Under fire, Racine insists Agency of Human Services is on track

Editor’s note: Morgan True contributed to this story.

Faced with a mounting array of crises, Doug Racine, the secretary of the Agency of Human Services, says the six departments that fall under his purview are on track.

The agency confronts intractable problems that affect Vermonters: drug addiction, homelessness, mental illness, imprisonment, old age and sickness.

But of late the agency has also had to handle multiple public relations crises. Fires burn in several departments, and critics say Racine has not been an effective leader.

The Department of Vermont Health Access has spent $72 million to implement the Affordable Care Act, but Vermont Health Connect, the state’s online health care exchange, is plagued by problems.

The Department for Children and Families is under scrutiny in the aftermath of the deaths of three toddlers who had been in the state’s care. Two of the deaths were ruled homicides.
The department has also been fined repeatedly by the federal government for a high percentage of mistakes made in administration of the food stamps program.

Meanwhile, the agency is also responsible for managing a new state psychiatric hospital and addressing an opiate crisis that affects 3,000 Vermonters.

Racine, who ran against Gov. Peter Shumlin in 2010 in the Democratic primary and was supported by advocates in human services organizations, has been described by critics as an empty suit who is in charge of a bloated agency.

Racine says he purposefully stays above the fray, only ducking in when needed. His focus is not on the child protection and health insurance crises that have been at the center of public controversy. Instead, Racine is bent on reining in agency expenditures.

Spending, however, has gone up over the course of Racine’s tenure.

Overall spending has grown $345 million or 8 percent since FY 2011, according figures Jim Giffin, the CFO for the Agency of Human Services.

Of the 10 sources VTDigger talked to, very few were willing to speak even off the record about Racine’s job performance, citing personal ties. No one would say anything negative about his leadership on the record, however, several knowledgable sources were deeply critical.

INHERITING A MESS

In 2011, Racine walked into an agency that was fragmented and demoralized after the Douglas administration laid off employees, consolidated departments and weakened programs, he said. Departments operated in silos even though they served many of the same people.

Several programs failed as staff shrank and the number of people the agency served increased.

“It was a disaster,” Racine said.

Then Tropical Storm Irene hit, scattering employees across the state. The agency diaspora has made collaboration between departments even more difficult. It will be several more years before workers return to the Waterbury state office complex.

The Agency of Human Services has 3,549 employees, nearly half of the 8,223 employees that make up the executive branch. The agency’s $2.3 billion budget represents about 42 percent of the state’s total expenditures, including federal funds.

Critics say the mammoth size of the agency is problematic.

The Agency of Human Services runs prisons and provides substance abuse treatment programs, health insurance plans, child protection, food stamps, fuel assistance as well as a host of other services. It oversees six departments, including the Department of Disabilities, Aging and Independent Living, the Department of Corrections, the Department of Health, the Department for Children and Families, the Department of Mental Health and the Department of Vermont Health Access.

Racine insists the agency is not bloated.

His interest in efficiency has been interpreted as a euphemism for budget cuts. Nonprofit organizations that work for the agency are particularly concerned about “results-based accountability,” which ties program outcomes to spending.

Christopher Curtis, an attorney with Vermont Legal Aid, is worried about the longterm impacts of repeated attempts to control spending.

“Slogans and calls for efficiency are nice, but at a certain point, without adequate resources, government will cease to function effectively,” Curtis said.

One of those attempts was “Challenges for Change.” In 2010, the Douglas administration and the Vermont Legislature hired consultants to propose cuts and program efficiencies in an effort to address the state’s ongoing budget gap problem.

“It didn’t work. It was a way of saying we’ll cut budgets and nothing bad will happen,” Racine said.

Meanwhile, state spending continues to outstrip tax revenues. The estimated gap for fiscal year 2016 is roughly $70 million.

LEANER AND MEANER

Most human services programs in Vermont are provided by third-party, local nonprofit organizations with agency contracts.

The government has no idea whether the services provided by the so-called “designated agencies” are effective, Racine said.

“I can’t tell you what designated agencies are doing well and which ones aren’t doing as well as the others,” he said.

Racine’s goal is to use data as the starting point for understanding what works and what doesn’t. Defining success in the context of human lives is difficult but possible, he said.

“This agency in the past has not been good at measuring,” he said.

To that end, the agency is developing scorecards for outcome assessments in state contracts.

Con Hogan, a former secretary of the agency in the 1990s, said he focused much of his energy on measuring outcomes. The agency would do well to bring back similar initiatives, he said.

Data, however, is difficult to obtain in part because the agency’s computer systems are 40 years old. While the agency is in the planning stages for an overhaul of its 1980s vintage mainframe computer system, known as ACCESS, it will be at least five more years before the new Integrated Eligibility system will function as a one-stop shop for services.

The new system will allow case managers to see what services — food stamps, Mediciad, welfare — a person is eligible to receive.

The idea isn’t new.

Former Rep. Tom Koch, who retired this year after 22 years in the Legislature, spent four years leading the committee that oversaw the AHS reorganization under Gov. Jim Douglas. Even then, the Legislature was trying to make it easier to get services.

“What we tried to do was create a policy of no wrong door,” Koch said.

The Integrated Eligibility project, which is at least 15 years overdue, won’t be complete until 2019. Racine said he doesn’t fault previous administrations for passing the buck.

“We got lucky, frankly, with the 90-10 federal match money,” Racine said. Federal grants will pay for as much as 90 percent of health related IT projects.

Between the feds and the state, Vermont could invest more than $400 million in IT projects over next five years to replace the AHS computer systems and build the infrastructure for a single-payer health care system.

Vermont State Employees Association officials met with Racine last week to discuss concerns about a variety of issues including the agency’s technology problems.

Doug Gibson, a spokesperson for the union, says that VSEA members working in several AHS worksites have been promised new, upgraded and better IT systems for years, but, to date, many are still relying on older, outdated AHS systems.

The systems, he said, “all too often hinder an employee’s ability to provide quality service to the public.”

Gibson said the Economic Services Division has failed in its years-long efforts to modernize IT systems.

State workers say their work is hampered by poorly functioning IT systems that sometimes do not provide timely or accurate information.

As he pushes forward with IT reforms, Racine is also dealing with crisis situations, including the recent deaths of three children who have been part of the state’s child protection program. Racine says he speaks with DCF Commissioner Dave Yacovone three or four times a day.

“I don’t think there is a ‘problem’ in DCF, I don’t think the system is broken, I don’t think the system leads to failures, I think it’s been a very good system. It’s not a perfect system,” he said.

Gov. Peter Shumlin has asked Racine to draft a proposal by Aug. 1 for restructuring the Department of Children and Families.

Yacovone has said he is stretched thin because of ongoing problems with the foodstamps program.

Racine is less involved with Vermont Health Connect, in part because other Shumlin administration officials are working on the glitch-ridden online health insurance exchange.

Mark Larson, the commissioner of the Department of Vermont Health Access, is the public face of the project, while Jeb Spaulding, the secretary of the Agency of Administration, and health care reform leaders Robin Lunge and Lawrence Miller oversee Vermont Health Connect.

Critics say Racine has taken a backseat on health care reform, even though his agency would likely administer the state’s planned universal health care program.

Peter Sterling, executive director of the single-payer advocacy group Vermont Leads, said Racine hasn’t been present at any of his meetings with state officials on the subject.

“I go where I can add value,” Racine said. His worth comes from being “a little bit removed from the day-to-day operations,” Racine said, and from having a different background.

Racine, who makes $124,000 a year as secretary, was a state senator from 1983 to 1992 and 2007 to 2010, and he led the Health and Welfare committee at the end of the Douglas administration.
Racine was lieutenant governor from 1996 to 2002. He is a vice president of Willie Racine’s Jeep, his father’s South Burlington business.

Racine rejects allegations that he has been absent as the agency has faced a range of crises.

“I’m not visible on a day-to-day basis on this, but people do know that I have been involved. Otherwise they wouldn’t be calling for my head,” he said.

Racine pointed to the fact that he attended the press conference in May when Shumlin announced changes at DCF and sent out a press release June 20 about a new boss at the Rutland DCF office.

“I believe there is a trust and a respect out there for me with people who are involved in these issues,” Racine said. “And I hope that it gives some credibility to it. People still know who I am. I spent a lot of money getting my face and name out there in various campaigns. People know who I am. I am responsible, it’s part of this agency and the governor holds me as responsible for what’s going on as he holds the commissioners for what’s going on.”

WHERE HE WANTS TO GO

The agency should develop programs that prevent Vermonters from needing services in the first place, Racine said. He would like to see better prenatal care for mothers and their babies, for example.

“Trying to find that balance between the public’s desire to pay for something and the public’s desire for services, however that’s expressed, is a political balance,” Racine said.

Replacing the IT system and the new state psychiatric hospital, another AHS project, are tough political feats because the return on investment – the political glory – may not come during his tenure.

But Racine said he’s “on a mission” and planning to stay in the job as long as he gets the only two votes he needs, his and the governor’s.

Editor’s note: This story was updated at 9:43 a.m. June 30. Budget information was updated, and quotes from VSEA were added.

CORRECTION: The original story stated that overall spending had grown by $545 million or 5 percent since FY 2011. These figures include duplicate totals from Medicaid. The actual total amount of growth over a five-year period, including Medicaid, is $345 million and total spending was $2.3 billion. The percentage increase is 8 percent over the time Racine has been secretary of Agency of Human Services.