July 01, 2005
Accenture takes over

After much hemming and hawing over how it was awarded, Accenture has officially won the bid to take over the state's health and human services screening.

State officials claim the new system, which will begin processing CHIP applicants in November, will save $646 million in the next five years and offer an easier benefits application system.

Under the plan, about 100 field offices will be shut down.

Part of the savings will be gained by terminating 2,900 of 5,800 full-time employees who determine eligibility, [Texas Health and Human Services Commissioner Jennifer] Harris said.

She said the commission will employ 298 state workers at the call centers, and Accenture plans to employ a staff of 2,500 private sector employees.

Meanwhile, Accenture has pledged to give preference in hiring to laid-off state workers. The commission expects to shift many of them to the Texas Department of Family and Protective Services, which is undergoing an overhaul that will include hiring 2,500 caseworkers.

Write that number down - $646 million. I want someone to do a followup story in five years and see how that projection turns out. It could go that way, but in my experience with outsourcing big IT projects, those estimates are always wildly optimistic. The devil's in the details on these things. The outsourcer agrees to do certain specific things in the deal they sign, and everything else is extra. There's a million ways they can find to claim that some request is outside the scope of the agreement, which means they get to charge at a regular consultant's rate.

The other dirty secret of this sort of thing is that the service is never as good. Why should it be? You get what you pay for, and we're paying for less here. It may still be good enough, but we won't know that for awhile. And I guarantee the transition will be very bumpy, because again, they always are.

Finally, just to put things in perspective, $646 million over five years is about $260 million for a biennium. Given that we spend about $60 billion of state money over the same time frame, this savings is a relative pittance. It's the services that THHSC provides that's the real money, not how they provide them.

UPDATE: More from Father John.

The private contractor who handles work programs for the Texas Workforce Commission in the Dallas area has been caught falsifying records, and encouraging their staff to "lie, cheat, or steal" to meet the numbers necessary for them to get the money from the State of Texas that the company wants them to get. An unhappy employee, used a hidden camera, and now, what those of us who have watched these private contractors over the years have known to be a common fact of life, has been caught on tape, and is exposed for all to see.

He's got the links to the video, so check it out. Not surprisingly, he's as skeptical as I am about that promised amount of savings.

Posted by Charles Kuffner on July 01, 2005 to Budget ballyhoo | TrackBack

My sister works for the DHS or whatever it's called these days, and the company that took over HR last year was not only outrageously expensive, they did not get W-2's out to the employees timely. It took her four or five requests over 8-10 weeks to get it.

"It's the services that THHSC provides that's the real money, not how they provide them."

Rick Perry put out some extremely high percentage at the Republican state convention, something like 20%, as the administrative cost to provide TANF services. I asked my sister about this and she was irate, because she was familiar with this figure. Basically, what he did was to take all administrative and divide it into one program (not all the programs administered) to come up with the percentage. It makes a nice sound bite, but it's a misrepresentation.

These folks are taking advantage of the general level of illiteracy in math and economics to promote changes in the system that don't result in any benefit to Texans.

Posted by: Sarah Berel-Harrop on July 2, 2005 9:23 AM

The whole premise of privatization of HHSC is based on lies, like the lie as to how much it takes to administer tanf, or the lie that Commisioner Hawkins has been promulgating that under the new system it will take 7 minutes to do a certification, which would mean that under the new system a worker will be able to do something like 68 certifications in a day. It appears that only a handful of republicans have had the guts to point out to the governor that this privatization plan can not work, all the others are either clueless, which is scary, or knowing that it can not work they still support it anyway, because they have no integrity.
But I do wish to thank those few republicans who have fought the privatization of HHSC, it can not be easy for them to fight their party on this issue, but they do it anyway, because they are men and women of integrity.

Posted by: Samm Almaguer on July 3, 2005 9:23 PM