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RATE SETTING REFORM: THE VICTORIES, CHALLENGES & BRIGHT FUTURE OF A MOVEMENT - Part I, The History:

Nobody said that wholly deconstructing, then reconstructing, the human services procurement system would be easy. Indeed it has not been.

In fact, over a decade ago, it was that looming challenge that prompted the formation of The Collaborative, a coalition of the state's three largest human services providers, whose primary charge is to ensure that a new rate-setting system gets done, and gets done right.

Because of The Collaborative's work, the system restructuring is underway, but it is, inarguably, a messy process. The initial timetable set forth for implementation was not adhered to. Last month, Governor Patrick and his Administration unveiled a new plan that The Collaborative members - the Providers' Council, the Association for Behavioral Healthcare and the Association of Developmental Disabilities Providers - had helped develop.

Passing and then implementing Chapter 257 is a long road. Now, the state is at a crossroads. Which way will we go?

Today, we stand at yet another crossroads, a point at which the future could be brighter than ever or more of the same. As such, we feel it is useful, crucial perhaps, to consider where we've been and where we're going. With that in mind, we present this three-part series, Rate-Setting Reform: The Victories, Challenges & Bright Future of a Movement, to reflect on the history of our movement and, given the latest developments, the forecast.

First, The History:  A System in Disarray

An Essential Industry

As state systems go, the human services industry is not one that Massachusetts can afford to neglect. The Executive Office of Health & Human Services and its 14 agencies rely on a network of over 1,100 independent, largely non-profit provider agencies to deliver the most critical services to vulnerable populations across the Commonwealth. These include public health services, addiction treatment, juvenile justice, child welfare, family support programs, homes for adults with chronic mental illness or cognitive/physical disabilities and a range of other social services.

According to a state report, the EOHHS purchased over $2.6 billion in services from the "Purchase of Service" system in fiscal year 2007, which in turn delivered care and support to over one million Commonwealth residents. Furthermore, the providers who delivered these services are a significant driver within the larger economy, employing over 185,000 workers - more than 3 percent of the state's overall workforce and comparable in size to the Commonwealth's telecommunications industry.

A Broken System

In October 2007, the EOHHS released a report that showed in detail the marked instability in the financial health of the state's human service organizations.

Titled The Financial Health of Providers in the Massachusetts Human Service System, the report linked the unstable conditions of the human service sector to the Commonwealth's archaic human service purchasing practices. The impacts, according to the report, were frightening: 

  • Sixty percent of providers reported having cumulative deficits on their Commonwealth activities since 1993
  • One-third of providers reported experiencing organization-wide deficits each year
  • Almost half of providers reporting not generating sufficient cash to pay for operations.

How did it come to this? For decades, provider contracts were under-funded because of a de-centralized system that negotiated reimbursement rates individually with little transparency or consistency. The system was badly broken, and everyone knew about it.

Something needed to be done, and only The Collaborative was in a position to do it.

The next installment... Victories and Challenges: Two Steps Forward, One Step Back

by Joshua Komyerov
Special to The Collaborative

Joshua Komyerov is the Director of Strategic Online Communications & Operations for the Massachusetts Down Syndrome Congress and an Arlington-based non-profit consultant. He can be reached at jmyerov@gmail.com