Dreaming with the Governor

While we're waiting for work to be done by the legislature, and since I haven't posted here in a month, I have some thoughts about one plank in the Governor's proposed cuts to DDS. One of the elements of the cost-cutting plan calls for Regional Centers to refer clients to the lowest cost provider of the desired service who is able to meet the requirements of the client. My agency seems to be the current low cost provider of individualized supports serving the SGPRC catchment area and, perhaps, the ELARC catchment area as well.

In a way, this is a better bad policy than most, at least from the provider perspective, particularly where agencies with state-set rates are concerned. The biggest budgetary risk from the rate cut implemented February 1 will be that vendors with already low rates close and are replaced with agencies whose rates remain higher than those charged by the low-cost providers before the cut. In fact, when the rate cut went through, ¡Arriba! was the second lowest-cost provider and remained so until our better closed in April. The risk is that unit costs rise or, at least, the overall affect becomes uncertain.

One smart way to avoid that trouble would be to cap rates rather than lower them proportionally. In that case, high-cost providers would be forced to charge less and if they failed to restructure their costs, they would be more likely replaced by lower-cost vendors.

But the proposal makes some sense, too. Under it, lower cost providers are to be strengthened after the proportional cuts through higher volume. This should help preserve the lower-cost providers. Setting aside for the moment my usual bitterness that the system should be so vendor-centered, at least the budgetary intent has a better shot with this proposal implemented.

Except it probably won't be implemented. I have very little hope that this agency will see more referrals. Regional centers are already incented to and expected to use the low-cost provider able to meet the clients' needs. When the previous low-cost provider closed, how many of their former clients were referred to us for service? Exactly. Even in the middle of a financial crisis that forced the regional center to cut hours, the lowest-cost alternative wasn't used.

So worry not, my friends, about this particular piece of trailer bill. Should it pass, your friends and loved ones will not be herded into low-cost programs but will continue to enjoy the higher-cost services of whatever quality they now receive. Hopefully, the cut was scored conservatively.