Service Portfolio Reallocation: Surviving in the “New Abnormal”

Human services agencies can assess the service portfolio with an eye toward maximizing outcomes and value.

The “new normal” is now old news to human services agencies. The tides continue to shift. Agencies face new challenges and demands and have entered into an era of the “new abnormal.” Most states have Medicaid waiting lists for persons with developmental disabilities. States lack the state-matching funds needed to purchase these services. Baby boomers are aging and the cost of long-term care (nursing homes and home health) for low-income baby boomer seniors is on an unsustainable growth curve.

Identifying the right portfolio of prioritized human services that yield value is more critical now than ever. Finding operating efficiencies, rate adjustments (up or down) and assessing changing demands should help the human services agency decide which service priorities should be funded, and which should be deferred or unfunded. A smart allocation of human services designed to maximize outcomes and value is a key strategy for surviving—and thriving—in the new abnormal.

This article appears in the December 2012 issue of Policy & Practice magazine.

After the recession of 2003, caseloads for the Supplemental Nutrition Assistance Program (SNAP) never declined. Today, state and local human services agencies face SNAP caseloads that are nearly twice as large as they were in 2008. Now, agencies have even fewer workers, and their pay has not kept pace with low rates of inflation. Agencies continue to reduce staff to fund rising healthcare costs. Morale is being tested. It’s the perfect storm of bigger caseloads, fewer workers, rising operating costs and a struggling economy. Welcome to the “new abnormal.”

What does the future hold? The federal budget cliff looms in January 2013, job growth is stagnant and family formation patterns indicate more demand on the horizon. The number of children being born into fragile families continues to grow. More than half of all births in the United States in 2012 to mothers under 30 will be non-marital births—foretelling a high likelihood of a childhood spent in poverty and a need for SNAP, Medicaid, more and higher quality early childhood services and a more robust child support enforcement service.

When the magnitude of need drastically outpaces funding, agencies must assess the value proposition of each public service funding choice. Private sector firms, when facing the reality of a collapse of a line of business, have had to shut down those activities that have lost their value. Some public sector human services agencies have also applied a similar mindset when assessing the service portfolio. The goal? Each program needs a sustainable business model that produces the greatest amount of human services value for the intended population. Many believe that the vulnerable families and individuals served by the services delivered are the value propositions of the programs we administer. But, the relative value or importance among programs may not justify a program’s continuation if its funding is needed to sustain a program with a higher value proposition.

Identifying the right portfolio of prioritized human services that yield value is more critical now than ever.

Each policymaker and human services leader should consider the following questions when rebalancing their agency’s human services portfolio:

 

1. What health or safety risks exist, and how significant are the risks? Agencies can assess risk by determining likelihood of occurrence, number of persons affected and the seriousness of the consequences of not responding to the risk.

    

    

2. Which services deliver the most long-term value to the community? Do certain programs offer opportunities to accelerate skill development, thereby providing opportunities to enhance self-sufficiency and economic security for families—and also fill immediate employment needs?

    

    

3. What are the state and federal fund matches for the program? Allocating more state funds to programs that have higher federal matches and high program results can improve human services performance.

    

    

4. What are the job creation or job elimination consequences of expanding or contracting a program? New smart eligibility systems rules engines may reduce much of the client data input work required. Can social workers that previously dealt with data be repurposed to deliver parent education, job matching, addiction or mental health services, and other high-value kinds of human capital development and rehabilitation services?

    

    

5. What opportunities exist for reducing waste, fraud and abuse? With the use of predictive analytics, the continued presence of targeted kinds of waste, fraud or abuse can be smartly identified and more quickly remedied with a higher likelihood of prosecution and enforcement.