know the ugly truth of our system. They know it, and it's not any big secret."

She cited the state's desire to charge a co-pay to its members for services as an example. It took 18 months to create a co-pay option in the existing system for only two health services, and the state was forced to scale back from its original plan of extending the co-pay to all its health services.

Medicaid expenditures account for a large chunk of Massachusetts' budget -- approximately $6 billion of the state's $24 billion total budget -- and the state, like many others, would dearly like to whittle that chunk down. The current claims-processing system is costing Massachusetts plenty of money and presenting plenty of obstacles to front-line staff, said Day.

"We've found that because our system is so outdated, the tail is wagging the dog," Day said. "So when you're trying to do some creative new program initiatives that might yield some cost containment, we don't have the ability to tweak things. We tend to have to do very simplistic things because that's what our system can do. That's a problem for our members and taxpayers as well."

House of Cards

Another Massachusetts agency going down the replacement path is the Department of Labor and Workforce Development (formerly the Division of Employment and Training), which relies on a 30-year-old Unisys mainframe system to process unemployment insurance benefit payments.

Jeff Ritter, CIO of the Department of Labor and Workforce Development, said the system's age isn't necessarily the problem.

"It's maintenance of the business logic," he said. "The Defense Department uses this equipment. The IRS uses this equipment. NASDAQ uses this equipment. It's not the hardware or its OS, per se. It's the 25-year-old, give or take, business rules invented in COBOL code that are the issue."

When the benefit payment system was written, he said, people seeking benefits went to a local unemployment office to file a claim. As a result, the office from which the claim originated was a critical piece of information, and the database used to process the payments contained a field for the office number.

Staff then used that field to drive some business logic, Ritter said, such as processing wages, adjudicating a claim or scheduling a hearing. If the state wanted to reach the person filing the claim for any reason, a message was sent to the office, which was instructed to contact that person.

"All of the business logic associated with 40 offices made complete sense in 1984," he said. "Today, we have precisely zero offices where you can walk in and file a claim because it's done over the phone or the Internet. All of the business logic associated with those 40 offices and the way data gets structured in the database is, at best, moot.

"If it were just moot, that would be fine," he said. "But some of the processes run off of which office you send the paperwork to. We have four virtual call centers where adjudication is done, and we can't send all the paper to every call center. We continue to build a house of cards on top of that data structure -- that doesn't make sense in the current business environment."

Full Circle

Still, the nature of replacement projects -- long-term animals that cost a lot of money to feed and care for until they can walk on their own -- often keeps politically sensitive agency leaders from making the commitment.

"Nobody is going to get elected to office or be deemed more popular politically because they replaced the mainframe down at [the Department of Labor and Workforce Development]," Ritter said. "Any savings that accrue due to reduced staffing, more efficiency and better outcomes may accumulate to your successor in office, not you.

"The timing is such that it takes a real visionary willing to commit to a project that you know you're not going to be around to see the end of and benefit from," he added. "That is one of the most important reasons these projects are hard to get started."

Shane Peterson  |  Associate Editor