Private Firm Seeks Residential Care Pact : Services: Chicago company says it can save the county millions with its in-home program. Some fear the recipients will suffer.

A private company seeking to take over most of a county program that cares for elderly, blind and disabled people in their homes says it can save Orange County millions by cutting back on the time that private service providers spend with the clients.

Chicago-based National Homecare Systems says it can save Orange County $4.5 million over three years by stamping out waste in the In-Home Supportive Services program.

But the company’s proposal has been greeted with skepticism by advocates for the poor, who say National’s arithmetic does not add up to a savings for the county, good wages for workers and a profit for the company.

And if National’s calculations are wrong, they say, the cost of its mistakes will be borne by the county’s most vulnerable population.

For many, the program is a crucial lifeline that allows them to live at home, rather than in an institution. Tasks performed by providers range from bathing and changing diapers for incontinent clients, to household chores such as preparing meals or grocery shopping.

For the needy who depend on the program, any perceived threat to the county services strikes recipients’ most deeply rooted fears, agency workers say. Also, because the overwhelming majority of those providing the care are relatives of the people receiving it, the prospect of severe cutbacks is stirring concern among the families of the disabled across Orange County.

Advocates for the elderly say they are anxious to hear all the details of the proposal, but a key concern for those questioning the program is how the company can pay workers union wages--far more than providers are paid now--and still save money for the county. They also worry about the implications of a Legal Services suit brought against National Homecare Systems in a Central California county.

Generally, National’s workers are members of the United Domestic Workers Union, and they make at least $7 and an hour, plus benefits. Home care providers now are paid $4.25 an hour and do not receive benefits.

Yet in its proposal, National guarantees it can save the county $1 million in the first year of a contract.

“We want to comprehend clearly how it is they would save this million dollars,” said Peggy Witherspoon, director of the Orange County Area Agency on Aging. “The current going rate in the private sector for home care is $10 to $14 an hour.”

“So how do you achieve that kind of savings?” asked Witherspoon. “If they can do it, that’s fine with us.”

Others say it simply cannot be done

Robert D. Cummings, executive director of the Dayle McIntosh Center for the Disabled, an Anaheim-based center that promotes independent living for disabled people, said, “We are adamantly opposed to this. It’s obvious that the only way National can make money or save money is to not provide the services.”

“And any reduction in services,” Cummings said, “raises a very real risk of (the client) having to go into an institution” such as a nursing home or hospital, which costs much more than in-home care.

In its proposal, National says that some savings would be achieved by using county services that advocates say have been discontinued or are tapped to capacity.

For example, rather than pay home-care providers to prepare meals for each client, National could contract with Meals on Wheels to provide food more cheaply. Also, existing public transportation could be used to transport clients to medical appointments, rather than continuing to have thousands of providers being paid hourly to drive thousands of clients to appointments, as is done now.

But advocates say that county resources for elderly and disabled people already are stretched to the limit, and that tapping into them might not be a feasible alternative.

The county ended its Dial-A-Ride program for the handicapped last fall and no longer provides transportation for seniors to medical appointments. And the Meals on Wheels program is virtually at capacity.

“They talk about accessing community resources, and I don’t see how it would work,” said Sharon Phelps at the Feedback Foundation in Anaheim, which runs several meal programs for senior citizens. “We coordinate some of those resources they talk about, and our home meal program is getting close to all we can handle.”

Officials at National Homecare point to their experience in 13 other California counties and eight other states, and say Orange County residents need not fear.

“The actual experience has been the opposite of what some of these advocates have been saying,” said program director Kim Kruser. “Frankly we think once they take a look at the program, it will relieve a lot of their concerns.”

County officials have received at least one other home-care service proposal within the past two years, but the idea did not attract much attention. But that was before the bankruptcy, which now has officials scrutinizing every budget line in search of savings.

“Right now, everything is on the table in terms of looking at privatization,” said interim County Treasurer Thomas E. Daxon. “There is no question we’re going to be able to deliver services in the future the way we did in the past--not without substantial tax increases, which people seem to be resisting.”

An added incentive to consider the proposal came last week, when state Rep. Curt Pringle (R-Garden Grove) introduced legislation that would allow Orange County to retain all the money--both state and local funds--saved by contracting with a private company.

Currently, about 6,200 elderly, blind and disabled people are cared for under the county’s In-Home Supportive Services program. The program’s budget for 1994-95 was $22.9 million, of which about $5.4 million is county money.

People eligible to receive home care are visited by a social worker who determines how many hours of service will be needed per month. The home-care client is then responsible for finding someone to provide care for them.

For example, children often provide care for their elderly parents or parents provide care for their disabled children. Providers are not considered county employees and work directly for the client.

In Orange County, 77% of all care providers are related to their clients. Under National’s proposal, home-care recipients could keep the providers they now have, or National would supply one.

The program’s structure has come under sharp criticism in the past. A 1991 report by the Little Hoover Commission entitled “Unsafe in Their Own Homes,” pointed to the irony of a system in which people found to need help accomplishing the most basic tasks are made responsible for recruiting, interviewing, hiring, supervising, training and firing the workers who care for them.

Through a local consortium, National proposes to manage the care for 4,900 non-severely disabled, blind and elderly clients. Severely disabled clients, about 21% of participants, would not have their care contracted to the consortium.

If the board approves the company’s proposal, all care providers would become the consortium’s employees and would receive training in home care. Also, wages would be above the minimum, and if providers chose to join the union they would be eligible for pay increases and benefits negotiated by the union.

The United Domestic Workers union has lobbied the board of supervisors to accept National’s proposal.

“As it is now, the clients are often at the mercy of untrained people. The providers are taken completely advantage of because they aren’t county employees but don’t have the freedom . . . to negotiate their own wages,” said UDW President Ken Msemaji.

“And the taxpayer is enormously robbed by this program--spending $1 billion a year for 200,000 people statewide.”

The UDW does not ask that providers who work for National join the union, Msemaji said, recognizing that many, if not most providers are care givers because people they love need their help.

“In Tulare, where (we have) done a managed-care program similar to what we are proposing in Orange County, the rate of out-of-home placement has dropped by 35%.

An initial state audit of National’s Tulare project in January, 1992, was highly critical, but a second audit in February 1994 found dramatically improved performance.

The first audit found that National was not offering or performing all authorized services, the company had reduced service to clients before receiving county approval to do so, and Tulare County had allowed National to reduce service to some clients by reclassifying their condition although their abilities had not improved, the audit found.

By the time the second audit was completed, nearly all the previous problems had been either partially or entirely remedied.

But some complaints remained. The audit paints a picture of National reducing the hours of authorized service to clients, and counting on their relatives to complete whatever tasks were required out of a sense of obligation.

More than half of the providers said they provided more services to the client than they were paid for. About 54% of providers, mostly relatives, said “they felt pressured to provide more services without payment than they were willing to provide.”

“What happened here was they cut the hours substantially and it’s been a horror,” said Russell Koch, executive director of Tulare/Kings Counties Legal Services.

The legal services group has filed two suits against National Homecare. The first was dismissed, and a second suit was filed in November, 1994. The second suit also includes as defendants Tulare County and the state Department of Social Services.

The lawsuit alleges that people were left for days without receiving a visit from a provider, and says that some clients whose care was curtailed were forced to attempt tasks they were not physically capable of doing.

National contests all the allegations in the suit, Kruser said.

“The first was thrown out of court, and the judge dismissed it with prejudice,” Kruser said. “This whole business of suits is a red herring. From what I know of the second suit, the allegations that I’ve heard of are as baseless as the first.”

Because of the pending lawsuit, Tulare Department of Social Service officials did not want to comment on National’s performance. But a letter from the Tulare Social Services Advisory Board to the Orange County Board of Supervisors is complimentary.

“Tulare County has been very pleased with our contract for the care of our senior and disabled,” wrote Madelyn Burkhart, the advisory board’s chairwoman.

Public hearings on National Homecare’s proposal to the Orange County Board of Supervisors will be Monday from 6 to 8 p.m. at the Garden Grove Community Center on Stanford Avenue, and on Tuesday from 1:30 to 3:30 p.m. at the Dana Point Harbor Youth and Group Facility on Ensenada Place. Written comments may be sent to the Social Services Agency, P.O. Box 22006, Santa Ana, CA 92702-2006, until March 8.