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LePage administration hires consultant to audit Maine's welfare programs

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The Alexander Group

The Alexander Group

The LePage administration announced Tuesday that it has contracted with an outside consulting firm to audit Maine’s welfare programs, including Medicaid.

The Rhode Island-based Alexander Group is headed by the former head of public welfare departments in Pennsylvania and Rhode Island, Gary Alexander.

According to HHS, The Alexander Group will assist Maine in addressing financial challenges and in crafting a program that effectively serves individuals and is sustainable. The work will include an evaluation all of Maine’s welfare programs as well as the Democrat-backed proposal to expand Medicaid.

“DHHS and the Alexander Group will undertake a complete assessment of all welfare systems within DHHS to determine how program reforms and additional flexibility can add efficiency, improve patient outcomes and achieve cost savings,” the Department said in a press release.

“Our number-one priority is to effectively and efficiently manage programs that meet the needs of the poor and vulnerable residents in our state,” said DHHS Commissioner Mary Mayhew. “We want to design and run a welfare system that is right for Maine and guards against any misuse of programs.”

“We have a responsibility to Maine citizens and taxpayers to run a program that not only meets the needs today, but is financially stable in the years ahead,” she said.

So what can we expect from The Alexander Group?

A report the firm submitted to the Arkansas State Assembly in July, “Review of Arkansas’s Medicaid and Public Welfare System,” is chock full of useful analysis, facts and statistics regarding Arkansas’ welfare system. The report may well foreshadow what The Alexander Group will produce for Maine.

The Alexander Group in Arkansas

Arkansas, like Maine, has a growing and unsustainable web of overlapping welfare programs. The Alexander Group calculates that each employed person in Arkansas supports an estimated 0.94 persons who are receiving welfare assistance and that for each employed Arkansan there are an estimated 1.15 persons who are receiving welfare assistance. “In Arkansas, Medicaid pays for roughly two-thirds of births and roughly 70 percent of nursing-home care,” the report states. “Considering Medicaid expansion pursuant to the Affordable Care Act and without major reform of the system, Medicaid spending is projected to increase even more dramatically.” Beyond understanding the scope of the welfare state – analysis that serves only to confirm what most moderates and conservatives intuitively believe – The Alexander Group’s report shines light on flawed practices within the administration of welfare programs.

The report is sharply critical of Arkansas’ comprehensive self-evaluation of its welfare programs, noting, “There is no indication on how successful welfare programs have been to help children to be cared for in their own homes, or on the overall reduction on dependence on the government, the reduction in out-of-wedlock pregnancies and births, or the formation and maintenance of two-parent families.” Although all of the aforementioned areas are stated goals of Arkansas’ welfare programs, HHS’s self-reporting “does not provide a single metric to measure any of these major goals.”

When The Alexander Group endeavored to analyze whether these goals were being met, they found that, “In fact, the social indicators reveal that the overall well-being of the target population has significantly declined.” Using U.S. Census data, researchers discovered that two-parent households are rarer than ever in Arkansas, out-of-wedlock births are increasing and the number of children in poverty is growing – all of this despite relentless increases in social-safety net spending designed to curb these problems. All of Arkansas’ problems mirror those experienced in the Pine Tree State.

The most important part of the report is entitled “Major Policy-Reform Recommendations.” The reforms include Medicaid global waivers and comprehensive welfare reform, and may be a prelude to the firm’s recommendations for Maine.

The Medicaid global waiver is akin to a reset button – a carte blanche request for federal permission to completely overhaul all aspects of Medicaid. The goal of the global waiver is to help Medicaid meet long established goals while bending the medical welfare cost-curve. The Alexander Group recommends this approach due to the complexity of Medicaid’s administration and the imperfect nature of government programs:

“Because of the complexity and burden of overlapping federal and state laws, rules, and regulations, the task of transforming the welfare system into an efficient operation focused on independence is more difficult than changing private-sector entities,” the researchers write. “Unlike successful businesses that quickly learn from mistakes, adapt to new realities, and have to be accountable or else they fail, governments can continue for years operating a system under outdated and misguided assumptions. Even in the face of clear program failure, our top-down, hierarchical system never calls for reexamination or repeal of programs, only for the adding of new levels of programming onto an already bloated and disorganized system.”

The researchers saw in the global waiver a way for Arkansas to break through the accumulated Great Society bureaucracy. “Currently, the state operated a myriad of Medicaid waivers and state plan amendments that do not comport across all programs. These thousands of rules, service definitions, and conflicting regulations yield operational chaos, cost escalation, lack of transparency, and a preoccupation with formal compliance with Uncle Sam, not better health outcomes for recipients,” the researchers write. “Consequently, a global redesign would not only make Medicaid more efficient, transparent, and accountable but also more accessible to legislators and even taxpayers. Moreover, this option would improve performance for employees and contractors, outcomes for recipients, and realize significant cost savings.”

Pursuing a global waiver is important for Arkansas more than ever, the researcher write, due to the Affordable Care Act and Medicaid expansion: “[T]here is no better time for a state like Arkansas to pursue a global reform of the broken system than now. The top –down, one-size-fits-all bureaucratic model that the federal government has imposed upon the states through both Medicaid and the ACA is unsustainable. Yet Arkansas can show leadership for the nation by taking control on her own resources and possibly even repurposing savings for more promising uses—like infrastructure improvements, vocational training, or tax relief to revitalize industry—that can enhance economic and job prospects for all.”

The comprehensive welfare reform The Alexander Group recommends bears resemblance to many GOP-backed reforms pending in Maine. The policy recommendation is based on the following principles: 1.) Welfare cliffs are eliminated, 2.) The system is person and household centered, 2.) The system is equitable, 3.) Natural supports, including familial relationships, are encouraged, 4.) It promotes personal responsibility and decision making, 6.) Time sensitive.

The most valuable part of The Alexander Group’s comprehensive welfare reform is not, however, its policy prescriptions, but its development of a strategy for achieving these reforms in the face of an overreaching federal government. “[P]reparing a comprehensive welfare reform is more complex than preparing a global waiver, as it must include a strategy to secure approvals from the federal government, and no state has yet accomplished this task.” The Arkansas report lists 30 specific welfare reforms and avenues for enactment.

The full report can be accessed here.

The state will reportedly pay $450,000 for The Alexander Group’s review, with the feds paying for the remainder of the nearly $1 million contract. It is unclear when the group is expected to deliver its report for Maine.

Steve Robinson
Maine Wire Reporter
SERobinson@themainewire.com

About Steve Robinson

Steve Robinson is the former editor of The Maine Wire and currently producer for the Howie Carr Show. Follow him on Twitter @Stevie_Rob or send him an email at Steve@HowieCarrShow.com.

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