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.

Free Our People Film Festival

I got home slightly before midnight, went to work in this morning, and saw the doctor this afternoon. So, you can expect me to be pretty tired. Nonetheless, I have to share how much fun it was participating in the Center for Disability RightsFree Our People Film Festival in Rochester, New York on Tuesday!

In March, my sister, Ginny, and I wrote and produced a seven-minute film, (Crip)perelli Life 2: Home Is Where The Hat Is. The film is a sequel to (Crip)perelli Life, a story about a highschooler with spinal muscular atrophy that joins a Mafia family with similarly disabled people. In the sequel, the highschooler’s service dog racing ring gets busted by the cops, and, without a transition plan in place, he gets stuck living in a nursing home. Members of the Cripperelli family have to bust him out.

Although the movie is satirical, it tackles the important and oft-ignored subject of institutionalization.  In fact, it’s estimated that more than 200,000 non-elderly people currently reside in nursing homes. The Center for Disability Rights sought to bring attention to this topic by sponsoring the Film Festival. Ginny and I came in second place, and had the pleasure of attending the Film Festival in person.

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Ginny introducing our production

In addition to watching the winning and third-place videos, the Center for Disability Rights showed a couple of other videos highlighting the terrible consequences of institutionalization. A filmmaker panel concluded the evening, as members of the audience got to ask questions about the films and other disability advocacy projects.

I was privileged to participate in the Film Festival, and encourage anyone reading this blog to check out each of the short films. You will laugh and definitely learn something.  Center for Disability Rights CEO Bruce Darling also committed to promoting a similar Film Festival next year, so keep visiting the website throughout the year if you want more information on how you can participate!