Monday, July 20, 2009

More On Daniels' Welfare Privatization

If Gov. Mitch Daniels hopes to someday be a candidate for president, his welfare privatization may prove to be his biggest Achilles heel. The Star's Will Higgins has a blistering assessment of the results so far from the privatizing of the welfare services administered by the Family & Social Services Administration. His heart-wrenching story about the experience of cancer victim Omega Young of Evansville says it all:

Omega Young lay in her hospital bed, her body wracked with disease. The cancer that started in her ovaries had spread to her kidneys, breast and liver.

She'd lost her appetite to the chemotherapy; she weighed 98 pounds.

Then came more bad news: After a botched round of telephone tag with welfare officials, the state of Indiana pulled the plug on her Medicaid benefits and food stamps.

The 50-year-old Young, who lived alone in a tiny apartment, was frantic.
"She'd call me, crying," says Cecilia Brennan, a staffer with Evansville-based Southwestern Indiana Regional Council on Aging. "She'd say, 'What am I going to do?' "

Brennan, whose agency advocates for older and disabled adults, blames privatization for putting Young through needless stress during what turned out to be her final days . . .

As for Young, the cancer patient, Brennan interceded on her behalf and represented her at a Medicaid appeals hearing in February. A few weeks later, an administrative judge ruled in Young's favor.

Her benefits were reinstated March 2.

Young had died March 1.

It was never a matter of life and death, but rather, quality of life. "She was just so sick, so weak," said her sister Christal Bell. "She knew she was going, but she had strong (Christian) faith."
Higgins' story notes that error rates have shot up since the privatization plan has been partially implemented and are well above the national error rate. Daniels is quoted as saying the performance of IBM and the other private contractors is "unacceptable" and fixing the welfare system remains "the number-one priority of our administration. The Daniels' administration is contemplating cancelling the contract if the situation doesn't improve by September. The privatization plan was initiated by former FSSA Secretary Mitch Roob. His former employer, ACS, is a leading member of IBM's privatization team.


Paul K. Ogden said...

Gary, I like Daniels in a lot of areas. But as an administrator, he has not been nearly active as he needs to be over the agencies that are administrating his policies. Granted, his subordinates are the ones falling down on the job, but the buck ultimately stops on the Governor's desk. Too many times his people have been told of problems in his agencies and nobody bothers to even take a look at the problems.
He needs to be a lot more proactive.

The situation at FSSA highlights not only that problem, but another one. Privatization should not be undertaken in every case. Not every government service is best provided by the private sector. Republicans have too often gotten away from the notion that privatization is supposed to be about market competition. What market competition is there when you have one company bidding and then hand them a 10 year contract. That's a government-endorsed monopoly.

Just A Thought said...

Boy or boy--didn't we all see this one coming when the Golden Boy Mitch Roob came up with the privatization idea and ,lo and behold, one of the companies he had an interest in just HAPPENED to be working on the bid....wouldn't the Church Lady say, "How Conveeeeeeenient!"??

iPOPA said...

Amen to Paul Ogden on diagnosing the problem perfectly. What makes the private sector preferred in some situations is the notion that competition will keep costs down. But when you give a company a monopoly, you get NONE of the cost reduction (well, that's not true - they'll fire every employee in favor of a computer), all of the insanely high executive compensation, and all of the corner cutting. At least FSSA didn't get a SEVENTY-FIVE YEAR CONTRACT.

Look at what happened the second the companies took over the toll road - the cost went to $4.65 then to $8.00 for some vehicles. Can anyone dispute that the Governor's "inspiration" could be distilled into one those late night commercials designed to get people foolishly to cough up long-term annuities from personal injury settlements in exchange for a lump sum that is worth sizeably less than the term value, even after discounting?

But what an ingenius political move by Governor Daniels. Had Indiana kept the toll road and raised rates to the same levels, we would have made a lot more money than 3.8 billion over 75 years, BUT we could only do that by raising rates. The Governor was too afraid to get appointees who would do this, so instead, he handed it over to a third-party to do the dirty work, and instead, he sold out our "annuity" so a lump sum for road construction. All he did was took money out of the hands of, oh, say the next 10 to 17 Hoosier Governors.

Heck, why not do the same thing with the Hoosier Lottery, folks? Over the past 20 years, the Hoosier Lottery has returned 3.4 billion to the state. Why not the next 20 years worth of revenue now? We can sell a twenty-year lease for a billion, and we can use that money to fund road construction, too! How exciting!