County social services officials and consumer advocates say Gov. Arnold Schwarzenegger’s eleventh-hour plan to privatize the health and human services eligibility process could be disastrous.
County Welfare Directors Association of California Executive Director Frank Mecca told reporters on a conference call this morning that his group’s members are “really disappointed in the governor and have very serious concerns about his proposal … which we believe will cost the taxpayers a fortune and more importantly is going to harm the most vulnerable, needy people in our state.”
Mecca said the plan seems to have “absolutely no accountability or oversight,” giving the governor’s administration a free pass on competitive bidding, conflict-of-interest and other controls. And while the governor says the plan could save California hundreds of millions of dollars over time, “the governor has never provided an analyis to anyone including the legislature showing a cost-benefit for his proposal,” he said.
The governor’s likening of programs such as MediCal to the already-privatized Health Families Program is “completely flawed, beyond simplistic – to call it apples to oranges is proably to paint it in more favorable light than it deserves,” Mecca said, as MediCal is immensely more complicated.
Celia Hagert, senior policy analyst at the Center for Public Policy Priorities in Austin, Tex., said from what she’s seen of Schwarzenegger’s plan, there are “striking similarities between it and what was attempted in Texas… which would make me very nervous if I were a California policy maker.”
Texas in 2007 dissolved an $899 million contract with Accenture Ltd. that called for the company to run an integrated eligibility determination system for the state’s health and welfare programs. That system’s January 2006 rollout in two Texas counties had been “an immediate disaster” with thousands of children kicked off their health care, a huge food-stamp application backlogged and long wait times and many abandoned calls for those seeking aid, Hagert said. Texas is still recovering from the debacle, she said: “It’s a high price to pay, and very difficult to make up for mistakes once they’re made.”
A similar story is still unfolding in Indiana, where the initial rollout “has been riddled with so many problems that the state hasn’t been able to justify rolling it out in other areas,” said Stacy Dean of the Center on Budget and Policy Priorities in Washington, D.C. Yet Schwarzenegger seems eager to relive the Texas and Indiana experiences, she said: “Unfortunately, I fear that it’s ‘Groundhog Day’ in California.”
Elizabeth Landsberg, a legislative advocate for the Western Center on Poverty & Law, said it’s “terrifying” to think that could happen here. “We’re not scared of modernization and we’re not scared of automation, but we need to do it right” rather than in last-minute, closed-door Big Five budget negotiations, she said, especially when 7 million Californians’ due process and privacy rights, not to mention their health and food, are at stake.
San Luis Obispo County Social Services Department Director Lee Collins said his county has one of the state’s highest work participation rates for people in the CalWorks welfare program because his staff starts helping people find work as soon as they begin the application process – something that will be lost if that process is privatized and automated. “These online eligibility programs really kind of hook them into public assistance and keep them there and don’t allow us to work with them as easily to achieve self-sufficiency,” Collins said, citing a case in which a $400 car repair helped keep one family from entering the CalWorks system for a lengthy stay.
“California has a bad enough track record in automation … We don’t need another Oracle,” he said, referring to the state’s 2002 cancellation of a $95 million contact with software maker Oracle after a state audit found it would cost the state an extra $41 million over time rather than save it $100 million as some had claimed.
Replied Schwarzenegger press secretary Aaron McLear: “This is another example of defenders of the status quo fighting against reform and against Sacramento living within its means. It is clear these individuals have no understanding of our proposal or the reforms that are necessary to end the fraud and abuse in these programs.”