Thursday, February 17, 2011


Alongside "draconian," "savage," "irresponsible," "responsible" and "common sense," "darwinian" is an adjective that deserve to modify the cuts in process. Still, there seems to be little discussion of how the system will evolve in the presence of significantly less funding and new regulations. To the extent that there's a vision for change, it seems to be towards accountability, a welcome new feature, if the new accountability systems proposed didn't seem as spectacularly inefficient as the worst images of the system and if there were some little bit of the new oversight that addressed outcomes.

But as to the composition of the system, I have a very hard time believing that will not change over the next year. What has frustrated me the most watching the changes so far has been the lack of intentionality to it all. In essence, real cuts have come with implementing statute which in at least half the cases was implausible. This has left it to regional centers to cut services not mentioned in the trailer bills. So, from the be the change you seek department, here is my projection for the system we are now creating.

Congregate care will be much more prominent on the menu of options, and large providers will dominate: Larger non-profits, with some notable exceptions such as Jay Nolan Community Services, are principally site-based, secondarily group-based, and often have individualized services attached as tiny portions of the whole. They are also more likely to be non-profit and to fund-raise successfully. These services have been unsuccessfully targeted for cuts. But are the best placed to weather them and have generally avoided implementation of most, leading to cuts not targeted in individualized care.

There will almost certainly be fewer providers in the future. Parent-providers may continue and large agencies should survive but the smaller agencies that comprise most of the individualized system will be less sustainable. These agencies may merge with one another to survive, or close. To the extent that large non-profits are willing and able to provide ILS, SLS, micro-enterprise support or that smaller agencies can merge, person-centered services may continue to be available. But it is worth noting that under the hedgehog principle that firms specialize for a reason, it seems worth noting that at large agencies that provide both congregate and individualized support, ILS and SLS et cetera are usually very small pieces of overall programming.

Note: For the purpose of this post I am not assuming that this is a bad thing for people with disabilities, but I also do not assume this will make care more efficient. While congregated services are cheaper per person and per hour, clients receiving individualized support often require much less of it. I think it would be impossible to say based on data we have whether the site-based system is more or less efficient than its alternative. For example, micro-enterprise and job-coaching are much more common than workshops or enclaves with clients of ILS and SLS services which eliminates a lot of bureaucracy.

Moreover, changes rarely go well without planning and, thus far, DDS has been scrupulous in spreading damage to the system fairly evenly. As a consequence, whatever system change will come is likely to favor not cost-savings nor efficiency, nor quality but the fiscal positions of the providers. Fortunately for everyone, blogging is a low-overhead activity.

Wednesday, February 16, 2011

In praise of the monkey

I had a recollection this morning of the old system-reform workgroups. The purpose as given was to make changes to the system, in partnership between DDS and other stakeholders, for the purpose of producing more value for the people the system served. All of the conversations, however, wound up focused on making the system more expensive. Better ideas were quickly forgotten in favor of silly ones. More than once since then, I've wondered what it takes to get sincerity and mission from experienced advocates. As much as anything, that question led to my ongoing support for CDCAN.

So, with that in mind, I like the survey monkey DDS employed for ideas regarding purchase of service standards. I'm skeptical that the resulting standards will be any less foolish than much of the existing trailer bill language. Even DDS, which is trying to reduce funding, can't seem to complete a thought on reform without bloating the cost of the system. (I would credit them for paying attention during the system reform.) But at least they are getting input some of which will be candid and thoughtful. I hope DDS continues to solicit feedback broadly and do hereby award them three bananas for current efforts.

Friday, February 11, 2011

A few notes on things as they are

Just a couple quick observations from the hearing 2/10.

First, Ms. Delgadillo used the continuing availability of new vendors in response to a question regarding the affect of existing rate cuts. It bears noting that new vendors receive higher rates than the older vendors that currently have most of the capacity. The number of agencies closing, assuming it is small, might be evidence that rate cuts aren't too damaging but the number of new vendors is entirely irrelevant as a datum.

Second, the audit suggestion depresses me. DDS needs to find ways of lowering the cost of the system other than by raising the cost of the system.

Friday, February 04, 2011

Things DDS (or LAO) should be thinking about, Part I

While DDS plays with service standards and administration costs and other proposals from which the unforeseen consequences will outnumber the planned reforms by 1,000 to one, there are some foreseeable scenarios for which planning could mitigate harm and reduce costs. Here is my list:

Consolidation is inevitable. The cuts the governor has proposed are more than the system can bear, but even without further cuts, many agencies are now unsustainable and there will be further cuts. What's more, there is no likelihood that the cuts as proposed will be the cuts as experienced. Things intended no longer to be compensated will be paid for and things left protected will be cut. Agencies will reach the point that they are no longer large enough to justify management and those agencies will start to close. The clients served by those agencies will in most cases receive new supports from different agencies.

Barriers to sale or merger of existing agencies can be removed, allowing the clients to avoid interruption of important relationships and lowering the administrative burden on both regional centers and vendors from the reallocation of those clients. The alternative is the existing process which is needlessly traumatic for clients and staff and needlessly costly for agencies and the state.

The savings in the Bureau of State Audit reports are between the headlines: So far, trailer bill language coming from DDS seems focussed on the most lurid offenses the BSA found in its work. I can certainly agree that IRC's budget-padding ought to be cut off and extra funding for relatives of regional center employees ought to be cut off. But booking savings seems foolish. It strikes me unlikely that any new statute will prevent miscreants and thieves employed by regional centers from spending any new money in ways that their colleagues have been caught.

But between the headlines were examples of how regional centers may waste money in small ways every day. To someone working in this system, a family member of someone who is a client in this system, the anecdote of the regional center employees explaining a contracting decision with an undocumented, unexplained preference resonated with countless experiences repeated so regularly I'd stopped noticing until I saw it in print. The new trailer bill language regarding large contracts might have prevented one $950,000 absurdity but perhaps never another. Reviewing vendor selection by regional centers by sampling the tens of thousands of opportunities that arise each year to be unintentionally inefficient holds much more promise.

As someone who has encountered both wild bears and domestic termites, I assure my friends in Sacramento that common, small pests do much more damage than big rare ones.

Look differently at rates: One way this system was meant to be efficient was competition. The problem is that there has never been a good tool for regional centers to use to reliably (or semi-reliably) judge quality and rates are opaque, so whatever providers compete on the basis of, it isn't quality and it isn't cost.

This has a couple implications. First, rates should be public so that agencies can compete on that basis. Second, it means that for the most part, the state is paying whatever rate was given to whatever agency was chosen on whatever basis. In the short term, if further rate cuts are anticipated, given that the rates are close to random, it would be better to cap rates than to continue hurting the low cost providers by the same percentage as the expensive ones. The usual justification why the rate system is so irrational has always been that to rationalize it would cost some agencies and they'll fight the change. That's still true, but seems pretty important in the present circumstances.

But rates ought to public and regional centers and/or DDS ought to publish them. That will make it a little harder for regional centers to neglect that consideration and a little harder for high-cost vendors to hype their own costs. Furthermore, it would help in negotiations as the fear of being cheated could be as completely allayed as it is possible to allay that particular phobia.

Query to readers: What do you think DDS should be considering while they write the trailer bill language? (Leave a comment and then go tell them.)