In-Home Care Analysis Weighs Costs vs. Compassion

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Few government programs in California seem to be more often embroiled in budget fights than In-Home Supportive Services, the important but costly effort by state and local officials to provide help for hundreds of thousands who have trouble caring for themselves.

It's unlikely that a new analysis by the Legislative Analyst's Office will settle the squabble -- an analysis that concludes the program probably saves state government money... but may nonetheless need to be downsized in these tough budget times.

The political fight over In-Home Supportive Services (IHSS) has become so repetitive that it's possible the public has already tuned out. Republicans and conservative critics deride it as rife with fraud and an expense the state can't afford; Democrats and organized labor defend it as a vital life-saving program for California's most vulnerable.

Today's LAO report is decidedly (and refreshingly) apolitical, and attempts to calculate the costs and benefits only in terms of reasonable public policy.

So what did they find?

Perhaps most importantly, the LAO report concludes that deciding whether IHSS is a sensible use of taxpayer dollars may depend on whether one considers only the costs to the state's general fund, or also includes the costs borne by California's 58 counties (IHSS is paid for through a blending of federal, state, and local dollars).

To answer the 'bang for the buck' question, the LAO created its own model of what would happen if IHSS was completely eliminated -- a not so far-fetched scenario considering that's exactly what Governor Arnold Schwarzenegger is proposing should the state not get $7 billion in federal funds to help erase its deficit.

Some IHSS recipients are so frail or impaired that the program's elimination would likely push them into a nursing home, at a much higher cost per-person to the state (more than $50,000 in average per person costs for a nursing home, says LAO, versus about $12,000 in average per person costs for IHSS).

So is the program cost effective? According to the LAO, if at least 32% of most IHSS recipients would -- without IHSS' existence -- end up in a nursing home, then it saves money for the state's general fund. And the report says it's "reasonable" that threshold would be met.

But if county costs are also included, then the report estimates the 'break even' point rises to 58% of most recipients having to be placed in nursing homes in a world without IHSS... a scenario the LAO report says is unlikely, thereby suggesting IHSS is probably not cost effective from a macro perspective.

Granted, there are a lot of assumptions in those numbers, and the thorough folks at the LAO lay them out in great detail. But the bottom line appears to be that the existence of IHSS clearly isn't explained just by money. And many will no doubt say that's fine.

But given the state's fiscal crisis, the LAO report does suggest ways to cut costs in the $5.5 billion program -- whose general fund price tag has risen 13% over the last decade, compared to a 4.8% rise in overall GF spending. Those recommendations include setting a new minimum threshold of disability for someone to be eligible for IHSS help, and providing either cash or occasional social worker visits to those who are less impaired.

As the LAO acknowledges, "whether IHSS is cost-effective to the state government should not be the sole basis for evaluating the merits of the program." Still, the report is a fascinating look at how the program works, how it's paid for, and how it fits into what is undoubtedly a bleak near future for the state's finances.

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • Karen Keeslar

    There are serious flaws in the LAO recommendations on IHSS. For example, the Governor is proposing to cut funding for county social workers by 91%. The LAO proposal to send social workers out to check on the elderly, blind and disabled can’t be implemented with 1,838 social workers hitting the unemployment roles.

  • Stevefromsacto

    Ms. Keeslar is on target. How can the LAO even consider a program involving counseling rather than homecare when the counselors (social workers)themselves are being thrown out of work?

    Take it one step further. While the governor preached “jobs,jobs, jobs,” in the State of the State message, he proposes throwing more than 350,000 low-wage IHSS homecare providers out of work. Beyond the obvious impact that eliminating IHSS would have on consumers, how will adding 350,000 to the unemployment impact state and local economies?