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nurse and patient

The New York Times reports on Michigan's attempts to save money by contracting out nursing assistant jobs at a state-run veterans home, moving from the home's long-time union workers to low-wage contract workers. There are a few problems with this. The inescapable one at the moment is this:

In Michigan, the plan to replace state nursing assistants at the veterans home resulted in a lawsuit contending that some temporary workers employed by the contract company had already jeopardized patient care. In one case, the suit says, a resident fell off his bed and broke his neck after being left unattended by a contract worker. A judge has granted a preliminary injunction that keeps the state employees at work while the lawsuit moves forward.

The injunction also prevents new workers from J2S Healthforce Group, which recently won the contract to replace the state employees, from taking jobs at the facility.

Oopsies! But a broken neck and a resident fed solid food who was not supposed to be, among other incidents, all of which the state dismisses as isolated, aren't the only problems here. For one thing, bringing in a new workforce paid around $10 per hour with no benefits instead of one paid $15-20 per hour with benefits ends up just shifting some costs around, as the low-wage contract nursing assistants are forced to rely on government aid like food stamps and child care assistance. The federal government takes on more of that expense, so the state of Michigan may still save, but ..."we saved by forcing full-time workers onto government assistance" isn't much of a rallying cry. (It isn't, is it? I'm hoping even most Republicans aren't quite that far gone.)

Then there's the question of how much is actually saved. When jobs are contracted out, the workers doing the jobs may earn less than government employees would. But the workers doing the jobs aren't the only ones collecting pay. For instance, the Michigan nursing assistant jobs are being outsourced to J2S Healthcare Group, of which the Times reports that:

Tim Frain, the chief executive of J2S, declined to comment.

What do you want to bet that guy gets health care, and retirement benefits, and earns more than $10 an hour? And that he's probably not the only person at J2S of whom those things are true. So while the hourly wage a nursing assistant working for J2S gets is $10, the state is paying J2S more. How much more, the New York Times does not report. But Eclectablog points out that the state pays J2S Healthcare Group $15 an hour for those $10 an hour nursing assistants.

Factor in the occasional broken neck leading to a lawsuit, other quality-of-care issues associated with increased employee turnover, and the burden on the social safety net of a bunch of people working full time and still needing food stamps, and the $4.2 million savings the state of Michigan will reap comes with a major price tag in human misery and damage to the state's social fabric. Also, too, the $1.7 billion corporate tax cut the state passed last spring would have paid for at least a couple of state-employed nursing assistants making $15 an hour plus benefits.

Originally posted to Daily Kos Labor on Mon Nov 07, 2011 at 08:10 AM PST.

Also republished by DKos Military Veterans and Daily Kos.

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Comment Preferences

  •  I'm really glad that (22+ / 0-)

    you are highlighting the true costs of outsourcing, including the additional public assistance caused by outsourcing.

    Too many people just look at the easily evident costs of outsourcing, such as comparing pay rates between contractors and state employees, without looking at the entire cost, and they completely forget about the costs associated with additional public assistance and tax breaks.

    Thank you for doing all of this research and advocacy.

    The banks have a stranglehold on the political process. Mike Whitney

    by dfarrah on Mon Nov 07, 2011 at 08:32:21 AM PST

  •  Republished to DKos Military Veterans group (10+ / 0-)

    Just another example of how the GOP supports our military veterans - as long as they're serving in a cannon fodder capacity.  Once they return home, or need long term care, not so much.

    We're resigned to our collective fate because we've been conditioned and brainwashed to believe that this is as good as it gets. It's not.

    by Richard Cranium on Mon Nov 07, 2011 at 09:12:29 AM PST

  •  $10/hour? Jaysus. (23+ / 0-)

    Caring for sick, elderly people is hard work.  It means changing adult diapers.  It means feeding and bathing patients.  It means dealing with patients who may have lost their filter (if they ever had one) and physically or verbally abuse caregivers.  It means dealing with families who are abusive or dismissive of caregivers.  It means dealing with patients who are depressed. It means dealing with patients who are crying because their family never visits (or, if the families do visit, the patient forgets between visits).   And it means dealing with death.

    It is hard work, it is valuable work.  Good care providers are very difficult to find.  I don't think I could handle it.

    So why are they being paid less well than some teenage babysitters?  Why is their work valued so little?

    We do not forgive. We do not forget. The whole world is watching.

    by Tracker on Mon Nov 07, 2011 at 09:25:10 AM PST

    •  Because to the teapublicans (10+ / 0-)

      there is money to be made by their campaign donors.

      Bring them all home NOW. There is no longer any excuse.

      by llbear on Mon Nov 07, 2011 at 10:36:14 AM PST

      [ Parent ]

    •  thank you. n/t (3+ / 0-)
      Recommended by:
      peregrine kate, jts327, Matt Z

      Conservatism is killing this country. Jayden

      by swampyankee on Mon Nov 07, 2011 at 08:29:00 PM PST

      [ Parent ]

    •  They don't cost $10/hr (0+ / 0-)

      The cost to the state is way more.  The direct cost is not the wage rate but the billing rate.  It is reported to be $15/hr, but frankly a multiplier of 1.5 is too low.  You can't pay payroll taxes, cover your administrative costs, and make a profit within that margin.   Add to that the fact that poorly trained, unmotivated workers, with high turnover, are not productive.  Then consider the costs of litigation, etc. and as they say, the lowest cost alternative is often not the most cost effective.  

      •  Correct. Contracting out is usually more Expensive (2+ / 0-)
        Recommended by:
        sharman, salmo

        You are absolutely right.  I work in a very large school district that contracts out significant amounts of work.  I know for a fact that contracting out "generally" costs more money.  Even studies have shown that.  While there are few exceptions to the rules, over 70% of the time government (the people) are getting swindled.

        Not only does the company have to pay taxes, etc. on the workers behalf, but they have lots of overhead, including profit margin.  In addition, the state has to hire staff to process contracts, auditing, payments, etc.  So that's extra staff they had to hire.  

        At my school district, contracting billing rates are about $200,000 versus $95,000 per employee, give or take.  That includes benefits, taxes, profits, pensions, overhead, etc.  

        Of course, what this means is someone is getting lots of $$ on the side.  Corruption at its finest and nobody is doing anything about it.

        •  wow (1+ / 0-)
          Recommended by:
          salmo

          Outsourcing at publicly traded companies is the model I'm familiar with.  Unless the work is really short-term, of course it costs more.  But it allows the company to tell the Street that they've trimmed the labor force, for which they get cookies.

        •  10% is the normal kickback rate (0+ / 0-)

          When I worked for the State of Ohio in the early '70's  the standard kickback rate was 10%.  I know this because I was directed to supervise one of those contracts awarded after the lame duck Governor got a $200,000 "campaign contribution."  Looking the documents to that point over, I was perplexed.  So, I asked around, and got the lay of the land, so to speak.  There wasn't much I could do about the origins of the contract, it was public knowledge so blowing the whistle was futile.  What I could do was refuse to pay the contractor's monthly bills until and unless the work required was satisfactorily performed, and documentation of all claimed expenses were in order.  

          After three months of non-payment and increasingly acrimonious meetings, I was summoned to my boss' boss' office, where my intransigence was questioned.  I had the files,  the submittals of "work" performed, the claimed basis for the bills, and the contract.  The idea was to browbeat me into authorizing payment.  Fortunately for me, but not for the citizens of the State, the contractor had demonstrably failed to even pretend to work - the whole thing stunk of the corrupt payoff that it was.  

          I was told that in Ohio, honest politics means that when you are bought, you stay bought (really, in those words).  I said that my integrity wasn't for sale, and I sure as hell hadn't been bought in this instance.  I also said that if he wanted to authorize payment, he could, but not with my signature.  And so he did.  For what it's worth, that was not my best career move.  I joined the union with the attorney my friend in the AG's office said was the one his office least liked to oppose in court.  I also got out of there at my earliest opportunity.

          There are several points to this ancient history.  First, those kickbacks amount to a lot of money, even at the state and local level.  Second, the outsourced work is always more expensive, especially so when the actual work performed is shoddy or non-existent, which it will be when the whole deal is crooked and there are no penalties for non-performance.  Third, the citizens were cheated out of the work for which they had paid and damaged by its absence.  Fourth, the benefits of that union were significant to me and they should have been significant to the citizens in a less corrupt environment.  Finally, the agency didn't develop the staff, expertise, and experience to undertake this and similar work in the future, so the damage was compounded.  I see nothing to suggest to me that these lessons apply less forcefully today than they did then.

  •  The Biggest Cost to Michigan (6+ / 0-)

    in the long run is that anyone with an IQ over 115 who can get the hell out of Michigan is getting out as fast as they can.  Ohio is enjoying the same benefit.  The outward flow from Ohio is barely started but it's finally becoming easy to spot.  

    Newt 2012. Sociopath, adulterer, hypocrite, Republican.

    by tikkun on Mon Nov 07, 2011 at 08:06:23 PM PST

    •  Did you miss Tricky Ricky's memo? (5+ / 0-)

      They are trying to attract young people and young families by raising college tuitions, cutting funding to K-12, and prosecuting medical pot users like they are public enemy number one.  MI Senate bill #593 wants to address the shortage in the pension fund (that they created) by changing from a defined benefit plan to a defined contribution plan starting with all those that retired after 1996.  Contract?  Vested?  Retired?   These are the pesky details that don't matter unless your a business.  Then those @ssh0les can't give them enough.  

      Leaving MI and OH isn't good enough.  Time to leave the country, but unfortunately, globalization has made the whole planet uncivilized.   I can't believe these jerks have another whole year in office to destroy our state.  

      Yes we can, but he won't. Banks Got Bailed Out. We Got Sold Out!

      by dkmich on Tue Nov 08, 2011 at 01:49:26 AM PST

      [ Parent ]

  •  The only way a traditionally understaffed nursing (10+ / 0-)

    home delivers even the most basic care is through the use of long term aides who 'know' the residents well. Among all the other problems you mentioned these new and mostly likely overworked aides will contribute to more deaths of the frail residents they know little or nothing about.

    Also less money ususally means less training and less caring. Disaster awaits.

    Roman Catholic by birth---thoroughly confused by life.

    by alasmoses on Mon Nov 07, 2011 at 08:15:31 PM PST

    •  True. I did this work from 1990 to 2002. (6+ / 0-)

      ,in one nursing home.Overworked,understaffed and under
      paid-all of us-whether we were longtimers or temp staffing.
       Knowing our charges gave us longtimers an edge over the temps-and an extra burden,if one had any kind of a conscience.To avoid disasters, a regular would take the more difficult people,and give a temp-not fewer people-but
      the more agreeable.It made the shift run smoother,and it was easier on our charges,most of the time.
       In the middle 90s,this place-to avoid the 'extra cost' of using agency aides,created an 'inhouse pool.'
      CNAs-usally newer ones-were encouraged to sign up for as
      many extra shifts as they wanted to.I saw women sign up for a month straight without a day off-for the extra pay.
      One thing-if a CNA missed one extra shift,she lost all her
      ot pay-got only straight time.
      So,aides came in sick,as well as overtired.Bad things would happen.
      It is so wrong that frail human lives and those who care for
      them are valued so little,considered so unimportant.
      I burned out-I quit.

       

      Conservatism is killing this country. Jayden

      by swampyankee on Mon Nov 07, 2011 at 08:58:48 PM PST

      [ Parent ]

  •  RAT BASTIDS. Hope the R's that vote for this (3+ / 0-)
    Recommended by:
    peregrine kate, swampyankee, Matt Z

    get to have personal experience with their family members. Then watch it change.

    "We're here to start a dialog, nothing more. We keep quiet and let the press, the politicians, and the Wall Streeters hang themselves." From a veteran protester in the civil rights days at Liberty Park. h/t to pistols at dawn.

    by mrsgoo on Mon Nov 07, 2011 at 08:24:51 PM PST

  •  What Is This "Lawsuit" You Speak of? (0+ / 0-)

    Haven't you heard of tort reform?

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Nov 07, 2011 at 08:30:52 PM PST

  •  Az has done the same thing. Haven't heard any (0+ / 0-)

    news about how it's gong but I'll bet you anything it's not cheaper.  Only the workers get screwed.

  •  This is such a good example of the morally (2+ / 0-)
    Recommended by:
    swampyankee, Matt Z

    bankrupt agendas of these privateers.  Trying to pay nothing for extremely hard work that requires enormous patience, compassion and diligence is wrong on so many levels.

    It is also important through diaries like this to point out the irony of how this kind of "cost cutting" actually is more expensive than just paying people a decent wage with benefits.  

    The ruthless stupidity of these people must be continually exposed.  They want to operate in the shadows of ignorance and indifference--and we must not let them.  

    "Repression works only to strengthen and knit the repressed." --J. Steinbeck

    by livjack on Mon Nov 07, 2011 at 09:10:18 PM PST

  •  Wi. added an ugly tpublican ALEC'tort reform' bill (1+ / 0-)
    Recommended by:
    swampyankee

    to the mix. This severely limits the amount an injured party-or family can recover, even if negligence is proven.

    I was a CNA for years, and found that work fulfilling, but it is difficult, and extremely physically demanding. Often, you are 'working short', meaning less coverage for your unit. This saves the facility major $$. It also means not enough staff to feed, toilet, bathe and provide for a residents most basic needs, along w/keeping an eye on them-to make sure they are safe when not providing 'cares'.

    It's better for the residents if staff can try to work in the same unit, and 'know' the residents, it builds trust, if it's a long term care facility. There is a lot of minutiae that is involved, and each resident has different care needs.

    I have always empathized with the agency aides who are'bounced' from place to place, often bust their butts, making a fraction of what the agency was paid. They would know how to provide basic cares, but not knowing the details puts them at a real disadvantage. It makes things more difficult, everyone suffers, and something vital gets lost.

    -and now they are able to get away w/cutting wages. Yes we had a union back than, better working conditions helped make everyone safer.
    Now it's all about the $$ greed. Reading this shit makes me angry, and sick.

  •  This kind of thing is also one of the ways that (2+ / 0-)
    Recommended by:
    swampyankee, Matt Z

    income and wealth gets concentrated at the top.

  •  Laura always gives us great editorials (1+ / 0-)
    Recommended by:
    Matt Z

    Keep up the good work. These stories need to be read.

  •  Walking past dollars to get to dimes: (2+ / 0-)
    Recommended by:
    Aquarius40, Matt Z

    The favorite pass time of the right wing.

  •  This story just proves (5+ / 0-)

    that privatization is never about saving money. It's about letting corporate crooks loot the public coffers.

    "Behind every great fortune is a great crime." - Honore de Balzac

    by mooremusings on Mon Nov 07, 2011 at 11:38:49 PM PST

  •  The way these things work is simple (2+ / 0-)
    Recommended by:
    salmo, Matt Z

    The government contracts out the service.

    A right winger "made guy" (member of the right-wing mafia) gets a "contract" for the services.

    The government pays the right-wing mafioso as set fee for every person "cared for."

    Mafioso takes 50%+ for his share for every "client,"* and pays an incompetent with an LPN a pittance for actually DOING the work.

    End result: the mafioso becomes rich (or, more likely, richer) and patients die faster and suffer more.

    The purpose of "health care" for the elderly in America has nothing to do with health and every thing to do with draining their bank account before allowing (helping) the victim (I mean patient) to die.

    * they used to be called "patients," but in modern America, there are no patients, only "profit centers" with arms and legs and a beating hart (but only for a short period of time -- until the money runs out).

  •  It's elder abuse (3+ / 0-)
    Recommended by:
    swampyankee, Matt Z, peptabysmal

    Give it a name. The residents that lived near my Aunt's condo on the grouuds of a "good" retirement home were afraid to complain about the lawn care. Afraid to complain about the lawn care?
    So now go inside the building, and frail individuals are at the mercy of caregivers. My Aunt who is now in there, was roughly handled getting off of the toilet one morning, her hip hurt and her arm was pinched. When she said something to the aide it was met with silence and no appology. It took time to calm her down. The aide was not a regular caregiver, my Aunt complained formally.
    But what of all the others that don't have regular visitors or anyone to monitor their care. You can bet a lot of things are swept under the rug and the frail elderly are not about to complain to anyone.
    Overworked and underpaid are not a good combination when caring for other human beings.

    "The Church has many that God does not have; God has many the Church does not have" St. Augustine

    by createpeace on Tue Nov 08, 2011 at 05:54:49 AM PST

  •  My daughter works in a care facility for $10/hr (1+ / 0-)
    Recommended by:
    swampyankee

    After 1.5 years, she's one of the senior employees.  It's hard, exhausting work, so everybody on staff is looking for a better job.  She'd be gone if the economy wasn't so crappy.  I sure as hell don't want my care to be in the hands of someone who's still learning the job (which is about 50% of the staff due to the high turnover), and who isn't too concerned about keeping it because it barely covers the bills.

    Best part:  If someone calls in sick, instead of bringing in a replacement they just have the rest of the staff pick up the slack.  In a care facility.  Viva la free market!!

  •  Help me with the math here (0+ / 0-)

    If the state pays $15/hr for the outsourced workers, how do they save $4.2 million on the contract, over paying state employees $15 - $20hr plus benefits?

    There appears to be a savings, other costs aside, but how in the world can it add up to that much?  The numbers seem untrustworthy.

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