The downside of subcontracting human services

We had an unintended confluence on the Thursday edition of the Mark Johnson Show, hosted by Yours Truly. Back-to-back interviews with VTDigger’s Morgan True and State Auditor Doug Hoffer turned out to cover some common themes.

True had reported on problems at Rutland Mental Health Services, one of the state’s “designated agencies” for providing social services. Hoffer had just released a very critical performance audit of the Corrections Department’s transitional housing program. I was in the middle of the show when the light bulb went off. Both interviews were kind of about the same thing: Inadequate oversight of human services contractors.

In both cases, an Agency of Human Services program is contracted out to nonprofit agencies that get virtually all their funding from the state. In a way, it’s a mutually captive relationship: the agencies are completely dependent on the state, and the state effectively has no options for replacing a poorly-performing contractor.

In their own way, True and Hoffer found similar problems in different areas of AHS: lack of consistent oversight, gaps in service provision, and inadequate methods for tracking performance. (In the case of RMHS, the situation boiled over into scandal.) The result is a system that looks good from a distance, not so good up close. Its failures are partly due to lax oversight; but we should also consider whether poor contractor performance may also be due, at least in part, to bare-bones funding by the state.

After the show was over, I pondered another issue: What does the Rutland situation have to say, if anything, about the Shumlin administration’s community-based mental health care system? Because those designated agencies are the front-line troops in that effort.

That’s the basis of the whole system, right? Less hospitalization, more in-community care. The administration has boasted, over and over again, that it has poured new resources into community-based services.

Well, who delivers those services? The designated agencies. Each one covers a defined geographic area. If you live in Rutland County, you get your services from Rutland Mental Health Services.

Now, we can hope that the other DA’s aren’t as troubled as RMHS. But do we know that?

RMHS is probably an outlier. But there hasn’t been a similar level of public scrutiny applied to other DA’s. I’ve heard, purely anecdotally, some bad things about one other DA, but nothing probative; and it’s well beyond my means to explore the performance of all the DA’s.

True reports that RMHS has a staff turnover rate of “close to 25 percent annually.” That’s awfully high, and indicates that the work takes a meatgrinder toll on staff. True notes that “RMH is not alone. Many designated agencies struggle to keep staff.

Why? Well, the work apparently sucks. And so does the pay.

Their workers also make far less than counterparts working for the state, in the public school system or private practice. People working for the designated agencies typically make $15,000 less than a comparable state employee.

This level of staff turnover makes effective management extremely difficult. You’re constantly in a cycle of hiring, training, and losing people. The best people leave soonest because they can get better jobs, while the laggards tend to stay behind.

Okay, here’s where I connect a couple of dots. Feel free to argue they shouldn’t be connected.

Dan Quinn was CEO of RMHS for eight years. Presumably his performance was at least adequate for much of that time; True’s reporting indicates that the state/RMHS relationship has declined in the last 2-3 years.

That’s the same period when the Shumlin administration was implementing its community-based mental health care system.

Coincidence? Or is the new system too demanding? Are the DA’s being asked to do more with less?

Well, if the DA’s pay their workers substantially less than the state does, then the state’s getting a big discount. Every patient moved from state-provided services to one of the DA’s is a cost savings.

In itself, that’s not a bad thing. For many people, community-based services are the best option. Hospitalization should be a last resort for the most severely (and dangerously) mentally ill. But if the system is being shortchanged, then RMHS may be the canary in the coal mine — and we can expect more scandals down the road.

Beyond all this, broader questions loom. Is there something fundamentally flawed with the contractor-based approach to human services? Is the system dysfunctional enough that it’s wasting money that should be going to our neediest residents?

Finally, is there a way to tackle these issues and create a social safety net that would be more efficient AND provide better, more consistent service?

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3 thoughts on “The downside of subcontracting human services

  1. Dave Katz

    But…but…if the state ran these programs, those employees would be union members, and all the good Third Way Democrats who are ascendant here in Vermont agree with their Repugnican’t counterparts’ framing that UNIONS ARE EVIL! GOVERNMENT IS THE PROBLEM! PRIVATIZATION! PRIVATIZATION! quackquackquackquack…and severely strapped public services don’t work as well, thus proving that “government” doesn’t work! QED. Simple, no? Drown that baby, boys and girls!
    Oh, and no sugary drinks for thee, neither. Love the tone-blind optics.

    Reply
  2. Brian L.

    For all the talk you hear under the Dome about getting tough on determining which services are working for Vermonters and which are not, this is a perfect example of why it’s all nothing but hollow rhetoric. There’s actually been a “Government Accountability” committee in place for years under the Dome, but they must have missed the glaring lack of oversight the Auditor and this True guy found. I’m guessing if you dove more into the oversight and checks and balances issues currently within state government, your head would spin in a cartoon-like way. It’s only taxpayer money folks. We’re in good hands.

    Reply
  3. John Heuser

    Employees of Vermont mental health designated agencies really have no options; the service is run by a clan of six-figure senior management that is immune to Board Licencure complaints because of a loophole in the rules. The State of Vermont offers zero protections for workers. The only thing left is collective bargaining. And this is on the way; it is the ethical choice when leadership is in a moral vacuum.

    Reply

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