Published: October 24, 2009 03:54 pm         

TRIBUNE-STAR EDITORIAL: Experiment gone wrong

Daniels does right thing by ending contract with IBM for privatization of state’s welfare system

Mistakes can hurt people. Those wounds get compounded when the mistake continues and goes unacknowledged.

Gov. Mitch Daniels did the right thing by ending an experiment gone wrong — the privatization of the state of Indiana’s delivery of welfare services. Daniels canceled the $1.34 billion contract with IBM, the company hired in 2006 to process food stamps, Medicaid and welfare cases. The deal with IBM substantially changed the way 1.2 million Hoosiers pursue those essential services. The previous state-run system of recipients meeting with case workers gave way to automation. The new system proved to be a sad failure.

People needing medical or food assistance were asked to contact the FSSA online or by phone at new state call centers. But the applicants’ calls frequently were lost or went unanswered — a costly setback for a poor person with limited cell phone minutes. Their paperwork often disappeared. Foul-ups took weeks or months to correct. Indiana legislators heard a litany of complaints and heart-wrenching stories about life-saving prescriptions going unfilled.

Indiana’s old welfare system needed fixing. Errors, fraud and slow service plagued that structure, too. But the modernization attempt under the IBM pact was the wrong remedy.

Thankfully, the governor acknowledged his administration’s misstep, albeit a little late. “It was a flawed concept that simply did not work in practice,” Daniels said. He even conceded his critics were right, saying, “Those who raised concerns about service quality were correct, and we appreciate their efforts. We’ll now take the best parts of the old and new, and move ahead with a hybrid system in what amounts to a major mid-course correction.”

That righting of the welfare ship is receiving intense scrutiny, and rightly so. The IBM system ends Dec. 14, and the hybrid plan takes over. Face-to-face contacts with case workers in each Indiana county will return. However, the state will retain the computerized, paperless record-keeping system operated by IBM subcontractor Affiliated Computer Services. Many Indiana lawmakers are uneasy with the continued involvement with ACS. The state’s negotiations with that Dallas-based firm and IBM were overseen by former FSSA secretary Mitch Roob, an ACS executive alum.

On Friday, Roob’s replacement — Anne Murphy — met with the legislature’s State Budget Committee to discuss the transition to the hybrid system. The lawmakers’ questions and concerns should begin a period of transparent review of the way Indiana connects needy residents to food and medical help. By Dec. 14, the real-life impact of this new system must be fully understood by the state and the people relying on its assistance.