Final Report
By:
Sheena McConnell, Andrew Burwick, Irma Perez-Johnson, and Pamela Winston
March 2003
Submitted to:
U.S. Department of Health and Human
Services
Office of the Assistant Secretary for Planning
and Evaluation
Project Officer:
Ann McCormick
Submitted by:
Mathematica Policy Research, Inc.
Project Director:
Sheena McConnell
This report is available on the Internet at:
http://aspe.hhs.gov/hsp/privatization-rpt03/
How to Obtain a Printed Copy
Acknowledgements
Executive Summary
Chapters
-
Introduction
-
Defining Privatization
-
Background to the Study
-
Study Design
-
Selecting Sites
-
Conducting the Case Studies
-
Privatizing TANF Case Management: Why,
What, and to Whom?
-
The Rationale for Privatization
-
Belief that Privatization Improves Service
Delivery
-
Pragmatic and Political Factors
-
Deciding Which Functions to Privatize
-
Types of Case Management and Processing Functions
Privatized
-
Factors Affecting Which Case Management and
Processing Functions are Privatized
-
Establishing the Scope and Size of TANF
Contracts
-
The Contractors
-
National For-Profits
-
Affiliates of National Nonprofits
-
Local and Regional Nonprofits
-
Collaboration Among Contractors
-
Strengths of Different Types of Contractors
-
Procurement: Ensuring a Fair, Effective,
And Competitive Process
-
Promoting Competition
-
Variation in the Degree of Competition
-
Decisions that Affect the Degree of
Competition
-
Ensuring a Fair and Effective Procurement
Process
-
Balancing Flexibility and Prescription in
Requests for Proposals
-
Providing Information and Assistance to Potential
Bidders
-
Evaluating Proposals and Selecting Contractors
Fairly
-
Designing Contracts That Work
-
Performance Measures
-
Creating Incentives to Meet Program Goals
-
Avoiding Unintended Incentives
-
Feasibility of Measurement
-
Payment Structure
-
Contract Types
-
Implications of the Contracts Payment
Structure
-
Contract Duration
-
Upholding Accountability Through Monitoring
-
Types and Methods of Monitoring
-
Service Quality and Effectiveness
-
Policy Compliance
-
Financial Integrity
-
Who Performs Monitoring?
-
Division of Responsibilities Between Agency
and Contractor
-
Professional Auditors Role
-
Client Advocates Role
-
Using Monitoring to Improve Services
-
Reporting Results
-
Addressing Deficiencies
-
Balancing the Benefit and Burden of Monitoring
-
Facing the Challenges of Service Provision Under
Privatization
-
Coordinating Public-private Provision of
Services
-
Coordination Challenges Created by
Privatization
-
Strategies to Facilitate Coordination
-
Managing the Transition to Privatized Services
-
Managing Contractor Turnover
-
Key Lessons Learned
-
Agencies Must Prepare to Address the Challenges
of Privatization
-
The Procurement Process Must Be Fair and
Transparent
-
Contract Design Affects the Level of
Competition
-
Performance Measures Should Be Targeted, Yet
Comprehensive Enough to Avoid Unintended Consequences
-
It Is Possible to Design Contracts that Include
Performance Incentives but Limit Risk to Contractors
-
Public Agencies Must Dedicate Resources to
Monitor the Work of Contractors Effectively
-
Public and Private Agencies Must Find Effective
Ways to Coordinate Services
References
Appendices
-
Site Descriptions
-
Service Providers Visited for Case Studies
Tables
List of Figures
I.1. Case Study Sites
We would like to thank the many administrators and staff of the public and
private agencies who met and talked with us during our site visits to Delaware,
Hennepin County, Lower Rio Grande Valley, Palm Beach County, San Diego County,
and Wisconsin. They were exceedingly generous with their time and in sharing
their perspectives on the successes and challenges of privatization. Several
sites had been involved with other studies of privatization and welfare reform
but were nonetheless willing to take the time and make the effort to assist
us with this study.
We are particularly grateful to the study liaisons in each site who organized
our visits, graciously hosted us, and reviewed and commented on the draft
of this report. They include: Tom Smith in Delaware, Philip AuClaire in Hennepin
County, Cassandra Moreno in the Lower Rio Grande Valley, Ken Montgomery in
Palm Beach County, Jolie Ramage in San Diego County, and Mary Rowin in Wisconsin.
In addition, we spoke with representatives of advocacy groups and public
employee unions in each site who were also very helpful in offering their
thoughts and concerns about the privatization of TANF case management.
Ann McCormick and Matt Lyon, our project officers from the Office of the
Assistant Secretary for Planning and Evaluation, U.S. Department of Health
and Human Services, provided insightful and collegial guidance, review, and
support throughout the project. They were a pleasure to work with.
Richard Roper of The Roper Group offered essential assistance. He coordinated
and led the site visits to Hennepin and Palm Beach Counties. He also provided
valuable advice and suggestions on the study design and interpretation of
the findings and made helpful comments on an earlier draft of this report.
At Mathematica Policy Research, Donna Pavetti, Alan Hershey, and Heather
Hill reviewed drafts of project reports and presentations and contributed
thoughtful feedback. Jackie Wong provided valuable assistance with many tasks
associated with this project. The report was edited by Caitlin Johnson and
expertly produced by Alfreda Holmes and Jill Miller.
To obtain a printed copy of this report, send or fax the title and your mailing
information to:
Human Services Policy, Room 404E
Assistant Secretary for Planning and Evaluation
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201
Fax: (202) 690-6562
Or you may print the "printer friendly" PDF version
(925KB).
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Last updated: 06/11/03