Tuesday, December 27, 2011

Nebraska Privatization of Welfare Services Increases Costs

This opinion piece recounts eloquently the failed attempt to privatize welfare services in Nebraska.  The following quote relays the basic facts:

From a business standpoint, there’s no doubt that privatization was unsuccessful. It did not rein in expenses, as leaders had said it would. Rather, much money was wasted in the name of saving money. Since the state privatized child welfare services in 2009, three of the five contractors dropped out because of financial management issues, and state spending actually increased by 27 percent instead of decreasing.

Unfortunately, this story seems to be rather typical of experiences with privatized welfare services, but many states do not try to reverse the change when things go badly.

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