Why privatization and corporate delivery of human and communty services to vulnerable people should be opposed

It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.
Paul Krugman

When a market liberal like Paul Krugman writes in a mainstream US newspaper about the horrors resulting from the privatization of human services to corporate and for profit providers it is more evidence that the privatization of public functions and the corporate delivery of  human and community services to vulnerable and marginalised people must be opposed.

Krugman's piece focuses on an investigation by the The New York Times about New Jersey’s system of halfway houses — privately run adjuncts to the regular system of prisons.  Krugman writes that the horrors described in the New York Times piece are not an isolated example but part of a broader pattern in which essential functions of government are being both privatized and degraded. 
Krugman also highlights how the privatization of public functions is built upon powerful networks and connections between politicians, elected offocials, lobbyits and the corporations who win the contracts.

Krugman writes:

"... the Times’s reports instead portray something closer to hell on earth — an understaffed, poorly run system, with a demoralized work force, from which the most dangerous individuals often escape to wreak havoc, while relatively mild offenders face terror and abuse at the hands of other inmates.

It’s a terrible story. But, as I said, you really need to see it in the broader context of a nationwide drive on the part of America’s right to privatize government functions, very much including the operation of prisons. What’s behind this drive?

       

You might be tempted to say that it reflects conservative belief in the magic of the marketplace, in the superiority of free-market competition over government planning. And that’s certainly the way right-wing politicians like to frame the issue......

So what’s really behind the drive to privatize prisons, and just about everything else?

      

One answer is that privatization can serve as a stealth form of government borrowing, in which governments avoid recording upfront expenses (or even raise money by selling existing facilities) while raising their long-run costs in ways taxpayers can’t see. We hear a lot about the hidden debts that states have incurred in the form of pension liabilities; we don’t hear much about the hidden debts now being accumulated in the form of long-term contracts with private companies hired to operate prisons, schools and more.

      

Another answer is that privatization is a way of getting rid of public employees, who do have a habit of unionizing and tend to lean Democratic in any case.

      

But the main answer, surely, is to follow the money. Never mind what privatization does or doesn’t do to state budgets; think instead of what it does for both the campaign coffers and the personal finances of politicians and their friends. As more and more government functions get privatized, states become pay-to-play paradises, in which both political contributions and contracts for friends and relatives become a quid pro quo for getting government business. Are the corporations capturing the politicians, or the politicians capturing the corporations? Does it matter?

       

Now, someone will surely point out that nonprivatized government has its own problems of undue influence, that prison guards and teachers’ unions also have political clout, and this clout sometimes distorts public policy. Fair enough. But such influence tends to be relatively transparent. Everyone knows about those arguably excessive public pensions; it took an investigation by The Times over several months to bring the account of New Jersey’s halfway-house-hell to light.

       

The point, then, is that you shouldn’t imagine that what The Times discovered about prison privatization in New Jersey is an isolated instance of bad behavior. It is, instead, almost surely a glimpse of a pervasive and growing reality, of a corrupt nexus of privatization and patronage that is undermining government across much of our nation.

Reclaiming the history of social justice activism

This story of social justice advocacy is a reminder of the ways that the contribution of radical and progressive social justice activists and campaigners is censored by so called "official narratives" and traditional bodies of knowledge.

Ken Giles* is an elementary school music teacher in Washington DC who uses music to teach his students the link between songs and social justice movements. He uses civil rights songs, peace songs and union songs to make the connection between music and movements for social justice and peace.

Giles is spearheading a campaign to have the acclaimed singer, actor, political activist Paul Robeson inluded in the music textbooks used in schools. Decades ago Robeson was censored from most school books because of his political activism and fierce critcism of US treatment of African Americans and US foreign policies.

As Ken Giles points out even though Robeson is experiencing something of a renaissance in the US, it is still difficult to find his recordings and films, and his work and contribution is not included in many school textbooks.

Giles argues that Robeson's exclusion is an example of the censorship that occurs in the educational textbook industry. In his own campaigning Giles is encouraging his students and other professionals to challenge such censorship.

For those of us who believe in and campaign for social and economic justice Ken Giles's actions show that it is important that we reclaim the history and contributions of social movements and individuals who fought for social and economic justice.

*Ken Giles is the music teacher at Shepherd Elementary School in Washington, DC. He teaches violin at the DC Youth Orchestra and sings with the DC Labor Chorus. He is a longtime member of Jewish Peace Fellowship and was a Conscientious Objector during the Vietnam War. You can read about his "150 years of Songs of Freedom and Justice” music history program at the Labor Heritage Foundation.

New Australia book on the Third Sector in Australia

I look forward to reading  the new book Driven by Purpose: Charities that Make a Difference by Australian authors Stephen Judd and Ann Robinson.

In particular, those of us committed to the growth, importance and value of the third sector need more books like this, written by Australians who work in the third sector and who write about the Australian sector from an Australia perspective. And we need more publications and book publishers willing to publish about the sector.

A brief review of the book here  in Third Sector Magazine tells us that:

Driven by purpose is a new handbook on how to lead and manage an efficient and accountable NFP organisation and contains insightful commentary on the current debate, strategy and action surrounding the role of the charitable sector in Australia.

Driven by purpose is written by Dr Stephen Judd and Anne Robinson, two of Australia’s most experienced and respected leaders in the NFP sector, as well as Felicity Errington who is an emerging leader with expertise in research and policy, international development and gender issues.

The book highlights the importance of being purpose-driven, explaining that it affects the character, operation, direction and strategies of an organisation.

The book explains that a truly purpose-driven NFP has the ‘who’ and ‘why’ at its very core saying “These are not simply academic theories and concepts that are nice to have but affect the ‘what’ and ‘how’ of the organisation, and are essential for organisations to deliver high performance.

 Driven by purpose sheds light on the important issues of identity and purpose by exploring:

• The scope and size of the NFP sector in Australia
• The history of the NFP sector in Australia
• The role that NFPs play in society and why they are vital for a healthy society
• What is meant by ‘charity’ and language wars that affect its identity
• Whether the predominance of faith-based charities in Australia an issue
• In addition, the book explores how being purpose-driven works in practice, and provides ten useful tips on how to survive NFP law".

Whilst I concur completely with the idea that successful NGO's are purpose driven and that a focus on being "purpose driven" should shape all key aspects of an agency including its character, operation culture direction and strategy, I am also somewhat wary of  the idea that NGO's can find singular recipes for success. But I will know more about that once I read the book.

Guidance for not- for-profit boards and management committee in Australia

For those of us who work with, or sit on not- for- profit boards the newly released Australian Non-Profit Sector Legal and Accounting Almanac is an excellent resource.

The Almanac enables us to navigate the complex landscape of not for profit governance, a task made even more difficult and challenging in recent times because of the numerous governance and tax reforms implemented by the Federal Government.

The Almanac has been edited by Myles McGregor Lowndes and his colleagues at  the Centre for Philanthropy and Non Profit studies at the Queensland University of Technology.

As well as assisting NFPs with their legal and governance responsibilities, the Almanac provides an update of recent regulatory reforms, amendments to law and legislation affecting NFPs and information on the latest accounting standards.

The Almanac is available for free of charge and can be downloaded here.

Corporate run nursing homes deliver lower quality care than not-for-profit providers

More evidence of the danger of allowing for- profit corporations to provide human and caring services to vulnerable people.

A major US study  to be published in the Journal Health Services Research has found that for-profit nursing homes deliver significantly lower quality of care than not-for- profit and government run nursing homes.

In the US the 10 largest for-profit corporate providers of hursing homes  operate about 2,000 nursing homes, controlling approximately 13 percent of the country’s nursing home beds.

The study found that the main reason that the quality of care is worse in corporate and for-profit run  nursing homes is that corporate and for- profit providers employ fewer staff  to keep costs down and profits up. In studying staffing and quality in the 10 largest corporate for profit providers of nursing homes the researchers found that the corporate providers  have a strategy of keeping labor costs low to increase profits, with the result that the quality of care suffers and there is a higher number of rated deficiencies.

The researchers found that low nurse staffing levels are the strongest predictor of poor nursing home quality.

The study found that between 2003 and 2008, both the percent of registered nurses and the numbers of all nursing staff were significantly less (30 percent) in the corporate for profit providers than the non-profit homes.  The lower staffing correlated with a considerably higher number of rated deficiencies - the private chains having 36 percent more deficiencies, and 41 percent more serious deficiencies than the non-profits.  Deficiencies include failure to prevent pressure sores, resident weight loss, falls, infections, resident mistreatment, poor sanitary conditions, and other problems that could seriously harm residents.

What is also troubling is that the study found that the quality of care worsened in nursing homes taken over by private equity companies. Nursing homes had more deficiencies after being acquired by a private equity company.This is directly relevant to Australia where private equity companies are increasingly involved in aged care and nursing home provision. The study is the first to make the connection between worse care following acquisition by private equity companies.

"In recent decades, nursing home chains have undergone a considerable expansion.A number of chains were publicly-traded companies until the early 2000s, when five of the country’s largest chains went bankrupt. Following restructuring and ownership changes, as well as increases in Medicare payments, the largest chains became more financially stable. More recently, some of the largest publicly held chains were purchased by private equity investment firms, which invest funds received from investors, with whom they share profits and losses. 

The researchers compared staffing levels and facility deficiencies at the for-profit chains to those at homes run by five other ownership groups to measure quality of care. The 10 largest chains were selected because they are influential in the nursing home industry and are the most successful in terms of growth and market share. 

The study found that for-profit homes strive to keep their costs down by reducing staffing, particularly RN staffing.

The 10 largest for-profit chains in 2008 were HCR Manor Care, Golden Living, Life Care Centers of America, Kindred Healthcare, Genesis HealthCare Corporation, Sun Health Care Group, Inc., SavaSeniorCare LLC, Extendicare Health Services, Inc., National Health Care Corporation, and Skilled HealthCare, LLC.

From 2003 to 2008, these chains had fewer nurse “staffing hours” than non-profit and government nursing homes when controlling for other factors. Together, these companies had the sickest residents, but their total nursing hours were 30 percent lower than non-profit and government nursing homes. Moreover, the top chains were well below the national average for RN and total nurse staffing, and below the minimum nurse staffing recommended by experts.

 The study also found that the four largest for-profit nursing home chains purchased by private equity companies between 2003 and 2008 had more deficiencies after being acquired. The study is the first to make the connection between worse care following acquisition by private equity companies.

There is now a growing body of evidence that demonstrates conclusively that for-profit corporate run nursing homes deliver lower quality care than not-for profit nursing homes.

A study in the British Medical Journal  compared quality-of-care measurements in 82 individual studies that collected data from 1965 to 2003 involving tens of thousands of nursing homes, mostly in the United States. It found that

The authors' meta-analysis, i.e. their integration and statistical analysis of the data from the multiple studies, shows that nonprofit facilities delivered higher quality care than for-profit facilities for two of the four most frequently reported quality measures: (1) more or higher quality staffing and (2) less prevalence of pressure ulcers, sometimes called bedsores.

The results also suggest better performance of nonprofit homes in two other quality measures: less frequent use of physical restraints and fewer noted deficiencies (quality violations) in governmental regulatory assessments.

"The reason patients' quality of care is inferior in for-profit nursing homes is that administrators must spend 10 percent to 15 percent of revenues satisfying shareholders and paying taxes..... For-profit providers cut corners to ensure shareholders achieve their expected return on investment."

Mergers as a strategy to ensure more seamless service delivery

Interesting article from the US by  Bob Harrington about the benefits of a merger between two not- for- profit organizations as a way of creating a more seamless service delivery system to address client needs.

"As the facilitator of this merger (and a former executive director with experience in behavioral health), the most compelling outcome was the creation of a seamless service delivery system to address the needs of clients in a more holistic way.

By unifying services to address substance abuse addictions, mental illness, homelessness, and to provide job training and primary health services, this merger will help to ensure that client needs do not slip through the cracks of a fragmented delivery system.

In the mainstream dialogue about nonprofit mergers, the focus is often on efficiency and costs savings   but ultimately these alliances must make sense from a mission perspective: How can services be integrated and provided in a more effective manner? What will payers – in this case the City and County Department of Public Health – find attractive for contracting?

The landscape of services in San Francisco is fragmented, with many separate organizations providing numerous different services addressing specific client needs.  However, in most cases, they are not comprehensive, integrated services. The merger of Haight Ashbury Free Clinics and Walden House creates a more seamless approach, such that clients do not have to go in search of services from multiple entities to get the care they need"

Charities and not "biting the hand that feeds them"

Sometimes artists and charities who take money from mining companies in Western Australia give the game away.

This story Mining Company cash creates movie making boom  appeared on the ABC TV program Stateline WA on Friday November 4 and demonstrates that the primary reason for the "philanthropic" activity of the mining industry in WA is self interest.

The message is very clear- we will sponsor you but you must not speak certain truths about the industry. In other words the mining industry buys the silence and acquiesence of those it sponsors.

Listen to the journalists and artists in the ABC story who make it very clear that with the money comes conditions and the expectation is that you must show the mining industry in a favourable light.

Show the mining industry in a less than favourable light in their eyes or speak certain truths about the industry and you can say goodbye to the sponsorship.

One interviewer put it this way:

" We can't say we want you to sponsor us but the script says you are unscrupulous swines who rape and pillage the land..... they see the first draft of the script....... they don't want the industry shown in an unfavourable light..... you don't bite the hand that feeds you".

Of course this story reflects a much larger issue- the way that the mining industry and corporations in WA are using their money and power to shape the arts and cultural industry and the charitable sector to serve their corporate interests.

This article by Rosemary Neill provides an insight into the corporate takeover of the arts and cultural industry and charitable sector in WA:

In a harbinger of this, some of the country's most powerful businesspeople have teamed up with artists and launched a new, turbo-charged arts lobby, the Chamber of Arts and Culture, aimed at developing a coherent cultural vision for WA. Among the chamber's founding members are Rio Tinto iron ore chief executive Sam Walsh, prominent arts patron and businesswoman Janet Holmes a Court, former WA Chamber of Commerce and Industry boss John Langoulant, KPMG national executive director Helen Cook and former Australia Council chairwoman Margaret Seares.

An alliance of high-powered executives -- some drawn from the blokey resources and engineering sectors -- intent on proselytising for the arts is a first not just for the West but, arguably, for the nation. Walsh says this move signifies that "the state is growing; there is a need for a more creative and vibrant community and arts and culture will help us deliver that and help us attract people. I think the stars are aligned . . . we have a unique opportunity in Perth and WA's history, building on the mining boom, to work on these things." The unfailingly courteous Rio Tinto boss says the chamber has received "very strong support" from Day and federal Arts Minister Simon Crean. He stresses it is not merely an arts lobby; that it will engage with governments, the regions, schools and untapped audiences to spread the word about culture.