Tuesday, July 20, 2004

Statewide Purchase of Service Standards

I'll start with a couple of apologies. First, that my laptop was in the shop and I haven't updated this blog in awhile. Second, that this post will be even more arcane than most and probably indecipherable to anyone not well acquainted with California's community-based system of support to people with developmental disabilities. As always, I'll be happy to answer any questions by email.

One proposal for reform which keeps coming up is the one for statewide purchase of service standards (POSS.) This post will explain why this is a bad proposal unlikely to produce the desired outcomes of improving equity or lowering costs while reducing some of the virtues of the current system.

POSS seems at the surface like a reasonable proposal. For those not aware of how our system operates, State law provides an entitlement to people with developmental disabilities, including the criteria by which a person is eligible and the standards that service providers (Regional Centers and their vendors) must meet. The state then provides the Department of Developmental Services with a budget to fund Regional Centers, highly-regulated (in truth semi-governmental, but officially private non-profit) agencies which contract out to vendors to provide services. Those services are required to pursue the individual client's aspirations and reflect that client's needs and preferences. Each Regional Center (RC) has a local board of Directors and a monopoly on providing services to clients in the catchment area.

The intellectual basis for the POSS proposals have focused on concern about significant disparity in how much funding different RCs provide on a per-client basis. This has led some policy-makers to reach two conclusions: The first is that there are major inequities between how clients are served across regions and the second is that the high spending regional centers must be frivolous.

The conclusion was that statewide standards, essentially limitations on what any RC could offer to clients would improve equity and lower cost growth. Laudable goals. Absolutely. They fit with all three basic assumptions in my original post.

The problems come in when one considers how the standards would operationalize. A few more facts about this system before the analysis.

1. The Social Security Act, with which the State must comply to retain the 38% of system funding which comes through our Medicaid Waiver, requires the State to allow for fair hearings when a client feels that they have been wrongly denied a service or support. This requirement is not waivable as part of the Medicaid Waiver program.
2. There are two ways money gets wasted in this system- POSS is designed to prevent the waste that comes from state funds being spent on services or supports which are excessive, don't help or are otherwise inappropriate. The other is when services or supports are denied which would have allowed a client to live in a less costly, less restrictive setting.
3. The challenge that all RC staff face is that there is rarely clarity as to how the risks mentioned (in 2.) above are balanced.
4. California's regulations require an exception process for most RC purchasing policies to allow for unusual conditions in which the standard policies will fail to account for a legitimate need.

As a consequence of the four facts above, most client's receive services within their RC policy guidelines but some do not. When policies are applied which a client or their family/guardian/conservator feel should be waived due to health and safety needs or in order to allow the client to live in a less-restrictive environment, there are two processes (exceptions to policy and fair hearings) which allow the interested party to appeal for a different service decision.

Although the POSS proposal creates an exception when service limitations would cause someone to move to a more restrictive setting, the question is: How will that be determined. At the more liberal RCs, that finding will often occur. At the more restrictive ones, pretty much, the finding will occur only for board members and their families. As a result, actual behavior needn't change at any of the regional centers. The one difference will be that in the rare occassion that a client files an appeal, the likelihood of an RC decision being overturned is reduced because the RC will have been following state regulations rather than its own policy in denying services.

In other words, the likely result of POSS may be a small increase in the inequity of the system as liberal RCs retain the tools to remain so and restrictive RCs are emboldened to be more so.

So, POSS is unlikely to achieve it's objective vis-a-vis greater equity. What about cost?

That really depends on whether the funding wasted on inappropriate, ineffective or unhelpful supports will be reduced by the money wasted when decisions are made which lead to clients in more restrictive settings. Neither the sponsors of POSS, the writers of it, or I have any credible information to make that judgement. What information exists is interesting, though:

The RCs in LA County generally considered to be the most liberal in their POS policies also happen to have the lowest expenditures on a per client basis. Although there are a lot of possible explanations for the differences other than good policy-making, it is compelling that the evidence doesn't support the principle that for our system, conservatism and stewardship go together.

Ultimately, POSS would have reduced the individualization that is the moral core of this system with little promise of lower cost or greater equity. It may represent the best thinking of California's Department of Finance but we do better thinking in the community. And at DDS. The next post will be about some reforms with more promise being worked on at DDS and in the community.

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