Outsourcing the Government Safety Net

Why is privatization happening? Pros and Cons?

Photo by Jon Tyson on Unsplash

“Hi, Miss Laura. Did you sign that Adobe contract?” Rene asked. My service coordinator called to see if I signed the Service Detail Report regarding my CBS SDE form for DDD, so I can get paid by PPL.

Got that? Shall I translate that for you?

DDD is the state agency that distributes federal funds to individuals with a documented disability. After I spent over two years filling out paperwork for the federal government and DDD proving that my son does have autism and epilepsy, then the government passed the rest of the job — determining where all that money should go, creating disability programs, and distributing the money — onto private vendors.

Rene’s private company manages the paperwork. Some of my son’s money goes to me, as a private contractor who supports my son. A little goes to a private computer training company that teaches him how to program in C++. He’s on a waitlist to get funding for housing, which he could spend at one of two local housing programs that support low needs adults.

The privatization of government is happening. It’s happening across sectors, especially in two sectors that I know well — education and disability services. It is happening because the government services simply cannot manage the current level of demand for services. Small businesses and non-profits, more nimble and specialized, have stepped in fill that void. As a recipient of these services, I’m excited to see what entrepreneurs can develop.

Disability Services

Rene is supposed to help me spend the money on other private services, but she isn’t too much help with that. So, I’m going to a DDD fair tonight at the local community college, where various small businesses, who were approved by the state, will advertise themselves to parents. One company might provide transportation for disabled people. Another might do job training.

But parents don’t have to use those DDD-approved services. After completing paperwork to become private contractors, parents can pay themselves the whole budget and then use the money to support their young adult in whatever way works for their family. For example, Ian needs to take Ubers, because he can’t drive until he’s seizure-free for a year. I could have Rene process the paperwork to get Uber vouchers, but it’s just easier to pay myself as a private contractor and then give him money for Ubers. Or pay his big brother to drive him around.

After dealing with the state of New Jersey for that initial qualification step, I never talked with a government employee again. My paycheck even come from a third party company. The job of supporting disabled adults is so complicated, that this is the only way to do things.

There’s no way that the government could provide all those services on its own. They can’t run Ubers. They can’t do computer training. They certainly aren’t running day programs or job training programs. It would be impossible to build up all those systems. So, third parties, who can manage these big jobs, are multiplying every day.

Because the number of adults with autism and other disabilities are exploding, the government system had to grow to meet those needs. And disability entrepreneurs have gotten the memo. One CEO, who runs some wonderful day programs for nonverbal autistic kids, confided that creating programs like his was a billion dollar opportunity.

Not that disabled people are living in luxury in my state. Far from it. In fact, there are shortages in all forms of help. Right now, they don’t have enough medical providers to diagnosis autistic toddlers. There is a two-year waiting list to be seen by a doctor and get that diagnosis. Families can’t start therapy for their toddlers, until they have that doctor’s note to get their health insurance companies to cover the enormous therapy costs. If private companies and non-profits want to step in to handle this crisis and many more, that’s AWESOME.

Schools

Privatization is happening in education, too. Quite a number of families left public education during the pandemic —the private schools stayed open, the publics closed. And once the kids were fully ensconced in their new schools, they never went back.

State legislation has made the private tuition more affordable. One million students are now using vouchers to access private schools. They are using the money at existing private schools, as well as at new forms of schools. In the New York Times, Dana Goldstein wrote about the rise of private micro-schools.

Goldstein notes that a number of families left public education, not just because the public system failed their kids during the pandemic. She says that some kids aren’t thriving in public schools, even now that they’re open and back to normal. Every day, I talk to upset parents of children with dyslexia, autism, and ADHD, so I get it.

Nobody likes a Cassandra, but the education geeks are noting some very troubling signs for the future. On top of the leakage of parents from public schools to private ones, we’re looking at nation-wide demographic shifts. People aren’t making babies like they used to, so the school age population is dwindling.

Meanwhile, schools didn’t use their COVID education funds to provide needy students with one-on-one tutoring. Instead they used that money to hire more staff and increase salaries — all nice things, except that the federal money is ending. With fewer kids in the seats, schools across the country are now laying off teachers and eliminating programs. The fiscal cliff will hit harder in state that receive more money from the federal government.

When public schools stumble, the private sector steps in. Private tutoring is a $106 billion market. Expect to see an explosion of private sports programs, special education services, and more. Many high performing high school students are now enrolled at their local community college. Students and dollars are flowing out of schools.

I have always been a huge believer in the basic mission of public education to provide a quality education to all students, regardless of income, ability, or background. I believe in giving all students that equality of opportunity. But if public schools cease to operate effectively, when only a third of our children reads on grade level, when neurodiverse children are marginalized, then we must examine all of the options.

Pros and Cons

For some, privatization is purely bad news. In last week’s Atlantic article, Anne Kim explains that government anti-poverty programs have largely become dismantled and outsourced to private companies.

The federal government now devotes hundreds of billions of dollars a year to programs that exclusively or disproportionately benefit low-income Americans, including housing subsidies, food stamps, welfare, and tax credits for working poor families. (This is true even if you exclude Medicaid, the single-biggest such program.)

That spending has done a lot of good over the years—and yet no one would say that America has won the War on Poverty. One reason: Most of the money doesn’t go directly to the people it’s supposed to be helping. It is instead funneled through an assortment of private-sector middlemen.

Giving private companies contracts to provide services, like tax preparation and job training, is a mistake, Kim writes. These private companies won’t control government bloat and have no incentive to shrink the number of low income families.

As someone who manages my autistic son’s disability support system (and now provides support for other autism families), I deal with third-party contractors for services every day. Some are great, some not. It does require some homework to make sure that I’m hiring the right services, but I can handle it. The government could not replicate the services that we are currently receiving.

When it comes to our schools, it unclear whether or not privatization can benefit children. We don’t know how it will impact the larger mission of public education, which is to provide equal access to opportunities. Yet, the pressures on the system are so significant right now, I think that all options should be considered.