Developing Obamacare's Health Care Exchanges Has Cost More Than Apple's Original iPhone Comment Now Follow Comments

This is a stunning number from Farhad Manjoo over at the Wall Street Journal. The development cost of the health care exchanges necessary under the ACA (aka Obamacare) is larger than the development cost of the original iPhone at Apple. Indeed, by some estimates it might be four times the cost:

If users found a few bugs in their iPads, she argued, most wouldn’t consider them a complete disaster. Instead, they’d recognize that technology is complicated, that errors are common, and they’d wait for an update. Apple Inc., she added, has “a few more resources” than her department, so “hopefully [citizens will] give us the same slack they give Apple.”

That argument is as clueless as it is misleading. While it’s true that Apple is fantastically wealthy, its product-development costs aren’t necessarily greater than those of the federal government. As Fred Vogelstein reports in his coming book, Apple spent about $150 million developing the iPhone. The health-insurance exchange—which, let’s remember, is merely a website meant to connect citizens to insurance companies, something quite a bit less complex than Apple’s groundbreaking miniature computer—so far has cost at least $360 million, and possibly as much as $600 million.

That’s a pretty bad indictment of the way those health care exchanges have been built: the most egregious problems being with the Federal one that covers the 36 states that did not decide to build their own. After all, the iPhone was not just a new product category, it was also a new operating system and a new paradigm for how to do computing. One would expect this to cost rather more than what is, at root, just a website calling on a few databases. But apparently not so it’s worth trying to work out what went wrong here. Manjoo gives us one reason here:

Today, any company looking to work with the government must navigate an obstacle course of niggling, outdated regulations and arbitrary-seeming requirements. For instance, your technology must be Y2K-compliant just to get in the door. The process locks out all but a tiny handful of full-time contractors—companies who also happen to be big federal lobbyists.

Via: Forbes
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