Editorial: State learns lesson about privatization

Editorial: State learns lesson about privatization

San Antonio Express-News
3/19/2007

 

Perhaps the best lesson to be gleaned from the experience of the Texas Health and Human Services Commission with Accenture LLP is this: Modernization of the state's public services is not necessarily synonymous with privatization.

 

Privatization has been a mantra of Gov. Rick Perry and the GOP leadership in Austin . In 2005, the state awarded a five-year, $899 million contract to a consortium of companies led by Accenture to run a pilot program for the Texas Integrated Eligibility and Enrollment Services.

 

The program covered eligibility and enrollment for the Children's Health Insurance Program, food stamps, Medicaid and Temporary Assistance for Needy Families. But the privatized effort has been fraught with problems.

 

A report last year from the Center for Public Policy Priorities found that more than a third of people trying to call the eligibility centers were abandoned. The average wait for phone calls was 22 minutes. The consortium's computer system didn't interface with the state's system. And there's a good chance that rather than saving money, this experiment may end up costing Texas taxpayers.

 

This week, the state and Accenture agreed to cancel the contract. It was the right decision.

 

The Health and Human Services Commission still needs to modernize the delivery of its services. And a billion-dollar bureaucracy is bound to suffer from waste and inefficiencies that some degree of privatization can help cure.

 

The pilot program for integrated eligibility ought to offer some practical experience about which functions private contractors can perform and which state workers should perform. A looming question: How much will the terminated contract cost the state?

 

As the Legislature considers even greater privatization - for Child Protective Services - it should take this experience and the costs of privatization to heart.

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