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Do MNsure’s problems reflect bigger government workforce problems?

A GAO study cited in a New York Times report found states often “had insufficient staff with the ability to maintain IT systems developed by vendors and knowledge of current programming languages needed to maintain modernized systems.”

If misery loves company, frustrated Minnesotans who have grappled with the troubled MNsure online health care exchange can take some solace.  We are not alone.  Oregon, Hawaii, Vermont and Maryland among others have all reported experiencing serious technical issues with their respective rollouts.

While all this health care stress has been occurring around the country, the New York Times recently reported on a completely separate but eerily similar problem plaguing many states: a spate of botched upgrades of state unemployment IT systems and website interfaces. From California to Florida to Massachusetts to Pennsylvania attempted upgrades and modernization efforts have also blown up in recent months, resulting in enormous cost overruns, massive citizen frustration, delays, and threats of lawsuits. Completely different area of government; provocatively similar stories.

What is going on in the world of government and information technology management? At first glance, these difficulties suggest serious problems in the administration of and/or work by IT vendors. However, the Times reported these problems are also symptomatic of something else: a shortage of information technology specialists in public service. A GAO study cited in the report found states often “had insufficient staff with the ability to maintain IT systems developed by vendors and knowledge of current programming languages needed to maintain modernized systems.” According to the Times, the result is “higher costs, botched systems and infuriating technical problems that fall hardest on the poor, the jobless and the neediest.” Such statements sound depressingly familiar.

Does this problem also exist to some extent in Minnesota? Is this a contributing factor to MNsure’s hiccups? And perhaps most importantly, can state government compete with the private sector to obtain critical but missing talent?

We don’t know the answers to the first two questions but we can shed some light on the third. According to the Department of Employee Relations website, there were 23 open information technology positions in all of state government as of January 14. Seven of those are directly associated with MNsure. Below are four of those open positions and the accompanying salary based on the current negotiated contract and desired years of experience.

ExperienceFY 2013 Salary Using MAPE Contract*
 Senior Java Design Analyst4 years$61,784
 Java Programmer4 years$55,645
 Advanced IT Project Manager4 years$61,784
 Business Solutions Architect3 years$53,975
* Salary at step 3 or 4, equal to relevant years of experience

To investigate whether the state can compete for this talent and fill these needs, we copied these position descriptions verbatim and sent them to some IT professionals and consultants to get an estimate of what private sector firms in the Twin Cities area might be expected to pay to obtain someone with such capabilities and experience.

Our respondents were quick to note they could only generate ballpark estimates. But the consensus was all four positions could easily fetch $100,000 and more in annual salary in the private sector based on the skill requirements and responsibilities described, the extreme tightness of the IT labor market, and the fact that these openings are in the healthcare area. The possible exception was the programmer position, but with four years of professional experience, it was believed that position too could demand a nearly six-figure salary.

The public/private sector gap appears substantial. To be sure, even in government there are ways to create a little flexibility such as starting in-demand talent at a higher experience level or “step.” But even the maximum salary on the state government’s pay scale for someone with over a decade of experience is lower, often substantially, than the market rates being suggested.

Fundamentally, this is a structural and systemic problem that more money and bigger budgets are unlikely to solve. Government workforce design, management, and compensation systems are riddled with issues that simply make it a lot more difficult for the state to compete for high-quality, specialized, in-demand talent – even if the money exists: To wit:

  • highly bureaucratic job evaluation and scoring system based on thinking and concepts from the 1940s and long criticized by many human resource experts as being inflexible, expensive to administer, slow to respond to changing conditions and the advent of new skills, hugely subjective despite the appearance of analytical rigor, blind to labor supply and demand realities, and biased toward managing people. (If you are morbidly curious, according to the latest scores the Java Programmer above is considered more valuable to state government than a pharmacist, less valuable than a central mail supervisor, and equal in value to – among others – a deputy state fire marshal, a registered landscape architect, and an arts education teacher.)
  • A compensation system whose competitiveness is driven by fringe benefits rather than salary. This includes significant back-ended compensation in the form of defined benefit pensions which bears witness to the underlying belief that the best way to attract and retain the best, brightest, college-loan-stuffed young talent for public service comes not through better salaries, but by giving them an economic incentive to stick around for decades for a payoff.
  • Other forms of regulatory intervention into government labor markets, most notably comparable worth laws that skew allocation of government compensation dollars. (Note – comparable worth law does NOT provide the absolutely essential and critical protections needed against gender bias in doing the same job, but ensures gender pay equity in “comparable work” – totally disparate jobs across the government employment spectrum but determined by the bureaucracy to be of “equal value or importance” to government based on the job evaluation processes described in the first bullet.)
  • Excessively prescriptive, classified, and constrained wage grids that significantly limit government’s adaptability and flexibility in allocating resources to maximize returns on its compensation spending.

Now the Office of the Legislative Auditor has been engaged to investigate MNsure’s vendor contracts and the state’s management of them, and their report is guaranteed to be one of the most read and reported on publications in that office’s history. We have no idea what they will eventually find and conclude. And even if the OLA does flag problems with respect to missing skill sets or competencies in state government, we expect it will lead to the usual calls for more money rather than a rethinking and reform of human resource management practices and systems. Ideally, in a state that embraces blue ribbon commissions to tackle complex, important issues of big state impact, we would benefit from having such an effort on civil service reform for the 21st century. There is no lack of ideas to study

In the meantime, we wait for the OLA report knowing that whatever the findings are, one truth abides.

You get what you pay for.

This post was written by Mark Haveman and originally published on Fiscal Fitness, the blog of the Minnesota Center for Fiscal Excellence.

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Comments (5)

  1. Submitted by ALAN BELISLE on 01/21/2014 - 09:56 am.

    government contractors

    I did a few contracts for governments; city, state, and federal. What I saw were managers with little knowledge of programming and computer systems supervising projects and programmers who used to maintain the obsolete systems hovering in the background while the contractors did the actual development. And most of those were on the long, slow coast toward retirement and their pension. At the Post Office I learned about the “Zero Squad”. Those were people whose job was obsolete (in some cases the actual hardware was gone) but they were too senior to be fired and refused to be retrained. The only job they had was to show up.
    If government IT is ever going to be effective and up-to-date, they are going to have to hire people, at market rate, and keep them with immediate benefits instead of deferred pensions. Those people have to develop and “own” the systems and tune them for best and fastest performance. Hire the best and brightest, fire the dead weight.
    In the long run, changing the way government IT runs would also save huge amounts of money. Instead of paying a low-performing employee a low salary for 20 years and then a pension and healthcare for 30 years AND having to hire contractors to do that person’s job for their last 5 years, they could hire a person at market rate with insurance and 401(k) who would be up on all of the latest and greatest in software tools and development.

  2. Submitted by jody rooney on 01/21/2014 - 10:15 am.

    You missed one:

    Career longevity of people in Government service. That is the good news and the bad news. In many areas people become better at their job with more experience but in rapidly changing fields like technology and programing people need to proactively seek training and experience to keep current. Unfortunately that is what get’s out of budgets when they are reduced.

    I once added up what the agency I worked for had spent in my training over my 22 year career. In tuition, travel, and salary it was well over $600,000. Part of that was supervisory and EEO training that was mandatory for all supervisors but that aside this that number is a lot of investment in human capital.

    Changing compensation is good but continuing education is perhaps a good compliment to it.

  3. Submitted by Mark Snyder on 01/21/2014 - 11:50 am.

    Compensation not the only problem

    There’s a definite need to re-examine how IT professionals (and other science/engineering/technical staff) are compensated. However, I cannot help but wonder how many of the problems with MNSure could have been avoided if implementation hadn’t been delayed for two years by a hostile Legislature. Wouldn’t that have provided a lot more time for the training and troubleshooting that reportedly did not take place?

  4. Submitted by Jim Young on 01/21/2014 - 01:35 pm.

    This isn’t limited to government projects

    I’ve worked in the IT world for a long time and I could have written the same article about various private sector projects I’ve seen and even a few I’ve been involved in. Every time I hear someone in charge of big new project talk about how they’ve got tight deadlines and they’re going to hire a slew of contractors to meet them, I just cringe. It’s a recipe for disaster. Private sector projects with huge issues when they first start up don’t get the same level of press coverage that the public sector projects do but they can be just as problematic to their users as the public sector ones.

    The one silver lining with these projects is that given enough time, talent and resources, they can often be salvaged. In 5 years, MNsure’s wobbly start may be ancient history, all but forgotten. On the other hand, if those who oppose the Affordable Care Act for whatever reason, are put in charge and actively work to undermine or terminate the act or the exchanges … things could turn out quite differently.

  5. Submitted by Paul Udstrand on 01/27/2014 - 09:26 am.

    Ditto on Jim Young

    The problems described here are endemic to the IT industry, not the government. I have a friend who consults with hospitals trying improve or implement electronic medical records and databases. This reports findings are almost verbatim what he’s been telling me about the hospitals he works for for years. Some are better than others, but it’s the same story.

    I think another problem that the IT field has never sorted out is the problem of credentials and proficiency. Frankly, I think the pay scale for many IT positions is too high given what they actually do and the role they have in the organization. The problem with talking about what kind of salary any given position might command in the private sector is that in reality there a wildly variable range of proficiency for people doing the same job, some are really really good, and some not so much. Now that in and of itself is no different than most other professions, but what’s different about the IT profession is the credentialing process. My buddy for instance makes well over a $100K a year, but has no IT credentials at all other than his actual work history. No degree, no certificate, other than a B.A. in something that had nothing to do IT. This is not that uncommon.

    So you say we have to hire good IT people. Well, who’s good? How do we know? At the state your pay scale is tied to education, typically you don’t get close to $100k unless you have a Doctorate degree or two of some kind. Matching IT proficiencies when IT professionals tend not to have degrees or credentials related to IT is very difficult in a system like that. The state has already set some of those requirements aside, some IT folks get paid on a higher scale than other sections, but how good are those IT people and what are they doing? And then you say well, they could make more in the private sector. Well, so could a lot of state workers.

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