Tuesday, August 4, 2009

Things You Might Not Know About Indiana's Social Service Privatization Scheme

By now, we all know that the privatization of Indiana's social services (a/k/a "the crown jewel" of government achievement according to Governor Mitch Daniels) has been a colossal failure.

According to Business Week, before the governor entered into a contract worth $1.1 billion with IBM and Affiliated Computer Services (ACS), food stamp errors occurred in 4.38 percent of cases. By January 2009, that number was 18.2!

What you might have also heard is that the governor was so upset, he called a senior IBM officer to demand improvement. (This is not surprising, of course, since nobody likes to look as clueless as to see the exact same boondoggle we are now facing unfold in Texas and then think it will be all smiles and lollipops here). Anyway, you are all thinking that we can rest easy now that the governor is putting the hammer down, right?

Oh, wait, didn't you hear? The governor's folks just added $180 million to the contract value. According to the guv's folks, these amendments reflect work not included in the original agreement, such as processing applications for the Healthy Indiana Plan, or HIP, the state-sponsored medical savings account for low-income adults, and emergency food stamps after floods last year in parts of the state. Yes, Indiana is privatizing more social services.

This makes sense because when a building is collapsing all around you, you have the same guys who built it do more construction on the roof. (Insert criticism of bank bailout here). Well, at least we won't have to pay for any of the screwups by IBM and ACS, you're all thinking. That would be stupi....

Oh, wait, didn't you hear? The new contract includes $35.14 million for "several items that addressed criticisms of the project," such as adding staff and a Web portal for nursing homes and group homes.

According to FSSA Secretary Murphy, IBM put together an improvement plan that "adds 350 people and new technology at no additional cost to the state. I'm sorry, but when did $35 million become "no cost?" Whatever happened to, "you broke it, you fix it? IBM/ACS said it could deliver something, and it didn't. Indiana should not have to spend a single extra dime to get its "bargain."

This is particularly true given that IBM is still heralding Indiana as a success story on its website. Were I the governor, I'd demand it come down because it's false advertising. (In fact, the only reason IBM can do this with a straight face is because corporations don't have faces).

My favorite quote is from Zach Main, director of Family Resources, Indiana Family and Social Services Administration:

“We’re very happy with how things have worked out,” says Main. “We’ve accomplished our basic mission, to open up new channels and increase our accuracy. Our variances are moving towards the target of 5 percent and we’re going to save a lot of money in the process. But at the end of the day, it’s really all about making the lives of our citizens better by delivering the services they need, when they need them. We’re doing that, better than ever.”

I have no idea who Zach Main is, but I do want to know if he is still working. If this is his view of success, he shouldn’t be. If this is the type of oversight the agency offers, he shouldn't be.

With such an inept effort by IBM/ACS, why didn't the guv just pull the plug now? Screw ACS, right! The Governor doesn't have any "connections" with these guys!

Oh, wait, didn't you hear? ACS was former FSSA Secretary Mitch Roob's former employer. Yeah, but how could pulling the plug on a guy who isn't even working there anymore hurt Roob? Wait...is that Mitch Roob who was the head of the Health and Hospital Corporation in 1994 during Steve Goldsmith's mayoral tenure in Indianapolis? Yes? You know who else ran in the inner circle with Mayor Goldsmith and who handled privatization for the city, no less? A guy named of "Skip" Stitt. I wonder what Skip is doing these days? Oh, you hadn't heard? An officer with ACS.

Well, that explains why ACS gave its maximum allowable corporate donation of $5,000 to Daniels in 2008, and why Stitt gave $2,500 out of his own pocket. Campaign finance records also show $2,000 from Maryland native and ACS' Chief Operating Officer Tom Burlin. Why would a guy from Maryland give to an Indiana Governor? Oh, you hadn't heard? The website says he had the responsibility "to develop and execute a strategy to reestablish IBM as a major player in the government market after the company had divested its position six years earlier." Good job, Tom! A billion and growing sure seems major!

Oh, you also might not have heard that Governor Daniels is apparently running for something. I say this because ACS wrote Governor Daniels a check for $5,000 in January of 2009. I'm sure this was just to make sure the Governor was well-funded for the election that was about to happen in....um....well, I'm sure the fact it was written right after Secretary Murphy got a whiff of the stench that was privatization was just a coincidence. It had nothing to do with the fact that the dookie was about to hit the oscillating unit.

As a final note, in 2008, ACS also gave $2,000 each to the Senate Majority Campaign Committee (R) and the House Republican campaign committee, as well as $1,000 to the Indiana House Democratic Caucus, too. Boy, ACS must just LOVE good government because it’s investing in it everywhere! What a civic-minded firm! I only wish I had time to look at IBM, too.



Miklo Velka said...

So my friend says to me the other day, on the topic of the "Socialized Medicine" "government-owned health care plan" (as he calls them), "Name one thing the government has done better than the private industry."

Well, I directed him to the social services debacle that is the Daniels plan, and he was quick to discuss that privitization of these types of services isn't the same...
indeed, it isn't the same. It's much worse than the government simply doing it better. It's the government actually failing to cease the hemorrhage when the accountants pint it out to you, and then actually slicing another artery wide open.

I guess that the lack of response to this post from anyone else probably indicates two things,
1) dumbstruck disgust by folks NOT in favor of the Daniels plan(s), or
2) surprise and deafening silence from those that ARE in favor of the Daniels plan(s).

Thank you for pointing this out Bulworth.

jabberdoodle said...

Thanks for putting this issue into full flower like this. Aren't the feds looking at making the state pull out of this contract or face some loss of funds?