WHY DO YOU THINK MARYLAND HOSPITALS ARE TIED WITH GUAM AND PUERTO RICO FOR NOT REPORTING DATA?
Remember, Maryland is ranked at the bottom nationally for fraud, corruption, and lack of transparency.....THAT'S WHY!
Don’t see your hospital? Here’s why: Unfortunately, our experts often do not have enough information on every hospital to issue a fair score. This is because certain hospitals are exempt from the requirement to publicly report on safety. Exempt hospitals include:
- Maryland hospitals
- Guam hospitals
- Puerto Rico hospitals
- Some specialty hospitals, such as children’s hospitals and surgical centers
- Critical access hospitals
It is important to see from the blog yesterday that public health departments are now being dismantled and handed to private contractors who will then grow their small business and then be absorbed by a national chain.....that is how you move public services to the private sector after all. Can you imagine all of public health care shielded behind the same cloak of public private partnerships that give us Baltimore Development Corporation just as health care is being made third world? You will see no valid statistics coming about how many people are dying from lack of access to care. THIS IS CRITICAL FOLKS AND IT IS BEING BROUGHT TO YOU BY VERY CORRUPT NEO-LIBERALS!
REBUILD THE PEOPLE'S DEMOCRATIC PARTY......RUN AND VOTE FOR LABOR AND JUSTICE CANDIDATES NEXT ELECTIONS!
The Schools of Social Work are teaching students how to be entrepreneurs!
The intent of privatization is to keep the poor and working class to home as they age rather than in nursing homes or retirement centers. Given the conditions of nursing homes around the country....in Maryland people who have loved ones in state care centers feel they need to visit every day or the level of care will disappear. Imagine what will happen to these elderly left alone in their homes as they age. I have shown the data detailing social workers over the last few decades have case loads in the hundreds, far over the stated limits and we know the management of the mentally ill case loads is almost non-existent. WHAT WILL HAPPEN WHEN THESE PEOPLE FALL INTO A SYSTEM OF PRIVATE HEALTH CARE WITH NO OVERSIGHT AND NO PUBLIC ASSESS AND ACCOUNTABILITY AT A TIME WHEN HEALTH CARE IS BECOMING A MARKET?
YOU BETCHA.....A DISASTER IN THE MAKING!
This is from the Board of Estimates hiring announcements:
Since 1994, the Health Department has also been authorized to manage the Montgomery County Personal Care Program and is reimbursed by the DHMH per case for every client in Montgomery County. The maximum number of assigned cases per individual case monitor at anytime is 75, unless a waiver is granted.
The Case Monitors will make home visits at least once every 90 days.....
In Maryland, most people are scared to go to the hospital because our health care has been moving towards privatization for a decade or two....THE MODEL FOR NATIONAL HEALTH CARE REFORM SAYS HOPKINS! You won't see many Maryland hospitals in these top rankings....it's about the profits in Maryland!
Below you hear a comment from a Hopkins spokesman on hospital safety....people who study this know that Hopkins had the highest rate of death from infection in major hospitals in the country just a few decades ago.....now it is ranked in the middle. What was made clear from these reports.....data is not available from Maryland to allow for a complete assessment.....DOES THAT SOUND FAMILIAR?
Raise your hand if you think all of this will get better as health reform makes markets out of public health....NO ONE!
But more needs to be done. “Hospitals haven’t given safety the attention it deserves,” says Peter Pronovost, M.D., senior vice president for patient safety and quality at Johns Hopkins Medicine in Baltimore. Nor has the government, he says. “Medical harm is probably one of the three leading causes of death in the U.S., but the government doesn’t adequately track it as it does deaths from automobiles, plane crashes, and cancer. It’s appalling.”
HOPKINS SUPPORTS THE POLICY OF 'COST BENEFIT ANALYSIS' THAT HAS CUT THE GOVERNMENT OUT OF ALL ACCOUNTABILITY OF BUSINESS.....IF IT IS APPALLING.....WHICH IT IS....THEN HOPKINS CREATES THE CONDITIONS!
Johns Hopkins Hospital had less than half the rate of infections of the national benchmark. But we couldn’t rate it for safety because Maryland hospitals don’t participate in the standard Medicare payment system that’s also used to collect data for some of the measures in our Ratings.
Don’t see your hospital? Here’s why: Unfortunately, our experts often do not have enough information on every hospital to issue a fair score. This is because certain hospitals are exempt from the requirement to publicly report on safety. Exempt hospitals include:
- Maryland hospitals
- Guam hospitals
- Puerto Rico hospitals
- Some specialty hospitals, such as children’s hospitals and surgical centers
- Critical access hospitals
Highest-scoring Teaching Hospitals Hospital Location Safety score
Mayo Clinic Hospital
Mayo Clinic Jacksonville
Gundersen Lutheran Medical Center
La Crosse, Wis.
Bronson Methodist Hospital
Saint Mary’s Hospital
Mayo Clinic-Saint Marys Hospital
Indiana University Health Ball Memorial Hospital
Avera McKennan Hospital and University Health Center
Sioux Falls, S.D.
Baystate Medical Center
University of Utah Health Care - Hospital and Clinics
Salt Lake City
Safety still lags in U.S. hospitals
Our updated Ratings show most hospitals need to improve Consumer Reports magazine: May 2013 Looking for good news about hospital safety? More hospitals are required to track and report more data, so our updated hospital safety Ratings now include 2,031 hospitals—up from 1,159 institutions in our August 2012 report.
But we still find cause for concern:
- The lowest-scoring hospital, Clinch Valley Medical Center in Richlands, Va., got only a 14 on our 100-point scale. Beth Stiltner, the hospital’s quality/risk manager, says that the score represents “only a small piece of the entire hospital’s performance” and that in 2012 the hospital reduced its infection rates. We’ll incorporate new data into future updates when they’re released by the government.
- The average score for all hospitals was 49. “When it comes to health care, average should never be good enough, and this average is clearly not even close,” says John Santa, M.D., director of the Consumer Reports Health Ratings Center.
- The highest-scoring hospital, Bellin Memorial Hospital in Green Bay, Wis., got just a 74. That shows that even top-scoring hospitals have room for improvement.
That trend is especially acute in and around New York City: 27 of the 28 teaching hospitals in the region scored below the national average. The exception: Winthrop University Hospital in Mineola, N.Y. Overall, 58 of the area’s 70 hospitals with a safety score ranked below average.
Our updated safety score focuses on five key measures: readmissions, complications, communication, the overuse of CT scans, and infections. The data, which come from federal and state governments, cover different time ranges, depending on the specific measure. See a full description of how we rate hospitals.
You see below that laws are passed in response to public outrage and then they are not enforced. It happens in Maryland in every avenue of public sector. You see as well that Montgomery County is tied to Baltimore.....the richest county in the country filled with wealth inequity tied to the poorest in the state. Maryland funds social services at a rate lowest in the country. HOW DOES IT GET TO BE A BLUE DEMOCRATIC STATE? IT ISN'T .....IT IS NEO-LIBERAL WORKING FOR WEALTH AND PROFIT.
This article was from 2000 but articles just written say the same thing. Look at the Urban Institute article below that to see the plan to privatize public services. URBAN INSTITUTE WAS THRIVING IN MARYLAND FOR THESE FEW DECADES AND IT IS WHY QUALITY OF LIFE IS THIRD WORLD! THIS IS A NEO-LIBERAL ORGANIZATION. YOU CAN SEE THIS TREND TO PRIVATIZE THE PUBLIC SECTOR TOOK HOLD WITH THE CLINTON ADMINISTRATION!
Why should the middle-class care about low-income people and their health? We are covered by good insurance and disposable income! OH REALLY! THIS IS THE SAME TIME CLINTON'S POLICIES OF FREE MARKET/GLOBALIZATION SENT THE MIDDLE-CLASS PACKING! Most people will end up in this category if we do not
REBUILD THE PEOPLE'S PARTY BY RUNNING LABOR AND JUSTICE IN ALL COMING ELECTIONS!
Social workers demand reduced caseloads
Laws ordering cuts not implemented, demonstrators say
March 03, 2000|By Kate Shatzkin | Kate Shatzkin,SUN STAFF
About 100 social workers and students rallied in Annapolis yesterday to urge Gov. Parris N. Glendening to fulfill the terms of a 2-year-old law that would reduce caseloads for caseworkers charged with protecting children.
The General Assembly passed the law after the high-profile death of Rita Fisher, a 9-year-old Pikesville girl who starved to death in 1997. Social workers had not removed the girl from her home despite receiving repeated reports of abuse.
The law ordered lower caseload ratios, required competency testing and banned the use of contractual employees in child welfare positions except in emergencies.
Chanting and marching outside the State House, the social workers said yesterday that the most important part of the law -- reducing caseloads -- hasn't come to pass.
"Workers are so overloaded that they aren't able to give each child the attention they need," said Claudia Harding, a student at the University of Maryland School of Social Work who said she has a hard time getting help for the children at the South Baltimore elementary school where she works. "It's very hard to reach them in the field."
Caseload reduction has started in three pilot locations -- two in rural Caroline and Allegany counties, in addition to Northwest Baltimore. In those places, the number of workers has been doubled.
Last year, legislators passed another law to require caseloads statewide to be brought down by 2003 -- a $50 million proposition. But Glendening has included only an extra $500,000 -- to reduce Montgomery County caseloads -- in his budget for 2001.
Legislators in the House and Senate have sponsored bills this session to try to ensure Glendening brings the caseloads down.
A Child Welfare League of America study commissioned by the state Department of Human Resources recommended in 1997 that the state reduce its average caseloads to 15 foster care cases per worker, and to 12 child protective cases per worker.
At a budget hearing yesterday, Linda Mouzon, director of the state's Social Services Administration, said the administration was on target to meet those goals by 2003, as last year's legislation required.
She said the department is waiting for many counties to undergo an accreditation process that will improve the level of service and more accurately pinpoint what the caseloads should be in each place.
"We don't think it's a snail's pace," Mouzon said, objecting to a fiscal analyst's description of the way the department was moving.
"I don't know," retorted Sen. Christopher Van Hollen Jr., a Montgomery County Democrat and sponsor of one of the bills to hire more workers. "It sounds pretty accurate to me."
In some counties, workers have twice the number of cases recommended by the Child Welfare League study -- numbers social workers protesting yesterday said were untenable. Because of the heavy loads, many workers leave their jobs, compounding the problem. The current statewide average: 17.2 child protective cases and 18.6 foster cases per worker.
Deaths from child abuse and neglect are up sharply in Maryland, according to state statistics. Thirty-six children died from mid-1998 to mid-1999, compared with 24 during the previous one-year period.
At the same time, the number of cases in which social workers found that abuse or neglect was "indicated" fell, leading advocates to suspect that high caseloads have led to incomplete investigations.
Human-resources officials downplay the numbers, saying the sharp increase in deaths reflects that they have gotten better at finding out when a death results from abuse or neglect.
Urban Institute is a neo-liberal organization committed to gentrifying city centers!
Privatization of Public Social Services A Background Paper
Demetra Smith Nightingale, Nancy M. Pindus
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| E-mailDocument date: October 15, 1997
Released online: October 15, 1997 This paper was prepared at the Urban Institute for U.S. Department of Labor, Office of the Assistant Secretary for Policy, under DOL Contract No. J-9-M-5-0048, #15. Opinions expressed are those of the authors and do not necessarily represent the positions of DOL, the Urban Institute or its sponsors.
The views expressed are those of the author and do not necessarily reflect those of the Urban Institute, its board, its sponsors, or other authors in the series
1. Introduction The purposes of the paper are to provide a general overview of the extent of privatization of public services in the areas of social services, welfare, and employment; rationales for privatizing service delivery, and evidence of effectiveness or problems. Examples are included to highlight specific types of privatization and actual operational experience. The paper is not intended to be a comprehensive treatment of the overall subject of privatization, but rather a brief review of issues and experiences specifically related to the delivery of employment and training, welfare, and social
services. The key points that are drawn from a review of the literature are:
- There is no single definition of privatization. Privatization covers a broad range of methods and models, including contracting out for services, voucher programs, and even the sale of public assets to the private sector. But for the purposes of this paper, privatization refers to the provision of publicly-funded services and activities by non-governmental entities.
- Privatization is not a new concept. The current rationales for privatization and their implementation strategies differ very little from earlier privatization initiatives (even as early as the 1930s). Perhaps the biggest single change in the current privatization environment in the area of social and human services is the possibility of private companies being contracted with to administer entire public-funded systems (e.g., all of welfare, all of child support, all of workforce development).
- The real issue is not so much public vs. private--it is monopoly vs. competition. A key issue in the current trend towards what is commonly referred to as "privatization" is the introduction of competition (e.g., public-public competition, public-private competition, competition between public-private ventures, public-nonprofit competition) to increase efficiency, reduce costs, and improve quality and customer satisfaction.
- Privatization is not inherently good or bad--the performance or effectiveness depends on implementation. The little empirical analysis comparing the effectiveness of public versus private service delivery shows no clear evidence that private service delivery is inherently more effective or less effective than public service delivery, although the public, private, and nonprofit sectors each have their own relative strengths and weaknesses. There are examples of success and failure in both sectors. Most of the research suggests that the key factor is whether there is clear accountability for results, clear criteria in contracts, and clear public objectives. The government is responsible for assuring that public services are effective, whether or not the services are publicly delivered.
- Privatization does reduce the number of public employees if services formerly performed in the public sector are shifted to the private sector. But it is not clear that workers are necessarily worse off in terms of employment, wages, morale, or job satisfaction. There are many examples of negotiated arrangements for transferring public employees to private employment or to other public agencies. There is undoubtedly, though, a clear reduction in public employee members of unions, although some number of privatized workers may join other unions.
- It is still too soon to know whether the most recent and highly-publicized privatization efforts will be effective or not. There are, however, many potential problem areas (e.g., profit motivation to cream and minimize costs) that, if unaddressed in the public contracts, could reduce service quality. There are many reasons for cautiously scrutinizing the process.
2. Current State of Privatization Similar to trends in the private sector, there is some indication that public agencies are increasingly considering downsizing and outsourcing as ways to address both financial constraints and a desire to improve performance. The Government Management Reform Act of 1994 (P.L. 103-356) states:
To be successful in the future, government must, like the private sector, adopt modern management methods, utilize meaningful program performance measures, increase workforce incentives and flexibility without sacrificing accountability, provide for humane downsizing opportunities and harness computers and other technology to strengthen service delivery. However, privatization is not a new phenomenon. Gurin (1989) notes that privatization of government social services has, in fact, increased at major watershed points in the history of social policy (the Progressive era in the late 19th century, New Deal, Great Society, and Reagan years), both at times of expansion and during contraction of government services. For example, during the 1970s, federal funding for social services increased greatly under Title XX of the Social Security Act, and for human development and employment services under the Economic Opportunity Act and the Comprehensive Employment and Training Act (CETA). Nonprofit organizations and for-profit businesses both emerged to fill the need for government contracted service providers. In contrast, during the early 1980s when federal funding for social programs was dramatically reduced, there was also some increase in contracting out services (in some locales) as one way to reduce unit costs and gain efficiencies despite reduced overall funding.
More recent interest in privatization of public social services is stimulated by both expansion and contraction of publicly funded programs. Federal funding for employment and training declined during the early 1990s, and this was one motivation for workforce development system redesign, which includes considering new ways to deliver services. At the same time, the 1996 welfare reform legislation increases the responsibility states have for redesigning their welfare systems and, at least in the short run, provides more federal funding for both income support and programs that promote employment. Privatization is one of the various welfare system redesigns that are being considered.
The recent dramatic emergence of large private corporations into the welfare field (discussed below) has raised many concerns about the appropriateness of this degree of privatization. The traditional approach to contracting in social services had been noncompetitive, quasi-grant arrangements, primarily with non-profit organizations (Hatry and Durman 1985). The increased emphasis on competition and performance contracting for the delivery of social services is consistent with private sector initiatives focusing on efficiency and customer service. Some organizations, such as the Reason Foundation, have been promoting the benefits of privatization for decades, and recently their efforts are gaining new momentum, providing technical advice and guidance to businesses and public officials on how to develop business ventures and effective public/private partnerships. In addition to welfare reform, several other recent federal initiatives also encourage more privatization, most notably in one-stop career centers and child support enforcement.
One-Stop Career Centers The federal One-Stop Career Center initiative encourages an expanded use of vouchers and competitive selection of administrative entities (e.g., for one-stop centers). Although national regulations do not specifically endorse privatization of services, they do encourage expanded competitiveness for the selection of center administrative and service delivery agents, allowing public and nonprofit organizations as well as private for-profit companies to compete openly for one-stop service contracts. The Massachusetts' One-Stop Career Center Initiative is a current example of the trend toward privatization in the one-stop and workforce development area. The state plan allows private firms to compete with public agencies for contracts to manage career centers, which serve as gateways to the states's new workforce development system. However, the initiative has run into opposition on several fronts due to competition for funds among rival employment and training agencies, high demand for services at the career centers, and concerns expressed by public employee unions (Boston Globe, 2/11/97).
Child Support Enforcement Federal child support enforcement legislation also supports an expanded role for non-profit and private contractors. The 1986 child support legislation specifically encourages states to consider contracts with private companies for technical activities such as locating absent parents and maintaining tracking and payment systems. The Reason Foundation reports that, in 1995, there were twenty states and dozens of local governments that had privatized one or more child support services, and that five more states were planning to do so in 1996. These states contract out for activities such as location, collection, payment processing, distribution of payments, and fully privatized offices. Georgia and Virginia give full caseload responsibility to private providers. The success of the private sector in increasing collections of child support payments is attributed to several factors: first private firms can bring technology and equipment to the tasks that governments typically cannot afford; second, private firms can expand or contract operations quickly as they are not bound by government personnel systems; and private firms use performance incentives, such as bonus pay, to increase collections per employee. (Reason Foundation pp 45-46)
A 1996 General Accounting Office Report (GAO, October 1996) found that in the fifteen states with some privatization of child support, there was a tendency to especially contract out collections of child support payment from hard to locate absent parents and parents with past-due support.1 Many contractors receive payment only if they collect, often retaining a percentage of the collection (ranging from 8 to 24 percent). In general, GAO found that both the federal and state governments benefitted financially (net) from contracts that were targeted on cases that might not otherwise be worked--in effect, the private contracting supplemented what the public agency could do. The net benefit is derived from collections on AFDC cases and from federal performance incentives attached to child support collections for both AFDC and non-AFDC collections.
Welfare Reform Increased requirements under welfare reform, coupled with spending restrictions that limit the amount of hiring that can occur in public agencies, have led some states to more seriously consider outside service contractors for welfare service delivery functions. For example, welfare officials in Nebraska and Arizona plan to increase their use of outside contractors (both for-profit and non-profit) to deliver services such as job placement and parenting skills training. (ETR 11/27/96) Other states may make similar decisions. "Private industry buzzwords such as 'streamlining' and 'cost-containment' have spilled over to the public sector, and welfare officials are moving to share risk and cut costs." (ETR 10/9/96) The recent welfare reform law, The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, is the latest federal policy that contributes to the privatization trend. The 1996 law removes previous restrictions that essentially prohibited states from contracting out initial welfare (AFDC) intake and eligibility determination functions. This has apparently opened a new market for private companies. In the past, service delivery contracting in the social welfare arena was mainly for direct service delivery such as job training, job search instruction, and day care provision; and service providers were mostly non-profit, although some for-profit companies have provided job training or other employment services. Large for-profit companies were mainly involved as contractors for data systems. Intake and eligibility determination for welfare programs remained with public agencies.
Now that welfare agencies can contract out the entire welfare system, including intake and eligibility determination, large for-profit companies are moving into the welfare service delivery market (e.g., EDS, Lockeed Martin, IBM). States are also more seriously considering privatization options because of concerns over cost and the need to meet specific federal goals fairly quickly. Large companies had already gained a foothold into some of the human service agencies, primarily through health care and child support enforcement, for data systems and, more recently in child support, for service delivery functions. "Before the new welfare law, moving people from welfare to work was the domain of nonprofit organizations and three relatively small businesses (America Works, Curtis and Associates, and Maximus). Now, some large companies see a potentially multibillion-dollar industry that could run entire welfare programs for states and counties." (Bernstein, 1996)
The three small for-profit companies referred to in the New York Times article (Bernstein, 1996) are:
- America Works: $7 million in contracts in New York City, Albany NY and Indianapolis; provides supportive services for the first four months a welfare client is on a job. The client receives minimum wage, but the employer pays America Works a higher wage, similar to the arrangement with temporary employment agencies. In addition, the government agency pays America Works $5000 per successful placement (defined as one that lasts 4 months).
- Curtis & Associates: $9.2 million in business last year in selected sites in 11 states, including California, New Jersey, Indiana, Vermont and Wisconsin; provides a job club model for agency clients; sells training manuals and materials.
- Maximus, Inc.: $100 million total government contracts, much but not all in the welfare area; has contracts for child support enforcement activities in 6 states, a $10 million contract in California to recruit recipients into HMOs, and welfare-to-work contracts in selected sites in California, Massachusetts, and Virginia; has also had many contracts for data systems development in the human services area.
- Andersen Consulting: $4.2 billion global management and technology consulting company that is an affiliate of the big accounting firm; now has contracts in 14 states, mostly for child support and child welfare activities. Marketing a profit-sharing approach to welfare, and recently won contracts for running welfare in two Canadian provinces.
- Electronic Data Systems: $12.4 billion information technology services company. Began with computerization of Medicaid billing and welfare reporting systems. Now has contracts in 20 states. EDS was recently awarded a new contract by the state of Texas which focusses on reengineering eligibility determination and service delivery for health and human services programs and securing a new computer system for the state.3
- Lockheed Martin Information Management Services: a nonmilitary division of the $30 billion dollar Lockheed Martin Corporation; has child support enforcement contracts in 16 states plus the District of Columbia; also has contracts in 20 states to convert various welfare benefits to an electronic debit card system. Now launching a major new "welfare reform/self-sufficiency line of business." (Bernstein 1996).
Wisconsin's latest major welfare reform effort, called W-2 (Wisconsin Works), for example, is based on market competition for delivery of services. Public, private and non-profit entities can compete for contracts to deliver the entire welfare system in specific localities. In the initial round of competition, proposals were submitted not by individual companies or agencies, but by consortia. Four (or five) consortia were formed to bid on the W-2 contracts and each consortium included at least one major private company, and public or non-profit agencies. The initial round did not produce many proposals, though, in part because of the very complex and inflexible criteria and requirements included in the state solicitation. Nonetheless, four contract consortia have been selected, and each will be responsible for the entire welfare administration in the four geographic areas within Milwaukee.
It is still unclear whether there will be a sharp increase in private companies assuming major responsibilities for work-welfare programs though, even in a state like Wisconsin. Wisconsin had, even before the latest reforms, already moved more towards privatization of welfare services, especially for work-related activities. In Milwaukee, for example, Manpower Temporaries, Inc. was, until recently, a primary contractor for administering a Welfare Job Center, delivering job placement services and coordinating services provided by other, mainly non-profit and public contractors. While the nature of the work was similar to Manpower's traditional business, the private firm's role has gradually shrunk in part because of the difficulty it had working with clients with serious employability barriers and collaborating with a disparate network of public and private organizations. (Employment and Training Reporter, 9/18/96)
Texas has received considerable attention recently because of its proposed privatization of the Texas Integrated Enrollment System (TIES). The TIES system was intended to integrate and streamline eligibility determination for fifteen programs, including AFDC/TANF, Food Stamps, and Medicaid. Officials in Texas emphasized that their objective was not to contract out government functions arbitrarily, but rather to improve efficiency and customer service in government through increased competition. Contracting with private, for-profit companies for Medicaid claims processing, child support payment tracking, and other information systems requirements are already accepted practices in Texas government.
The proposed privatization of TIES differed from other privatization initiatives because the eligibility determination functions to be contracted out were traditionally carried out by state employees. This change raised two concerns: the potential loss of jobs for state employees; and the appropriateness of having private rather than public employees make decisions related to program eligibility. The TIES privatization was strongly opposed by public employee unions, which launched a major public relations campaign to gain public support to oppose the state's plan ( Houston Chronicle, April 14, 1997 ). The potentially large size (estimated at $2.8 billion over 7 years) of the TIES privatization contract attracted major private corporations such as EDS and Lockheed-Martin, each in partnership with state agencies as part of the bidders' teams (Texas Department of Human Services [TDHS] with EDS and Texas Workforce Commission [TWC] with Lockheed-Martin).
Implementation of the contracting process for TIES was delayed for nine months pending federal approval of the state's draft "Request for Offers." The 1996 federal welfare reform did not prohibit non-government employees from determining eligibility for TANF, as had been the case for AFDC. However, the historic restriction still remained for other federal assistance programs, particularly Food Stamps and Medicaid, which were unaffected by the 1996 legislation. The state privatization plan, therefore, required special federal approval as an exception to policy. In May 1997, the Clinton administration ruled that privatization of Food Stamp and Medicaid eligibility was not allowable under federal law.
At about the same time as the federal administration's decision, the Texas legislature was reshaping the TIES project. HB 2777, which was enacted in June 1997, directed the Texas Health and Human Services Commission to coordinate the TIES effort in consultation with TDHS and TWC. As a result, these state agencies have terminated their teaming arrangements with private sector vendors. Recommendations developed by TDHS in partnership with EDS during the bidding process will serve as a starting point for the reengineering efforts required in the $3.7 million 15-month contract awarded to EDS (Kinsey, 1997). Thus, Texas has turned to an incremental approach for integrating and improving eligibility systems, and will build upon lessons learned and innovations proposed during planning of the TIES procurement.
Employment and Training Throughout the history of employment and training programs, contracting has been a common model for delivering services, often including intake and eligibility determination as well as training, job placement and other employment-related services. MDTA, CETA, YEDPA, Job Corps, and now JTPA all involve extensive contracting for service delivery--Job Corps is totally contracted, and Center operators include some small and large for-profit companies (e.g., ITT Industries; BDM International/Vinnell; ResCare, Inc.). In fact, the majority of federally-funded E&T services since the 1960s have been contracted out by the administering public agency. Most of the E&T service contractors have been non-profit or public entities (e.g., community colleges, public school districts, vocational schools, employment service). In some localities, for-profit companies have also provided services under contract (e.g., proprietary training institutions and schools, for-profit companies operating job clubs or job placement services). The best-known for-profit companies today that have contracts to provide job placement services to welfare recipients are America Works and Curtis and Associates. Ironically, Job Corps is the only major federally-administered E&T program and the only one that is totally contracted out. It has also been found to be among the more effective programs. In part the success of Job Corps is attributed to its mix of public direction, oversight, monitoring, and clear competitive contracting with performance expectations (Gurin 1989). The government role in policy development, planning, monitoring and oversight is a critical factor in the Job Corps success. Job Corps centers can't affect their performance measures by screening applicants (i.e., "creaming") or by securing jobs for applicants because they have no control over this (Donahue 1989).
The Job Corps program operates through a partnership of government, labor and the private sector, at 111 Job Corps Centers in 46 states, D.C. and Puerto Rico. Private corporations and private nonprofit organizations-- including Teledyne, ITT, Vinnell, Management and Training Corporation, Career Systems Development Corporation, Res-Care, and MINACT--operate 81 Job Corps centers under contracts with the U.S. Department of Labor (DOL). An additional 30 Job Corp Centers are operated by the U.S. Departments of Agriculture and Interior--called civilian conservation centers--on public lands throughout the country under interagency agreements with the U.S. DOL. A nationwide network of other public, private, nonprofit, business, and labor union subcontractors provide services for Job Corps, ranging from intake and application to occupational training, job placement and post-program support services.
Child Welfare Child Welfare privatization of service delivery also expanded greatly in the 1970s and 1980s as caseloads of child abuse and neglect rose, budgets were increasingly constrained, and public agencies' flexibility in staffing up was severely limited by personnel policies and state or local restrictions on spending. Agencies contract for various services from investigation to substitute care and therapeutic services. For example, in New York City, contract agencies take care of 70 percent of the city's children in foster care (Giuliani 1996). In fact, the majority of publicly financed social services programs in New York City are delivered through contracts. These private suppliers, mostly well-established non-profit service agencies, both secular and religiously affiliated, have provided an ongoing source of political support for the city's human service activities (Bendick 1989).
3. Models of Privatization As the brief discussions above suggest, there is no single definition of privatization. But for the purposes of this paper, privatization refers to the provision of publicly-funded services and activities by non-governmental entities. There are also various methods by which services can be privatized, including contracts, formal agreements, vouchers, grants, subsidies, public/private partnerships, and collaborative service delivery. In general, though, the common use of the term privatization refers to formal contracting out of services by the government to the private for-profit or non-profit sector. One way to think about privatization is to consider two separate but related dimensions:
- (1) degree of market competition--ranging, for example, from open competition for all or public services, to government contracting for specific services; and (2) role of the public sector vis a vis other sectors--for example, government oversight of private services versus separate systems of services operated by government, for-profit and/or non-profit entities, versus public-private partnerships.
Some of the most recent examples of privatization in the welfare and workforce development area, such as in Texas, Wisconsin and Massachusetts have adopted versions of such a broad-based competitive model where public-private teams compete for contracts. In Indianapolis, public employees are required to compete against privately owned businesses for contracts to deliver all services with the exception of police, fire, and zoning operations. Initially, city employees and their union opposed the privatization initiative and feared losing their jobs. After negotiating changes to "level the playing field," such as consulting assistance to prepare bids and streamlining the city workforce by reducing middle management, unionized employees have gone on to win 37 of the 86 contracts put out for bid by the city (Jeter 1997).
Sectoral Roles. A second dimension of the privatization concept relates to activities or functions performed by the governmental and non-governmental sectors, regardless of whether funds actually are exchanged and regardless of whether there is a formal contract or agreement. Much of the current discussion about privatization refers to for-profit businesses, but as Starr (1989) explains, there are actually four types of "private" providers: (1) personal, informal, mutual aid; (2) voluntary non-profit sector; (3) small businesses, entrepreneurial companies; and (4) corporate for-profit sector. The responsibilities and services of each may or may not result from contractual arrangements or exchange of funds.
For example, the welfare reform law of 1986 included strong language that would encourage community-based and faith-based organizations to be formal providers of services, presumably with government contracts. But underlying welfare reform's focus on individual and family responsibility is that the informal community, charities, and neighbors are also an important source of support for persons in times of need.
4. Effectiveness and Potential of Privatization There are strong and vocal advocates and opponents of privatization, but little empirical evidence about whether the public sector or the private sector is more effective.
Arguments For and Against Privatization Arguments for Privatization. There are major advantages generally put forth for contracting for services with private (non-profit and for-profit) organizations, as indicated in Exhibit 1. In general, the strongest arguments for privatization of public services are:
- 1. Increased flexibility resulting from a reduction of bureaucratic complexity and procedures, and 2. Reduced costs resulting from improved efficiency, especially if there is a truly competitive process with clear performance criteria.
- discontent with the performance of the public sector;
- desire for more flexibility (e.g., personnel, operations, innovations);
- desire to reduce costs; and
- desire to "empower" service intermediaries (e.g., CBOs).
Reasons for Using the Private Sector
- To obtain special skills or supplement staff for short periods of time
- To meet demands beyond current government capacity
- To reduce costs
- To improve service quality
- To provide clients with more choice of providers and levels of service
- Ideology--less government is better.
- Source: Adapted from Allen, et al, The Private Sector in State Service Delivery.
Washington, D.C. The Urban Institute Press, 1989
The strongest opposition to privatization comes from public employees and unions representing public employees, stemming essentially from a fear that public sector jobs will be lost. The prospect of massive layoffs of government workers is one of the barriers that "keeps governments from moving into a more catalytic mode regarding privatization," according to Osborne and Gaebler (1992)--a fear, they note, that is "legitimate." The federal Office of Personnel Management (OPM) recently reported that executive branch employees covered by union agreements dropped by 13 percent between 1992 and 1997. Almost all of the decline in union representation can be attributed to the government's downsizing, particularly base closings and cutbacks at the Defense Department (Barr and McAllister 1997).
Major Arguments for Opposing Privatization
- Major loss of public employee jobs
- Relinquishes public responsibility for public funds. "Private business has no business allocating public funds...or monitoring the use of public funds." "Threatens fiscal accountability"
- Weakens community ability to assert collective interests; decreases citizen participation in government
- High potential for fraud, financial conflicts-of-interest and cost-overruns
- Any resulting cost savings are directed away from taxpayers and towards the contractor.
- Threatens confidentiality of private information
- Financial conflicts of interest
- Increases temptation to reduce quality of services and "cream" the best clients to reduce costs and maximize profit.
- Source: Adapted from materials prepared by the AFL-CIO, Public Employee Department
Evidence of Effectiveness Thus, there are strong reasons for privatization and some equally-strong concerns and fears (see Exhibit 3). Most analysts, though, concur that each sector may actually have certain relative strengths, and private sector delivery of services is not inherently better or worse than public service delivery. "Business does some things better than government, but government does some things better than business. The public sector tends to be better, for instance, at policy management, regulation, ensuring equity, preventing discrimination or exploitation, ensuring continuity and stability of services, and ensuring social cohesion... Business tends to be better at performing economic tasks, innovating, replicating successful experiments, adapting to rapid change, abandoning unsuccessful or obsolete activities, and performing complex or technical tasks. The [non-profit] sector tends to be best at performing tasks that generate little or no profit, demand compassion and commitment to individuals, require extensive trust on the part of customers or clients, need hands-on, personal attention..., and involve the enforcement of moral codes and individual responsibility for behavior." (Osborne and Gaebler 1992) Bendick (1989) agrees, noting that private contractors are well-suited for straightforward or specialized services such as refuse collection, processing payments, data processing, and computer systems design. But, as one moves to "more complex, undefinable long-range, and 'subjective' services characteristic of the social welfare field, the record of successful experience rapidly thins." (e.g., training ex-offenders, drug addicts, mentally ill, least employable welfare recipients) (p. 15) He attributes this mainly to the "limited ability of privatized systems to tackle the most difficult cases or to pursue the most complex objectives." (p. 16) Bendick further notes the nonprofit sector is better able than the for-profit sector to deal with complex and high risk cases, mainly because it is less motivated by profit. But nonprofit deliverers are not noticeably better or worse than the public sector (p. 18) because of high risk and/or high cost associated with complex cases.
Major Potential Advantages and Problems with Delivery of Public Services by For-Profit Companies Potential Advantages Potential Problems
- Less red tape and bureaucracy
- More competition
- Lower unit costs, especially if operating in multiple jurisdictions/sites