Integration and Outsourcing Simplify Social Services in Indiana

For decades, pursuing benefits from Indiana social services was a test of will, according to Zach Main, director of the Indiana Family and Social Services Administration (FSSA).

Citizens who needed services had to navigate a time-consuming bureaucracy before receiving benefits. Benefits disbursement errors and eligibility determination blunders also plagued the agency, costing the state

millions of dollars.

Before taking his position in 2005, Main oversaw construction of the Indiana Republican Party's Voter Vault database. The model he implemented is now the standard for Republican voter databases in all 50 states. Main outsourced the FSSA's case management operations to IBM, which revamped processes and technologies to decrease eligibility inaccuracies and eliminate unnecessary steps during the delivery of services. The pilot program is already in progress.

Inheriting a Mess

Main toured the organization's 107 offices after joining the agency. He found incompatible bureaucracies that forced citizens to travel more than once to government offices for social services that often took two weeks to initiate.

"We had taken the people who, in many ways, had the least time to give and the least amount of paid time off, and we were making them jump through way too many hoops to get the assistance they were entitled to," he said.

Main soon discovered the administration's business processes were more inconsistent than he and his team originally thought.

"If you walked into an office in one county, it would be a completely different experience than if you had walked into an office in another county," he said. "We found we had about 2,000 caseworkers out there, and we realized we actually had about 2,000 ways of doing business. Every caseworker within that system operated independently of the rest."

Counties managed much of Indiana's family and social services until the state consolidated those functions by creating the FSSA in 1991. However, in 2004, individual FSSA offices still operated with their own rules as if they were still county offices, said Main.

The FSSA also mismanaged money. Main discovered that 12 percent of the time, the agency made errors when qualifying people for food stamps or determining the dollar amounts they could receive. The agency also incorrectly determined eligibility 36 percent of the time when disbursing Medicaid benefits, usually giving them to ineligible recipients.

"That's the Medicaid you give to elderly people who need to be in a nursing home but can't afford a nursing home," Main said. "The state pays for their nursing home to the tune of about $3,000 a month for the rest of their lives. As you can see, those decisions can run into hundreds of thousands of dollars for just one eligibility decision."

Bypassing Government Culture

Main decided to outsource the FSSA's services to IBM because a major internal change would have been too difficult and expensive. For example, Indiana's human resources infrastructure discouraged altering job classifications, which the agency needed to do to implement new processes.

"That was virtually impossible within the old system," he said. "If the person whose job you changed didn't like it, it could trigger an appeal process that would last 18 months, and you weren't sure if you would win it in the end."

To transform the agency internally, Main would have needed a budget increase of more than $100 million.

"It's very hard for me to go to the Legislature and say I need a [multi]million dollar increase to my budget because the savings is coming beyond when their next election cycle is going to be - and maybe beyond when this governor is going to be here," Main said.

However, the IBM deal slashed the 10-year cost of modernizing the agency down to $1.6 billion, which was $341 million below the agency's current costs. That offered legislators a savings