAQ:MSFT) executive Kurt DelBene, who oversaw the development of Microsoft’s Office division for two decades and is expected to lead Healthcare.gov for at least the first six months of 2014.
Given that Healthcare.gov’s been improving so rapidly since Zients took over, it’s a bit disconcerting that the leadership at the top is suddenly changing, but with Zients taking the NEC position, it’s a move that needed to be made. The question now becomes whether the appointment of DelBene is the smartest or dumbest move we’ve witnessed so far by the administration.
On one hand, DelBene oversaw Microsoft Corporation (NASDAQ:MSFT)’s successful Office software division (perhaps the lone bright spot recently for Microsoft) and development for two decades. Some of this can be attributed to the growing acceptance of PCs and laptops worldwide and the sliding scale that has seen gaining access to a computer grow significantly easier and cheaper. However, Microsoft and DelBene deserve credit for maintaining their dominance in PC operating systems throughout the past two decades against Apple Inc. (NASDAQ:AAPL)‘s various operating systems and a handful of Linux-based competitors, as well as their dominance in the enterprise setting. At its peak, Apple’s OS could be found in more than 80% of desktop and laptop computers in the U.S.
On the other hand, hiring a Microsoft Corporation (NASDAQ:MSFT) executive is bound to draw new rounds of criticism as Microsoft’s organic growth has languished far behind its peers for the past decade and the Windows OS has been losing market share, albeit slowly, to rivals over the past couple of years. In addition, consumer sentiment toward Windows 8 remains poor. Consumers are inherently opposed to change (at least when it comes to their operating system) and a large poll conducted by research firm Avast last year found that 70% of U.S. PC users polled (more than 135,000) had no plans to upgrade their operating system.
While the Obamacare website isn’t exactly in need of “innovation” anymore per se, bringing someone in that was associated with Microsoft Corporation (NASDAQ:MSFT)’s slow-and-go development process may not go over well with prospective enrollees or Obamacare critics.
Here’s what really matters
As much as I’d lean toward calling this hiring move questionable given Microsoft’s shaky growth in its software division, DelBene is unlikely to have a large material impact on the performance or progression of the website.
With Healthcare.gov essentially fixed, DelBene’s role is likely to be muted compared to the ultimate goal of bringing healthy young adults into the fold. In other words, instead of mining DelBene’s software management expertise, it appears that DelBene’s primary role will be as a promotional leader targeting America’s youth to help offset the higher expected costs of bringing sicker patients and government-sponsored patients into the health-care network. Whether this is will prove successful is what remains to be seen.
What’s your take? Is the DelBene hire a smart move for Obamacare or just another stick for critics to jab the opposition with?
The article Will This Obamacare Move Be Its Smartest or Dumbest to Date 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 Apple and Google. It also owns shares of Microsoft and Oracle.
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Tags: Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NYSE:ORCL), Red Hat Inc. (NYSE