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We shouldn’t criminalize intellectual disability

December 1, 2015 4 comments

When people with intellectual disabilities commit assaults or other violent crimes, our response should not be to race to lock them up.

That, however, appears to be the intent of the Bristol County District Attorney’s Office.

An Attleboro District Court judge has ruled that Brett Reich, who has a severe intellectual disability, is not competent to stand trial for assaulting two female staff workers outside his group home last March.  The Bristol County D.A.’s office, however, has appealed that ruling, contending that Brett had “engaged in very serious assaultive behavior, and it is our obligation to ensure the protection of the public.”

Brett’s father, Daniel, is concerned that the D.A.’s actions could lead to imprisonment for Brett, or his possible placement in Bridgewater State Hospital, a facility for persons with mental illness who have been convicted of or charged with committing violent crimes.  “It’s inhumane,” Daniel Reich said.  “He’s never going to get out if he goes to Bridgewater State.  They are trying to destroy him and us.  We want him home safe with us.”

We agree with Daniel Reich that neither Bridgewater State Hospital nor jail would be appropriate places for Brett. Brett, who is 24, is intellectually disabled, not mentally ill.  He needs residential care from the Department of Developmental Services.

Bridgewater State has, in fact, been a focus of continuing controversy over the use of restraints and isolation.  Last year, The Boston Globe published a series of articles about the use of isolation and forced restraints at at the facility, including restraints that resulted in the death of a patient there in 2009.  The federally funded Disability Law Center has called for major reforms at Bridgewater State Hospital, including removing it from the control of the Department of Corrections.

Assault and then eviction from provider residence

After the alleged assault occurred outside his Attleboro group home, Brett Reich was evicted from the residence, according to his father, Daniel.  The group home is run by Lifeworks, Inc., a DDS provider.

Brett is large man — he stands 6 foot, 3 inches and weighs about 240 pounds.  He allegedly assaulted the two staff workers, one of whom was his personal caretaker, as he was being taken  for a trip outside the residence.

As he was being placed in a van, Brett suddenly turned on the staff worker.  According to The Attleboro Sun Chronicle, Brett began choking the woman and grabbed a fistful of hair from her head before she fled to the group home where she locked the door.

While still outside the home, Reich allegedly attacked another female staff member moments later when she arrived at the home to assist the first worker.  The newspaper said he punched her head and body and bit her right hand.  Both women, who were treated for cuts and bruises at Sturdy Memorial Hospital in Attleboro, told police they feared for their lives.

In retrospect, it doesn’t appear that the Lifeworks group home was suitable for Brett.  Daniel Reich does not believe the staff in the residence were properly equipped or trained to deal with Brett’s behavioral issues.  Daniel said that when Brett was first placed by DDS in the Attleboro group home, he and his wife, Carrie, had requested that Brett have male direct-care staff “who were bigger and stronger.”  That request was not heeded, however.

Before being placed in the Attleboro group home, Brett had lived in a residential facility in New Hampshire in which his aides were men.  That program, however, came to an end when Brett turned 22 and was required to move from the special education system to the DDS system of care in Massachusetts.

Reich said that Brett’s behavioral issues are controllable if he receives his prescribed medications.

We think an appropriate residential setting for Brett would be either a secure DDS state-operated group home (which would tend to have better trained staff than a provider-run residence) or the Templeton Developmental Center, a DDS-run Intermediate Care Facility, which has staff that is experienced in caring for residents with behavioral issues.  Other possible ICF choices that should be made available to Brett are the Wrentham Developmental Center and the Hogan Regional Center.

As we have previously noted, however, DDS does not appear to inform most individuals and families in the system that state-run residential care is available to them.  Daniel Reich said DDS offered only the Lifeworks group home as a residential option for Brett.  We think most families of developmentally disabled persons are not even aware that state-run alternatives to provider-operated residences exist.

Under federal law, DDS is required to provide developmentally disabled individuals with a choice of available residential alternatives, which we believe would include the facilities I’ve noted above.  The Home and Community Based waiver of the Medicaid Law (42 U.S.C., Section 1396) specifically requires that intellectually disabled individuals and their guardians be informed of the available “feasible alternatives” for care.

In addition, the federal Rehabilitation Act (29 U.S.C.,  Section 794) states that no disabled person may be excluded or denied benefits from any program receiving federal funding.

If, in fact, DDS is unwilling to provide Brett with a state-run residential placement, as required by law, then it would seem the only options left for him would be prison or Bridgewater State Hospital.

The case of Anthony Remillard

Prison, in fact, has been the outcome for the past two years for Anthony Remillard, another developmentally disabled man, who was charged in the fatal assault of Dennis Perry, a 64-year-old developmentally disabled man, at the Templeton Center.

After the alleged assault against Perry, Remillard, who is also now 24, was placed in the Worcester House of Correction.  In August of this year, he was found be a Superior Court judge to be incompetent to stand trial.  But as of November 30, Remillard remained an inmate in the prison.

While DDS cleared itself of responsibility in the Remillard case, we believe the incident raises many questions about the Department’s policies and procedures involving care and supervision of clients with behavioral issues.  Despite that, we are convinced that a facility like Templeton remains a far better option for people like Brett Reich and Anthony Remillard than does either Bridgewater State Hospital or the Worcester House of Correction.

The lack of adequate options for care for potentially violent people with developmental disabilities is something that policy makers should be concerned with.  It is unfortunate that the state Legislature, in particular, has shown little interest in this problem, even though the Children and Families Committee at one point considered holding a hearing on the Remillard case.  That hearing has never occurred.

Sheltered workshops being closed in MA despite protective budget language

November 16, 2015 3 comments

Despite the passage of protective language in the state budget last year and this year, the Department of Developmental Services appears to be moving rapidly to shut down all remaining sheltered workshops in the state for people with developmental disabilities.

“Can’t believe after all the hard work so many people put in, it (the workshop closures) is still happening,” one workshop supporter wrote in an email, referring to grassroots lobbying efforts mounted in the past two years to keep the workshops open.

The protective language that was inserted by State Representative Brian Dempsey in the past two years into the DDS community day line item in the budget seemed to be definitive.  The language states that DDS “shall not reduce the availability or decrease funding for sheltered workshops serving persons with disabilities who voluntarily seek or wish to retain such employment services.”

At the same time, however, Dempsey’s House Ways and Means Committee supported the appropriation of $1 million last year and $3 million this year in a separate DDS line item to fund the transfer of people from sheltered workshops to community-based day or employment programs. So, even while the language in one line item has appeared to protect the workshops for those who want to remain in them, the other line item has funded the removal from the workshops of everyone whose guardians haven’t formally objected to moving them to the day programs.

Sheltered workshops around the country have become an ideological target of the federal government and of many states, which contend that the workshops “segregate” people with developmental disabilities from their peers in the mainstream workforce. But many families of the sheltered workshop participants have countered that the programs are fully integrated into the surrounding communities and provide the participants with meaningful activities and valuable skills.

Sheltered workshops provide developmentally disabled persons with a range of assembly jobs and other types of work, usually for a small wage.

In 2013, the Massachusetts DDS and the state’s major lobbying organizations for corporate DDS providers issued a plan to close all sheltered workshops as of last June, and to transfer all of the participants to either DDS day programs or to “integrated individual or group employment at minimum wage or higher.”

Sheltered workshops are defined by the Social Security Administration as “a private non-profit, state, or local government institution that provides employment opportunities for individuals who are developmentally, physically, or mentally impaired, to prepare for gainful work in the general economy. These services may include physical rehabilitation, training in basic work and life skills…”

Integrated employment is defined by the federal Labor Department as “jobs held by people with disabilities in typical workplace settings where the majority of persons employed are not persons with disabilities, where they earn at least minimum wage, and where they are paid directly by the employer.”

Our concern regarding the DDS/corporate provider plan to close sheltered workshops is that there appears to be a limited number of opportunities in Massachusetts for persons with developmental disabilities to find jobs in “typical workplace settings” where the majority of the people employed are not disabled.  Unless and until these integrated workforce opportunities exist in sufficient quantities, we don’t think sheltered workshops should be eliminated as options.

Unfortunately, the state’s attitude concerning care for the developmentally disabled has long been to close facilities that are considered expensive or that otherwise don’t fit an ideological mold, without having a plan or sufficient resources to adequately replace those facilities.

The director of one sheltered workshop program I talked to said that while there hasn’t actually been a directive from DDS to transfer everyone out of his workshop by a particular date, DDS recently indicated that transfer funding had become available and that his workshop should “determine who would move at this time.”

The workshop director said he planned to transfer more than half of the program’s current participants out between next month and March of next year.  While the protective language in the budget would appear to allow the guardians of the workshop participants to object to the transfer plans, the workshop director said no one had yet voiced an objection.  It’s possible, he said, that people will begin to object once the transfers start.  But he said he sensed less resistance among families and guardians to the prospect of leaving his workshop program than was the case two years ago.

One of the existing integrated work settings in Massachusetts is MicroTek in Chicopee, an electronic cable manufacturer. The company employs 130 people, 15 of whom have disabilities, according to Cynthia Piechota, the company’s program director.  Piechota said she knew of only a handful of other integrated work programs in the state.

A workplace program that is smaller than MicroTek, but similar to it, is Interface Precision Benchmarks (IPB) in Orange, where six people are employed in manufacturing electronic cables. The IPB workforce is currently divided evenly between disabled and nondisabled employees (3 disabled and 3 nondisabled); thus it’s not clear that IPB actually fits the Labor Department’s definition of an integrated workplace.

Ed Orzechowski, whose sister-in-law, Carol Chunglo recently retired as an IPB employee, said he and his wife, Gail, “can’t say enough about what a positive experience it was for Carol to work at IPB. There should be more places like it.”  Ed Orzechowski is a COFAR Board member and president of The Advocacy Network, an affiliated advocacy organization for people with developmental disabilities in Massachusetts.

A University of Massachusetts report noted that in 2010, there were 3,700 people with intellectual disabilities in sheltered workshops in Massachusetts and about 3,500 people in “integrated employment.” However, there were about 9,500 people in “non-work” settings, which appear to include DDS day programs.

COFAR has filed a Public Records Law request with DDS to try to determine how many people the Department anticipates will be transferred over the next five years to integrated workplaces, and how many will be transferred over that time to DDS day programs.

It’s unfortunate that sheltered workshops appear to be going the way of so many other previous high-quality programs and services for people with developmental disabilities in Massachusetts. The potential elimination of these services is usually vigorously opposed by families and guardians who understand how critically important they are.  But DDS has long perfected a wait-them-out strategy.

The Department understands that grassroots resistance to new, untried policies, can be worn down over time.

Andy and Stan McDonald gain a small victory in a system that has been pitted against them

November 3, 2015 1 comment

In a Middlesex Probate Court hearing last Monday (October 26), Andy McDonald, an intellectually disabled man, finally got the opportunity to tell a judge his long-sought wish — that he be allowed to visit his aging parents in their Sherborn home.

As we have reported, Andy, who is 48 and lives in a group home in Westborough, has been denied permission since 1996 to visit his parents. Andy’s father, Stan, is now 80.  In a ruling in 2006,  former Probate Judge Edward Rockett concluded that Andy was sexually dangerous and should never be allowed to return to his childhood home.

Not only were Andy’s parents never to discuss with Andy the prospect of his ever visiting his home, but Rockett ruled that Stan must personally tell his son, in the presence of clinicians, that he would never be allowed to go home again. McDonald said he has refused to say something like that to Andy.

I will discuss Rockett’s ruling more fully below.  We have noted previously that a key claim made in the ruling — that Andy was arrested in 1990 for sexually assaulting three young girls — is untrue.  Andy has never been charged with a sexual offense.

Yet Rockett’s decision, and the claim in it that Andy was arrested for sexual assault, is the basis for the Department of Developmental Services’ longstanding position that Andy should never be allowed to return to Sherborn, and that the matter of visits there should never be discussed with him.

Rockett’s ruling

We think it is important to expose what we see are misstatements and a lack of a factual basis in Judge Rockett’s ruling. Rockett decision, and an appeals court ruling upholding it, were repeatedly cited during a break in the court hearing last week by a DDS attorney as reasons to oppose ever lifting the ban on home visits.

Stan was even told he would be in contempt of court if he mentioned to the judge his own wish that Andy be allowed supervised visits home. As it turned out however, it was Andy himself who brought up the subject of home visits before the judge.

Beyond that, there is a larger reason for examining Rockett’s decision, we think.  Someday, Andy will be on his own; and if the conclusions in Rockett’s decision are never challenged, he may be locked up somewhere for good.  One attorney contacted by Stan about his case termed Rockett’s decision “devastating.”

It therefore seemed somewhat extraordinary that there were no objections last week when Andy asked to speak to Middlesex Probate Judge Megan Christopher during the October 26 hearing.  When Christopher assented to his request to speak, Andy politely asked  that he be granted a supervised visit home “for a couple of hours.”

Judge Christopher didn’t flatly deny Andy’s request, but said she would schedule a new trial date in which that issue may be considered.  She told Andy that what he wanted “was  complicated and required more looking into.”  She pointed out that “it’s not always possible to have everything you want.  You understand that,” she added.

The October 26 probate hearing was held to consider the appointment of attorney Marie Dunn as Andy’s new guardian, replacing Dennis Yeaw, an attorney who had opposed home visits for Andy, also citing Rockett’s decision.  In 1986, Stan and his former wife agreed to the appointment of a guardian for Andy as part of the settlement of a longstanding custody battle over him.  Stan has been unsuccessful since that time in regaining his guardianship, even though his former wife, local legislators, and other supporters have publicly expressed support for that.

Andy’s arrest

Andy was arrested in Sherborn in May of 1990 for threatening an unidentified person during a telephone call, according to the district court record.  The nature of the threats was not disclosed.  In July of that year, he was charged with disturbing the peace in downtown Sherborn, according to a police department report. In that incident, he allegedly followed a young woman and threatened to kill her father. That same day, he was charged with assault after he punched Ellen, his stepmother.  Stan and Ellen say the punch was accidental.

Andy has not exhibited any significant behavioral problems in close to a decade and has been taken on community outings to many places other than his home without any behavioral incidents, according to Stan and to his yearly clinical care plans.  He is described in his latest clinical care plan as “kind and friendly to others,” and as “a polite man.”

According to the plan, Andy enjoys going to the library, going out to dinner, and seeing his father’s jazz band play.  He regularly goes into the community to shop for program supplies and volunteers at Meals on Wheels.

Yet, Andy has in the past told clinicians that he has had sexual fantasies about children; and that, combined with the mistaken claim that he was arrested for sexual offenses in Sherborn in 1990, led to Rockett’s lifetime ban on him from visits home.  Stan maintains that the ban on visits has caused Andy emotional harm.  His latest clinical care plan states that Andy’s rapid speech and eating habits are related to anxiety, although the plan attributes that anxiety to a fear of death and bees.

One-sided view

Rockett’s decision appears to take a selective view of the history of the case.

In his ruling banning Andy from Sherborn for life, Rockett concluded that Stan “should never be considered for appointment as guardian of his son,” and that Stan “lacks common sense and has poor judgment skills.”  Rockett stated that Stan and other family members, who he didn’t name, “wish to usurp the authority over the program and introduce their own ideas for clinical treatment for Andrew…”

Rockett further banned Stan from ever directly contacting any doctor, clinician, or service provider providing care to Andy.

Rockett’s decision, however, said nothing about Stan’s long-time personal advocacy on behalf of Andy, in particular his successful fight to discontinue the use on Andy of Stelazine, an anti-psychotic drug, which appears to have caused Andy’s disruptive behaviors prior to 2006. Rockett also did not mention the fact that clinicians had misdiagnosed Andy in the early 1990’s as mentally ill when, in fact, he is intellectually disabled, and that, as a result, Andy was inappropriately placed in Westborough State Hospital, a facility in which he was first put on Stelazine.

The Stelazine caused Andy to develop Tardive Dyskinesia, a disorder  resulting in involuntary, repetitive body movements.  Because the court-appointed guardians did little or nothing to address that problem, Stan said he personally got a court order and paid for an independent evaluation of Andy’s medications. This resulted in discontinuing the Stelazine and replacement of the prescribing doctor.

Among those who have written DDS in support of Stan’s bid for guardianship since that time has been State Representative David Linsky, who earlier this year was joined by State Senator Richard Ross in calling for a new, independent clinical evaluation of Andy.

John Carroll, a former residential counselor to Andy at the Cardinal Cushing School, wrote to DDS in 2013 to say that he had frequently observed visits to Andy by Stan and Ellen, and that “Stanley’s and Ellen’s dedication to Andy’s care and treatment in all circumstances leaves no question in my mind that Stanley McDonald is the sole individual with the knowledge, experience, and love, deserving to have responsibility for major decisions in Andy’s life as guardian.”

But Rockett didn’t see it that way. In his 2006 decision, Rockett accused Stan of failing to cooperate with Andy’s court-appointed guardians and with clinicians, and stated that Stan failed to “recognize the seriousness of Andrew’s fantasies.” He also implied in his decision that Stan had a drinking problem.  He offered no evidence for that, however.

Failure to specify prohibited materials

In support of the former accusation regarding the seriousness of Andy’s fantasies, Rockett stated that “Andrew uses pictures of children as sexual stimulants,” and that Stan had provided Andy on a number of occasions with “prohibited materials.”  But Rockett did not state what those prohibited materials were.

According to Stan and Ellen, the prohibited materials consisted of the following items: A piece of beach glass (which Westborough State Hospital considered dangerous), a sparkler that was lit on a birthday cake, a drawing of a baby from a Family Circus cartoon, and a photo of Andy’s niece and nephew.  Ellen said a poster-sized version of the photo of Andy’s niece and nephew had been on the wall in his room in his group home with the staff’s full knowledge.  “The poster seemed to us to indicate explicit authorization for Andy to have pictures of his niece and nephew,” Ellen said. “Stan did not show or give anything to Andy believing Andy would use them for any inappropriate purpose.”

Regarding the drinking issue, Rockett wrote that “Andrew has stated that his father’s drinking bothered him.” Rockett offered no further explanation of that claim, other than two follow-up statements concerning Stan’s visits to his son. One statement was that “Mr. Burch (the clinical director of Andy’s group home) had instructed Stanley McDonald not to drink during the visits.” The next line stated: “They (Stan, Andy, and Burch) went to a restaurant and Stanley McDonald immediately ordered wine.  Andrew became very agitated and went to the restroom, where Mr. Burch had to quiet him down.”

In our view Rockett’s statements imply, without actually stating it, that Stan brought alcohol to Andy’s group home, and that Andy was bothered because Stan must have been drinking excessively during the visits.  In fact, here is Stan’s wife, Ellen’s, explanation of the drinking issue:
Stan has never brought alcohol to Andy’s (group home) program.  Andy does not like to be around Stan when he is drinking.  Andy worries about the effects on Stan of alcohol and tobacco.  He doesn’t want Stan to drink or smoke.  He is very influenced by ads he sees on TV about the danger of drinking and driving.  After that incident where Stan ordered a glass of wine in a restaurant he never again ordered an alcoholic beverage in Andy’s presence – until once very recently, when Andy didn’t express any objection.  Stan does drink at Primavera (in Millis) while he is playing (in his Blue Horizon Jazz Band), and nobody has raised this as an issue – neither Andy nor staff who accompany him.  Andy loves to be at Primavera when Stan is playing.  He goes from table to table and talks with all of the guests and band members.  Many have known him since he was a child.  Nineteen years ago when Andy last visited at home Stan did not have a drink while Andy was there.  Stan honors Andy’s wish and orders iced tea when we go out to supper.  Stan smokes in Andy’s presence but tries to minimize it.  It’s a tough habit for him to give up.

No support for statements about alleged dangerousness

Rockett’s decision also included a lengthy discussion of Andy’s alleged sexual dangerousness, starting with the mistaken claim discussed above that Andy was arrested in 1990 for sexual assault. Rockett referred three times to the arrest, and, in one instance, stated that Andy had “stalked the three neighborhood children.”  As noted, there is no evidence in police or court records that anyone was sexually assaulted in those incidents, that any young children were involved, or that Andy stalked anyone.

(Even the appeals court, which upheld Rockett’s decision in 2009, stated in a footnote that “some of the fact findings adopted by the judge (Rockett) were not supported by the evidence…” The appeals court footnote specifically stated with regard to Rockett’s claims about the arrest for sexual assault and stalking three girls, “the specific facts (of the incidents in Sherborn) and the charges are not clear from the record.”)

Rockett also claimed in his decision that Andy had confessed to having “bizarre sexual fantasies” about children; yet Rockett noted that Andy “will always say what people want to hear.”

In addition, Rockett included what appears to be an unsupported and inflammatory statement by Burch that Andy was “the most dangerous person he has ever treated.”

But there is no evidence cited or presented in Rockett’s decision that Andy ever sexually assaulted anyone. Rockett stated, for instance, that in the 1990’s, when he was first admitted to his group home, Andy “attempted to attack female staff” in both his residential and day programs.  But Rockett provided no details about those alleged attempted assaults.

Rockett’s decision also included two accounts about Andy’s alleged fantasies and about Andy engaging in masturbation; but while the accounts were graphic, nothing that Rockett described could be said to constitute crimes or prove that Andy was dangerous.

Ellen and Stan maintained that at least some of the statements given by clinicians regarding Andy’s alleged sexual fantasies may have stemmed from statements Andy made while participating in a group therapy program in the 1990’s in Andy’s group home, which is run by Community Resources for Justice.  Participants were reportedly encouraged to discuss their sexual fantasies in the sessions.

“As I recall we were told at least some of the group members had actually offended,” Ellen said. “We weren’t told details of these sessions.”

Questions remain

Marie Dunn, the new guardian appointed last week for Andy, was not present at the October 26 court hearing.  But both Andy’s court-appointed attorney and the DDS attorney encouraged Stan and Ellen to meet with Dunn.  Stan is hopeful that Dunn will agree to a new, independent evaluation of Andy, and that she will support supervised home visits for him.

We hope things will finally move in a positive direction for Stan, Ellen, and Andy.  We think it was a good sign that Judge Christopher allowed Andy to state his wish in open court to visit home.  We also think it is a positive thing that Andy finally has a new guardian.

We strongly support at least a co-guardianship for Stan; and we hope the day comes soon when Andy can have supervised visits home once again, and that common sense will finally prevail in this case.

Public health report exonerates hospital in death, but leaves questions unanswered

October 20, 2015 Leave a comment

[UPDATE: It was brought to our attention that a bill was filed earlier this year by state Rep. Carolyn Dykema of Holliston that would require that physicians, nurses, dentists, and other healthcare professionals receive training in treating persons with intellectual and developmental disabilities.

The bill (H. 1932) would also require the state to promulgate regulations to reduce disparities and discrimination in medical care provided to developmentally disabled persons.  The bill was referred last January to the Public Health Committee, which included the measure in a list of bills that were given a public hearing earlier today (Tuesday).]

A report provided to us by the state Department of Public Health exonerates Lowell General Hospital in the case of an an intellectually disabled man who died of an apparent heart attack in 2012 after having been sent home twice by the hospital without any significant treatment.

The DPH report confirms that the 51-year-old patient was discharged twice from the hospital in two days, and was pronounced dead after he was brought back to the hospital for the third time.

Despite the exoneration, the report appears to leave many questions about this case unanswered — particularly whether the man, whose identity is being withheld, may have received inadequate care because hospital staff was not properly trained in dealing with developmentally disabled people.

We obtained the latest version of the report after filing two appeals to the state public records supervisor.  The DPH first denied our request for the report entirely, citing the deceased man’s privacy; but the department later provided an initial version of the report after the records supervisor ordered it to do so in April.  That initial version was so heavily redacted, however, that it was virtually unreadable.

In a ruling on September 21, the public records supervisor ordered the DPH to produce a less redacted version of the report. We have received that version, which is more readable than the first version the department provided.  Still, every reference in the latest version to the resident’s physical condition when he was brought on the two occasions to the hospital emergency room remains redacted.

The report concludes that an allegation made by an unidentified person — that the hospital was “ill-equipped” to treat an intellectually disabled individual — was not valid.  In fact, the term for the man’s disability is redacted in the report, but we are assuming the allegation against the hospital was in reference to the fact that the man was intellectually disabled.

The report concludes that “appropriate care was rendered” and that discharge plans were appropriate and communicated to a staff member of the patient’s group home. There are no recommendations in the report.

The report states that the investigation of the incident was done over a two-day period in March 2012. The investigator or investigators interviewed the unnamed complainant, three nurses, three emergency department physicians, the hospital’s vice president of patient care, and the director of risk management.  In addition, the DPH reviewed the resident’s medical records, hospital procedures, the emergency department physician schedule, and the hospital’s personnel and credentials files.

While it may appear at first glance that the DPH investigation was exhaustive, we think a case can be made that the review was really somewhat cursory. It‘s hard for us to accept that the hospital did everything right in this case and that no recommendations regarding hospital policies or procedures were warranted, given that the man was not treated by the hospital in any significant way, and the outcome was his death.

To be fair, the report does state that a survey of the hospital was conducted under the authorization of the federal Centers for Medicare and Medicaid Services, and that no deficiencies were found.  The report doesn’t indicate when the survey was done. We assume that this was a separate licensure survey that the DPH periodically conducts of all hospitals in the state.

In this case, the man’s day program and group home staff were concerned enough on three separate occasions that they called 911 and had the man sent to the hospital emergency room. According to the DPH report, the emergency room staff did perform diagnostic testing and took the patient’s vital signs during the visits. During the second visit, a nurse also called the group home to ask for more information. All references to the results of the diagnostic tests and all references to the man’s vital signs are redacted in the report.

One troubling issue noted in the report is that it appears that a physician examined the patient when he was brought to the emergency room for the first time. But it appears that the man was discharged after the second visit to the hospital by a nurse.  There is no indication that he was examined by a physician during the second visit.

We think the report failed to substantively examine the specific allegation that was made in this case. This may reflect the fact that neither the health care nor oversight systems in Massachusetts or around the country seem to be very concerned about an apparent lack of adequate medical care provided to people with disabilities.

For instance it doesn’t appear that there are any federal regulations that specifically address the treatment of people with intellectual or other disabilities in acute care hospitals.  We couldn’t find any references to disabled patients in federal or state regulations governing licensure of acute care hospitals.

In its report on this case, the DPH cited three federal regulations governing hospital care, none of which appears to address the issue of patients with disabilities.  The federal regulations cited in the report require hospitals to have an “organized medical staff”; state that the patient has a right to receive care in a “safe setting”; and state that emergency department policies and procedures are “a continuing responsibility of the medical staff.” (42 CFR 482)

It’s not clear whether Lowell General Hospital has any policies for treating people with developmental disabilities. Based on studies we have reviewed, the lack of such policies and procedures is a serious problem in hospitals in this and other countries.

One study by BMC Health Services Research concluded that people with intellectual disabilities “are at risk of poor hospital experiences and outcomes.”  That study, which involved a review of papers written on the subject, noted that hospital patients with intellectual disabilities had a higher percentage of avoidable deaths than non-disabled patients due to misdiagnoses of their conditions (37 percent versus 13 percent).

A second study done for a group of disability advocates in California found that the inability to communicate their symptoms was a key reason that people with intellectual disabilities receive poorer treatment in hospitals than do non-disabled people. The study noted that those individuals are “commonly unable to identify pain, describe symptoms of illness, or articulate indicators of discomfort to physicians.”

It seems likely that the resident in the Lowell General Hospital case was nonverbal, although a statement in the report that appears to imply that the patient was nonverbal was partially redacted.

The California study, which was based on interviews with providers and advocates, added that in a “typical example,” one nonprofit executive reported that the provider had sent one of their group home clients to a hospital and the hospital sent him back home.  A couple of days later, the executive stated, “we found out he has a broken leg.”

In a report on health care for people with disabilities, the National Council on Disability stated that most medical schools do not include “disability competency” as a core curriculum requirement, and disability competency isn’t generally required in obtaining a medical or professional healthcare license.

The NCD report added that in a survey of Connecticut physicians, 91 percent said they had received no training in intellectual and developmental disabilities. The report also stated that health care providers frequently conduct examinations or diagnostic tests while disabled patients are seated in their wheelchairs, which can generate inaccurate test results or “conceal physical evidence required for appropriate diagnosis and treatment.”

Finally, the NCD study stated that:

For many people with disabilities, poor communication with providers and limited time for office visits reduces the quality of care they receive and may impede diagnosis of new health conditions and prolong or leave untreated chronic health problems. (my emphasis)

We are not saying any of the issues raised in these studies was necessarily a reason or cause of the former resident’s death in the Lowell General Hospital case.  But given that the DPH report doesn’t appear to address those issues in any way, we think that question remains unanswered.

State Public Records ruling on release of hospital report is a win for the public

September 28, 2015 Leave a comment

In what we see as a win for the public’s right to know, the state’s Supervisor of Public Records has concluded that the Department of Public Health went too far in redacting virtually an entire report on an intellectually disabled man who died in February 2012 after he was reportedly sent home twice by Lowell General Hospital.

The September 21, 2015 decision by Public Records Supervisor Shawn Williams was issued in response to an appeal filed by COFAR after the DPH had sent us a report in May that was virtually unreadable because just about everything in it had been whited out.  Williams ordered DPH to provide us with “a new redacted copy” of the report within 10 days, along with a written explanation regarding any portion the Department still considers to be exempt from disclosure.

Last month, the Public Records Division reviewed an unredacted version of the report in camera to determine whether DPH was justified in the wholesale redactions based on a claim that the report contained medical information that might violate the deceased man’s privacy.

Williams stated in his Sept. 21 decision that “generally, medical information will always be of a sufficiently personal nature to warrant exemption” from the Public Records Law.  The decision also stated that even though the individual is deceased, “an individual’s privacy interest in medical information survives death.”

However, even given that exemption, Williams said DPH “provided no explanation as to why it could not redact portions (of the report) that specifically identify the individual to whom the medical information relates.”  DPH also redacted portions of the report “describing the actions of others who are not the person to whom the medical exemption would apply,” Williams stated.

Williams concluded that “…other than portions of the report that specifically identify a person, the Department (DPH) has failed to satisfy its burden under the law to merit nondisclosure of such significant portions of the narrative.”

The Public Records Supervisor’s decision pointed out that COFAR was willing to accept a redacted version of the report that did not reveal the individual’s name or medical information that might violate his privacy.  Williams also noted our complaint that it was impossible to tell from the redacted report whether DPH had examined the hospital’s policies for treating people with developmental disabilities, or whether the report contained any recommendations regarding hospital policies and procedures.

We have previously reported that the 51-year-old man had been having difficulty breathing and was sweating when he was taken to the hospital on both February 6 and 7 in 2012.  On both occasions, he was sent back by the hospital to the group home in which he was living with no significant treatment.  He died, apparently en route to the hospital, after staff in his group home called an ambulance for the third time on the afternoon of February 7.

The cause of death was listed on the death certificate on file in the City of Lowell as acute respiratory failure and aspiration pneumonia, which can indicate choking.  A death report form filed with the Disabled Persons Protection Commission stated that the man died after experiencing cardiac arrest.

The DPPC referred the case of the man’s death to the DPH, apparently because an allegation about improper care in the case involved the hospital and not the man’s group home, which is operated by the Department of Developmental Services. Williams’ ruling still seems to leave some room for DPH to redact anything that they contend could identify the deceased resident; but they will have to include more information in the report than they did in the document they previously provided to us.

Secretary of State Bill Galvin, whose office oversees the Public Records Division, has come in for criticism lately for his allegedly lackluster enforcement of the Public Records Law in Massachusetts.  But in this case at least, we have to commend Galvin and his staff for the work they’ve done.

Requirements reduced for ‘Real Lives’ law contractor to DDS

September 22, 2015 1 comment

Due to what appears to be an open-ended provision in a bid document in 2008, the Department of Developmental Services dropped contractual work requirements and yet increased administrative fee payments to a private firm to manage “self-directed services” for clients with developmental disabilities in Massachusetts.

Documents received by COFAR under a Public Records law request indicate that several key work requirements listed in the 2008 bid document for two self-directed services contracts were later dropped from those contracts with Public Partnerships, LLC (PPL).  Yet, according to information available on an online state contract tracking site, PPL’s administrative fees under the contracts rose from $529,435 to $969,282 between fiscal 2010 and 2014 — an 83 percent increase.

PPL appears to play a major role in managing self-directed services programs around the country. Audited financial statements for the company disclose that PPL and a Colorado affiliate managed more than $1 billion in funding from state, county, and local public agencies for self-directed services in fiscal 2014.

PPL’s website states that the company has been managing self-directed services programs since 1999, and that it is now operating in 21 states and the District of Columbia. PPL is a subsidiary of Public Consulting Group, a Boston-based consulting firm, to which PPL pays millions of dollars in “management fees” each year, according to the audited financial statements.

Self-directed services are billed as an alternative to the traditional method under which public agencies provide services to developmentally disabled clients either directly or via contracts with providers.  Under self-directed services, program clients reportedly plan their own services, manage their “individual budgets” for care, and hire support workers of their choosing.

While DDS has been operating self-directed services programs since the late 1990s, the Massachusetts Legislature authorized a major expansion of those programs last year with passage of the “Real Lives” law.

States are required by the federal government to hire private “fiscal intermediaries” to manage self-directed programs on behalf of program participants, according to DDS.

In Massachusetts, there appears to have been little competition in the selection process that led to the PPL contracts in 2008.  PPL was one of only two firms that submitted proposals in response to a Request for Response (RFR) issued by DDS that year for fiscal intermediary services.  The losing proposer was Non Profit Care Coordination, Inc., a Boston-based nonprofit with zero assets and less than $300,000 in revenues in 2014, according to Guidestar, a financial tracking service for nonprofits.

Federal requirements for fiscal intermediaries for self-directed services appear to be vague. COFAR has reported that PPL’s contracts in Massachusetts essentially require the firm to perform what appear to be check-processing and basic accounting services in connection with three self-directed services programs.

Contract amendments, signed the same year as the RFR was issued, state that PPL would not be required to carry out several services specified in the RFR.  Those dropped services included hiring care workers under the self-directed service programs, performing reference checks on the care workers, and managing “support broker” services.  Support brokers are employed by participants in self-directed services to help in managing their care.

It is also unclear whether PPL’s contracts require the company to help participants manage their “individual budgets” under the self-directed services programs.  Helping participants manage their budgets had been a requirement in the RFR as well.

Meanwhile, a third self-directed services program was added since 2008 to PPL’s contracts, potentially increasing the company’s fees; yet it does not appear that PPL was required to bid to become the fiscal intermediary for that additional program.  It also does not appear that the addition of the new program to PPL’s scope of work resulted in a net increase in PPL’s work requirements.

The three self-directed services programs for which PPL is currently contracted to act as fiscal intermediary in Massachusetts include an adult “Participant Directed Program,” an “Autism Waiver Program,” and a “Department of Elementary and Secondary Education Program.”  The 2008 RFR had specified that the selected contractor would serve as the fiscal intermediary only for the first two programs.

State regulations prohibit the practice of dropping or adding substantial requirements or costs specified in an RFR; but that prohibition is waived under the regulations if the RFR authorizes such changes (801 CMR 21.07).  An open-ended statement in the 2008 RFR appears to have provided that authorization to make major changes to the PPL contract.

The 2008 RFR stated the following:

During the life of these contracts, additional funding may become available; new individuals may enter the POS (Purchase of Services) funding system; existing resources may be reassigned; service needs of individuals funded from the contract may change; or service delivery costs of the provider may change.  The contract(s) that result from the RFR may be amended to accommodate any of these needs, subject to the service delivery goals expressed in this RFR. (my emphasis)

In a May 4 letter to COFAR, Marianne Meacham, DDS general counsel,  maintained that PPL’s contract requirements “far exceed” basic accounting functions, and that “the functions performed by PPL have expanded, not been reduced, since 2008.”

However, a contract amendment, dated June 15, 2008, explicitly deleted the work requirements noted above in the RFR, which was dated February 2008.

In a June 18, 2015,email to DDS Commissioner Elin Howe, COFAR asked for comment regarding the deletions of the requirements in the contract.   As of September 22, no response was forthcoming from the Department to the email request.

In addition to the specified deletions from the RFR, the June 2008 contract amendment stated that PPL would not be required to provide the following services, which had been proposed in the firm’s response to the RFR.  PPL’s RFR response was dated March 28, 2008:

  • Support brokerage, network development and training for non-DMR staff
  • Web-based directory of credentialed providers for ISO (adult) program
  • Consumer online budget access

The final version of the Real Lives law dropped a number of provisions in earlier drafts of the legislation that appeared to unduly benefit corporate providers of DDS services.  Nevertheless, COFAR continues to have concerns that the new law will transfer decision-making authority from guardians and family members of disabled individuals to private financial management companies.

Virtually no one waiting for DDS care getting into state-run DDS homes

August 7, 2015 Leave a comment

Despite the fact that an unknown number of intellectually disabled people are waiting for residential services in Massachusetts, new data provided by the state appear to show that virtually none of those people are getting into state-operated group homes.

According to the data, provided by the Department of Developmental Services in response to a Public Records Law request, the number of people living in state-operated group homes in Massachusetts increased by a total of 144 between fiscal 2008 and 2015.

Previously, DDS had provided data showing a total of 156 persons had been transferred from state-run developmental centers to state-operated group homes between fiscal 2008 and 2014.

These numbers seem to imply that the entire increase in population in the state-operated homes since 2008 came from the developmental centers. Also, the numbers appear to imply that up to 12 of those transferred residents have either died or been transferred for a second time to some other location since 2008.

We’ve written previously that DDS data appeared to show that the Department was failing to inform people seeking residential care of the option of state-run services.  Families and individuals appear to be directed almost exclusively to group homes run by corporate providers to DDS.

In addition to provider-run group homes, DDS maintains a network of group homes that are staffed by departmental employees.  State workers have better training on average than do workers in privately run residences, and have lower turnover and higher pay and benefits.

There are an unknown number of people in Massachusetts waiting for residential care and services from DDS.  This number is unknown because DDS doesn’t officially acknowledge a waiting list.  The Massachusetts Developmental Disabilities Council has cited a 2010 survey indicating that some 600 people were waiting for residential services in the state, and up to 3,000 people were waiting for family support services.

Despite the apparent lack of sufficient housing and services for all of those who need it, DDS appears to be steadily phasing out state-run services and transferring those services to private providers.  Yet, the capacity of the provider-based system is clearly inadequate to meet the entire need for services.  And as we’ve recently noted, privatization of state services doesn’t automatically result in lower cost or better quality.

Some other highlights of the new DDS numbers:

  1. There were a total of 266 state-operated homes in Massachusetts as of April 2015, which amounted to a net increase of 40 homes over the total number in 2008.  Previous data from DDS indicated that DDS had closed 28 state-operated residences since 2008.
  2. Virtually all the (97 out of 99) people living in the state-operated homes that were closed were transferred to the new state-operated homes.

Thus, there has been a total of 253 people who have been transferred since 2008 from the developmental centers and the closed state-operated homes, apparently all to the new state-operated homes.

This raises a further question about DDS’s priorities.  Given the hundreds waiting for residential care in the state, why did DDS close 28 state-operated group homes in the past eight years?

  1.  DDS has no projections on the number of people who will be living in state-operated homes in the next five to 10 years.

The bottom line is that it appears the state-operated DDS system has been expanded only enough to accommodate people already receiving services.

The situation may violate the federal Medicaid Law, which requires that intellectually disabled individuals and their guardians be informed of the available “feasible alternatives”  for care. In addition, the situation appears to violate the federal Rehabilitation Act, which states that no disabled person may be excluded or denied benefits from any program receiving federal funding.

On July 27, I sent an email to DDS, asking for information on the number of people who have been admitted to state-operated group homes who were not transferred there from other state-operated homes or from the developmental centers.  I haven’t yet received a response to that question, but I will be very surprised if the answer is more than a handful of people.

As this post attempts to demonstrate, it is virtually impossible for anyone seeking DDS services to be admitted to a state-operated group home.  One of the few people who was able to accomplish it in recent years had to file a federal lawsuit to do so.

Both the administration and the Legislature have provided disproportionate increases in funding to the provider-operated residential system in Massachusetts, and have continued to short-change state-operated care.  Now that it turns out that the previous fiscal year ended with a $200 million surplus and not the deficit that had been projected, we hope the Legislature will begin to consider restoring some balance to the DDS system, and begin to fund state-run care adequately.

Governor’s MBTA panel provided virtually no support for its recommendation to restrict the Pacheco Law

The Governor’s Special Panel to Review the MBTA earlier this year made some reasonable proposals to better manage the MBTA.  But the Panel report’s recommendation to remove the MBTA from the Pacheco Law’s jurisdiction appears to us to have been a misstep; and the report spent less than a sentence in explaining the rationale for its recommendation.

Based in part on the Panel’s recommendation, the Legislature suspended the Pacheco Law’s provisions for three years with regard to the MBTA, thereby removing an important means of ensuring long-term cost-effectiveness in privatizing services at the T.

The Pacheco Law’s stated intent is “to ensure that citizens of the commonwealth receive high quality services at low cost.” The Special Panel’s report asserted, however, that “the MBTA is inhibited by the Pacheco Law from procuring private, cost-effective services…”

That latter statement, which appears to constitute the sum total of the Panel’s discussion of the Pacheco Law, appears to be at odds with the stated purpose of the statute. There is no additional comment in the report about the impact of the law — not even an explanation of what the law does.

Moreover, as discussed below, the Special Panel did not appear to have consulted with state agencies that oversee procurement of supplies and services in Massachusetts, in preparing its report.  Possibly as a result, the Special Panel’s report also appears to be incorrect in stating (in that same sentence) that the MBTA is “strictly limited by state law in its use of many procurement processes (e.g., CM at-Risk and Design/Build).”  More about that below as well.

The Special Panel has previously run into criticism from CommonWealth magazine for flawed methodology on which it based a separate finding concerning employee absenteeism at the MBTA.

What the Pacheco Law actually requires

As we’ve noted before, the Pacheco Law requires a state agency seeking to privatize services to compare bids from outside contractors with a bid from existing employees based on the cost of providing the services in-house “in the most cost-efficient manner.”  The bids from both contractors and existing employees are examined by the state auditor, who must determine whether:

1. the proposed contract cost is lower than the calculated cost of providing in-house services in the most cost-efficient manner; and

2. the quality of the proposed services will be equal to or better than the quality of the services proposed by the existing employees.

What this means is that both parties — the state employees and the outside contractors — can bid to provide the services; and, if the state auditor concurs that the proposed contract is less expensive and equal or better in quality than what existing employees have proposed, the privatization plan will be likely to be approved.

The Special Panel contends that the Pacheco Law “inhibits” privatization.  But State Auditor Suzanne Bump has stated that her office has approved 12 out of 15 privatization proposals presented to the office since the Pacheco Law was enacted in 1993.

The Special Panel did not consult key state agencies that regulate procurement of supplies and services in Massachusetts

Among the 38 organizations listed by the Special Panel in its report as having provided the Panel with input, most were special interest groups, ranging from the Mass. Association of Realtors to the Conservation Law Foundation to the Boston Carmen’s Union.  But not on the Panel’s list was anyone from the office of the state auditor, which, as noted, administers the Pacheco Law, or either the inspector general or attorney general’s offices, which oversee state procurement laws and regulations.

That may explain why the Special Panel’s report stated, apparently incorrectly, that the MBTA “is strictly limited by state law in its use of many procurement processes (e.g., CM at-Risk and Design/Build).”  In fact, this is the second half of the sentence cited above, claiming that the MBTA has been “inhibited” by the Pacheco Law.  Once again, a single sentence (or rather half a sentence) constitutes the sum of the report’s discussion of an allegedly serious problem faced by the MBTA — in this case, the alleged limitations on the MBTA’s procurement options.

Construction management at-risk (CM at-risk) and design-build services are alternatives to the traditional design-bid-build approach in managing public projects.  Under the traditional approach, construction contractors bid on fully completed designs.  The alternative approaches allow for fast-tracking some construction activities before design is complete.

Despite the Special Panel’s assertion, the state’s bidding laws do provide permission to the MBTA and other state agencies to use CM at-risk for building construction projects (MGL C. 149A, Section 4), and design-build for public works projects, estimated in both cases to cost $5 million or more (MGL C. 149A, Section 16).

If the Special Panel’s concern was that the MBTA should be allowed to use CM at-risk and design-build on projects costing less than $5 million, it wasn’t stated in the report.

Email query to Professor Gomez-Ibanez

On January 28, I emailed Jose Gomez-Ibanez, a professor at Harvard’s Kennedy School and a member of the Special Panel, to ask whether he concurred with the Panel’s recommendation on the Pacheco Law.

Gomez-Ibanez has written compellingly about economic and political issues involved in the privatization of governmental functions and services.  In a 2004 working paper, “The Future of Private Infrastructure,” he stated that:

…in retrospect it is clear that we severely underestimated the difficulties of privatization. We often failed to appreciate that the challenge of privatization was not primarily technical, but also fundamentally political.

In our view, the Pacheco Law implicitly recognizes those technical and political problems of privatization.

In my email, I stated that:

It is not surprising to us that a conservative think tank such as the Pioneer Institute might draw ideologically based conclusions about privatization.  But it was surprising to me that the Governor’s Special Panel, which included faculty of Harvard and Northeastern Universities, including yourself, would support a recommendation that appears to have no written rationale to support it.

To date, I haven’t heard back from Gomez-Ibanez.

Critics of the Pacheco Law overlook the costs of privatization 

In its single statement about the Pacheco Law’s impact, the Special Panel contends that privatized services are inherently more cost-effective than in-house services, and implies that even requiring a comparison between in-house and contracted services is unnecessary.

While the Special Panel provides no explanation for its assertion about the Pacheco Law, the Pioneer Institute, one of the chief critics of the law, argues that the major flaw in the cost-competition process under the law is the following: if the state employee bid is found to be lower than the contract bid, there is nothing in the law that requires the state agency to adhere to the state employees’ bid costs going forward.

But this argument overlooks the fact that there is little to prevent contract costs from rising over time as well.

As we pointed out previously, the cost of contracting at the T appears to have risen even faster than in-house services there.  The T’s budget history appears to bear this out as well.  The budget shows contracted commuter rail expenses rising by 122.5 percent between fiscal 2001 and 2016, compared with a 75.6 percent increase in-house wages during that same period. The budget also shows “purchased (contracted) local service expenses” rising by 336.3 percent between fiscal 2001 and 2016.

One of the reasons that privatization can be expensive is that the private sector tends to pay higher salaries than the public sector for upper-level management positions, and lower wages than the public sector for lower-level positions.  So, allowing unfettered privatization of an already quasi-privatized organization such as the T would seem likely to exacerbate the problem of high executive salaries.

The Special Panel appears to have played political games with its report

I would venture to guess that at this point, some members of the Special Panel are wishing they hadn’t signed on to the product that the Panel ultimately delivered.  Whenever the final report of a panel or commission is a PowerPoint presentation, as was the case with the Special Panel’s report, it may be a tipoff that the product isn’t first-rate.

I would also venture to guess that the single-sentence (or half-sentence) critique of the Pacheco Law in the Panel’s report may have been stuck in there at the last-minute — maybe at the request of the man who commissioned the report in the first place — Governor Baker — who has made the Pacheco Law a political target of his at least as far back as his first run for governor in 2010.   Is it really a coincidence that Baker’s hand-picked commission came up with the very same recommendation about that particular law that Baker has espoused for years?

Politics and public policy obviously go hand in hand, and that’s as it should be.  But major policy decisions should not be based solely on politics.  Recent developments in the long-running saga of the Pacheco Law show how major policy decisions can, in fact, be based on ideologically biased analyses and unsupported statements from prestigious commissions.

MBTA commuter rail contracts rose by a greater percentage than in-house bus costs

While proponents of privatizing the MBTA point to the rising cost of in-house operations there, the cost to the agency of contracting out appears to have risen even faster.

The annual cost to the MBTA of contracting for commuter rail services has risen by 99.4 percent since 2000, compared with a 74.9 percent increase in the annual cost of the agency’s in-house bus operations, according to cost information we’ve compiled from public online sources (see below).

In our view, the rising cost of the commuter rail contracts since 2000 casts further doubt on the claims by the Pioneer Institute and other privatization proponents that contracting out for services will automatically save hundreds of millions of dollars at the T.

In case you missed it, the Pioneer Institute issued a report earlier this month that compared the actual cost of MBTA bus operations to a proposal based on bids from outside contractors to undertake those functions.

The Pioneer report concluded that had the state auditor allowed the planned privatization of the bus operations to go forward, the MBTA would have saved $450 million between 1997 and 2015. The report claimed those allegedly foregone savings were the fault of the Pacheco Law, which the auditor had cited in objecting to the outside contract proposal.

(As discussed below, the state auditor did not definitively reject the MBTA’s contract proposal, but rather asked the agency to resubmit its proposal after addressing concerns raised by the auditor about its cost calculations. The MBTA never did resubmit its proposal, but instead chose to sue the auditor in state superior court to reverse the auditor’s decision, and lost.)

The Pacheco Law requires state agencies seeking to privatize existing operations to show that bids from private contractors would be lower than a calculated cost of continuing to perform specified work by regular state employees “in the most cost-efficient manner.”  The state agencies must submit their calculations to the state auditor, who has the final say as to whether the functions can be privatized.

Largely due to unrelenting political pressure from the Pioneer Institute and other privatization advocates, the Legislature approved a 3-year freeze earlier this month on invoking the Pacheco Law with regard to privatizing MBTA functions.

Last week, we raised a number of concerns about the methodology of the Pioneer report, including criticizing its comparison of actual in-house MBTA costs to bids.  We argued that it’s meaningless to compare actual costs to hypothetical costs over a nearly 20-year period.

We think it would make more sense to compare actual in-house costs to actual contract costs over a multi-year period.  An obvious candidate for an evaluation of actual contracting costs appears to be commuter rail.

The MBTA has contracted out for commuter rail service since the 1980s, according to a state audit report on the agency. Beginning in 1987, Amtrak began providing commuter rail services to the T under a cost-plus-overhead and profit contract. In 1995, this was changed to a negotiated fixed price contract with a three-year term and two one-year options.

In May 2000, according to the audit report, the MBTA was given permission by the federal government to extend the Amtrak contract without bidding for an additional three years.  The total cost of the three-year contract extension, plus additional work that was in included in subsequent contracts, came to $168 million per year.

The Massachusetts Bay Commuter Rail Company (MBCR) subsequently won a competitive RFP process to operate the commuter rail system, starting in 2003.  The cost per year of that fixed-price contract was $217.4 million, which amounted to a 29.4 percent increase over the cost of the Amtrak contract three years earlier.  In that same period, the in-house cost of MBTA bus operations rose by just 12.8 percent, based on the Pioneer report’s figures (See chart below).

MBTA cost chart

In 2008, the MBTA granted MBCR a three-year contract extension at a cost of $246 million per year, which amounted to a 46.4 percent increase in commuter rail contracting costs to the MBTA since 2000.  In that same time, the in-house bus operations cost had risen 40.4 percent.

In 2011, MBCR received a final 2-year commuter-rail contract extension costing $288.5 million a year.  By that time, the MBTA’s cost of contracting for commuter rail had risen by 71.7 percent since 2000, whereas the in-house cost of MBTA bus operations had risen by 55.7 percent.

Finally, the MBTA signed an eight-year contract last year with Keolis Commuter Services at an annual cost of $335 million, according to The Boston Globe.  (Note: the headline on the linked Globe story appears to be wrong.)  As a result, by the time Keolis began operations last July, its annual contract cost was 99.4 percent higher to the MBTA than the Amtrak contract cost had been in 2000. In contrast, the cost of in-house bus operations at the MBTA was only 74.9 percent higher in 2014 than it had been in 2000.

By the way, it may be only a matter of time before the Keolis contract cost rises above the $335 million annual amount, given that the company is reportedly already losing money operating the MBTA commuter system.

The Pioneer report characterized the in-house cost of MBTA bus operations as “inordinately expensive,” and concluded that for that reason, replacing that in-house service with contracted work in 1997 would have saved hundreds of millions of dollars.  But the Pioneer report failed to consider the actual experience that the MBTA has had with contracting.

One might argue that you can’t legitimately compare the cost of commuter rail operations to bus operations.  But at the same time, we think our comparison shows that entering into contracts for services doesn’t guarantee that the costs won’t rise dramatically.  Since 1995, the commuter rail contracts have all been fixed-price contracts.

The Pioneer report misrepresented the state auditor’s objection to the MBTA’s 1997 privatization proposal as a “ban” on the award of the contracts

The Pioneer report referred in different places to the state auditor as having “banned” or “blocked” or “barred” the MBTA’s proposal to privatize the agency’s bus services in 1997.  According to the report, this adverse decision, which was based on the Pacheco Law, not only thwarted the MBTA’s attempts to save costs and improve quality of its bus service, but the MBTA never again attempted to privatize that service.

But the actual decision by then State Auditor Joseph DeNucci did not ban or block or bar the MBTA from privatizing its bus services.  Instead, DeNucci invited the MBTA to resubmit its proposal after addressing a number of issues raised in his decision letter and in a previous letter regarding the proposal.   Among those issues were alleged failures by the MBTA to support specific cost savings in its bid proposal and to provide measurable indicators of service quality as a baseline for comparison, such as information about on-time performance.

It does appear that the MBTA was not happy with the issues and inquiries DeNucci’s staff was raising about the MBTA’s privatization proposal.  According to DeNucci’s letter, the MBTA objected at one point to the auditor’s questions about how claimed savings in contracting out functions at garages in Charlestown and Quincy could be achieved since a third facility in Everett was providing services to support the two other garages.

When the auditor inquired as to how costs would be reduced at the Everett facility, the MBTA responded that the auditor’s inquiry was “of no significance,” and “beyond the scope” of the Pacheco Law.

DeNucci’s final letter to the MBTA stated the following:

Recommendation:
We believe that the MBTA should seriously address each of the above substantive issues disclosed
by our review. A carefully considered objective analysis of these matters, such as the Everett and
Arlington facilities, quality of service, changes and extra work, pension costs, 13(c), and bid price
changes, should be undertaken prior to privatization. A hasty, ill-considered, rather than a thorough
analysis, would not well serve the MBTA’s ridership and the taxpaying public.

Conclusion:
Therefore, pursuant to Section 55(a) of Chapter 7, MGL, this office hereby notifies the MBTA of
its objection to the awarding of these contracts. In accordance with Section 55(d), this objection is final
and binding on the MBTA, until such time as a revised certificate is submitted and approved by this
office. As always, this office is available to discuss our findings and provide further assistance to the
agency. (my emphasis)

Whatever reasons the MBTA had for not answering the auditor’s questions, the fact that those questions remained unanswered was the reason that the auditor objected to the MBTA’s privatization proposal.  Nevertheless, the auditor clearly invited the MBTA to try again and to resubmit a revised privatization plan that addressed the issues in the auditor’s review.

The Pioneer report implies that it is somehow the fault of the Pacheco Law and the state auditor that the MBTA never did revise or resubmit its proposal, and never again attempted to privatize its bus services.  That seems to us to overlook the MBTA’s responsibility for failing to comply with the auditor’s reasonable requests for information.

If you want someone in authority to grant a request you’ve made, and they say they may well grant it, but first they would like some more information about it, do you then say “it’s none of your business?”  That, in effect, appears to be what the MBTA told the auditor in the the bus privatization case.

It was the MBTA’s choice not to answer the auditor’s questions and subsequently to sue the auditor rather than resubmit its proposal.  It was also the MBTA’s choice never to submit another privatization proposal to the auditor for those services.

Now, not only is the Pioneer Institute continuing to complain about the auditor’s 1997 decision, we think the Institute has failed to make the case that the decision cost the taxpayers money over the intervening years.

And one more thing about the Pioneer report’s calculation of the alleged foregone savings 

As noted above, the Pioneer report’s figure of $450 million in lost savings from 1997 to the present, due to the Pacheco Law, is based on comparing the T’s actual in-house operating cost for bus service to an outside contract bid.  The report stated that as a means of comparison, it escalated the proposed contract bid between the years 2002 and 2013, the last date for which in-house cost data on the MBTA was available. The Pioneer report escalated the contract bid by the same percentage rate that it escalated the in-house cost each year.

But why did the Pioneer report not escalate the contract bid for the first five years of the comparison (from 1997 to 2002)? For no readily apparent reason, the report lists the same hourly contract rate for those first five years of its comparison. Yet, the report shows in-house MBTA costs rising by over 18 percent during that same initial five-year period. Had the report applied the same escalation rate to the contract bid as it did to the actual in-house costs throughout the comparison period (1997 to 2015), it would reduce the alleged $450 million in foregone savings by about $72 million.

If there was a reason that the Pioneer report assumed the bus contract costs would remain flat for the first five years, but would escalate after that, it isn’t stated in the report, as far as I could tell. But even if the report had assumed the same escalation rate throughout the comparison period, we would still reject the entire comparison of actual to proposed numbers.

The Pioneer Institute does acrobatic logical twists re the Pacheco Law

July 13, 2015 4 comments

In what has been widely viewed as a setback for state employee unions in Massachusetts, state legislators last week approved a state budget for Fiscal Year 2016 that includes a provision freezing the Pacheco Law for three years with regard to the MBTA.

The Pioneer Institute apparently had a lot of influence on the Legislature in approving the Pacheco Law suspension.  The Institute and other long-time opponents of the Pacheco Law claim the suspension, or better yet, an outright repeal of the law, will allow the T to operate without “anti-competitive” restraints on privatization, and thereby improve transit service and save taxpayers millions of dollars.

We have waded through the Pioneer Institute’s report,  which is filled with charts and financial analyses. You don’t have to go too deeply into the numbers, though, to see that there are a number of apparent holes in the methodology and logical conclusions drawn in the report.

The Pacheco law basically says you have to prove you will save money before you can privatize state services. The Pioneer Institute has had to twist the numbers, logic, and the facts to persuade legislators and the public to draw the opposite conclusion.

In at least one instance, which I’ll get to below, the Pioneer report appears to have misquoted the actual language of the law. It’s an unusually acrobatic performance even by the standards of the Institute.

(Note: While the Pacheco Law does not appear to have had a role in preventing the past privatization of human services, which we are primarily concerned with, the Baker administration’s next step, with the support of the Pioneer Institute and like-minded organizations, might well be to exempt future privatization of human services from the law.)

Unsupported statement

I’ll begin by noting that the Pioneer report says, without any attribution, that several “anti-competitive elements” in the Pacheco Law  “combine to create the nation’s most extreme anti-privatization law.”

What the Pioneer report doesn’t say is that the Pacheco Law is based on a federal Office of Management and Budget (OMB) requirement that federal functions be subjected to a competitive cost analysis before they can be privatized (OMB Circular A-76). As I’ll discuss below, at least two of the top three supposedly anti-competitive requirements in the Pacheco Law are also requirements in Circular A-76, while a third is a requirement of the Defense Department in complying with A-76.

The Pioneer report makes no mention whatsoever of Circular A-76, which has public-private cost-comparison elements that date back to the Reagan administration and even before.  That’s not surprising since an analysis of the requirements of A-76 would seem to cast doubt on Pioneer’s claim that the Pacheco Law is the nation’s most extreme anti-privatization law.

Far from complaining that the cost analysis requirements of Circular A-76 would prevent public agencies from saving money through privatization, most of the critics of A-76 have contended that its real purpose has been to encourage privatization of federal functions by introducing cost competitions for what had been publicly provided services.  As a result, a moratorium has actually been placed on A-76 cost competitions at the federal level since 2009 as a means of slowing the rate of privatization of federal agency services.

It is apparently only in Massachusetts that a law setting conditions for competitions to privatize services can be seen as an impediment to privatization. We do not view the Pacheco Law as an impediment to privatization if the case has been made that privatization will save money and ensure the quality of services.

The Republican Bush administration maintained in 2003 that the competition provisions in A-76 would save taxpayers money.   As an online Bush administration document noted:

At the Defense Department, a survey of the results of hundreds of (A-76 public vs. private service) competitions done since 1994 showed savings averaging 42 percent…It makes sense to periodically evaluate whether or not any organization is organized in the best possible way to accomplish its mission. This self-examination is fundamentally what public-private competition is intended to achieve.

The Pioneer Institute’s apples-to-oranges comparison

The Pacheco Law authorizes the state auditor to compare bids from private contractors to a calculated cost of continuing to perform specified work by regular state employees “in the most cost-efficient manner.”  If the auditor determines that the cost of continuing to provide the services in-house would be less than the bids, or if he or she determines that the privatized service would not equal or exceed the in-house service in quality, the auditor can reject the bids and the service will stay in house.

The main complaint raised in the Pioneer report about the Pacheco Law is that the the auditor used the law’s provisions to deny a proposal by the MBTA to sign two contracts in 1997 with private companies to operate 38 percent of its bus and bus maintenance service.

The Pioneer report concludes that had the Pacheco Law not been in effect, the MBTA would have saved $450 million since 1997 through the privatization of those bus services.  But in making this claim, the Pioneer report compared bids proposed by the two prospective bus service vendors with actual costs incurred by the MBTA in that and subsequent years, and applied a cost-escalation factor to the bids.

The problem in doing that is that even though the Pioneer Institute claims it is being fair in applying that cost escalation factor, it is still comparing apples to oranges.

Under the Pacheco Law, the state auditor compared the bids from the vendors with a calculated cost of in-house operation at the MBTA based on operation in the most “cost efficient manner.” Based on that comparison, the auditor found that the MBTA operation would be less expensive than the proposed bus contracts.

The Pioneer report takes great exception to the Pacheco Law’s requirement that the cost comparison be made between contractor bids and a projection of the “most cost efficient” state operation.  That is a key “anti-competitive element” that the Pioneer Institute cites.  But the Pacheco Law is not unique in setting the comparison up that way. Circular A-76 also states that a federal agency can base its costs in a privatization analysis on what is referred to as a “most efficient organization.”

In fact, we think the Pacheco Law and Circular A-76 establish a true apples-to-apples comparison.  While calculating costs based on operating in the most efficient manner may not reflect an agency’s actual operating costs, neither do bids necessarily reflect a vendor’s true operating costs.  Bids are often lowballed, as we well know.  As a result, contracting out for public services can prove to be much more expensive in actuality than it appeared in the plans or bids.

The Project on Government Oversight (POGO) found in 2011 that the federal government was paying billions of dollars more annually to hire contractors than it would to hire federal employees to perform comparable services.

We think that much of the high cost of human services contracting at the state level is due to a hidden layer of bureaucracy consisting of executives of corporate providers to the Department of Developmental Services.  Our own survey showed that those executives receive some $85 million a year in taxpayer funding in Massachusetts.

So, in that regard, the Pioneer’s entire calculation of a $450 million in foregone savings in rejecting the MBTA vendor contracts is suspect, in our view.

A second major complaint about the Pacheco Law in the Pioneer report is that the law requires the winning bidder to offer jobs to public agency employees whose jobs are terminated by privatization.  But that requirement is also in A-76.

Apparent misquote of the language in the Pacheco Law

The Pioneer report claims that under the cost analysis requirements of the Pacheco Law, any outside bidder must offer to pay the same wage rates and health insurance benefits to its employees as the incumbent state agency. This, according to the report, “neutralizes any potential advantage the outside bidder may have based on cost of labor.”

The Pioneer report, in fact, appears to be quoting from the law verbatim in including the following statement under the heading “Restrictive Elements of the Pacheco Law”:

Every privatization contract must include compensation and health insurance benefits for the contractor’s employees no less than those paid to equivalent employees at the public contracting agency; (my emphasis)

But I could find no such language in the Pacheco Law!  Regarding wages, the Pacheco Law states that the outside bidder must offer to pay the lesser of either the average private sector wage rate for the position or step one of the grade of the comparable state employee.  That could mean that the bidder could stipulate a lower wage cost in its bid than the state’s wage.

Regarding benefits, the Pacheco law says the bidder must offer a comparable percentage of the cost of health insurance plans as the state agency.  This is consistent with the policy of the Defense Department, for instance, which prohibits private bidders in A-76 competitions from offering to pay less for health benefits than the DoD pays for its employees.

Despite his chamber’s action last week to freeze the Pacheco law, Senate President Stanley Rosenberg has appeared to be less than enthusiastic about the efforts to discredit the law and either freeze or repeal it.  “There’s an ideological-slash-political component to this,” Rosenberg said. “We ought to be driving policy based on outcomes and data and how things actually work.”

Unfortunately, the latest attacks on the Pacheco Law seem to be more about ideology and politics than about real outcomes and data.

In 2010, I wrote a defense of the Pacheco Law, noting that it was already a major political target of the Pioneer Institute and Charlie Baker, who was making his first bid for governor at the time.  If anything, the hyperbole and misrepresentations used to attack the Pacheco Law have only intensified since then.