If the Private Sector Isn’t Getting it Done Turn Toward …

 the Private Sector?

In times of financial woes it is easy for policymakers looking for government savings to be seduced by the siren calls of privatization. The private sector can do it better, more efficiently, and cheaper than government. Right? But what happens when the solution is replacing the private sector with the private sector?

In Brooklyn, New York, broker Logisiticare replaced about 200 private fleets. Two hundred locally owned fleets. Things have not gone all that well. Logisticare says, “Hey, forget about it.”

“It is a mess,” said Gary Farberov, head of the recently formed Ambulette Para-Transit Coalition. “They are robbing us of patients, they are not paying us on time, and the call center isn’t even operating,” Farberov said. Here’s the link to the article in the NewYork Post:

In Texas, Logisticare took over an area in the Dallas area that had been managed by Irving Holdings (Yellow Cab). The complaints in that area are excessive and well documented. Meanwhile, broker MTM, which was awarded the Houston – Beaumont area under the pilot program, has been systematically punishing Yellow Cab of Houston for the egregious act of complaining to HHSC that Yellow Cab had not be been paid for 3 months worth of  legitimate trips.

In the spirit of capitalism and the American way, maybe a system can be devised where the public and private sector compete head to head  allowing competition and the marketplace to determine the NEMT contractor. This system would rely on competition to  drive down costs.

Oh yeah, we forgot --- that is the system we have NOW in Texas.

Private companies such as LeFleur, AMR and Irving Holdings are the Medicaid transportation providers in several regions. Public transit agencies such as the Brazos Transit District (The District), Capital Area Rural Transit System (CARTS) and Hill Country Transit manage the Medicaid trips in the rest of the state. ALL the aforementioned organizations were awarded their contracts on a competitive basis.

The implementation of a statewide broker in Texas would in effect create a monopoly. It doesn’t take John Kenneth Galbraith to figure out what will happen to quality and costs if that is permitted to happen. And it doesn’t take LBJ to figure out what to do with this public policy Trojan horse.