Y2pocalypse May Hit Health Care

Insight on the News, Feb 1, 1999 by Kelly Patricia O'Meara

Despite fresh Clinton administration proclamations to the contrary, experts are concerned that the government may still be susceptible to the millennium bug's nasty byte.

Standing before a larger-than-life Social Security card, President Clinton in late December reassured the nation's senior citizens with great fanfare that "the millennium bug will not delay the payment of Social Security checks by a single day." The announcement was welcome news to Americans dependent upon the monthly benefit, but some government experts are concerned that the announcement may send a false signal that the byte from the year 2000 bug -- the dread Y2K problem -- is easily treated. They say it isn't.

The Y2K computer glitch is the result of early programmers trying to save memory space. Until recently computers were programmed to read only the last two digits of a date -- 99 for 1999. As a result, if billions of lines of computer code are not corrected, most of the world's computers will recognize "00" as the year 1900, not 2000, causing massive computer crashing, network failures and maybe even a worldwide "technological earthquake" that will shut down not only communications but utilities.

In late November, Rep. Steven Horn, the California Republican who is chairman of the House Government Reform subcommittee on Government Management, Information and Technology, gave out his quarterly Y2K Report Card on federal agencies. Overall, the federal government earned a "D" for its efforts to address the Y2K problem. Failing grades went to the departments of Justice, Energy, Health and Human Services, Transportation and State.

Efforts to correct the millennium bug in federal computer systems are made doubly difficult because so many of these systems rely on information passed to them from state and local agencies. According to GAO/AIMD-99-28, a recently released report by the General Accounting Office, or GAO, 421 automated systems are used by state and local governments to administer the federal welfare programs alone. These must interact with federal systems if there is to be no interruption of services. "If one of these systems is corrupt -- not Y2K-compliant -- the compliant system will not function," says Edward Yardeni, chief economist and managing director of Deutsche Morgan Grenfell Inc. in New York and longtime critic of the lethargic response to the Y2K problem.

The Health Care Financing Administration, or HCFA, part of the Department of Health and Human Services, or HHS, is the nation's largest health-care insurer, processing nearly $290 billion in benefits annually. It is an agency highly dependent on information from contractors such as Blue Cross/Blue Shield and private medical providers.

Joel Willemssen, the director of Civil Agencies Information Systems at the GAO, testified last May before the House Ways and Means Committee that HCFA "had not identified critical areas of responsibility for year 2000 activities, had not required systems contractors to submit year 2000 plans for approval and did not have contracts or other specific legal agreements with any contractors stating how or when the year 2000 problem would be corrected."

Horn's November report confirmed that HCFA, which makes up a large portion of the systems at HHS, had done little to correct its dismal showing. With the agency again receiving a failing grade from Horn's subcommittee, serious doubt was raised about whether medical providers would receive reimbursements from the federal government in 2000. According to Horn, "Of the 100 mission-critical systems at HCFA, only seven were compliant as of the October filing."

By December, HCFA had made a seemingly remarkable recovery, reporting that 25 of its most critical internal systems had been renovated, tested and validated by outside experts. The reason for the speedy recovery? "The information the committee had was outdated. We were much farther along than we had anticipated," says Gary Christoph, chief information officer for HCFA. Christoph assures Insight that "all 25 internal systems now are Y2K compliant and we expect that the other 75 external systems will be online by mid-January. The spokesman cautioned, however, "It's not a perfect system now, and we fully expect that there will be isolated failures around the country -- something like what you experience during a crippling snowstorm."

Horn, although surprised by HCFA's move to the front of the class, is pleased by its improved status and is optimistic that it's on track for 2000. But his optimism is tempered by caution. "Another report card is due in February, and we'll get a better sense of where they are then. The role of the committee is to make sure agencies are telling the truth about their status" he says.

Taking these agencies at their word is of concern to more than just the House subcommittee that oversees their Y2K status. "My approach to good news is to not dismiss it" says banker Yardeni. "It gives me hope that others will follow their lead, but the problem I have with reports of agencies of the federal government being compliant is that there is no independent verification -- no hard data made available. We're just supposed to trust the reports are accurate."