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Welfare 'Outsourcing' Hits a Snag in Texas

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Welfare 'Outsourcing' Hits a Snag in Texas


Welfare 'Outsourcing' Hits a Snag in Texas

Welfare 'Outsourcing' Hits a Snag in Texas

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Last year, the state of Texas hired a private company to manage its welfare system. The idea was that private management would be cheaper — but the new system has been crippled by technical glitches and untrained staffers. The new management has vowed to try harder.


This is DAY TO DAY. I'm Madeleine Brand.

In a few minutes, we'll talk with a woman who sued her husband in civil court for brutal domestic abuse and won.

First, we mark a 10-year anniversary. On this day in 1996, President Bill Clinton signed a law that overhauled welfare. The goal was to get people off government assistance and into jobs. New technology was supposed to make that transition easier. It did not turn out that way.

Alex Cohen reports from Texas.

ALEX COHEN reporting:

Three years ago, the Texas legislature was in a panic. The number of welfare cases was on the rise, and the budget to handle them was shrinking. The state considered hiring a private company to manage its public benefits as a way to save money.

Mr. ALBERT HAWKINS (Head of Texas Health and Human Services Commission): When we compared the cost of the contract over the five-year period to our baseline cost - the cost we expend currently - it resulted in a savings of some $646 million.

Albert Hawkins heads the Texas Health and Human Services Commission. Last summer, he says the commission signed a contract with a company called Texas Access Alliance - owned by Accenture.

The goal was to cut costs and make life easier for welfare recipients, many of whom now work and don't have time to go into local offices. The plan was to have Accenture use new software to replace a nearly 40-year-old welfare computer program and to open up four new call centers.

FEFE(ph) (Operator at Call Center): Thank you for calling the STAR and STAR+PLUS helpline. My name is Fefe, may have the case - excuse me, the Medicaid ID for the recipient you are calling for today?

COHEN: More than 150,000 phone calls per month are handled by this call center in Austin. Positive feedback comments from callers are printed on brightly colored paper stars that hang on the wall.

But not all Texans are thrilled with the new way of doing things, including Ashley Soto(ph).

Ms. ASHLEY SOTO: I thought the system was going to be easier. I thought phone interview, they call your house, you fax in the information that you needed to - and it was supposed to be easier.

COHEN: Soto is a 23-year-old single mom living in Austin, Texas.

Ms. SOTO: You want me to open that?

Unidentified Child: (Unintelligible).

Ms. SOTO: I'll open it if you ask for help.

COHEN: Soto relies on her electronic food stamp card to feed her two young children. In December, Soto went to her local welfare office where she was told she would have a phone appointment to renew her benefits. She said she waited for over an hour and was finally connected to her phone appointment.

Ms. SOTO: And he told me within the end of the day that I would have my food stamps on my card. Well, at the end of the day they still weren't on there. So the next day they still weren't on there. And this went on for a month.

COHEN: Soto finally got her food stamps six months later. She says she's never been able to figure out why exactly it took so long.

There have been numerous reports of welfare recipients using the new call system getting hung up on, given the wrong information, or being denied benefits when they shouldn't have been.

Judy Lugo isn't surprised by this. The President of the Texas State Employees Union says state workers are trained more thoroughly and are paid better than the staff hired through private contractors.

And she adds it's much easier to have less sympathy for a client when you only hear her over the phone.

Ms. JUDY LUGO (President Texas State Employee Union): But when you have that person sitting in front of you crying and you see their family and you see what they're going through and you see the way their dressed, then it's very hard not to be affected by what they have to say and their plight.

MR. DOUG DOERR (Accenture): I've listened to a lot of our - the sampling of our phone calls, and I hear empathy from our staff. And we do care.

COHEN: That's Doug Doerr of Accenture. He admits the transition to private call centers hasn't been 100 percent perfect, but he says things are getting better. They've boosted their level of training and reduced the call wait time from an average of 20 minutes to just 16 seconds.

And Doerr says they're still on track to save Texas hundreds of millions of dollars. Other states are taking notice. Several are considering hiring private companies to administer their welfare programs.

That's troubling to Celia Hagert, Senior Policy Analyst at the Center for Public Policy Priorities. Hagert says private business models may save money, but aren't necessarily appropriate for public benefits.

Ms. CELIA HAGERT (Senior Policy Analyst): You know, you're not going to have the kind of competition to run these kind of programs that you have in other areas. Clients don't have a choice. You know, it's not like they can call up and get treated poorly and say well I'm calling the other food stamp program. You know, I'm taking my business elsewhere.

COHEN: Hagert says she's no opponent of modernization. She only hopes other states will take a good look at what's happen in Texas first.

Alex Cohen, NPR News.

BRAND: The 1996 Welfare Law helped move millions of mothers from public assistance into the workforce, but it did little to help the bleak prospects of poor young fathers. Experts weigh in on how government policy could change that. You can read their suggestions at our Web site,

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