October 7, 2011
In 2009, a decision was made and
an initiative launched by the Heineman Administration to privatize to a
considerable extent Nebraska’s child-welfare services, which encompass
foster care and interaction with the juvenile-justice system.
The thought was, apparently, that it would be
cost-effective, fiscally prudent, and better all the way around for state
government to contract with private-sector firms and businesses for a lot of
service-delivery and management.
The reform initiative was given the positive,
encouraging title, "Families Matter."
Undoubtedly, state government is motivated by, and
committed to, a desire to be responsive to the welfare of vulnerable
children and hurting families. That had better be true, for the sake of the
common good. But the challenges of responsibly and effectively implementing
privatization have proved to be whopping.
Perhaps not unexpectedly, this reform initiative,
which gradually and ultimately would result in complete privatization of
child-welfare services, has encountered some problems. The transitions from
government to private sector have not had smooth sailing. Quite likely, the
seas of change have been a whole lot more turbulent than those steering and
manning the ship anticipated. As evidence, consider these examples of news
and editorial headlines from September just past:
"Foley blasts HHS in audit." "Audit
slams state’s management of millions in child welfare funds." "Troubling
set of problems." "Key agency taking more fire." "More changes
demanded following DHHS audit."
And there’s more: "Why didn’t HHS share highly
critical audit with Governor Heineman?" "Heineman’s likely hot over
administration’s screw up in child welfare services." "Governor
offers no excuses for child welfare reform snags." "Child welfare
caseloads still heavy; private contractors have same staffing problems that
plagued HHS." "Time to end the confusion; time to fix child welfare
The audit given attention generated a 152-page
report by the State Auditor of Public Accounts, Mike Foley. He presented the
report Sept. 7, at a public hearing conducted by the Legislature’s Health
and Human Services Committee. It created some big waves.
The audit found serious fault with the Nebraska
Department of Health and Human Services (DHHS) with regard to fiscal
management, control and accountability as related to child-welfare services.
The report cited particular issues of escalating costs—up 27 percent between
2009 and 2011—lack of documentation, lost records, overpayments, a
"lackadaisical approach" to scrutinizing subcontractors (assuming such
scrutiny is a responsibility under contract) and lack of cooperation with
the audit itself.
More than one news outlet referred to the audit
report and/or the Auditor’s comments as "scathing."
Since the privatization initiative was launched in
2009, three of the original five contractors have gone out of business or
quit. Regarding one of those contractors, the Auditor’s report concludes
that the contractor was overpaid under its services contracts with DHHS by
more than $1.8 million. Then DHHS entered into a settlement agreement that
cost the State an additional $2 million. And then, DHHS somehow overpaid the
settlement agreement by $127,472.
Among other findings: contractors failed to meet
contractual benchmarks in terms of services provided and, in another
instance, according to the audit report, service-providing employees of a
subcontractor were paid between $10.50 and $13 per hour, but the contractor
was reimbursed by DHHS at $47 per hour.
The Auditor’s work examined management, not
quality of services. The latter context, as well as the overall situation,
is being investigated by the Legislature’s Health and Human Services
Committee. Look for some form of oversight legislation when the Unicameral
convenes a new session in January upcoming.
One of the foremost problems encountered by
contractors for child-welfare services—and it isn’t any different when the
State is the services provider—is the two-pronged problem of caseloads that
are too high and worker turnover. When caseloads exceed sound standards,
that’s threatening effectiveness, if not asking for trouble.
In an odd way, this situation is sort of like the
situation with Husker football. It’s not time to abandon the ship, but it is
time to learn from mistakes, build upon bad experiences and move forward,
meeting the challenges and getting better.
In the case of child-welfare, any greater
jeopardy, instability or declining outcomes for children are unacceptable.
The priority is unmistakable.
And finally... in another realm, from sharp-as-a-tack, George Mason
University Law Professor, Helen Alvare: "If you want to give new meaning to
the word ‘outsider’ in Washington (D.C.) today, identify yourself
prominently as a conscientious objector to birth control as a tool in the
‘war against unintended pregnancy.’ A giant federal health care bureaucracy
becomes your enemy. So does one of its closest collaborators, the
self-described champion of all things female, the Planned Parenthood
Federation of America."
You can contact Jim at the
Nebraska Catholic Conference, 215 Centennial
Suite 310, Lincoln, NE 68508;