A New Frontier for Health and Human Services

July 26, 2006

by Christy G. Black

Prepared for the
Texas House Committee on Government Reform

The new Texas integrated eligibility and enrollment system is a good program, based on sound policy, and should continue its course to improve the ways over three million Texans apply for and receive social services.  Designed in the 1960s, the previous eligibility system was outdated, inefficient and uncoordinated. The new system uses modern technology to give clients more choices and greater access to social services.

Some Texas Legislators have recently claimed that Texas had one of the best systems as little as two years ago. That is simply not true.  The old system was undesirable and inconvenient for most clients and, in fact, led to adoption of the current system.  In 2003, the Texas Legislature directed the Texas Health and Human Services Commission (HHSC) to investigate and identify ways to increase efficiency and client access while reducing costs. After thorough analysis, HHSC determined that outsourcing the application process to private firms would improve services and create a net savings of about $646 million over five years.

Remember Reasons for Reform.  Under the old system, each application for a social service had to be made in-person at a state office during business hours (8 a.m.-5 p.m.) and each visit required an average wait of two to three hours (on days with light numbers of applicants). At each visit an applicant interacted with an average of three to four employees and in almost three-fourths of cases (72 percent), eligibility was not determined during the initial interview - requiring additional verification and often additional office visits.  Many of the people who receive benefits are members of the working poor and they often risk losing their jobs by having to repeatedly take time off work to stand in lines at state offices.  

Welfare and public health care clients have expressed strong support for the capabilities of the new program. According to a September 2005 survey of more than 1,000 social services clients conducted by Hill Research for HHSC and the contractors:1

  • 78 percent said they would like the convenience of applying via phone or the Internet versus going to a state office.
  • 82 percent would like greater control over how and when they apply for state services and 82 percent would like the flexibility to apply during hours other than 8 a.m. to 5 p.m.
  • 81 percent said they would like to apply in private without others around, such as via phone or Internet.
  • 62 percent said they would feel comfortable filling out an application online.

In the past, clients also had to arrange transportation and/or child care in order to complete the application process. Under the new eligibility system, they can apply for assistance over the phone, on the Internet, by mail and fax, or in person. There is now only one form to apply for various services, and clients will be able to track the progress of their application through an automated phone system.

The new system will significantly reduce the time and effort clients spend on the application process - time that could be better spent at work and getting back on their feet.  According to HHSC estimates:2

  • If 30 percent of applicants saved 2 hours of lost time from a minimum wage job each year, they would save about $12 million annually - not including savings on transportation or day care.
  • At a cost of $3 per trip, clients could save an additional $4.5 million each year if half of them avoid one extra trip a year.

Once the system is rolled-out statewide, all Texans will be able to dial 2-1-1 toll free anywhere in the state to reach the call centers for assistance from 8 a.m. to 8 p.m. weekdays. All incoming calls are recorded (over 3 million since January 2006) and all recorded calls are easily reviewed for quality assurance. (Recorded calls will also help resolve issues faster, such as client complaints about poor customer service or incorrect information.) To further streamline the system, the databases have been consolidated, making it fast and easy to access cases and determine case status. And more than 7 million documents, faxes, mail and internet applications have been scanned and saved as images, making it hard to lose or misplace paperwork.3

In addition, community and faith-based organizations will now be able to play an even greater part in helping people access social services. These organizations can now assist clients in the application process (that is, by phone, mail, fax and Internet) and help them register for aid, instead of just sending them to a state office. In addition to public libraries, community and faith-based organizations can provide Internet access to applicants. HHSC is launching a $3 million information, outreach, training and education campaign to help guide clients and community organizations through the transition.4

Success Stories.  Texas has already had great success with contractor call centers on a smaller scale. Three call centers for Children's Medicaid were set up as pilot projects. According to the Texas Comptroller, they increased efficiency and improved customer service:5

  • In Houston, the number of applications processed per full-time employee almost tripled while the number of completed reviews more than doubled during a three-month period.
  • Statewide implementation is expected to reduce processing costs from $188 per application to less than $20 each.

HHSC had success with another contracted-out call center for SCHIP. In the first two years, the center received more than 3 million phone calls and one million applications, at a cost of $17 to $21 per completed application.6

Other states have also had success from implementing new technology and from outsourcing application processing and other administrative tasks. Applications for Healthy Families, California's SCHIP, are processed by an administrative contractor using a state-owned system. This and similar systems in other states have realized significant savings:7

  • Eligibility processes cost an average of $77 per person for Healthy Families, compared to an average of $337 per person for Medi-Cal, CalWORKs and Food Stamps.
  • Statewide integration using a contractor would reduce the average costs for administering the three programs to $111 per recipient, according to the California Performance Review, saving the state $4 billion over five years.
  • Pennsylvania uses an online system and spends an average of $68 per person; Florida estimates using a contractor will reduce their costs 15 to 25 percent.

Based on Texas' previous success with pilot projects and lessons learned from other states, Texans should feel confident Health and Human Services' new system will benefit both social service recipients and taxpayers.  Taxpayers will see savings through a more efficient system while clients enjoy greater access and better customer service.

Critics and Their Concerns.  Resistance to the new system has come principally from state employees and unions. While some state employees will eventually be laid off, the contractor has agreed to give them priority consideration for positions at call centers and will waive any waiting period for health insurance benefits.  State workers will also receive priority consideration for jobs in other areas of heath and human services, including 2,500 positions that have been added at the state's Child and Adult Protective Services.  It is important to remember, however, that the reform of the system is intended to better serve the over 3 million Texans who depend on aid - not preserve government jobs.

Despite the enhanced customer service and modern technology the new system provides, some observers are concerned about the effect of office closures on the ability of potential clients to apply for benefits. Because the new system does not require in-person transactions, HHSC will close 99 eligibility offices. However, it will keep 211 field offices open and will station state eligibility workers in about 300 hospitals and other medical facilities for consumers to apply in person. To put this in perspective, there are only 71 Social Security offices and 233 drivers' license offices in Texas. Furthermore, the 99 offices closing were chosen because they are unnecessary or redundant. According to HHSC, of the 99 offices that will be shut down:8

  • 87 process fewer than 1,000 applications each month and 20 process fewer than 100 applications.
  • 31 are located within 15 miles of another full-service eligibility office while 13 are located within 5 miles of another office.
  • 78 have 10 or less employees, and 59 of them have no more than 5 employees.

Even with the office closures, clients in urban areas will be no more than five miles from a state office and those in rural areas will be no more than 30 miles from a state office according to HHSC. Any client that prefers to apply in person will still be able to do so in the new system.  For HHSC clients who have difficulty traveling or live in very remote areas, HHSC is creating mobile units.

Stay the Course.   There are bound to be bumps in the road when blazing a new trail, as Texas has seen in transitioning to the new system.  However, that is why the new system began with a pilot phase - to identify areas for improvement and to adjust as necessary. And that is exactly what has happened.  There have been several rough points during the transition, but the issues were promptly identified and steps were immediately taken to fix the problems.  For example, in the call centers, state workers are now positioned with customer service representatives, both to ensure accuracy of information given to callers and to assist with complex policy questions.  Additional customer service representatives have been hired in recent months to address higher demand than anticipated and all workers are receiving new and additional training.  As a result, call hold times and abandoned call rates have decreased accordingly. 

Perhaps the most important aspect of the new system is that the clients like it and they are using it.  According to the contractor, more than 90 percent of the clients in the pilot area are taking advantage of new communication channels. Over 18,000 people in the two pilot counties have taken advantage of the extended hours and have made more than 250,000 calls.9 Once Texas' new system is fully implemented, HHSC estimates it will reduce office visits by more than one-sixth and reduce clerical work by about 45 percent.10 Importantly, these outsourced call centers free state workers from burdensome paperwork, giving them more time to focus on clients.

Implementing technology and integrating systems is reducing the administrative burden on social services and giving Texans greater access to needed aid. As the program becomes more established, state employees will find they have more time to interact with their clients and to make sure people get the help they need and attention they deserve. Clients will find that applying for aid will be less time consuming and less frustrating than under the previous system.

The new integrated eligibility and enrollment system is working and should be allowed to continue working.  By using private contractors who specialize in technology and data management and by outsourcing the administrative duties, the system will be more efficient, will cost less and state employees will be able to focus on people, not paper.

  1. Hill Research Consultants, poll of 1,034 state benefit recipients, September 28 - October 2, 2005.
  2. HHSC, "Integrated Eligibility Determination, Phase II: Business Case Analysis," March 2004. Available at http://www.hhs.state.tx.us/consolidation/IE/BC_FinalReport.pdf
  3. Texas ACCESS Alliance.
  4. Polly Ross Hughes, "Lawmakers Skeptical of Benefits Screening," Houston Chronicle, April 30, 2006.
  5. Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, et al., "Limited Government, Unlimited Opportunity: Recommendations of the Texas Comptroller," e-Texas, January 2003. Available at http://www.window.state.tx.us/etexas2003/gg12.html
  6. Ibid.
  7. California Performance Review, "CRP Report, Issues and Recommendations: Transform Eligibility Processing," Volume 4, Chapter 2, HHS01, August 3, 2004.
  8. Fact Sheet, "New System Includes Convenient Office Locations," Texas Health and Human Services, July 2005.
  9. Texas ACCESS Aliance.
  10. Texas Health and Human Services Commission, "Integrated Eligibility Determination, Phase II: Business Case Analysis," March 2004. Available at http://www.hhs.state.tx.us/consolidation/IE/BC_FinalReport.pdf