Accenture , RIP


Texas’ contract with Accenture Inc. to run health care call centers will be remembered as a giant public policy fiasco. The $899 million deal was the largest private contract ever signed by the state. In mid-March, health officials finally tore up the contract, fed up with Bermuda-based Accenture’s many failures.

Just three years ago, right-wing lawmakers touted the Accenture deal as a grand innovation that would save taxpayers money. “We’re talking about access. We’re talking about a system for the future,” Gregg Phillips, the man at the Health and Human Services Commission who implemented the plan, told the Houston Chronicle in June 2004. (A few months later, Phillips resigned amid allegations that he steered government contracts to companies run by his friends and family.) “What this means is removing a lot of barriers to access. I think it’s an important change,” said Rep. Arlene Wohlgemuth, the North Texas Republican who authored the call center plan passed during the 2003 session.

The call center idea certainly was radical. It was meant to streamline screening and enrolling poor families in all the state’s safety-net programs, including Medicaid, food stamps, and the Children’s Health Insurance Program. The plan was to close hundreds of government offices from the border to the Panhandle, Houston to El Paso, and fire thousands of state workers who help millions of needy Texans sign up for government assistance. In their place, Accenture would operate four call centers. It was like turning Texas’ social-service programs over to Wal-Mart. The outsourcing was supposed to save the state nearly $400 million. HHSC officials now concede those savings never materialized. Meanwhile, Accenture mistakenly dropped hundreds, perhaps thousands, of eligible families from state programs.

It didn’t take a psychic to see this coming. Yet leading Republicans like Wohlgemuth shunted aside valid criticisms and sensible warnings in a rush to test a rigid ideology forged over the years at policy luncheons of right-wing think tanks. They believe the public bureaucracy is lazy and wasteful, and should be replaced whenever possible with private companies, which, spurred by free-market competition, are more efficient. And isn’t it odd that these lucrative contracts always seem to end up in the hands of lavish donors to the GOP?

Some private companies have successfully handled clerical and basic government tasks. But ample evidence shows they are no more efficient than government, and when they take on the most complex duties of the state, the results are often tragic. The Accenture disaster is just the latest evidence. Texas has privatized much of its foster care services, with horrific consequences. Private prisons are one of the state’s fastest growing industries—and the number of abuse lawsuits filed against private prison companies grows just as fast. The state’s ill-conceived plan to privatize highways by allowing foreign corporations to build and operate toll roads is under such fierce attack that even its legislative authors are crawfishing away from it.

Yet the ideology behind this privatization inanity continues to thrive. This session, Republican state lawmakers are considering outsourcing the most critical level of oversight in foster care—the caseworker, a child’s lone advocate in the system [see “Child’s Play,” March 9, 2007]. Do we want a private company to decide when a foster kid returns to live with an alcoholic parent? Some current proposals in the Legislature would do just that in the name of greater “efficiency.” And there are always tempting state assets our leaders want to sell away. Gov. Rick Perry has a hairbrained scheme to privatize the lottery to fund health care. With the Accenture debacle, the record is now clearer than ever. Privatization screws Texans.