We've moved!

Social Icons

twitterfacebooklinkedinrss feed

Wednesday, July 8, 2009

Indiana Welfare Privatization Results in More Errors, Worse Service

For those of you who insist that government always operates less efficiently than the private sector, here's your counterexample of the week: Indiana officials are considering canceling their contract with IBM to manage its welfare system. What's the problem? IBM is screwing up worse than the state ever did. In January 2007, pre-IBM, the Hoosiers mishandled 4.38% of their food stamps cases. In January 2009, IBM made boo-boos on 18.2% of food stamp cases.

"The horror stories I've heard," said Charles Warren, chairman of the Indiana Institute for Working Families' advisory committee. "Applications rejected for the flimsiest of reasons, lost paperwork, people being told to start all over again" [Will Higgins, "$1B Privatization Deal at Risk," IndyStar.com, 2009.07.08].

Gee, sounds like my experience with my previous private health insurance company.

I know, one example doesn't prove anything, and two examples prove twice as much... but it's worth noting that Texas abandoned a similar social services privatization scheme with Accenture in 2008, after just two years, due to inaccuracies and improperly denied benefits.

So please, as we debate health coverage reform, don't tell me that government can't do anything right. Government makes mistakes, but so does the private sector.


  1. Over the years and domiciles, I've found the U.S. Postal Service more reliable in general -- and often faster -- than UPS, FedEx, or DHL.

  2. The one good thing about privatization is that you can dump the company that is doing poor work for another company that can do the work much better. So you have that accountability.

    When it's the government program ITSELF that's screwing up, there's no accountability, because you can't fire the government and hire another company to do the job... or can you?

  3. Matt, isn't that what elections are? I'm pretty sure the Republicans were effectively fired in 2008.

  4. I'm not talking about the elections, I'm talking about holding the agencies responsible.

    Most elected people are figureheads, at best. The work that gets done (or screwed up) lies in the bureaucracy. These people are not elected, and are fairly ensconced in their positions. Basically, you have to be a complete idiot to lose a government job.

    With that kind of permanent security, where is the innovation to do it better, faster and cheaper? Case in point, the Air Traffic Controllers. Most airports are STILL using computers and technology that's anywhere from 20-30 years old. Yet Canada privitized the Air Traffic Control system, which led to rapid upgrades and more reliable service.

    Should all government programs be privitized? Heck, no. Law Enforcement should still be under the control of the government to eliminate any chance of "favoritism" or "bias". I'm pretty sure our armed forces do a beter job of protecting our country than someone like Blackwater ever could.

    But for many other areas, I think privitization would be just fine. You save money, and you have that accountability.

    Of course, the governing agencies shouldn't be content to turn a blind eye. They should remain vigilant overseeing these companies as they are about us paying our taxes.

    And for some odd reason, you happen to think I'm a Republucrat. I'm a Libertarian. I can show you a copy of my Voter Registration card sometime (if I can ever get my kitchen cleaned). It has a big capital "L" in the Party Afilliation blank. "L" as in "Libertarian."

  5. "Should all government programs be privatized? Heck, no." Thank you for agreeing with the original thesis of the post.

    Elections are a way to hold agencies responsible. We can call on our elected officials to put pressure on and take action against agencies that do not serve the public interest effectively.

    And private accountability doesn't seem to be working for Indiana's food stamps program. This doesn't mean privatization doesn't ever work; it just means that the ultra-conservatives can't justify calls for privatization by saying government is inherently less effective than private actors (a generalization I used to espouse, until I stepped out of the Rush Limbaugh echo chamber of my head and started paying attention to reality and its numerous complications).


Comments are closed, as this portion of the Madville Times is in archive mode. You can join the discussion of current issues at MadvilleTimes.com.

Note: Only a member of this blog may post a comment.