Q:  How will this legislation help provide better service?
A rate setting system that provides for the actual cost of providing services will benefit consumers/clients/program participants because providers will be able to attract and retain a more highly-qualified staff who will work with those in need, and do so in residences and offices that are better maintained  for all involved.

Currently, providers are seriously underfunded. Improved funding will allow them to pay for a better trained staff that will work in more cost efficient settings. High turnover and unfilled vacancies, which are the norm with many providers today, will cease to be a pressing problem with the passage of this legislation.

Q: Please describe the current rate setting and reimbursement scheme?
Simply, the state determines how much it is willing to pay for a certain service, and waits for a provider to match that cost. Many contracts have not had an open and competitive bidding process for years, if not decades. The providers are forced to bid on fixed contract amounts with no price flexibility, causing a race to the bottom in order to win the bids. There is no transparency, and contracts are frequently awarded to providers willing to do the work, even at a loss.  This is 10% of the state’s operating budget, and it must be more transparent. The state needs to know if it is paying too much or too little.

Q: How much money will this legislation cost the Commonwealth?
In effect, this won’t actually cost the state anything. This bill simply establishes what true market rates are for necessary services. The current rates are set at 1987 levels, which is unworkable for providers.

What the legislation will do is help establish a real cost for services provided. Because of the piecemeal approach to reimbursements, the state does not know the total cost of providing services to these consumers/clients/program participants. This bill is the fiscally responsible approach and will enable the state to learn the real cost.

Q: Has the quality of care provided suffered for a lack of funds?
A level of care has diminished because low salaries make it impossible to keep talented and dedicated staff on board. Staff members are very good at their jobs, but more often than not move on to other jobs that pay a fair wage. Who can blame them?

The Patrick Administration just released a very telling report that warns of a growing crisis in the system because underfunded providers are facing dire financial straits.

The report is available at http://www.providers.org/publicpolicy/financialhealth.pdf.

Q: How experienced is the workforce? How much training do they undertake?
Much less experienced than it was 20 years ago. Back in the 1980s, the industry attracted college graduates who held relevant degrees. Now, we’re just hoping for a commitment to work hard and a clean CORI record.
For many employees, this is their second job, and others are on work visas and speak English as a second language. There is an increased need for training and a diminished capacity to perform. The providers recognize these challenges, and are employing a number of strategies to address and overcome them. But they are challenges that didn’t exist, at least not in large numbers, back in 1987.

Q: If funding is such a problem, how are providers still in business? How are they making ends meet?
It is a massive struggle. More than 20% of providers are operating at a deficit, and 60% do not have more than one month's operating reserve on hand. That is a crisis.

Still, our mission driven commitment forces us to press on. Providers defer expenses as best they can, and, sadly, are forced to keep salaries – their major expense –low. Providers are all holding on for the day when equity returns to the funding system.

In the meantime, providers are forced to provide quality service on a shoestring. They look for efficiencies where they can, although that is getting more difficult each year, since fixed costs continue to increase.

Q: Have other providers gone out of business?
Our industry has seen a number of mergers, and the shifting of contracts to larger organizations. But every time that happens, quality suffers. When one provider leaves an area, there are consumers/clients/program participants who are left with a need that isn’t filled.

And even the large organizations have major problems with meeting the rising costs of health care, energy, maintenance and hiring qualified staff. No one is exempt from these issues. So far the only solution has been to shift the problems to agencies that currently have some degree of stability. This is not a good answer. The other mechanisms have been to limit salaries and cut program expenses that may help the consumers/clients/program participants.

These providers are a very large part of the Massachusetts economy. A recent state report said its impact is similar to the telecommunications industry.  The human service industry accounts for about $4.6 billion in revenue, more than $2 billion in payroll taxes and workers account for about $112 million in state and local taxes.

Q: Is there more of a demand for your services now than 20 years ago? If yes, why?
A recent report indicated that human services staff will have to increase by nearly 40% in the next 10 years. People are living longer and need more assistance. This budget problem is not going to go away – it is going to grow exponentially.

Human service providers  have seen waiting lists expand as people become aware of the services available.  Demand has also increased as people have moved from expensive institutional settings to less expensive community settings.  These factors all put demands on the service delivery system. 

Q: The state has a lot of requests for increased appropriations. Why is this more deserving than other industries?
Human service providers are the Commonwealth’s system of community-based care for individuals mandated by the Legislature to receive services.  Thirty years ago, Massachusetts made the right decision to move away from warehousing people in large institutions, and instead allow these individuals to move to community-based settings.  This was not just a money-saving decision. It was simply the morally right thing to do and our communities have been enriched in the process.  The Commonwealth has an obligation to provide the funding necessary to ensure that the community-based system is fairly funded.

Q: How are we going to pay for this?
That would be up to the legislative leaders to decide. We would be in favor of exploring a number of different ways to fund this, including broad-based taxes or the state purchasing fewer services.  But one thing is for certain, the state cannot continue to have community based human service provider do more and more each year for less and less.