Week 14

Capitol Connections

 

The ink was barely dry on the House budget proposal for next year when we quickly started working on the following year. While the Senate deliberates on the proper amount of spending for next year, the House Appropriations Committee has already started to take testimony in preparation for fiscal year 2019.

It is clear to me that we cannot sustain the level of services we have in Vermont unless we rethink how we do business. There will be some who insist that we raise taxes, especially on the wealthiest among us to meet the needs of Vermonters. I do not embrace this approach. Why? I am not unwilling to raise more revenues from those who can afford it, but to do so now is very premature. We need to wait and see what impact the Trump budget will have on Vermont, and save whatever revenue raising capacity we may have until we know the extent of the problem.

In the meantime, I am advocating that we try to reengineer the delivery of services to Vermonters, not just to balance our budgets in the short term, but to fund from those savings investments that will save us money in the long term.

Vermont unlike many other states does not have a county government that provides a broad spectrum of services that extend beyond law enforcement. Many of the roughly 3100 counties across America provide housing, health care and social services. Vermont relies on a vast network of nonprofit organizations to provide state funded services.

Over the years a form of human services sprawl has developed. Each organization has an administrative overhead structure that has to be supported, before funds are provided for direct services. What if we could consolidate the administration of these organizations? Could we save money? What if instead of each organization having a business office manager and staff that paid bills, did payroll, accounted for revenues, managed insurances and such, there was one, or several regional business offices if needed, that performed those duties instead of many?

Years ago then Vermont Mental Health Commissioner Rod Copeland brought some 15 mental health organizations together and told them he had to cut their budget. He told them he would far rather reduce their administrative costs than cut back on direct treatment services. He asked them to come together with ideas to consolidate management functions across the agencies. His request was not met with great enthusiasm. Five of the small agencies did however join together and helped form an organization that could perform administrative functions less costly than they could do on their own. Today the administrative costs of those agencies is less than that of their peers.

Over the years I have suggested to other organizations in Vermont that they too should rethink how they provide these back room management services by consolidating these functions. I recall vividly what it felt like to be a skunk at a party.

What if our five Community Action Agencies in Vermont joined together and partnered to save money on administrative costs? Could our five Area Agencies on Aging do the same? How about our twelve mental health agencies, and our fifteen Parent Child Centers, could they too reengineer their business office functions, quality assurance or other management tasks? My guess is, human nature being what it is, the efforts would not move fast or get far.

The State of Vermont that pays these organizations needs to lead the analysis of such an effort. To expect people who could likely lose their job to lead the analysis is not realistic. But the State who contracts with these organizations to provide services to Vermonters could do an objective analysis and then decide to grant funds to those entities with lower administrative costs. Some of the savings that might be generated could be shared with the agencies to do more direct service work, or pay their staff better, and some could help balance the budget.

We need to reimagine how we serve Vermonters. Instead of a system that sends families seeking parenting assistance to one organization, then to another agency for food assistance and yet another for help with housing, could we integrate these services and do it at lessor costs while serving families better in a holistic fashion? Could we combine these services with our other health care providers?

We cannot continue business as usual. I am not suggesting that we make these types of changes without careful analysis, but I am saying they are way over due for discussion. And to be clear, just focusing on administrative efficiencies that might be achieved is only half the story. We need to help our various community organizations come together to focus strategically on adverse childhood experiences, which research shows can be a powerful predictor of poor health throughout life. But that will be the topic of another article.

 

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