Self-Directed Services: Episode I

In which Doug rants about what real reform is and explains why Self-Direction qualifies.

OK, so the first thing is to distinguish real reform and "reform." The analog for me is to construction. Smarter architecture and better carpentry technique can allow structures to accomplish new things, find new uses or maintain the old function with fewer materials. We kind of already read in the papers about what happens when builders try to do things the same way with lesser materials.

The parental co-pay starting in January is not real reform, it's the opposite, because it adds costs not related to the function of the system in order to change who pays. More cost, no added benefit to the client.

The Statewide Purchase of Service Standards (POSS) that I expect to be proposed in January are likewise, not real reform. I expect them to raise the cost to the State and reduce benefit to society. My prediction is reasonable but unsupported by facts as is the opposite prediction. In a clear and concrete way, the POSS proposal is an arbitrary attempt to use less lumber in building an identical structure. The real savings or added cost depends on how soon it collapses and which attorneys the injured employ.

Self-direction, on the other hand, is better architecture. One of the chief inefficiencies in our system is what economists call the "Principal-Agent problem." That means that the people making decisions have different goals and incentives than the supposed beneficiaries. The inefficiencies that economists connect with this problem are, yup, waste, fraud and abuse. Basically, resources are diverted from their purpose to serve the goals of the agent (i.e., service coordinators, life quality assessors, direct-care staff, portly executive directors, etc.) Please note, this isn't always (or often) the intention of bad people, but often natural result of committed people who are worried about the alligator biting their bootheel and climbing their leg.

Under self-direction, the Principal (the client) is significantly more the agent than is currently the case. Service Providers are free to set rates and clients are free to pay them or to substitute a cheaper and sufficient alternative. The only reasonable outcome to expect is that the principal will seek a cost-effective array of services and reduce the incidence (and cost) of bad service selection by service-coordinators, inflated service provision by vendors, unrealistic expectations by life-quality assessors and clients' rights officers, etc.

The principal-agent problem persists, with the positions reversed, when you consider the goal to be stewardship of taxpayer dollars (a stated goal of the Lanterman Act.) Because clients and their families bear little or none of the cost of services under the current delivery model, they have no incentive to accept insignificant reductions in benefit in exchange for substantial cost savings. (In theory, the family share of cost assessment due to begin in January was meant to reduce this problem and maybe in another post I'll write about it's flaws as a solution.) In this case the State or the taxpayer or the system is the principal and the client/family member is the agent making decisions.

Consider: One cost that my agency bears (and therefore the State) is client absenteeism. If I send someone to work with a client who is not there, no service is delivered and I don't bill but I do pay staff for time and mileage and therefore I am restricted in my ability to lower my rate. Another cost related to providing services (this may be limited to specialized services like ours) is the cost of serving different individuals in different places. When staff see three different clients in an 8-hour day, there is often one hour of travel time during which there is no benefit to the client.

After last year's Self-Determination Conference I grabbed 10 files at random and calculated that a 100% reduction in client absenteeism and a 50% reduction in travel-time would amount to a 12% reduction in our costs for those 10 clients. Under the current delivery model, it would be illegal (I assume) and unethical (I'm certain) to offer to pay clients for perfect attendence and to work with staff less often for longer sessions. Granted, some clients may have sound and irremovable cause to miss sessions or to see us more often for less time. For the others, however, under a self-directed services model, I could absolutely offer a discount in exchange for consideration.

There's another available source of systemwide savings that would improve the benefits to clients. Because this system does not evaluate outcomes, nor supervise services, the focus of system's quality assurance process amounts to primarily a review of proxy documentation. The assumption is that if a thorough review of your documentation supports the the presumption of a quality program, then you may be alright.

This leads to two inefficiencies vis-a-vis either principle stakeholder groups- the clients and the taxpayers. Because our paperwork is the messenger of quality, vendors and regional centers dedicate probably more effort to turning out (or reviewing) good-lookin' sheets than actually improves our services. My reckoning has always been "they don't know how we're doing so they have to know what." In theory, when the person controlling the funds is the person who benefits (or not) from what they buy, the quality assurance currently being done can focus on measures of success rather than measures of effort. That means a shift in incentive to providers from describing services well to providing good service. As a consequence, resources will be redirected in the same direction. A client willing to continue paying for services means almost the same thing as a thorough documentation of effort and should be cheaper to maintain.

More client benefit, less cost, more sustainable agencies. Real reform.

Stay tuned later this week for the next episode.