Is it possible to reduce state spending and keep providing the quality services the people of Connecticut need? Yes.
According to the bipartisan Commission on Nonprofit Health and Human Services, Connecticut’s nonprofit community already provides a number of healthcare services to the state at substantially lower cost than if those services were provided by state employees and institutions. By carefully expanding the use of qualified nonprofit providers, Connecticut could deliver quality programs and services at less cost.
What’s more, Connecticut and many other states have used nonprofit, community programs to reduce corrections system costs and achieve better results through treatment, locally based programs, and rehabilitation.
Governor Malloy recognized the importance of the nonprofit provider community when in 2011 he created a cabinet-level position of Nonprofit Liaison to the Governor, as well as the state’s first public-private Cabinet on Nonprofit Health and Human Services.
Assessing Current Programs
As the demand for services increases, a prerequisite for expanding the use of nonprofit providers should be accurately assessing the effectiveness of current state government efforts.
It’s critically important that results-based accountability (RBA) and other efficiency measures be implemented throughout state government. Only by measuring their results will agencies be able to effectively identify the most appropriate opportunities for engaging the nonprofit community to meet the increasing demand for services.
Union work rules should also be modified to more easily allow the interagency redeployment of state employees to bypass the current attrition system of staffing and more effectively address priority services.
Moreover, most state agencies operate in “silos,” working independently of each other. In a recent study, the Connecticut Institute for the 21st Century called for “intentional, aligned, cross-agency efforts that target unified community outcomes.”
The Commission on Nonprofit Health and Human Services found the cost difference between the state and nonprofit providers so large that even if the wages, benefits, and costs of care were increased in the nonprofits, as the commission recommends, substantial taxpayer savings would remain. The commission analyzed the funding provided to nonprofit providers of health and human services under state Purchase of Service contracts.
Comparing employee wages, benefits, and cost of services between public- and private-sector providers, the commission confirmed what the Connecticut Institute for the 21st Century, the Commission on Enhancing Agency Outcomes, and others have said: The state doesn’t have to spend as much as it does now to provide the people of Connecticut with essential services.
In addition to substantial wage and benefit differences, there are also great differences in costs between, institutional care and community-based healthcare.
Institutional care is traditionally the method of choice for those requiring a higher level of healthcare. However, “advancements in treatment methodologies, expansion of community-based services” and new drug therapies “have greatly reduced lengths of stay and even negated the need for institutionalization,” says the Commission on Nonprofit Health and Human Services.
More people are now being safely and effectively treated in their local communities and living independently, with their families, or in group homes.
Cost differences between state institutions and nonprofit residential care are obvious: At a Department of Developmental Services residential facility, for example, annual client cost was $297,110, or $814 per day per client. Comparable residential services at a private institution were $136,371, or $373 per day.
“True cost savings can only be generated through a thoughtful and strategic planning process that recognizes and balances…both the risks and benefits that will impact clients and providers across the continuum of care,” says the Commission on Nonprofit Health and Human Services. Among its many recommendations, the commission calls for the state to “support a robust community-based system of care that provides timely and accessible services across a broad continuum.”