Why Haven’t States and Localities Capitalized on Great Management Ideas?

If you sat down and read all the articles we’ve written over the years about various government reforms, you would gain the impression that city, county and state management must by now have reached the pinnacle of excellence.

You would be wrong.

Many highly anticipated managerial reforms crash into the sharp shoals of monetary shortfalls or technological disasters. Others simply fall by the wayside or are curtailed because they don’t deliver as promised. Still others cease for less defensible reasons.

Read the March issue of Governing magazine.

Take Maine. Starting in the mid-1990s, the state made its way through a series of rebounding reforms. In an attempt to put the state’s fiscal house in order, officials adopted performance-based budgeting. Hope and support abounded, but problems cropped up. Some were linked to constraints on the process imposed by the legislature, including retaining line-item control. Additionally, the state’s budgeting information systems couldn’t deliver the necessary data. “It was a very good process [at first],” according to a source close to the scene, “but momentum fizzled.”

The state then turned to something called “modified flat budgeting.” That didn’t work out either. So in 2011 the governor called for zero-based budgeting, a concept that’s been around for decades. But at this point, there’s talk in the state about “reform fatigue.”

We’re sympathetic to the men and women who spend lots of time trying to make something new work -- only to feel that their time has been wasted. But resolutely sticking with the status quo seems like the greater evil. “My notion is that iterative reforms leave in place something that can be built on, even if it doesn’t look like it at the time,” says Philip Joyce, professor of management, finance and leadership at the University of Maryland’s School of Public Policy.

That makes sense. But as Joyce points out, often reforms are dropped and new ones generated for reasons that are substantially political, and that’s not a good thing. But it’s predictable. “You have to anticipate there will be modifications in policy with new administrations,” says Greg R. Lawson, statehouse liaison and policy analyst for the Buckeye Institute for Public Policy Solutions. “I’m sure there is frustration, but elections have consequences.”

They sure do. In Indiana, a chronic disease management program established in 2003 for patients with chronic heart disease reduced claims to Medicaid by an average of $283 a month, according to researchers from Indiana and Purdue universities. After a 2005 change in administrations, however, the effort was outsourced and the economics of that deal worked out in such a way that a follow-up evaluation found no savings. Ultimately, the program was scaled back.

Equally dramatic is the case of Minnesota, where the politicization of health-care reforms has been a long-standing game. Consider this: In 2008, the legislature passed a health reform package, which included a $45 million allocation for public health to combat smoking and obesity. It also included an effort to identify certain conditions and treatments -- such as a knee replacement for an arthritis-damaged knee -- and ask providers to bid on a package to provide the appropriate service.

But before these potentially worthwhile changes had a chance to prove their success (or to be shown as failures), the governorship switched from Republican to Democrat; the legislature shifted its political balance in the opposite direction. The $45 million was cut by two-thirds. The packaging of services was put on the back burner and a new round of reforms was introduced.

When management meets politics, management is generally the loser. So, what can policymakers do to heighten the chances that a reform will, at least, be given the opportunity to succeed or fail on its own merits? Here are a few ideas from the experts:

• “It is much more likely that there will be continuity in these reforms if they are codified in law as opposed to just the idea of the governor or mayor. If it is in the law that agencies have to produce performance reports -- it can’t be completely ignored by the new administration.” - Philip Joyce, University of Maryland.
• “Reforms that are made quietly and gently are more likely to slip in and not be bothered.” For instance, it helps to avoid calling a reform a reform, but to use words like “progression.” “If an incoming administration treats it that way, it won’t be something that was associated with a prior [administration].” — Harry Hatry, director of the Public Management Program for the Urban Institute.
• “Managing the pace of change is an art form. We have seen organizations try to make too many changes at the same time. When too much change is stacked up, the organization doesn’t have time to learn from its own change. You get people who are burned out.” — Marv Weidner, CEO of the public-sector consulting firm Weidner Inc.

One last note: Some of our comments could lead readers to believe that we never met a reform we didn’t like. Obviously, many are misguided or unfeasible, and these should certainly be shut down as quickly as possible. But that shouldn’t happen for the wrong reasons.