(Cross-posted from The COFAR Blogsite)
In his proposed Fiscal 2017 budget, which he filed last week, Governor Baker is continuing to boost funding for privatized care for the developmentally disabled at the expense of state-run care.
This continues a pattern that has crossed party lines — the Patrick administration did the same thing — of reducing both the available choices and the quality of care for people with developmental disabilities.
Privatization of human services reduces the quality of care because it reduces money spent on direct-care staffing. Direct care workers of corporate providers get lower pay and less benefits than their counterparts in state-run facilities.
Privatization reduces choice in care because it results in the closures of state-run facilities and consequently eliminates them as an option for people who might want that higher level of staffing and care.
Of course, as the linked New York Times article points out, privatizing services doesn’t necessarily result in long-term fiscal savings for state taxpayers. The money saved in hiring lower-paid workers is usually offset by higher costs such as unemployment insurance and by Medicaid and other public assistance for workers earning low incomes. We also believe any savings in privatization is also offset by the often inordinately high compensation provided to executives of the corporate providers.
Yet it appears the Baker administration still believes it will save money in using lower-paid direct-care workers. That seems to be the case with the administration’s proposal to privatize mental health services in southeastern Massachusetts. In that case, the administration appears to be implicitly backing a reduction in wages to direct-care workers after an initial contract period.
Governor’s FY ’17 DDS budget numbers
Here are some of the key numbers in Baker’s Fiscal 2017 budget proposal for the Department of Developmental Services. Note: All numbers below are adjusted for inflation using the Mass. Budget and Policy Center’s CPI index numbers. The CPI numbers show inflation running at about 1.8 percent for Fiscal 2016.
We believe that in order to gauge the level of the administration’s commitment to privatization of services for the developmentally disabled, it’s necessary to compare what has happened and is happening to the corporate provider line item with what happens to other DDS line items.
Here’s how it looks graphically, with more detailed explanation below:
Corporate provider residential line item (5920-2000): This is the main DDS line item supporting privatized services. It has become by far the largest line item in the DDS budget — funding under this line item exceeded $1 billion for the first time in Fiscal 2015.
Corporate provider residential line item (5920-2000): This is the main DDS line item supporting privatized services. It has become by far the largest line item in the DDS budget — funding under this line item exceeded $1 billion for the first time in Fiscal 2015.
The governor’s Fiscal 2017 budget would increase the corporate provider line item by $5.9 million, or 0.5 percent, over current-year funding. If the governor’s Fiscal 2017 budget is adopted, this line item will have been increased by $309 million, or 38.6 percent, since Fiscal 2012.
Chapter 257 Reserve 1599-6903: This is a reserve fund created to last year to provide even more funding for corporate providers. The governor’s budget would increase this fund by $5.7 million or 18.6 percent, to $36.2 million.
The following three line items are key indicators of the administration’s commitment to state-run services.
State-run developmental centers budget line item (5930-1000): The governor’s Fiscal 2017 budget would cut this line item by $3.18 million or 2.8 percent from the current-year appropriation. If the governor’s proposal for Fiscal 2017 is adopted, this line item will have been cut by $41.6 million, or 27.5 percent, since Fiscal 2012.
That $41.6 million cut reflects the closures since 2008 of three of six remaining developmental centers.
State-operated Residential line item (5920-2010): The governor’s Fiscal 2017 budget would cut this line item by $212,800, or 0.1 percent, from current-year funding. (In nominal dollars, the governor has proposed a $3.7 million increase in this line item, but it’s a cut when adjusted for inflation.) If the governor’s Fiscal 2017 budget is adopted, this line item will have been increased by $42.8 million, or 24.4 percent, since Fiscal 2012.
That 24.4 percent increase since Fiscal 2012 for state-operated residential care can be compared to the 38.6 percent increase in the corporate provider residential line item. Moreover, that funding increase in the state-operated residential line item is actually a result of the underlying dynamic of privatization.
As we have noted before, there has been a net increase of 40 state-run group homes over the total number in 2008; but the state has closed state-run residences even as it has built new ones. It appears the new state-run residences and the additional funding for those residences have been intended to accommodate the more than 250 people who have been transferred since 2008 from the closed developmental centers and the closed state-run homes. Those are apparently the only people who have been admitted to the new state-operated homes.
As we’ve also pointed out, the administration does not even offer state-run residential facilities as options for developmentally disabled people waiting for residential care. Privatized, corporate-run care has become the only “choice” available those people despite the fact that the federal Medicaid Law requires that developmentally disabled individuals and their guardians be informed of the available “feasible alternatives” for care.
DDS administration (5911-1003): In addition to administrative functions, this line item funds DDS service coordinators, who are responsible for ensuring that clients throughout the system are receiving services to which they are entitled. The service coordinators have seen their caseloads rise dramatically in recent years, but funding under this line item has never kept up with the caseload increases.
The governor’s Fiscal 2017 budget would cut the DDS administrative line item by $977,000, or 1.4 percent. (In nominal dollars, the governor is proposing a slight increase in this line item, but it’s a cut when adjusted for inflation.) Since Fiscal 2012, this line item will have been increased by 8.1 percent if the governor’s Fiscal 2017 budget is approved.
Other line items that demonstrate the administration’s commitment to increased DDS privatization include the following:
Community day and work 5920-2025: The governor’s budget would increase this line item by $5.6 million or 3 percent. Since Fiscal 2012, this line item will have been increased by 45 percent if the governor’s Fiscal 2017 budget is approved. It appears that some of the increase proposed for this line item reflects the transfers of people from sheltered workshops to day programs.
Employment pilot program 5920-2026: The governor’s Fiscal 2017 budget would increase this line item by $4.6 million, which is a major increase, given that the current year appropriation is just over $3 million. That proposed 150 percent increase reflects the transition from sheltered workshops to supposed integrated employment.
The pattern of privatization in Massachusetts state government has become almost permanently established even though the benefits of privatization are highly debatable. Many questions have been raised about the privatization of prisons and the privatization of education in Massachusetts and elsewhere around the country. The privatization of human services may be the biggest prize of all for government-funded contractors. We need to preserve what’s left of state-run services.
there is a pattern in Baker’s administration. Much of the time the details are not reported upon. There is a lot to digest and maybe that’s what the Pioneer folks are counting on.
I had this debate every day with fellow public servants and the general public. My argument basically boiled down to this : Government is business operated for public benefit instead of private profit and that’s why you can’t run government like a business.
Fred Rich LaRiccia