Getting Smarter on Health Care, Ironing Out Government's Conflicting Goals, and the Problem with Job Creation

Plus: Illegal pension recipients, and more management news
 

While we think it's a safe assumption that there aren't many B&G readers on Medicaid, we have a question for you that we think could help come up with ways for states to save money for that program. We've personally had a great many encounters with the medical profession over the last couple of months. And we keep seeing -- and frequently avoiding -- fiscally unsound practices, like the duplication of tests. (Just this morning when a doctor told one of us to get a blood test, we pointed out that one was administered yesterday. So, no blood test.)

But we can't help but wonder how many Medicaid patients would argue with the man in the white coat. Share with us, if you will, personal experiences you've had dealing with the medical establishment where you think money has been wasted in some way. Identify yourselves, please, but we guarantee anonymity in any use we make of your responses. Email us with your stories!


Conflicting goals within governments can be counterproductive, wasting time, effort and money. We've repeatedly run across this phenomenon over the years. One of our favorite examples from the past was shared with us by then-Mayor John Norquist of Milwaukee, Wis. His point centered around infrastructure in downtowns. Lots of money has been spent over the years to make it easier for automobiles to zip right through downtown areas, he explained. Efficient, uncongested roadways were the goal. But what if another goal is to keep more shoppers in the downtown area? Suddenly those fluid downtown roadways don't look ideal, if they make it a whole lot easier to speed on through and get to the nearby suburban mall.

We've just come across a particularly interesting version of this same theme in a recent New York Times article. Turns out that health officials in New York (and elsewhere we're sure) are intent on distributing condoms to prostitutes, in order to cut down on the spread of sexually transmitted diseases. But apparently "police departments are harassing sex workers for carrying [condoms] and using them as evidence to support arrests," reported the Times. Both departments are doing their jobs, trying to achieve their own goals. But somebody someplace in city government should take a shot at reconciling them.


Watch out! There's been a great deal of much-warranted information produced in the last few years about state and municipal pension plans. But we've seen very little about the condition of the school district plans. From what we can tell, this is another shoe about to drop. And it's a size 12.


Listening to leaders from a great many cities and states, it's clear that job creation is one of the most important items on their wish lists. It isn't hard to see why that would be the case. But there can be a danger in going overboard. That was apparently the situation in Rhode Island recently, according to Stateline.

The Stateline article points to the recent demise of a video game company called 38 Studios. Back in November 2010, according to the piece, "38 Studios had secured a deal with the state of Rhode Island for a $75 million economic development loan to move its headquarters from Massachusetts to Providence. The deal was touted as a potential industry-starter for the economically depressed state. ... Now, the company is facing liquidation in federal bankruptcy court." The bigger problem, according to the article, is that the "largest creditor -- and arguably the entity with the most to lose -- is Rhode Island. The state is on the hook for about $116 million -- including interest and fees -- stemming from the $75 million loan."

Why would a state put such a bet on a company that's in as intrinsically risky a business as video games? Ed Mazze, professor of business administration at the University of Rhode Island's College of Business Administration, answers this question in Stateline: "The only reason that I believe we gave them the funds is that we were so desperate to create jobs."


"Man is the only animal that laughs and has a state legislature." -- Sam Butler


Sometimes we run across a revealing audit in one state and can't help but wonder whether the same problem exists elsewhere. That's the case with a new report from New Jersey's comptroller, which identified "widespread improper participation in [the] state pension system."

At heart, the investigation discovered that local governments in the state weren't complying with a state law barring independent contractors from earning pensions. According to the comptroller's office, it "reviewed 58 municipalities and school districts and found that an overwhelming majority of those local governments failed to comply with a 2007 state law that required all public entities to determine whether their professional service providers were bona fide employees as opposed to independent contractors."

The audit indicates that the accrued pension credits from illegal recipients resulted in inappropriate payments of approximately $1.9 million per year in pension benefits. And of course there are hundreds of additional municipalities and school districts in the state that weren't covered by the audit, and might be paying millions of additional dollars to ineligible recipients.


Back in 1999, according San Francisco's Bay Citizen, "San Francisco residents voted to require the transit agency [Muni] to be on time at least 85 percent of the time. For years, bonuses for the Muni chief have also been tied to performance measures, including on-time performance."

That certainly seemed like a sensible goal and a good incentive to do something that would clearly benefit city residents. But what did the transit agency do to pass muster? In part, officials chose to inflate on-time arrival rates of buses, with a series of so-called "quirks." For example, according to a memo written by the transit agency's chief information officer (and recently obtained by the Bay Citizen), "Muni would count a bus as on time if it came to a stop at the time when another bus was scheduled to arrive, even if it was a different late or early bus on the same bus line."

When this kind of activity was uncovered a couple of years ago, nothing was done about it, according to the paper. In fact, the accounting tricks that hyped the numbers were apparently effective enough to boost the on-time rates by as much as 18 percent.


More about user fees, and our belief that states and cities are on the edge of significant public resistance, not unlike the property tax rebellions of recent years: According to the Brennan Center for Justice, "Many states are imposing new and often onerous 'user fees' on individuals with criminal convictions. Yet far from being easy money, these fees impose severe -- and often hidden -- costs on communities, taxpayers, and indigent people convicted of crimes. They create new paths to prison for those unable to pay their debts and make it harder to find employment and housing as well to meet child support obligations."

Though the population most vulnerable to these fees doesn't tend to be politically powerful, they just add to the list of places where utilization of user fees may have gone over the edge.

Here are a few key findings from the Brennan Center:

  • Though individual fees may be small, they can add up quickly, leaving the underprivileged mired in unaffordable debt.
  • The inability to pay fees can lead to yet more fees. Late fees, payment plan fees and interest make the bills still larger; on top of that, bill collectors take their cut of the pie. "For example," the report points out, "Florida permits private debt collectors to tack on a 40 percent surcharge to existing debt."
  • "Although "debtors' prison" is illegal in all states," the report says, "reincarcerating individuals for failure to pay debt is, in fact, common in some -- and in all states new paths back to prison are emerging for those who owe criminal justice debt."
  • The more debt a lawbreaker accumulates, the harder it is to reenter society after a conviction.

Congratulations to the Chicago Library System. Thanks to an effort to improve the efficiency of staffing, it's been able to keep many libraries open for four more hours on Monday -- without spending a single additional dollar, according to the Chicago Sun-Times.

Part of the key was coming up with a better mixture of full-time and part-time positions, and part was relocating positions from one library to another. "The extra hours will allow the libraries to add more early literacy programs, host school visits and engage in outreach programs to schools," according to the Sun-Times.

We hope the Chicago Library System doesn't mind our suggesting this, but we recommend that other cities reach out to officials there to see if their approach can be duplicated.

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