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Improving the customer experience through technology

This year's 44th Annual IT Solutions Management (ISM) for Human Services Conference focused heavily on the importance of customer experience. During a federal panel discussion, Rick Friedman, director of State Systems for the Center for Medicare and Medicaid Systems, talked about what Medicaid consumers can expect by 2014. He said a new business model, a coordinated set of rules, and a single, streamlined, one-stop shop for determining eligibility are all in the works. It can no longer be a case where the client may be at the "wrong door." It is crucial for future solutions to illustrate an interoperable model and emphasize data sharing. Friedman holds a "one size should fit all" outlook, and believes rules that are being applied should be the same for everyone; you cannot expect to have different rules and expect the same outcome. He later defined shared services that Medicaid, CHIP and insurance exchanges can benefit from. These services include portals, business rules systems, interfaces, customer service, technology support and case notes. Fortunately, the Department of Health and Human Services (HHS) is beginning to move toward a more holistic approach since no customer needs only one service.

Richard Evans, director of eligibility automation and data integrity for the Oklahoma Health Care Authority, gave a presentation on innovative service delivery solutions in his region. Prior to modernization, it took 20 days for eligibility to be determined for a client. Now, it takes only 20 minutes. The department's goal was to empower and equip members, develop multiple program applications, and expand enrollment to service locations. Evans encouraged the "no-wrong-door" policy by removing barriers in order to increase effectiveness. Moreover, Oklahoma was able to make these modifications to the system without changing the eligibility policy much. Oklahoma's new, streamlined Web application for online enrollment is state-sponsored and launched in September 2010.

User-friendliness is another major component in improving customer experience. It is essential for systems within health and human services agencies to be easy to use for caseworkers, and in the case of insurance exchanges, for customers. We are getting closer and closer to a society where both attention and patience are inherently decreasing. As a result, technologies in place must be easily useable and intuitive. Linda Sheppard, director of the Accident & Health Division and PPACA project manager for the Kansas Department of Insurance, gave a presentation on experiences with implementing the insurance exchange. Though the state returned federal funding to support implementation activities, it will still be carrying out plans to ensure an optimal solution is created. Some of the main goals for the exchange include a system that provides best possible outcomes for Kansas consumers, balances administrative effectiveness, ensures continuity of care, and provides user-friendly access to the exchanges. Since the insurance exchanges are consumer-based marketplaces to purchase health plans, it is imperative that states create portals that give customers access to sufficient information and exuberate usability.

Analyst's Take

At the end of the day, it is the client who needs to have access to services, and it is technology that will allow health and human service agencies to make it happen. For that, agencies must work together in a way that will enhance customer experience and improve the delivery of services. Systems must be designed in a way that they are highly accessible and easy to use without sacrificing the level of effectiveness. To download an in-depth recap of this year's ISM Conference, go here.

Don't forget to follow GovWin's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn.

Conceptual architecture and interoperability

Sitting in the audience at nearly any human services conference over the past year, it seems the same discussion is occurring over and over again with equal fervor and varying levels of frustration. This discussion hinges on the topic of interoperability – a new term to describe an idea that has been around for a long time.

Interoperability, though elusive in the minds of many, is neither a new nor difficult concept to grasp. An individual in need approaches their state's health and human services organization and requests assistance. At this point, to varying degrees, bureaucracy sets in motion a number of processes and systems – not always compatible and often defying common sense – to determine if the client should receive benefits.

Wouldn't it be great if that individual could go to their local office or website to find out which state programs they are eligible for, such as the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF) and Medicaid? Not only would it be great, it would be more efficient, cost-effective, and just plain easier for everyone involved. So, how do we make it happen? It is this dilemma that is driving conversation in the post-Affordable Care Act health and human services world. In this world, a public policy consensus defying party identification has been met with technology capabilities to drive a move toward interoperability.

Over the past year, several conceptual frameworks for change have begun to take shape at the federal level and in many localities. The most notable framework is Human Services 2.0 used by the US Administration for Children and Families, but disparate agencies have come up with different methods to develop a conceptual roadmap for interoperable human services systems. Specifically, Allegheny County, Pa., Illinois, and Minnesota provide one with examples of a streamlined future with better outcomes for the clients who rely on human services.

The full analysis of conceptual architecture is available for subscribers here.

Don't forget to follow GovWin's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn.

Southern Illinois’ groundbreaking 911 pilot

Southern Illinois is taking steps to increase the efficiency of emergency response in rural America. Several counties have been chosen to participate in a nationwide pilot program to test new initiatives and advancements for how dispatchers respond to 911 calls, text and picture messages, and streaming video.

The counties of Southern Illinois' (CSI) 911 Association project will be a pilot program for how to develop and test a next generation 911 (NG911) system as a basis for a 911 network in rural America. The project is being funded through the National Emergency Number Association (NENA) along with a $600,000 federal grant. The project started out as a grassroots effort and has since expanded to include the 15-county consortium of CSI 911.

Southern Illinois seems to be booming with technology projects. The region was also the recipient of a $45 million fiber optic network project through Clearwave Communications. This project involved the creation of a high-speed broadband network across a 23-county region to improve broadband access. Clearwave decided to partner with CSI 911 and contribute to the success of the pilot by procuring more than a million dollars as part of a multi-million dollar broadband initiative. By combining CSI 911 and Clearwave Communications, Southern Illinois will set the stage for technological growth for the rest of the nation to emulate. The project aims to spawn further development in the region where economic hardship is prevalent.

Pilots can be a great success in tackling statewide public safety efforts. Washington County, Maine recently combined efforts to establish a pilot for a mobile broadband project to improve rural wireless connectivity. The pilot will serve as a research tool to create real-time connectivity to transmit public safety data. If the project demonstrates success at the county level, it will expand statewide and possibly nationally.

Analyst's Take

Pilot projects are important for generating support for larger-scale projects by combining planning, evaluation, cost analysis and implementation. These projects serve as a catalyst for initiatives nationwide. In rural areas like Southern Illinois, where connectivity is hindered and public safety can become jeopardized, a pilot serves a special purpose to improve public safety measures. In the case of CSI 911, new advancements in 911 technologies are needed to ensure emergency response is quick and efficient for people in need. Vendors should become aware of pilots in order to help win a favorable position when future projects arise. Pilot projects like CSI 911 can allow vendors to determine how improve their products to be a valuable competitor in the NG911 market and, in turn, get ahead of the game. It is also important to analyze which types of systems are feasible and which communities a system would benefit. Another valuable tool vendors should familiarize themselves with is the National 911 Assessment Guidelines which serve as a comprehensive benchmark for statewide 911 systems to track their progress as well as assist states with achieving the best results for 911 services.

Earthquake shakes mobile service, and the increased need for NG911

As we near the tenth anniversary of 9/11, it seems wireless communication during times of crisis is still an uphill battle. Tuesday's 5.8-magnitude earthquake centered in Mineral, Va. left many East Coasters hanging on the line, waiting for a dial tone. Now, with Hurricane Irene fast approaching, will mobile phone service once again be disrupted?

Federal Communications Commission Chairman Julius Genachowski has launched an investigation into the lost phone service that left many unable to reach family, friends, and 9-1-1 centers for nearly an hour. "We are very concerned by incidents where emergency wireless calls to 9-1-1 after yesterday's earthquake were hampered by network congestion," FCC Public Safety & Homeland Security Bureau Chief Jamie Barnett said in a statement Wednesday.

Barnett also stressed the continued need to move toward next generation 9-1-1 (NG911) services, which allow 9-1-1 centers to receive text, picture and video messages from those reporting an emergency. Here at Deltek's Herndon, Va. headquarters, the state and local research team – in unison – jumped up from our seats as the building shook for what seemed to be an inordinate amount of time. After a few minutes of wide-eyed confusion, shaky-voiced fear, and humorous banter mixed throughout the group, many of us grabbed our cell phones or hit the Internet for news. As for myself, I immediately updated my social media profile with a simple "um ... was that an earthquake?" which was followed by a bevy of friends posting similar updates.

According to Twitter's own feed, more than 40,000 earthquake-related Tweets were sent within a minute of initial rumblings, and the site hit "about 5,500 Tweets per second (TPS). For context, this TPS is more than Osama Bin Laden's death & on par w/ the Japanese quake."

Sure, social media is a great way to spread the word, but what about direct communication during an emergency? I tried calling my mom shortly after the shake – no service. Two minutes later – no service. Five, ten, twenty minutes – no service. I resorted to text messages, all of which went through without flaw.

The reason for often seamless text service is that text messages can be sent, cued for transmission, and placed in an open route within seconds, whereas a phone call can take minutes to transmit and cannot be altered for time. Mobile phone companies admit service was a problem during the quake, though there is debate on whether it stemmed from extreme call traffic or damage to network infrastructure. Still, regardless of the root of disruption, you'd hope calls to emergency services would somehow move to the front of the line for priority connection. Earlier this month, Deltek Senior Analyst Jeff Webster reported on the radio spectrum known as the D-block, which the FCC, Congress and state officials are working to determine how to best allocate. The D-block has received a lot of attention from public safety officials urging Congress to assign the spectrum to public safety use, and current bills in the House of Representatives (HR 607) and the Senate (S 911) – if passed – would do just that.

"The driving force behind this initiative goes back to the Department of Homeland Security's report on the status of interoperable communications and the 9/11 Commission's recommendations. Both reports suggest that during 9/11 and the days after, communication amongst public safety officials was poor. The systems in place did not allow agencies to talk to one another and thus jeopardized response efforts. Since then, more than $1 billion has been set aside for public safety communications by the federal government." – from Jeff Webster's report.

Analyst's Take

Extreme weather seems to be becoming a norm for many parts of the country, and commercial carriers would be wise to work with agencies to prepare for such events and ensure uninterrupted communication. Additionally, the increasing rise of social media use during emergencies proves the power of technology in relaying vital information. One way to enhance the effectiveness of social media in emergency response and public safety would be to equip officers with smartphones to track latest news and key location points during a disaster. As Hurricane Irene heads inward, we risk the possibility of more mobile service disruption. No matter the result, I'm sure we'll all have cell phone in hand, well-prepared to talk, text or Tweet.

Where were you when the earthquake hit? Did you experience trouble getting through to people? Post your comments here.

Follow me on Twitter @kridleyGovWin.

Washington Superior Court receives feasibility study for statewide case management implementation

On August 22, 2011, MTG Management Consultants released its draft feasibility study for the Washington Superior Court Management project. The feasibility study outlines plans for the state in implementing statewide case management architecture. MTG outlined four alternatives for the state, but based on risk and cost/benefit, reduced it to two options: central implementation and local implementation. Both of these projects aim to have a robust statewide case management system in place within the next three years. The costs of these options differ, but estimates put them around $30 million. Below is an outline of the two options, which have different contracting and procurement strategies.

Central implementation and hosting

This strategy would focus on a top-down approach that implements one case management system across the state. The statewide rollout consists of implementing the application in 23 small and medium district courts using three selectable configurations and averaging six months for each implementation. The Administrative Office of the Courts (AOC) will implement eight small and medium courts each year. The nine large courts would have their own customized project plans and would average nine months for implementation.

Local implementation and hosting

This strategy would focus on a bottom-up approach. Under this plan, the state would create a master contract for local courts to use in implementation applications that flow up to the statewide case management system. Statewide adoption by the 32 courts is expected to take three years.

The system would enable judges and court administrators to:

  • Direct and monitor court case progress
  • Schedule case events
  • Enforce court business rules
  • View case plans/schedule, status, progress, and case party information
  • Quickly and efficiently communicate court schedules and orders

Analyst's Take:

Given the size and scope outlined by the feasibility study and supporting documents, the Superior Court will need to ensure it has proper project management and funding to complete this project. One only needs to look south to California to see where court case management projects can be extremely difficult to implement on a statewide basis. It will be important for the Superior Court to properly document the systems at the local level to ensure compatibility and effective implementation. Vendors will need to provide the state with robust proposal documents that leave no room for error. They will also need to better understand the current data exchange efforts taking place in the court that could affect their proposal and implementation strategy.

44th Annual ISM Conference advises states not to reinvent the wheel

The 44th Annual IT Solutions Management for Human Services (ISM) Conference was held August 14-17, 2011, at the Hilton hotel in Austin, Texas. The theme of this year's conference was "Enabling Change: Deep in the Heart of Technology." The conference, sponsored by ISM, an affiliate of the America Public Human Services Association (APHSA), brought together a variety of state representatives, vendors, and other industry leaders in health and human services. The goal of these conferences is to create a stimulating and engaging environment for federal, state, local and private sector stakeholders to discuss emerging issues, trends, and how technology can be utilized to streamline business processes in health and human services agencies.

The conference consisted of numerous plenary sessions, panel discussions and breakout sessions from several vendors. Attendees were also able to explore the extensive vendor exhibit where private sector partners displayed and discussed the latest information technology products, solutions and services in the health and social services arena. Topics of discussion at this year's ISM conference included health care reform, interoperability and integration, innovative service delivery solutions, cloud computing, cybersecurity, health insurance exchanges, workforce strategies, streamlining services, and many more. The central theme of this year's conference was learning from other states and leveraging existing technologies in a way that streamlines business processes and improves customer experience.

Simply put, states should not be looking to "reinvent the wheel." Instead, they should be looking to other states for ways they can leverage existing architecture to comply with new requirements trickling down from health care reform. With looming deadlines, tight budgets and never-ending requirements, states are really looking for infrastructure that is reliable, modular and flexible. For instance, when it came to setting up a health insurance exchange, Utah did not look to reinvent the wheel. Cindy Layton, information technology manager for the Utah Department of Technology Services, explained that when Utah needed to set up a health insurance exchange, state officials consulted with insurers, brokers and other stakeholders who knew about the business space. Today, Utah's landing page leverages private-partner technology and has links to other websites and system portals in the health insurance exchange market. The state built minimal infrastructure with the exchange and has been successfully facilitating data share.

Another theme throughout the conference was that the lines between health and human services are finally blending. A lot of times, clients need access to a range of health and human service programs such as Medicaid, the Children's Health Insurance Plan (CHIP), and the Supplemental Nutrition Assistance Program (SNAP). For that, states are now examining more ways that these can be streamlined. By doing this, they will be able to enforce a "no-wrong-door" strategy that will inherently improve customer experience. Tom Seuhs, Texas Health and Human Services executive commissioner, expressed how focusing on technology means focusing on the customer. During his presentation, he explained how health and human services are more integrated than people realize, even though the systems may not be at the moment. Utilizing technology to integrate and enhance eligibility systems will reduce workloads and other burdens across programs.

Other concepts mentioned in this year's conference revolved around dwindling state budgets and the importance of "doing more with less." Having solutions that are cost-effective and affordable is just as important as their level of performance. Oracle gave a presentation on the future of cloud computing in health and human services, and predicted these agencies will eventually move to this type of technology. Cloud computing offers itself as a solution to dealing with the financial challenges most states are facing. Deploying this type of technology in the health and human services space will virtually change the delivery of services and how it is consumed. Still, health and human services agencies are still a long way from adopting this type of technology, as there are several barriers regarding security and regulatory compliance.

Analyst's Take

States are really looking for ways to integrate health and human services agencies within their communities. Attention is going back down to the customer level, and in order for states to truly enhance the delivery of their services, changes must be made in their business processes. Now is the time for vendors to start thinking about how technology can be leveraged to streamline services across health and human services agencies. Furthermore, since states are still facing economic pressure, it is important for vendors to consider technologies that are not only efficient, but cost-effective. To download an in-depth recap of this year's ISM Conference, go here.

Don't forget to follow GovWin's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn.

APCO holds annual conference in Philadelphia focusing on public safety communications

This year, Philadelphia played host to the Association of Public Safety Communication Officials' (APCO) Annual Conference. Like previous years, the conference provided attendees with information and education on issues challenging public safety answering points (PSAPs) and emergency communication centers/departments. Sessions covered a variety of themes including disaster preparation; next generation 911 news and updates; Project 25 standards and narrowbanding efforts; FCC updates, plans, and projects; and project management and procurement strategies. All of these sessions focused on providing dispatchers, PSAP managers, and communication officials with the tools and information necessary to ensure public safety and improve response times.

GovWin has released our Analyst Recap of that event. This recap covers a variety of topics that were discussed during the conference along with analyst perspective on those issues and how they affect the justice/public safety and homeland security market. APCO caps off a busy summer, which included annual conferences from NENA and IACP LEIM.

Good news graphs, part three; Health care and social services state budget projections

By Chris Cotner and Kate Tussey

The national healthcare debate has waxed and waned for decades, with the obvious recent history of Clinton's failed foray and Obama's push for national health care reform. Two main drivers behind the discussion are the rapidly rising cost of health care (HC) and the massive baby boomer generation entering retirement. An additional qualifier since the recession has been the increased number of uninsured, either by way of unemployment or underemployment. Even before the Affordable Care Act of 2010 (ACA), states were concerned about paying for HC services in this projected environment. After the act, 26 states entered a class action suit against the federal government, 17 states passed laws opposing the act, and 44 states filed legislative measures opposing elements of the legislation. The issue is clearly not resolved.

Some of these same drivers also affected social services (SS) budgets in the states. After Clinton's massive revision of welfare law in the 1990s, public assistance roles were drastically reduced. However, with the recent recession, unemployment, underemployment, and employment without benefits, HC have once again been on the rise in the states. While the recessionary forces are temporary abnormal drivers of social services budgets, states must still contend with this short-term spike and plan for providing services moving forward.

In all states combined, HC and SS will account for 34.8% of all funds expenditures in 2012. This is the largest budget expenditure for the states (with education closing in around 31%). In the recent environment of decreased state revenues in the sluggish economy, budget cuts have been the norm. As I wrote in my previous article (here), FY 2012 is the first time in decades that states budgets have decreased on the whole. With the prospect of rising costs and budgets in HC and SS, there is good reason for states to be concerned.

I wrote about the good news of overall budget projections for the states in a previous article (here). Despite the net loss in FY 2012, state budgets are expected to flatten and begin upward growth in FY 2013. However, drilling down, there is more news around which to rally.

As part of our continued analysis of state and local budgets and spending, Deltek developed a set of statistical projection models to examine future trends in the HC and SS verticals. What we found was more good news. Quite simply, the HC and SS verticals are projected to increase at the state level (see Figure 1, below) moving forward in FY 2013. The following analysis explains both the methodology and projections in greater detail.

Figure 1: Health Care & Social Services Total State Spending (Actual and Projected)


Click to view Full Size

The Methodology

All good models start with good data. Deltek has accurate, sound data on state budgets (including IT) through FY 2012 for all states and into FY 2013 for some. However, having current budgetary data in itself is not enough to develop projection models. In order to project out past our current data, other data projecting various variables in the states are needed. For example, in HC and SS, variables such as population, population groups, unemployment, birth rates, and poverty rates all have the potential to correlate and impact spending levels. However, getting accurate projection rates for all of these variables for all states is simply not possible.

Within the haystack of available data, the Census Bureau produces some of the best projection data around. In fact, their projection of the 2010 U.S. population made in 2005 was off by only 0.06 percent. In terms of projection, businesses would give whatever they could afford to have a crystal ball that accurate out to 5 years. With this in mind, we used Census data to create the HC and SS projection modeling.

Using Deltek's particularly robust budget data, combined with the Census' accurate past data and future population projections, we were able to create excellent models (highly correlative and highly predictive). Combining the HC and SS projections for FY 2012 for each state and comparing them with the actual FY 2012 data produced identical results. While this is evidence of both good data and subsequent modeling, this kind of accuracy cannot be expected for each year moving forward. Nonetheless, we are certainly in the proverbial ballpark.

However, HC and SS budgets are tricky in the states and projection for the individual verticals is complicated. In the simplest terms, Medicaid funding is used in both areas. Most public budget areas that seem mostly health care related always include some social services functions, and vice versa. A good example might be a clinical health program providing mostly health services. However, if funded in part by Medicaid, the clients receiving services will most likely be eligible for case management in the program that will reach beyond just health care. For example, an individual receiving specialized Medicaid-funded health care in a hospital will also be offered case management and social services linkages in the community through the discharge process. In this way, it is difficult to fully track and assign funding to one vertical or another. Complicating matters even further states and localities have looked to streamline services by grouping as many publically-funded services together. In effort to be more efficient, services are less compartmentalized, and, thus, funding is more mixed.

The Projections

Taking a look at Figure 1, above, the projection looks similar to my previous budget projection data (here).There is an uptick in FY 2011 for combined HC and SS budgets (likely the result of stimulus spending and the ACA), followed by a decrease in FY 2012 (the result of stimulus funding running out, the recession catching up with budgets, and most states engaging in budgetary reductions). Looking closer, the gains in HC and SS spending from FY 2011 to 2012 were modest, with a 9.5 percent gain. This growth is very close to the overall 9.7 percent gain for all combined funds in state budgets over the same period. While growing, HC and SS spending occupied virtually the same percentage of state budgets from FY 2010 – 2013 (26 to 27 percent for HC and 8 to 9 percent for SS, respectively). In FY 2012, HC and SS funding decreased by a combined 5.2 percent. In this environment of projected increases in HC and SS funding and a history of steadily advancing budgets, this is an excellent picture of the budgetary pressures under which the states are operating.

Evaluating the 95 percent confidence intervals, it is still possible for more HC and SS loss in FY 2013 – 2014. However, this would be highly unlikely and been seen as an outlier event. Even in this worst-case and highly unlikely scenario, the model indicates likely budgetary growth in FY 2013, with strong indications of growth in FY 2014 moving forward. However, all factors point to the news being better than this worst-case projection. In FY 2013, state spending in the combined HC and SS verticals should flatten and begin getting back on track with a projected annual growth rate of at least 1.0 percent.

Given some of the numbers quoted in media outlets about skyrocketing health care and human service costs, this projection may seem a bit low. However, these projections consider many interdependent factors. States are working to streamline and reduce budgets in every area possible. As mentioned previously, states are working diligently to combine funds, health care, and social service functionality to improve efficiency. Also, while health care costs to individuals are increasing, the states are generally able to manage and provide health care at rates lower than those of individuals seeking service through private providers. While HC costs are projected to rise, state budgets include many more items other than direct service provision to citizens, which further adjusts costs. This figure also includes both HC and SS budgets, with SS budgets increasing at a slower rate than HC. Additionally, Medicaid reimbursement rates have undergone a series of reductions under both the Bush and Obama administrations, which is helping reduce some of the costs to the states. So, the final numbers represents the combined all funds, all state HC and SS budgets considering all of these mitigating factors

Additional analysis on individual HC and SS funding is available for subscribers, here.

Analyst's Take – Kate Tussey

It shouldn't come as a surprise that HC spending will continue to rise among the states, even with governor's yearly goals year dedicated to controlling Medicaid spending. As in the Justice and Public Safety market, federal agencies such as the Centers for Medicare and Medicaid (CMS), Center for Consumer Information and Insurance Oversight (CIIO), and the Office of the National Coordinator (ONC) were, and will continue to be, drivers for change in the HC technology field. Despite a federal budget crisis, feds have and are on schedule to cough up large amounts of grant funding for a range of initiatives, including health insurance exchanges (HIX), Medicaid management information system (MMIS) development, and development costs associated with integrated eligibility systems.

States are seeing a break in IT systems spending surrounding MMIS and eligibility systems until 2015, when 90/10 funding returns to normal match rates (here). But that doesn't mean smaller dollar amounts for vendors. CMS estimates 25 states will be replacing MMISs between FY 2011 - 2015 at an average cost of $50 million over three years, with eligibility systems costing the federal government an estimated 42.9 billion. Same goes with HIXs – between planning grants, early innovator funding, and Level 1 and 2 grant opportunities, you would think states would have costs covered. Early planning documents from several states, however, place yearly maintenance costs of HIXs ranging from $20 million to $50 million per year. This doesn't include future contracting opportunities for call centers, web site development, health insurance navigators, tax systems, etc.

For more of Kate's analysis on HC and SS spending and IT projections, subscribers can click here.

Analyst's Take – Chris Cotner

With these uncertain and fluctuating financial times, any good news is welcomed by the business community. HC and SS budgets are projected to grow in FY 2013 and beyond. Given that state HC and SS budgets are coming off of one of the only declines in recent history (FY 2012), this is certainly good news. However, there are still some cautionary considerations. While the overall budgets are improving, an individual state's HC or SS budget can experience sharp fluctuations from year-to-year with changing political priorities and projects. Second, the immediate future of HC and SS funding will still show a net loss for FY 2012. Third, while growth is projected, with annual overall growth rates at around one percent, this market will not see the sharper growth it did during stimulus funding. However, with the continued population and demographic pressures, projected gains sure do beat past losses.

As companies settle in for the coming difficult months in preparation for slow growth out of the decline, what can they do? While I have rolled these out a few times before, I believe these six simple strategies are sound in this environment.

  1. Save the Date: Work toward strategies that capitalize on growth in FY 2013.
  2. Hunker Down: Vendors may need to focus on service and existing contracts to help make it through the hard times.
  3. Let the Wind Take the Chaff: Weaker companies will not be able to weather this storm by waiting for state purchasing to pick back up in the next fiscal year. As weaker companies fall aside, when procurement and opportunities pick back up, vendors should be well-positioned. In the meantime, continue to let officials know your enterprise is stable and ready for business when opportunities arise.
  4. Talk to Decision Makers to Create the Want: In state government, if a decision maker becomes interested enough in a business solution or product, as long as the purchase is below the threshold for legislative or cabinet-level approval, the funds can suddenly become available; things are moved around in the budget for items decision makers want.
  5. Get Creative and Cooperative: Governments want solutions that do a few simple things including: increasing efficiency (saving money), improving service to citizens, and creating job opportunities. Creative and cooperative solutions that do this are more likely to win.
  6. Engage Governments in Strategic Education: Deltek continues to read and hear from state officials who are interested in finding out the best possible solutions for the problems they face. Often, officials are not aware of the possibilities. Educate these companies about the possibilities well before any RFI/RFPs come out.

More specifically, Kate Tussey illustrated growth areas in the HC and SS market, above. Some of these are explored further, below:

  • Governments are moving toward streamlining operations. One of the best ways to improve efficiency is through IT. Simply, these governments need to spend money in IT in order to save money and provide more efficient service in HC and SS.
  • Public funding, including Medicaid, continues to be used creatively in cross-cutting initiatives. Siloed services are not efficient. While many state service providers may not understand all of the IT possibilities, they want integrated solutions. IT solutions that integrate functioning, funding, and services in this environment are more likely to win.
  • Just as companies are moving toward quantitatively-driven analytics for business, such evidence-based approaches to government services are becoming even more important in lean budgetary times. Simply, the government wants the most efficient bang for the buck. HC and SS solutions that include data-driven and analytics solutions stand a better chance of winning contracts.
  • The goal of all human services is to ultimately provide resources to enable citizens to move away from public support and no longer require services. While those in business are not in the business of working themselves out of jobs, this is par for the course in human services. Governments want solutions that allow for creative, accurate decision making that effectively links clients to the most efficient solutions for their individual problems. By collaborating with governments to provide solutions that allow for the best services possible for clients, vendors become part of the greater solution of a healthy and well society.


Summary

Kate Tussey

In closing, the HC and SS arena is unique in that the department (whether it is Medicaid or WIC) exists solely to help those citizens in need. An IT system that doesn't work could mean life or death for an individual and will be splashed across the next day's newspaper. While this is a hard market in which to operate, it is a goldmine of an opportunity.

Chris Cotner

Despite recent budgetary setbacks, spending is projected to improve in FY 2013 and beyond. The answer is not for vendors to retreat from the state and local market. Rather, the opportunity for growth is phenomenal. Governments need to save money and are desperate for any creative solutions they can afford. Most vendors in this market have some interest in improving the human capital; it is part of the business in HC and SS. Vendors really interested in winning business and making a difference should look toward not only remaining in the state and local market, but becoming more cooperative in their approach. Partner with governments. Participate in grants. Enter into-joint and mutually-beneficial ventures. Give back to the community by bringing a bit more than just a solution. In the health care, care is operative. In human services, service is essential. Work to improve the community you strive to serve through collaborative and creative solutions that allow the best quality care possible to be delivered.

To read the full analysis, subscribers can click here.

Follow Deltek and this blog for future updates, including predictive analysis of spending types and IT within the HC and SS verticals.

Follow me on Twitter, here.

Follow Kate on Twitter, here.

Visit the HC and SS vertical profiles, here.

North Carolina announces new Department of Public Safety head

North Carolina Governor Bev Perdue recently announced that Secretary Reuben Young will lead the newly restructured Department of Public Safety. The new department will consist of three former departments: the Department of Corrections (headed by Alvin Keller), the Department of Juvenile Justice and Delinquency Prevention (currently headed by Linda Hayes), and the Department of Crime Control and Public Safety, which Young currently heads.

The consolidation, announced last December, gives Secretary Young control over the North Carolina Highway Patrol, National Guard, prisons, parole officers and youth centers starting January 1, 2012. The goal of the departmental restructuring, which is part of a larger state government overhaul initiative, is to streamline government. These public safety changes will affect nearly 27,000 employees and save at least $3.7 million through the consolidation of management and staffing functions. The state hopes to reduce redundancies throughout departments, particularly in the areas of human resources, training, administration and purchasing. Numerous large-scale projects are likely to be affected by this transition, and some may be put on hold until the proper authority is established for executing contracts under new departments. The Department of Correction's Inmate Trust Fund Deposit and Disbursement System project, which is already on hold due to budget cuts, is likely to be further delayed. Also, existing contracts set to expire during the transition may be renewed to avoid having to issue solicitations while the new department establishes itself.

North Carolina is not the first entity to undertake departmental restructuring in an attempt to save money. In May 2011, South Carolina's House of Representatives voted for the state's Department of Corrections to usurp the Department of Probation, Parole and Pardon Services. The legislature adjourned prior to finalizing the restructuring; however, it will be considered after the summer recess. In Illinois, Gov. Pat Quinn has made moves to combine the state's Department of Juvenile Justice into the Department of Children and Family Services. Like North Carolina, both Illinois and South Carolina are hoping to reduce the number of redundant functions in departments and save money by eliminating cabinet positions. South Carolina estimates the restructuring could save the state more than $5 million, though opponents question whether there would really be any long-term savings. It is too early to say whether these mergers will produce the desired cost savings or whether already overworked (and in many cases, underpaid) staff will simply be pushed beyond their limits.

Analyst's Take:

Vendors should note that this consolidation is part of a larger move to help reduce the state's expenditures, and should not assume that a reduction in cost will translate to an increased ability to spend. There will certainly be growing pains in the first few months of a new organization, and vendors may find it difficult to get in touch with contacts or obtain information on specific projects while staff adjusts to new processes. Ultimately, however, the change should make it easier for vendors to find contacts and establish relationships with state employees since they will be working closely together and aware of many projects. This will be particularly true in the purchasing department. Therefore, vendors should invest in forming strong relationships with all contacts in any new department.

New York releases RFI to revamp procurement process

Most national vendors know New York probably ranks as one of the most private states in the country when it comes to divulging information about future contracting opportunities. While many states such as Virginia and Maryland are often happy to answer queries on or even publicize upcoming opportunities, strict procurement laws in New York often leave vendors in the dark when it comes to the future plans. While procurement officials are happy to answer questions about requests for proposals (RFPs) after they are released, asking questions outside the narrowly-defined scope of whatever the state has determined is "in bounds" for a particular solicitation can sometimes feel like banging your head against a brick wall. Hence, it was somewhat refreshing to see New York's Office of General Services release a request for information (RFI) late last week seeking advice and guidance from vendors on a range of IT service issues. According to the RFI, the state is looking to "develop a general understanding of current vendor demographics and capabilities," "obtain vendor feedback on working with New York State" to determine process improvements, and "solicit vendor perspective on the future direction for acquiring hourly-based information technology services."

Assistance from qualified vendors on developing adequate pricing models for future solicitations is also requested along with a questionnaire asking vendors what the biggest obstacles are that they've faced when doing business with the state. Essentially, the state is considering a revamp of its hourly-based IT procurement process and is asking vendors to describe in detail the type of operating model they would like adopted in the future. Responses are due August 22, 2011, and invitations to a planned August 30 roundtable discussion are reserved for companies that submit a response to this RFI.

Analyst's Take

Over the past year, New York has been hit by a string of high-profile state and local contracting scandals that have raised questions about how the Empire State does its business behind closed doors. This RFI might not be a direct response to those problems, but the bad press certainly has state officials in the mood to examine possible reforms to the procurement process. It is an encouraging sign that the state is at least considering the possibility that collaboration between the government and vendor community doesn't always have to start after an RFP is released. It also offers IT vendors a foothold into one of the biggest contracting markets in the county, as well as an opportunity to introduce their company and peddle their wares.

It's too early in the process to know whether this RFI will result in a state contracting schedule, specific follow-up solicitations, or simply serve as a useful pow-wow between the state and vendor community. GovWin has created a tracked opportunity for this RFI for vendors to better track new developments. In addition, GovWin is also tracking an existing New York state multi-vendor backdrop IT consulting contract that may overlap with the services requested in the RFI.

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