Care for the Needy Called Shaky

Unless bold reforms are made quickly, California’s $60-billion-a-year “noble commitment” to protect and care for its poor, sick and disabled is in danger of collapse, the state’s Little Hoover Commission warned Wednesday.

In a strongly worded indictment of efforts to improve the lives of what it called California’s “most vulnerable” citizens, the independent oversight panel called on Gov. Arnold Schwarzenegger to take the lead in rescuing threatened services from an expensive, inefficient and duplicative bureaucracy and to make the responsible departments perform better at less cost.

“California cannot afford to operate health and human services as presently designed,” the panel said in an assessment that capped a yearlong investigation of 13 state departments -- all under the umbrella of the Health and Human Services Agency -- providing such services as aid for the aged and welfare for young mothers.

The commission issued advisory recommendations for reform that it said would produce millions of dollars in immediate savings and billions in years ahead.

During this era of shrinking California budgets, the “price tag for health and human services continues to grow, yet people are still turned away or do not receive the quality of care that could change their lives,” the report charged.

The bipartisan panel of 13 people appointed by the governor and the Legislature said California also ranks near the bottom when compared to other states in key areas:

* The state is 36th in the nation for the number of children who experience abuse and neglect, and 49th for the percentage removed from their homes as a result.

* One out of six children has no health insurance coverage, ranking California 43rd in that area.

* About 6 million adults and children depend on Medi-Cal for their healthcare needs, while another 6 million are without any kind of health insurance. The state is 48th in ensuring that its citizens are covered by health insurance.

Chairman Michael E. Alpert, a 10-year veteran of the panel, said the report’s blunt words reflected “some frustration” on the part of commissioners who had examined troubled programs in the past and made recommendations for change only to see no reforms occurring.

In an interview, Alpert said the entire health and social services system is at risk of collapsing unless Schwarzenegger, the Legislature and other policymakers agree on a “vision” of fundamental reform and commit to carrying it out.

“It is time to make this work. We just cannot sustain the system the way it is,” he said.

The commission announced its findings just as a separate investigation ordered by Schwarzenegger hit the stretch in evaluating most functions of state bureaucracy.

The review -- which the governor announced as a high priority upon taking office in November -- is expected to be unveiled June 30.

The governor’s office forwarded the Little Hoover report to that evaluation team, spokeswoman Ashley Sneed said, and its contents will be analyzed as part of the overall review.

“We hope they borrow heavily from it,” Alpert said, noting that investigators from both organizations had met regularly. He said completion of the report was hastened so members of the governor’s group could examine the document before their work was done.

As a top priority, the commission recommended that the state shift control of programs and money to the counties, where most of the services examined are delivered. In turn, the counties would be held accountable for their performance.

The commission praised the efforts of government employees who try to make the state’s second-most-expensive group of programs -- behind education -- work. The services consume one of every three general-fund tax dollars. The panel also commended efforts by some counties to improve efficiency and said the state could learn from their experiences.

But the commission charged that over the years problems had been ignored, patchwork repairs had failed and no one had kept track of which programs did or did not work.

As a result, the expenditure of billions of dollars is driven not by the needs of recipients but often by the “persuasive” powers of influential lobbyists.

The panel said “overly complex” organizational structures, “perverse” funding incentives and “weak oversight” had conspired to deny services to an expanding pool of genuinely needy recipients -- while allowing less-qualified applicants access to the same programs.

“As organized, managed and funded, the system is simply unsustainable,” warned the commission, an agency created in 1962 -- after a series of scandals -- to examine the efficiency and economy of government operations and recommend reforms.

Even some attempts to fix problems in departments within Health and Human Services have boomeranged, the report said. “The lack of focused and persistent leadership has resulted in piecemeal reforms that only made matters worse,” the commission charged.

The panel criticized the state’s often-strained relationships with counties and suggested that Sacramento be more aggressive in pursuing federal funding and obtaining waivers from Washington for innovations that might deliver more services at lower costs.

Duplicative state government functions whose combination into a single program might save taxpayers money drew special attention from the commission. For example, the report said there were 10 teenage-pregnancy programs operated independently by four departments.

It also found at least 52 examples of duplication of licensing and certification functions among five of the 13 departments. For example, the task of licensing adult day care centers is under the jurisdiction of the departments of Health Services, Aging and Social Services.

But the commission said that if the governor and lawmakers agreed to make “fundamental” reform of Health and Human Services their highest priority, a more economical and efficient system could emerge that would help the state both “live within its means” and deliver essential services to the needy.

If the efficiency of local programs were improved only 10%, it would produce the equivalent of $5.5 billion that could be applied to services, the commission said.

Chairman Alpert said it was critically important for the state to improve its relations with counties, which view Sacramento with suspicion and distrust.

“There is a lot of finger pointing. The counties say the state sets too many limits, and the state says the counties are not spending the money wisely,” he added.

In response to questions, Alpert said he believed that Los Angeles County was attempting to make “significant changes.”

He said he believed that the county “really could become a leader” for reform, because “whatever problems the state has, L.A. has. As L.A. goes, so goes the state, which is always an issue.”