Vaccine distribution and the Obamacare web site

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Tyler Cowen writes about the fiasco that is vaccine distribution,

Virginia runs prisons, schools, maintains roads, has a Medicaid program, and various state-level functions, such as hiring staff for the governor, some of those in conjunction with other levels of government. Maybe those services are not productivity marvels, but they work OK — I’ve lived here for a long time. So why the differences?

It is important to distinguish baseline functions from project management. Baseline functions work reasonably well. Even the DMV has gotten better. But projects, like the Obamacare web site and the fight against the virus, don’t work the same way. In business, a project needs a strong project manager and a project executive who is powerful and involved. The project manager figures out how to solve every problem in getting the project done, and the project executive knocks over everyone who the project manager says is standing in the way.

The project executive should be the governor (it should be the President, but the only project on his mind is overturning the election result, at which he is flailing). The project manager in this case should be somebody with experience in solving a logistical crisis.

I would bet that Ralph Northam, Barack Obama, and many other elected officials have never learned the first thing about project management. They just expected people whose main concern is their baseline function to somehow “handle” vaccine distribution or developing a web site. When it comes to serving as executives, elected officials are mostly bush league. That is why vaccine distribution should have been left to the private sector, as horrifying that is to many people.

23 thoughts on “Vaccine distribution and the Obamacare web site”

  1. I agree that the private sector would end up vaccinating more people, more quickly, at a lower cost than the typical politician and public health department.

    People who disagree will point to successes like Israel, where it looks to me like they got lucky and just happen to have a highly effective, MIT-Sloan-School-trained chief executive who is also highly motivated (Netanyahu is facing re-election).

    Supporting your point you need both an executive and a project manager: Netanyahu fired his first coronavirus’czar’ Ronni Gamzu in November: https://www.google.com/amp/s/www.timesofisrael.com/ending-his-tenure-virus-czar-says-politicians-hamstrung-his-efforts/amp/

    … but it looks to me that was a brilliant move— get rid of the medical bureaucrat and put the military in charge.

  2. “That is why vaccine distribution should have been left to the private sector, as horrifying that is to many people.”

    Letting the market handle it would be horrifying to some because the rich would get vaccinated first. But, in America, the rich have always served as guinea pigs for new products. On the other hand, imagine the outcry if the poor were vaccinated first: “Using the poor as lab rats!”

    • There were tens of millions of doses available when vaccination started.

      The number of millionaire households is only 11 million. And it’s not like all of those are so interested in the vaccine that they would spend their entire net worth on it.

      Let’s be honest, if it was available for auction those who most stand to benefit (generally the old and sick) would find the money without going bankrupt to win an auction for the vaccine, and those with few assets could probably raise the money through charity if their need were great enough.

  3. In Army officer leadership training, it is customary to put the individual nominally in charge (i.e., platoon leader for the week) last in line for chow, or other processing, or, as a funny coincidences and as I directly experienced once, getting vaccine shots.

    It’s not just a norm, it has an important function, and not just related to being able to monitor from the back to ensure 100% compliance. It harnesses individual incentives. The platoon leader must manage time to the second, and in order to satisfy his own needs, will need to backwards plan to make sure everybody else is where they need to be as the right time and gets through as quickly as possible, or else he himself will starve.

    No one else has to tell a competent leader any other details. The “you are last in line” rule, all by itself, guarantees he puts his heart into making things happen as quickly as possible for everyone else.

    There was a lot of debate about who should go first. Really, that doesn’t matter. What matters is he answer to the question, “Who goes last?” It needs to me the same people with the power to make decisions affecting the pace of completing the distribution prices, and hopefully the most vulnerable of those at the very end.

    Otherwise, you have terrible leadership and terrible results.

    • Congress and nearly all of my local government officials seem to have gotten the vaccine first.

  4. Perhaps not surprisingly the two best performing governors on vaccination both have substantive business experience. Kristi Noem of South Dakota dropped out of college when her father was killed in a farming accident and helped manage the family business. Jim Justice of West Virginia built an empire of 94 businesses. On the other hand also unsurprisingly whiny camera hogs like Larry Hogan have been complete duds. Most of the other governors and their families have already been vaccinated (notable exception Ron DeSantis of Florida) so they are treating vaccinatios as leverage to extort more federal money for their states.

    Trump’s big mistake was to have delegated significant management responsibilities in Operation Warp Speed to generals. General Gustave F. Perna, who served as commanding general of Army Materiel Command, was named Operation Warp Speed chief operating officer. Retired Lieutenant General Paul A. Ostrowski, who previously served as Director of the Army Acquisition Corps, is the Director of Supply, Production, and Distribution. So that is really all you need to know about why so few have been vaccinated. The next war should be fought by the private sector too: it is impossible for the Department of Defense to perform anything competently.

    • “The next war should be fought by the private sector too: it is impossible for the Department of Defense to perform anything competently.”

      Clearly you have never actually worked there, as I did for fifteen years. Among Federal agencies, the services–not DoD itself, which is a useless head-shed–do a pretty good job of program management (as we called it in my day). And a lot of that is due to the high quality of the military leadership that actually are the program managers.

      Most of what you see as incompetence is the product either of congressional micromanagement of the process, or risk-aversion by the top brass, or the inevitable ossification that all large bureaucratic organizations eventually succumb to. To say nothing of the featherbedding that inevitable corrupts the system due to a public-choice predictable concerted effort by corporations and congressmen to limit competition.

      One of the real insights I gained from my time working for the Navy as a contracting officer on both sole-source and competitive programs is that competition makes all the difference. A sole-source environment–be it government or private-sector–is inevitably going to be less efficient, less responsive, and more rent-protective than a competitive one. As Norman Augustine famously observed, “A hungry dog hunts best. A hungrier dog hunts even better.”

      When I was contracting officer for the Phoenix missile program, I met the newly-appointed senior manager at Hughes Missile Systems Division, Barry Abrahams, during a meet-and-greet. He actually thanked me for forcing Hughes to compete by setting up an alternate source–Raytheon–as he said it forced Hughes to sharpen its pencil, and as a result, their margins were better than they had been in the sole-source environment that Hughes had fought tooth-and-nail to preserve.

      Higher quality. Lower prices. Better returns for the company. What’s not to like?

      Competition works. It just works.

  5. What is happening virtually everywhere is that the State governments are contracting various private healthcare delivery networks in their state to do this work. Everything that is going wrong is either in the coordination between Federal authorities and vaccine providers, the logistics of distribution to the providers, or the shortcomings of the providers themselves. Governors aren’t typically standing up government run operations themselves.

    So it seems you are getting the best the private sector can do.

    • According to Declan Garvey, writing in “The Dispatch” (see link below), the slow rollout is due to:
      1. A 72-96 hour lag in reporting (per General Gustave Perna, chief operating officer of Operation Warp Speed). Federal data collection coordination has reportedly been poor throughout the pandemic.
      2. The holidays have slowed the rollout considerably.
      3. The snowstorm in the Northeast had a negative impact.
      4. The CDC’s recommendation that people receiving the vaccine stay in the facility for 15-30 minutes is causing logistics headaches.
      https://thedispatch.com/p/vaccine-delays-fda-cdc-operation-warp-speed

      I think that a big bottleneck is identifying the people who we’ve decided should receive the vaccine first. The elderly and those with comorbidities have been receiving e-mailed “invitations” to take the vaccine from hospitals at which they’ve been treated. Some have received multiple invitations from different hospitals and clinics.

      Is it possible that we’d be better off if we didn’t try to “triage” the rollout?

      • Some things that jump out at me reading your list:

        1. Why didn’t the federal government build out real time collection and reporting mechanisms? It’s actually more coding to create batch data collection systems.

        2. Who did the math on the projections? Holidays and recommended patient workflow were known inputs. We’ve had some weather but it is end of December and hardly worse than average. Did they assume it wasn’t winter?

        3. First phase in most states are not the independent elderly. They are healthcare workers, first responders, nursing/long term care and staff, etc… They are the easiest to coordinate and follow up on of anyone.

        • The answer to your questions 1 and 2 depends on the incentives the federal bureaucrats responsible for doing those tasks have. Since I know nothing about what those bureaucrats have been performing, I presume that the incentives are perverse. I’d appreciate references to serious studies of their incentives.

          About point 3, I read this

          https://www.latimes.com/california/story/2020-12-31/healthcare-workers-refuse-covid-19-vaccine-access

          Also, it’d be interesting to ask each healthcare worker: how many vaccines do you think your coworkers have stolen to sell in the black market? Sorry, but in the past 70 years, I’ve seen black markets for many goods and services.

          • The Kaiser Family Foundations may have found a key force: Republicans and Black Americans more likely to be hesitant about getting the vaccine: See
            https://www.kff.org

            But would you trust the KFF survey data? Isn’t it too close to Cal Dems?

      • The elderly and those with comorbidities have been receiving e-mailed “invitations”

        —-
        My Dad fits this bill and we can’t get him a vaccine no matter how hard we try. It’s possible he won’t get a chance for months.

        —-
        Is it possible that we’d be better off if we didn’t try to “triage” the rollout?

        —–

        If we let people pay there would be no issue. Price signals solve queuing problems. It’s likely the old would pay the most based on simple incentives, and I think most senior citizens without personal funds wouldn’t have that hard a time raising funds from charity, so having people pay would look a lot like just letting the old go first. We have tens of millions of doses with more on the way, it’s not going to get bid up that high.

        —-

        When I worked on the Obamacare website the coders involved seemed competent enough and the company involved had a track record of success before and after (their stock is up 400% since they botched the website).

        The big problem people had was that the government couldn’t give them a clear idea of what it was they were suppose to be building, so in the end they didn’t built anything coherent. Only after it was a public disaster was there enough political capital to make the people who needed to finalize these things in a logically consistent manner do so.

        Of course people openly mocked the project while at work, and I myself was interviewing to leave two months after starting because I was able to learn the score rather quickly. But the people at the top didn’t learn the score because they didn’t want to know the score. An hour in the trenches would have been enough. It’s like the Elizabeth Holmes documentary where the guy describes existing in two different worlds on two different floors of the same building.

        It’s also like how when a military contractor turns out a bad weapon system they often get paid over and over again in peacetime and its only when it fails on the battlefield that it gets fixed. Come to think of it, that company was a military contractor.

    • Not sure about other governors, but Cuomo is imposing up to a $1 million fine and revocation of all licenses on any medical provider that vaccinates someone who isn’t sufficiently eligible, and requiring eligibility certificates for all vaccination. Basically, he’s saying, ‘we’d rather let vaccines spoil while waiting for weeks for eligible people who don’t even want them to sit at home and ignore the invitation than vaccinate anyone at the next level of triage.’

      So yeah, it’s a government problem. If I were government official trying to do my best to throttle the vaccine rollout and kill as many people as possible in general while retaining the slightest appearance of someone who at least thinks he’s trying to do his job, Cuomo is exactly what I’d come up with.

  6. Arnold, I hope you read again TC’s post and your post. You have chosen the wrong mentor. Both posts are naive. TC because he refers to very old agencies with the only purpose of throwing peanuts at his readers. You because you want (a) to be fair with both political parties by referring to Obamacare (a totally different project than the urgent vaccination of millions of Americans), and (b) to handle all the distribution through private enterprises selected by the same government bureaucrats (like Fauci) that have failed all Americans (please don’t tell me what Trump should have done last April or July or October because you are naive about what has been going on in your country’s politics for the past 5 years as I explained in a comment to your post on the politics of 2020).

  7. Serious question: Is Israel distributing more vaccines because it is used to militaristic chain of command national decisions?

    • Yes. What’s your next question? I suggest you find a better blog to argue seriously about what is going on.

  8. God save us from the private sector. Does anyone really think that an organization based on a religious oath to maximize shareholder value is going to vaccinate more than the bare minimum necessary to turn a good profit? Just about everything to private sector touches turns into s**t. Look at our broadband roll out. Look at our airlines. Look at those god awful parasitic charter schools. Look at our health care system. The only health insurance program anyone doesn’t loathe is Medicare.

    Of course, one can’t expect politicians to run this kind of program. Their job is to choose someone who can actually do the job and then manage them. That means running the interference, dealing with political hits, raising funds, placating recalcitrant public interest groups and managing legislatures. A good example is Robert Moses, whose name is reviled by every New Yorker, but who built an amazing array of bridges, highways and other facilities in the city.

    In theory, the president could have appointed someone and backed him or her. A presidential declaration or invocation here and there combined with a threat or two would have eliminated a lot of obstacles. There is already a lot of legislation in place for dealing with epidemics, and the states are already cued to follow the federal lead. We’ve all seen what we got instead.

  9. Under what authority do you believe the president would be the powerful executive to knock obstacles in the states out of the way? And after Cuomo declared that he would do his own efficacy/safety trial and not trust the federal government?

    Would things be better if they had trained up a bunch of Army sergeants in a week of training to give the vaccines and roll into towns in convoy of trucks? And even then have no authority to move local health officials out of the way or order state licenses hospitals, doctors, etc. to do anything in that state.

    Perhaps it would be nice if we had had 50 independent health authorities plus the 100s of county health officials each exercising independent judgement, but we don’t. We found to have a bunch of healthcare admin grads who have no organizing talent and wait for direction from the CDC, but themselves, “just expected people whose main concern is their baseline function to somehow “handle” vaccine distribution”.

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