Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Governmental efficiency and the fate of the Fernald Center

Posted by David Kassel on October 11, 2007

In an article in the current (September/October) issue of Public Administration Review, Hindy Lauer Schachter argues that governmental efficency is a political concept.  

Efficiency inolves getting the biggest bang for the taxpayer’s buck–“maximizing the ratio of outputs to inputs” in public administration jargon.  Everyone is in favor of it, and virtually every governmental reform effort has put efficiency at the top of its list.

But Schachter notes that in the public realm:

…political decisions undergird which numbers count, which data constitute benefits, and which are costs.  Governmental efficiency exists in a specific political context.

Reading the article brought to mind a political debate that has been ongoing in Massachusetts over continuing attempts by the then Romney and now Patrick administrations to shut the Fernald Developmental Center in Waltham, MA, the nation’s oldest state-run facility for people with mental retardation.  (By way of disclosure, I have been doing consulting work for the Fernald League, a nonprofit organization of parents and relatives of the Fernald residents, which is fighting to keep the facility open.)

The Patrick administration has put forth an efficiency argument in favor of closing Fernald and ultimately transferring the remaining 180 residents to privately provided, community-based care.  A statement issued in September by the Executive Office of Health and Human Services maintained that Fernald was the most expensive state facility in Massachusetts, with an operating cost in excess of $239,000 per resident, compared with a cost-per-resident of “comparable” community-based care of $102,000.

The EOHHS statement was issued in conjunction with the Patrick administration’s decision in September to appeal a U.S. District Court judge’s ruling that Fernald must remain open to its current residents.

Uising that high comparison cost figure for Fernald may well be a politically effective strategy, given that we are a society in which, as Schachter notes, efficency is a treasured value.  The use of comparison costs appears, on the surface, to take politics out of the discussion.   Whether or not you agree with the political arguments for or against privatization, you can’t argue with the numbers when they’re put before you so starkly.

But do those numbers have any basis in reality?  The EOHHS statement contained no backup or indication as to how the $239,000 and $102,000 amounts were derived.  And yet, the figures were uncritically cited the next day by news media outlets throughout the state.

It’s quite difficult, however, to determine the true cost-per-resident at a complex facility such as Fernald, and potentially even more difficult to determine that type of cost in a sprawling community-based system of services.  For instance, at Fernald, you can’t just take the total facility budget and divide it by the total number of residents to arrive at a true cost per resident.  The reason is that the Fernald budget covers a number of costs that don’t directly or exclusively benefit the residents.  (By the way, the Massachusetts Coalition of Families and Advocates for the Retarded, Inc. (COFAR) filed numerous Public Records Law requests over a period of several months last year in order to get even rudimentary budgetary figures for Fernald from the Department of Mental Retardation.)

Take the skilled nursing facility on the Fernald campus, for example.  The cost of operating the nursing facility, which serves 25 patients, appears to fall under the Fernald budget (although even that is unclear, based on the DMR information that was provided to COFAR).  Yet, the nursing facility is open to all clients of the DMR system, not just the residents at Fernald.  Those 25 patients aren’t even counted among the 180 remaining residents at Fernald.

A couple of other facts to consider, based on an an analysis earlier this year by COFAR of the DMR cost information: Fernald residents share the use of at least 12 buildings on the campus with community-based clients and derive no apparent benefit from eight other buildings.  In addition, nearly 30 buildings on the campus are unoccupied.  Yet virtually all the buildings on the campus are connected to the campus heating and electricity infrastructure.  Those costs are part of the Fernald budget, but should they all be attributed soley to the residents?  COFAR also found out that the $91,900 salary of the director of the Hogan Regional Development Center in Danvers, MA, was inexplicably listed on the payroll of the Fernald Center (See May 2007 COFAR Voice, p. 5).

Then, there’s the whole thorny question of how the administration came up with the $102,000 per-resident for care in the community.  Despite the apparent specificity of that and the Fernald cost number, there is no way anyone can proclaim them as absolutely truthful or even as reliable.  

The Fernald situation demonstrates that it’s impossible to remove politics from cost/benefit analyses of public functions.   Given that reality, Schachter maintains that it’s important to engage citizens and:

…make them more visible and connected to the way political officials and administrators define costs and benefits…Citizen involvement is a prerequisite to meaningful cost-benefit calculations.

I would suggest that at a minimum, citizens need to be informed about the complexities of governmental policies, such as the decision to privatize services for the mentally retarded.  The problem is that when the public administrators justify their actions with simplistic explanations and the press accepts those explanations uncritically, the citizens don’t have much of a chance.

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