Tuesday, September 28, 2004

John O'Brien and the right system design

This post is a week or more late. I received word from my good friend, Julia Mullen, that John O'Brien had recently undergone surgery, and that we all should be thinking of him. I've had a couple of articles he wrote that I wanted to discuss in this space but couldn't find them. After a week of hunting, and this being a weblog (no accountability or expectation of accuracy,) I'm going to write about his work without it in front of me, confident that I won't mislead very many people.

John and his wife, Connie are two of the most important thinkers who analyze, describe and advocate on how society treats people with disabilities and how society can do better. The solutions they describe are both common-sense and radical. Maybe the greatest lesson I've learned from them is the recognition that common-sense is a radical departure in human services. That's how far we have to go.

The article I wanted to write about but can't find talks about redesigning the system so the incentives are aligned with the goals (duh?) All participants are described as agents and are expected to pursue their own self-interest (duh?) It's common sense because that is how the world works everywhere. It's radical, because we design our human service systems on the assumption that people who work for pay should otherwise be altruistic, mortifying their own needs in order to pursue the best interests of those who need help. The belief that direct care workers, boards of directors, executive managers of agencies, regional center staff, etc. should forsake their own interests in order to serve the client is pervasive. But is it realistic or even constructive?

It passes the What Would Jesus Do test, but until He returns, one of the chief sources of inefficiency in our system is how much those of us who participate in it hide what we're really up to. I wonder sometimes how much the state pays annually for camouflage. We create forms and pay people to fill them out which help us appear to follow instructions we all find absurd. We go to meetings with quality assurance folks and they ask us to do things we're too smart to do and then train staff how to imitate bad ideas while doing well. I'll be shocked if, upon arriving in heaven I find out that the State of California and philanthropists spent less than $25 million this year in the developmental disability system to pay the cost of misdirection. I won't be shocked if it's $250M. Then there's the cost involved when people actually take bad suggestions and implement them. There's human cost to that as well.

Our lack of honesty is a lack of efficiency and a deprivation of the aspirations of those we serve. Clients do it, their families too, providers and regional centers and the administration. All of this, in large measure, to appear as though we are pure servants and not self-interested people doing the best we can for ourselves while doing our best for the people we serve.

It's cathartic to admit that I'm fat but still hungry, successful but still ambitious and my hopes for myself drive my work along with those of the clients I serve. Now imagine how much better our system would work if you could eat, buy and aspire more by helping more.

One of John O'Brien's important contributions to our system has been to describe how our system might work better if it were set up to harness the skills and good will of well-intended, self-interested people instead of relying on ascetics.

So, best wishes, Dr. O'Brien, on a full and speedy recovery. Our thoughts and prayers are for your lasting health. Not just for your sake but also for ours.

Monday, September 13, 2004

Rate reform

Aha! The third rail! Hold on, my zipper's stuck.

Rate reform means different things to different people but the following applies as a rule.

For vendors: Rate reform = getting more money for doing the same work for the same people.
For government folks: Rate reform = getting more of the same work for the same people for the same money. Quality is subjective anyhow.

I'm indifferent as to whether rate reform should raise the number of dollars coming into this system. I'm zealous, however that the irrelevance of support needed to funding provided needs to change. The failure is nearly total to correlate funding with the resources required to provide the right support, in the right amount, with sufficient quality to produce the outcomes that our clients seek and the State benefits from.

So, here's another primer. This time on how rates are currently set in this system.

There are really three methods of rate-setting. These are state-set rates, residential rates and negotiated rates.
In the most common (state-set) method as I understand it, a new agency receives a temporary rate which is the same for a given category of service regardless of where you are in the State (Inyokern rate=San Francisco rate.) The agency then functions for one year under that rate, fills out a statement explaining that agency's costs over that year and a new rate is assigned. Obviously, if you get the joke, in your first year as a program you spend every cent you're paid and lose as much money as you can afford to on whatever you can in order to produce as high a bill as possible at the end of your first year. The adjusted permanent rate circles over the agency forever, cawing to the great white whale that lurks in the deep. Once in a long while, the state adjusts the oldest rates and those older agencies go from the lowest rates to the highest.

So here's how various factors affect state-set rates, a few years after assignment:
Market value of qualified workers in an area: Irrelevant
Changes in worker's compensation insurance cost: Irrelevant
Cost of appropriate training and skill-building: Irrelevant
Administrative cost of regulatory compliance: Irrelevant
Quality of care provided: Irrelevant
Year Established: High correlation.

In negotiated rates, the agency predicts it's costs, tells the Regional Center what those will be, and then a process takes place leading to a contract to provide services at a given rate. According to the Legislative Analyst's Office, these rates increase at three times the rate of the state-set ones.

Residential rates, as I understand them (and I don't know that I do) works like the state-set rates but with a cost-of-living increase (suspended for several years now) so the correlation between real factors and rates would be like state-set with year of establishment being less relevant.

So the main factors in the level of funding that agencies receive for providing services are:
Whether they have been vendorized in a category in which the rate is state-set or negotiated and what year that vendorization took place. The individual needs and aspirations of the people this system serves, and measurable success in meeting those needs and reaching those aspirations are divorced, utterly, from the fiscal process and the financial incentives.

I don't mean to imply that this is unprecedented or poor incentive. Lots of California industries reward you for being young.

Another interesting trick of the state system is that rates apply to units of service performed not on deliverables. So, spending all day accomplishing nothing pays better than quick success.

When we talk about "rate reform" in this system, we talk about how people are compensated for the work they do, not about what the state is actually buying.

So, I'm thinking about rate reform and wondering whether the system couldn't get a little more cost-effective by:

Correlating rates with the outcomes sought, challenges presented and the likelihood of success and making level of accomplishment the unit the rates are paid to.

I'd bet on more effective services and lower costs if there were incentives to achieve either.


Monday, September 06, 2004

Labor Day

It's Labor Day and I'm at work, so consider this passive resistance. It seems like a good time to look at a recent and future proposal for reform to this system. The concept is loose, but Service Employees Internation Union (SEIU) put forward last year a proposal to create workforce service centers in this system. The proposal was pretty controversial, but a variation on it will come soon, so it seems like it deserves a place on this blog for the throngs who read weekly.

The next version of the proposal to come forward isn't known to me yet, so rather than write an endorsement or opposition, I'll just review where I stand on some of what were said to be the pros and cons of the previous concept.

Being long-winded, I'll start with an introduction: The original draft of AB 649 (Wiggins) (a hardly-related rewrite passed and currently awaits the governor's signature or not.) The basic idea was that by legislative fiat, thirteen centers would be created. All staff working directly with people who have developmental diagnoses through Regional Center funding would be employed by the centers and, basically rented out to the agencies responsible for the work. Different drafts of the proposal included different functions but in one or more draft the Centers would:
1. Recruit direct care staff;
2. Pay and provide benefits to the direct care staff (and, possibly, managers;)
3. Provide a fair-hearing process for disciplinary action;
4. Centralize many employment-related administrative functions;
5. Provide core training; and
6. Serve as a launching point for more efficient unionization of direct care staff. (Aye, thar's the rub.)

So, here are some of the arguments made about the concept and the conclusions I naively reached about them:

Hypothesis: "With a Union involved, we'll lose our ability to fire or discipline our staff."
Doug's Opinion: Maybe, but probably not. People with developmental disabilities are far too sympathetic and the system too expensive for an undisciplined workforce to sneak by.

H: Once the workers are unionized, people with disabilities will have a political lion to roar on their behalf.
D: I kind of don't trust this theory. I don't question that the membership and leadership of SEIU (and, maybe AFSCME) really want to do the right thing, and there's no doubt SEIU has more pull in Sacramento than pretty near anyone. Nonetheless, I've complained that the vendor-driven advocacy of the past is narrowed by its perspective and insufficiently challenged by our clients and their families. The same is true of Regional Center-driven advocacy. The same will likely be true if labor unions drive the advocacy.

H: Centralizing some of the system's administration will allow wages to rise without increasing the cost of the system or reducing quality of care:
D: Actually, as long as the operative word is allow (I do need a little wiggle-room,) I agree. 8000 agencies statewide hiring an average of 12 employees apiece can't possibly be efficient. As an example, ¡Arriba!, when we need staff, takes out ads at $80-150 per in obscure places for the purpose of hiring 1 person at a time. Combining that across the hundreds of similarly sized agencies in eastern LA County could provide for big ads in the LA Times, La Opinion and several others. The WSC concept also makes easier self-determination models of care which can be cheaper and more successful for some clients.

H: Having a monopoly on labor for this system is a terrible idea.
D: I'm pretty sympathetic to this argument, especially when you consider the proposals for governance in which someone appoints a board and there's no process for the community to dislodge the boards. When you look at the stubbornness of the failed regional centers, the idea that all labor provided to this system could be connected to similar administrative catastrophes, the concept is chilling. No new self-perpetuating or appointed boards in this system will get my support. Uh-uh.

Happy Labor Day, everyone!