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My dentist’s office used to be a Mom and Pop operation. Dad and son were both dentists. Mom ran the office. Sister was a hygienist. I heard Dad had built the building.
Mom and Dad retired, sister and her husband started an unrelated business and one day there was a new logo outside, and my dentist told me he had sold the practice and was now an employee. He was grinning. All the worries of being the employer and landlord were lifted from his shoulders.
From my years of experience in the murky depths of employment law, I understood his relief. So, I imagine, does every small business owner. Employers have a dizzying number of responsibilities. The requirement to meet payroll, which is an obligation under law even if you can’t feed your own family, is only the beginning. You have to be concerned with everything from occupational safety to preventing your employees from making stupid sexually harassing remarks to each other. You are responsible for the insurance, the taxes and regulations specific to your industry. And maintenance of the property. And, finally, doing the work that you’re in business to do in the first place.
So the recent revelations that some of the providers in New Mexico’s now-decimated behavioral health community had been networked seemed perfectly logical to me. The report said several of the nonprofit agencies that were the object of the state’s audit had belonged to a network, which provided administrative services and paid the salaries of the CEOs. The administrator was a high-profile, for-profit corporation. Was this scandalous? By itself, absolutely not.
These organizations lived with all the pressures of any small business, and more. Their biggest problem was their biggest customer, government — for some, the only customer. When you have only one customer, you are at the customer’s mercy and can’t negotiate on anything close to an equal footing.
Managed care was introduced to this system more than a decade ago, implemented by a contracting company hired by the state: first Value Options, then Optum Health. The managed care company’s job is to save money by reducing unnecessary services. But what’s necessary is always a matter of opinion. Some of the clients desperately need those services.
Was there inadequate management or overutilization before managed care? Were taxpayer dollars being wasted? Possibly. These organizations were founded and run by social workers, not accountants. Maybe managed care introduced beneficial efficiencies. But once those efficiencies were implemented, the managed care company’s job is to continue to produce more savings. So the behavioral health providers have been squeezed, year after year. I have been hearing about it privately for years — refusals to authorize payment for services that troubled children really needed, time and resources wasted on excessive paperwork, layoffs forced by budget cuts. So some of them hired management experts to help them squeeze the dollars out of administrative costs? That sounds not scandalous but prudent.
An ad hoc coalition supporting the behavioral health community has produced a documentary film, which can be seen on YouTube. It is titled “Breaking Bonds, The Shutdown of New Mexico’s Behavioral Health Providers.”
It is possible that the scandal is genuine, that these organizations have been grossly mismanaged or outright dishonest. Until the public knows what’s in the audit, vetted by the attorney general’s investigation, it’s impossible to know.
Meanwhile, I echo many others in repeating the critical questions: If accounting anomalies were so grievous, why didn’t Optum discover them earlier? When they were discovered, why did that lead directly to the takeover of the agencies rather than exploratory conversations and less drastic remedial steps?
Dannemann through triplespacedagain.com.