NCPA - National Center for Policy Analysis


February 23, 2006

Texas is using modern technology and private contractors to create a "one-stop" application process for social services that will improve access to more than 50 different programs, while reducing administrative costs, says Christy G. Black, an editor/analyst with the National Center for Policy Analysis.

Clients can enroll by telephone, fax, mail, the Internet or in person. Other states have established call centers or provide online applications for certain programs, but Texas is the first to adopt such a comprehensive reform. The Texas Health and Human Services Commission estimates that private contractors will save the state $646 million over the next five years.

Three Medicaid call centers already set up as pilot projects significantly increased efficiency, according to the Texas Comptroller:

  • 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.

Other states have seen similar savings on eligibility and enrollment processes from contractors using online programs and call centers:

  • Eligibility processes cost an average of $77 per person for Healthy Families, California's contractor-run SCHIP, compared to an average of $337 per person for Medi-Cal, CalWORKs and Food Stamps.
  • 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.

Texas' new system provides a model for privatizing the administration of social services in other states. Black says it could also be the first step toward contracting with the private sector to deliver all social services -- as the Texas Workforce Commission has done with workforce development programs.

Source: Christy G. Black, "e-Welfare Reform," National Center for Policy Analysis, Brief Analysis No. 541, February 23, 2006.

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