We recently ran across this article from stateline.org which describes how Vermont sat down with their unions to jointly resolve part of their budget crisis. A little outside the box thinking went a long way. Kudos to Vermont for thinking creatively and turning a potentially adversarial situation into a win for both parties.

Are you applying creative solutions to your problems?

• Are tired of consultant bait and switch strategies where superior resources are bid (and may even start) on the project but less experienced staff show up and do the bulk of the work;
• Want rapid access to known consulting resources for projects; and
• Want to make sure there’s continuity on project issues and tasks provided by the consultant.

There are however downsides to having consultants devoted exclusively to your project. Consultants:

• Become myopic over time and miss critical issues and solutions a fresh pair of eyes might catch;
• Are costly resources that should only be on board when they are needed, when they’re not fully utilized (and there are always those down times on projects) you don’t want to pay for them;
• Stop bringing in new ideas and experience gleaned from other projects that might be just what you need to thrive; and
• Become viewed as staff and their unique experience and voice is no long heard.

Of course we’re not suggesting the elimination of consistent consulting staff on your projects. You do need continuity and responsiveness. And we are also not suggesting consultants should be swapped out regularly. Just be aware there are hidden costs to demanding consultants be devoted full time to your project (particularly on longer projects) and benefits to having “fresh legs” in the marathon that projects can be.

Focus on simplicity – you’re not likely to look for the “Cadillac” solution, you can’t afford it. Simple solutions tend to be easier to implement.

Encourage staff participation – you won’t be able to afford, nor will you need, an army of consultants to implement your simple solution. Your staff will have to take on added project responsibility to get things done. There’s nothing like having skin in the game to make your staff fight for success.

Use the wisdom of your own people – you can’t buy your way out of the problem so your approach likely has to be home grown. You’ll be relying on the creativity that exists within your organization to complete this project. When solutions are home grown they are easier to sell internally and generally a better fit for your needs.

Better utilize the funds that do exist – when resources are scarce you pay greater attention to them. You are forced to track every dollar spent on the project which in turn means you are likely to spend your money where it will do the most good.

Of course lack of funds will limit the kinds/size of projects you take on. You’re not likely to re-engineer your entire Medicaid system. But…what about rewriting those out-of-date procedures manuals? How about revisiting your policies? What if you could re-engineer a few of those inefficient processes? Lack of funding, while not ideal, is the reality we all now face. It shouldn’t stop your projects and can even help them to be successful.

The video shows a few things: States ended up with budget shortfalls from similar causes and solutions involve draconian cuts to services.

Professionalism. Cutting-edge public procurement agencies are raising the level of professionalism among their staff and supervisors through training, certification and the adoption of clearly defined standards.

Innovation. Progressive procurement agencies look for ways to improve their processes and to be more effective and efficient. Some best practices include:

• In the area of IT purchasing:
  • Writing solicitations that describe a problem and ask for a solution, which allows suppliers to propose innovative ideas that could provide better value to the state.
  • Making purchasing decisions based on overall value rather than price alone (best value).
  • Forming long-term strategic partnerships with qualified suppliers.
  • Sharing risks and benefits with suppliers.
  • Creating a pool of qualified suppliers.
• Focusing on sustainable/green procurement.
• Directing state resources to strategic sourcing and cooperative purchasing to gain volume pricing from suppliers.
• Making use of reverse auctions, purchasing cards and multiple award contracts.

E-procurement. Successful procurement entities use electronic systems to run the procurement process from solicitation development to contract administration. The optimal systems include the following features:

• Supplier management, electronic notification of bids, reverse auctions and electronic catalogs.
• A system linked to government accounting systems with automated electronic invoicing, evaluated receipt settlement and accounts payable processes.
• Online supplier registration, electronic posting and distribution of solicitations, e-mail notification of solicitations, electronic bidding, posting of tabulations and awards, online auctions, and electronic purchase orders.

Productivity. Well-regarded procurement agencies have tools and policies designed to increase productivity and decrease strain on existing resources. Some of those tools are listed below.

• Web page with a “how to do business” guide.
• Formally established ethics policy with enforcement and training.
• End-user and supplier outreach and education.
• Master contracts to permit rapid low cost acquisition.
• Performance measures.
• Procurement manual that has been published or revised recently.
• Internal and external customer service and supplier surveys.

Leadership. Best practices indicate a preference for a center-led organizational structure, defined as: The central procurement authority focuses on training and education, performance measurement, dispute resolution, system oversight and supply-chain management. Agencies are empowered to conduct procurements over which they are subject matter experts while the central authority consults, provides support, and reviews compliance with state rules and policies.

• State, local, tribal, or territorial government entity with a public health focus
• Integrated delivery network or health system with broad community partnerships
• Independent physician association or consortium of medical groups
• Public/Private partnership aimed at health system improvement and/or community health improvement
• ONC-funded regional extension center with the capacity to expand its services

Eligible applicants are expected to demonstrate an existing infrastructure for health IT and exchange, or previous success in either a community-level practice redesign and care coordination or community-level evaluation that advances health IT and exchange infrastructure.  Applicants are required to provide a detailed approach describing how they plan to advance current health IT and exchange capabilities to achieve a more cost-effective and higher-quality patient care.

An additional $15 million will be provided for technical assistance to the communities to evaluate the success of the program.

An electronic Letter of Intent is required to be submitted by January 8, 2010. Final applications for the grants are due on February 1, 2010.  Award decisions are anticipated in March 2010.  The grants will last for a 36-months.

For more information, visit the HITECH website.

The results of the site visits will culminate in a paper published by CBPP on eligibility integration best practices for a new Ford Foundation initiative.  The paper will accompany a grant opportunity the Ford Foundation and Urban Institute will make available to states and counties in 2010.  The grant will fund demonstration projects in 5 to 10 states interested in implementing the best practices in order to integrate access and retention in the core public assistance programs.

PK completed the first site visit in Cuyahoga County, Ohio in November.  Site visits in Washington State and Oklahoma are planned for January.  The location of the fourth site visit is still being finalized.

For more information on the Ford Foundation initiative, see this NY Times article or go directly to the Ford Foundation’s Press Release.

The conclusions of the report are less interesting to us than some of the data:

• Only five states (Wyoming, Alabama, Montana, Iowa, and Nevada) did not see a drop in revenue from first quarter 2008 to first quarter 2009.
• All states except Montana and North Dakota face a budget gap for FY 2010.
• All states have seen an increase in unemployment.

The obvious conclusion we draw from this: States have less money and will, with higher unemployment, face more demand for their services.  The stimulus bill only goes so far to patch these holes.  Increased operational, organizational and information systems effectiveness and efficiency are necessary to manage these budget gaps without further cuts to staff and service levels.