Review: The Poverty Industry

One of my clients recently recommended that I read Professor Daniel Hatcher‘s The Poverty Industry. So I did. Now I understand why my client was so adamant that I read the book, and with the same urgency, I recommend that you do the same.

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Hatcher addresses the “poverty industry,” akin to the military industrial complex of which President Eisenhower warned. But it’s worse than that:

In 2011, the defense industry spent in excess of $134 million on government lobbying efforts. Impressive. But the healthcare industry spent almost four times that amount – more than half a billion dollars, including a significant focus on lobbying related to government healthcare problems for the poor. The defense industry also spent almost $24 million in 2011 on campaign contributions, but the healthcare industry multiplied that amount by almost eleven. In fact, campaign contributions made only on behalf of hospitals and nursing homes were about equal to all the campaign contributions made on behalf of the entire defense industry.

Not many Americans are aware of the extent to which private interests are intimately involved in healthcare aspects of what Hatcher refers to as “fiscal federalism.” Most of us believe that the federal government provides money to states, and permits states to deliver those funds to vulnerable populations in a manner most meaningful to the particular circumstances of those populations. But private contractors are interjected into this relationship, creating the iron triangle and the worrisome statistics noted above.

Contractors like MAXIMUS and PCG (the Public Consulting Group) operate internationally, helping governments’ take advantage of financial opportunities. What opportunities that we talking about? Taking Social Security benefits from children in the foster care system.  Taking Medicaid payments for nursing home care, and applying them to state general fund coffers or other projects that have absolutely no linkage to care of the elderly. (By the way, such contractors are often also hired by the federal government for audit activities, creating a scenario in which they are responsible for checking off on their own behavior.)

One of the examples Hatcher shares in the book hits close to home. The Marion County Health & Hospital Corporation in Indianapolis began buying for-profit nursing homes throughout Indiana. It then contracted with American Senior Communities to manage them. Owning the nursing homes permitted the claiming of more federal dollars, which would presumably be used to increase the quality of care nursing home residents were receiving. (Note that Indiana rates abysmally in regard to the quality of care experienced by nursing home residents.) In fact, the Indiana General Assembly passed a bill that would require any additional federal dollars to be spent on nursing homes. However, Governor Frank O’Bannon vetoed the bill, allowing the federal dollars to be routed elsewhere. Ultimately, they were used to fund Eskenazi Hospital. Quality of care in Indiana’s nursing homes is still deplorable.

The Poverty Industry describes numerous other examples of private companies – often with shareholders to keep in mind – working with the government to take advantage of those to whom the money was intended. It is a great eye-opener, and is likely to disturb you like no other non-fiction book on the market. I strongly recommend that everyone read this and then look into how their own state manages public benefits coming from the federal government.

Chapman University, Media, and Society Fail

Last night I heard a news story about Marty O’Connor and his mother, Judy. After becoming quadriplegic, Marty opted to enter Chapman University‘s MBA program.  When he graduated on May 20, Chapman awarded Judy an honorary degree. Judy apparently attended every class with Marty, helping him take notes and providing other physical assistance as necessary. The story has gone viral, and many of those sharing it indicate that the story makes them feel good. Not me. I’m pissed off.

First, I’m curious why Chapman can award an honorary degree but not reasonable accommodations. Chapman may be a private institution, but I have a hard time believing that it does not accept federal funding of any kind, including federal student loans to pay tuition.  Under the Rehabilitation Act, Chapman would be responsible for accommodating students with disabilities. One of the simplest accommodations to provide those with limited mobility is note taking services. There should not have been a need for Judy to attend classes with Marty. Even assuming that Chapman could not provide all of the services rendered by Judy – personal care, for example, would not be a reasonable accommodation in most circumstances – Marty should have been served by the California vocational rehabilitation (VR) program. VR is designed to help individuals with disabilities achieve and maintain their employment goals, and can provide a range of services including personal care, transportation, and assistive technology.

The fact that Judy did not leave her son’s side during his MBA program is not something to be celebrated. Would we fawn over an able-bodied student’s mother going to graduate school with him or her? No! We’d probably be disturbed. If that story was covered by the media at all, it would be to discuss millennials’ failure to launch or overbearing mothers; the mother would most certainly not be praised.

My intent not to malign Judy; I have no doubt that she sacrificed a lot in order to help Marty be successful. And I believe that the media covering the story probably have good intentions, and want to commend the selflessness of a loving parent.  But the current system designed to help people with disabilities relies far too heavily on parents to provide for adult children.  In Indiana, for example, parents must be more than 80 years old in order their adult children with developmental disabilities to qualify for emergency placement on a waiver that provides in-home services. More than a decade after retirement age, Indiana still expects parents to provide the majority of care for adults with disabilities. By praising parents like Judy, who willingly make these life sacrifices, I’m afraid that the media perpetuates the myth that these relationships like those of Marty and Judy should be the norm. Yes, mothers should love their children. But when those children become adults, they need to have the opportunity to gain independence and flourish independently.

I told the above to my own mother, discussing the story with her this afternoon. She said that I was one to talk; after all, I rely on her to provide my transportation to and from work every day. Which brings me to my final point – society is still failing people with disabilities. I would gladly hire someone else to drive me to and from work, but I cannot afford it, even as an attorney.  Though VR legally should have paid for my tuition, it refused, and I graduated with $83,000 in student loans, which I am still repaying.  Though I am on Indiana’s Medicaid buy-in program, it pays caregivers so little – less than $10 per hour – that I cannot attract the quality individuals on whom I must rely. My sister, for example, receives personal care assistance through an agency, and that agency has failed to send someone to get her out of bed more than five times in the last month. It seems that people like Judy and my own mom have to step in because the social programs designed to help us are so crappy.

The next time you read a story like that of Marty and Judy, I encourage you to do more than “feel good.” Ask yourself whether everything is as sunny as it appears. And if the answer is “no,” ask what you can do to help change it.

Review: In Our Hands

You might’ve heard about political scientist and professor Charles Murray recently. He was the subject of a recent campus protest, and is also (in)famous for writing The Bell Curve. I picked up the most recent draft of his call for the creation of a universal basic income (“UBI”), In Our Hands: A Plan for Replacing the Welfare State.  As a person who relies on government welfare programs (e.g., Medicaid), I’m skeptical of most libertarian plans for reform. However, Murray and his book surprised me in a very positive way!

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Unsurprisingly, Murray calls for the elimination of most wealth transfer programs, including Social Security, Medicare, Medicaid, and additional programs that may not initially come to mind when one thinks about welfare (e.g., farming subsidies). However, people – citizens, at least – will not be left completely without government support. Wealth transfer programs will be replaced by UBI. The figure Murray gives is $13,000 per year for each individual aged 21 and older (the amount can be proportionally reduced by up to $6,500, depending upon how much income a given citizen receives each year). Lest you think this is going to cost taxpayers even more than current welfare programs, Murray’s proposal is actually less costly than the status quo!

Unlike current programs that place in enormous restrictions on how each form of wealth transfer may be used, Murray’s UBI has at least $3,000 each year must be used to purchase catastrophic health insurance. This should please Democrats, in that all Americans would have healthcare. It should also please Republicans, in that catastrophic care truly is health insurance. Believe it or not, I am also impressed by Murray’s proposal because he states that long-term care would be included in the mandatory health insurance packages. People with severe disabilities in need of personal care assistance have been looking for a Medicaid alternative for years – could Murray’s UBI be it?

There is much more to discuss in this short book, and perhaps this blog will revisit some of the other benefits of UBI at a later time. I’m intrigued with the idea, and have been mulling over Murray’s proposal all week. Needless to say, this is definitely a book I recommend to anyone interested in government reform.  AEI-affiliated ideas strike again!