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Wednesday, August 05, 2009

Ind. Gov't. - More on: State paying millions more to "correct" IBM problems in implementing welfare contract?

Updating this ILB entry from August 2nd, the Evansville Courier & Press has a hard-hitting editorial today headed "Welfare woes." Some quotes:

Call us naive, but we thought the cost of adjustments to Indiana's privatized welfare application system would be on the backs of the contractors — not the taxpayers — given that the businesses had agreed in late 2006 to give the state a modern, automated operation for $1.16 billion.

But now we learn that the privatized system is costing Indiana an additional $180 million, some of it to fix the basic program, which has come under harsh criticism from advocates for welfare clients.

And we have learned, based on a contract review by The Associated Press, that the administration agreed in 2008 for the private contractors, led by IBM, to take on additional responsibilities even though they were having difficulty delivering basic services to welfare applicants.

The program has been so troubled that Indiana Family and Social Services Administration Secretary Anne Murphy has told the contractors that the state could drop their program if improvements aren't made by the end of September.

What's puzzling is why the state should have to pay for those improvements for services that the contractors agreed to deliver originally.

More from the story:
Now we learn from The Associated Press of additional contract obligations from the state to the contractors.

For example, the state agreed to pay $35 million for additional staff and for a Web portal for nursing homes and group homes. These were seen as addressing some of the trouble areas.

Also, $7 million was added for additional staff and overtime to meet a higher volume of welfare applications.

Also, in 2008, a whopping $130.2 million was added to the original agreement for the contractors to begin processing applications for the Healthy Indiana Plan (HIP), a state-sponsored medical saving account for low-income adults, and for emergency food stamps, as a result of flooding.

We would have thought that the state would have allowed the contractor to get basic services right first.

The editorial concludes:
In the meantime, the Indiana Legislature has asked the State Budget Committee to investigate and determine whether the private contractors are doing their job under the contract. According to the AP, on Monday, the Legislative Council — a group of legislative leaders — assigned the task to the powerful committee.

It is about time that some group other than the administration was brought into the fray.

It is taking too long to make it work. The state's most vulnerable citizens need these services delivered in an efficient, timely and understandable manner. The old government-run system did not do well for these citizens, and now, it appears, the private sector is failing them as well. It is not lost on anyone here that Texas ended such an arrangement with another company in 2007 after problems developed there.

It must pain Indiana taxpayers as well, now, to learn that additional millions are being spent as the contractors attempt to get it right.

Here is the August 2nd AP story by Ken Kusmer referenced in the editorial.

Posted by Marcia Oddi on August 5, 2009 09:43 AM
Posted to Indiana Government