The Computerworld Honors Program
Honoring those who use Information Technology to benefit society
LOCATION:
Indianapolis, IN, United States

YEAR:
2008

STATUS:
Laureate

CATEGORY:
Government

NOMINATING COMPANY:
IBM

ORGANIZATION:
State of Indiana Family and Social Service Administration Division of Family Resources

PROJECT NAME:
State of Indiana DFR Eligibility Modernization



Introductory Overview
On behalf of the Indiana Family Social Services Administration (FSSA), the Division of Family Resources (DFR) administers eligibility for cash assistance, child care assistance, food stamps, employment and training services for low-income clients as well as Medicaid eligibility throughout the state. The environment consisted of 107 offices in 92 counties across the State.

Beginning with the new administration in 2005, a newly appointed DFR executive team evaluated the division’s performance and capabilities and reached some discomfiting conclusions.
We commit too many errors: Case errors in all assistance programs exceeded not only the federally mandated limits, but cheated needy people out of their benefits.

Our clients receive poor service: Service models have evolved to the point of delivering extraordinarily poor service to our clients. A 2005 survey showed that 65% of our customers rated their satisfaction with FSSA service as “Below Average,” 56% complained that the intake process was “too slow,” 27% noted that “The telephone system doesn’t work,” and 48% found it difficult to reach a caseworker.”

DFR Systemic Problems -Our system did not serve our clients well, nor did it serve our employees. Each of our case workers balances an average caseload of 300 cases, while urban area caseworkers carry as many as 700 cases. A recent audit found that “DFR processes and practices have evolved over time and multiple administrations. As a result, there has been a lack of common operating processes and the accompanying training and acculturation of employees.”

In 2005, a team was established to craft a solution addressing these problems. The solution was designed to meet the following principles:

- Provide multiple access point entry into system: The current system required clients to make multiple visits to a county office at their caseworker’s convenience.
o While maintaining the county offices, the new system was to provide access through the internet, phone, and an organized network of community based organizations.

- Introduce fundamental changes to the Eligibility Process: The current system was complex, error prone and allowed for fraudulent activity.
o The new system would move from a ‘case based’ system, reliant on a single caseworker to client interaction, to a task-based approach allowing the organization to engineer in efficiencies.

- Change the traditional human resource model to enable change: The state merit system contributed greatly to the inefficiencies and poor service.
-
With the support of Mitch Roob, Secretary of the Indiana FSSA, and the support of the Governor, DFR elected to proceed with a public-private partnership for the following rationale:

- We could not change fast enough
o Simply stated, our current workforce was too busy to implement significant changes while performing their ‘day jobs’
- The State Merit Employment system limited our ability to change
o We could not bring in or retain the caliber of talent we need to create an atmosphere of constant and positive change.
- Employee lack of outside perspective
o With little exposure to the external practices, our personnel could hardly be expected to easily recognize or adapt best practices from outside of Indiana Government.
- Lack of stability in upper management constrains our project length
o The tenure of our top management is inherently short term. Politics and the lack of market comparable salaries make the possibility of a long term project executive unlikely.
- Excessive cost to implement
o We have no opportunity to raise the additional start-up funding required in addition to our normal operating budget. The obvious option of terminating existing staff to fund development was neither practical nor desired.

The Importance of Technology
How did the technology you used contribute to this project and why was it important?
The implementation of new technologies is the enabler of Indiana’s Modernized Eligibility System.

The State eligibility ‘system of record’, as define by the Federal regulatory agencies that oversee public assistance, is known as the Indiana Client Eligibility System or ICES. This legacy system is an online, mainframe based, IMS DB/DC system. By its designation as system of record, all final eligibility decisions must be made by State employees utilizing the system. Therefore, all new technology must interact with a 20 year old ICES.

To implement the new system, a shared services center was created to house a call center, a document center and a data center. A second services center was constructed approximately 150 miles away to provide hot site backup and call center overflow capabilities.

Key to enabling the new system was creating electronic case files to replace the old paper files. The creation of a document center provides complete document scanning of any paper documents creating image files that are index and attached to cases. This enables workers to view the ICES data side by side with image documents that validate the cases, enabling a worker, ultimately anywhere within the State to make the eligibility decision. All administrative data gathering is done by employees of the IBM led coalition with the final decisions and federally mandated interviews being performed by State employees.

To automate the back room workflow, IBM implemented Curam, a COTS based enterprise framework for Health and Human Services. Curam manages queues for the specific tasks. The output of this system is to correctly populate ICES to produce a decision-ready case for the State workers. Document images are retained in a CURAM-DB2 database for document retention and future requirements.

To provide for enhanced client access, two new functions were created. A multi-tier call center to enable client inquiries and assistance was created. Clients connect with either an interactive video response unit for information or case status inquiry or can speak to an agent. Call takers have access to view electronic cases and all supporting documentation. Clients may be transferred to different levels of either State or vendor employees to resolve their issues.

A client may be screened for and can apply for benefits using an internet-based, interactive application. This feature allows the client to apply not only in the county office as before, but in any facility that provides internet access. As part of this initiative the state has recruited and trained a network of faith or community based organizations to provide facilities and assistance completing the application process. This network is know as the VCAN network, consisting of over 1,000 points of presence across the State.
Though the use of enabling technologies, and employing new paradigms in delivering public assistance, the State of Indiana has more than quadrupled the points of access for its neediest clients. This initiative is done with no tax increase or borrowing, without the short term loss of a single job, and significant long term savings to the taxpayers of Indiana.
Key to employing these technologies effectively is the States’ implementation of formal oversight and governance organizations. Formal management processes and regular meetings enforce our governance structure and ensure that all parties work to roll out and employ Indiana’s Modernized Eligibility System.

Benefits
Has your project helped those it was designed to help?   Yes

Has your project fundamentally changed how tasks are performed?   Yes

What new advantage or opportunity does your project provide to people?
When the government undertakes a significant change, such as Eligibility Modernization, which can profoundly affect people’s lives, a great deal of management, legislative and public attention is given to the project. To explain the administration’s approach and thought processes, the governor’s office published a pamphlet, which is enclosed in the ‘Visual Material’s’ section of this nomination (note: This pamplet cannot be attached as it is a PDF).

Our major stakeholders, in order of importance are our clients, the roughly 1 Million Indiana citizens who receive some form of public assistance, be it TANF (Cash assistance), Medicaid (Medical care) or Food Stamps; approximately 2,500 DFR workers, and finally the institution of State Government. The statements below summarize the benefits by stakeholder group.

Clients get faster, more convenient access to benefits with integrated work programs.
• Clients have greater access to assistance programs through multiple channels
o On-line or telephone application
o Community based network
o County offices
• Less trips to State facilities required
• Child Care and Work Programs integrated with Welfare processes to ensure work readiness

“…It is true that Indiana's welfare delivery system is in need of improvement. Steps that could be taken include: Opening phone banks (staffed by trained state employees) equipped with toll-free numbers and 24-hour accessibility via voice mail. Allowing access to the system through the Internet. Hiring sufficient staff to get the job done (as child welfare has recently done).

Why don't we all work together to improve our system, for the benefit of those in need and Hoosier taxpayers? Name-calling and reliance on half-baked reports help no one. . . .” - Indianapolis Star, 9/7/2006


Employees get job, salary and benefit protection; opportunity to focus on their profession and enhanced career opportunities.
• All employees employed by vendor or State
• Vendor protects jobs for at least two years
• Salaries are the same or better
• Medical benefits provided are equivalent and offer greater options Retirement benefits are at least equal - often greater
• Workers are freed from onerous paperwork burdens

A key element in the Indiana plan, and one that has by Main’s account prevented some likely objections, was the insistence by the state that IBM hire and retain 1,600 state workers whose jobs are privatized under the plan. Main asserts that although there’s been some opposition, the unions are almost completely driving the effort, and 95 percent of the affected state employees have accepted a same or better salary and benefits working for IBM. – Washington Technology, 2/26/07
At one of the many employee meetings, the DFR Director, was treated to a rendition of the ‘double dipping dance’ by workers, when they realized that their state retirement benefits were completely protected and that they would potentially receive an additional retirement benefit from our partners.


The State gets a new welfare eligibility system that is ‘better faster and cheaper’.
• Vendor is contractually committed to deliver higher application accuracy.
• Partnership gives DFR access to immediate capital improvement
o Partners will invest ~ $100 million to modernize our environment
o Partners will reengineer processes and modernize technology in support of the environment
• 41 new locations integrating welfare eligibility and work participation
• Vendor will deliver the new solution at a significant cost savings.



“For taxpayers, a billion dollars of savings,” Daniels said in a statement. “For recipients, better service and a better chance to escape welfare for the world of work and self-reliance. For employees, better compensation and career prospects. For the Indiana economy, 1,000 new quality jobs. No decision we’ve made is more clearly in the public interest.” - Gov. Mitch Daniels quoted in Indianapolis Star 12/27/2006


If possible, include an example of how the project has benefited a specific individual, enterprise or organization. Please include personal quotes from individuals who have directly benefited from your work.
DFR serves over a million people statewide so individual public assistance cases are difficult to cite as we measure on a very large population in a large geography. In large part, our successes or failures are measured by our regulatory funding agencies. Below see some extracts from a recent Report to Congress by the Food and Nutrition service, easily our most diligent reviewers.

Selected quotes from the 'United States Department of Agriculture, Food and Nutrition Service, report to Congress, [dated]February 7, 2008'

Before:
"The State of Indiana’s FY 2006 timeliness of application processing rate was 81.59 percent. This ranked 44th in the nation."

After
"The increase in both the numbers of applications filed and approved relative to 2006 indicates continuing access to benefits during the transitional period"
"The total dollar value of benefits in current dollars increased during the project period reflecting both an increase in participating households and in the average benefits."

DFR's recent implementation of the Governor Daniels' 'Healthy Indiana Plan' gives us the opportunity to see the results of a brand new program that gives the working poor an opportunity to receive group health insurance and to receive preventative medical services, perhaps for the first time in their lives. The following quote, from The Indianapolis Star titled:

" Hoosiers to start lining up for insurance
Advocates for low-income residents praise Indiana health program that starts Jan. 1"

By Shari Rudavsky, December 13, 2007

"Thousands of uninsured adults in Indiana will have access to health insurance Jan 1 through a new government-backed program hailed as the most significant expansion of health coverage in recent years.

Sheryl Mayes, 44, already has her application. Despite the fact that she struggles with asthma, the Eastside Indianapolis woman hasn't had health insurance for 11 years.

"There have been times when I've put off going to the doctor because I just really didn't have the money to go," said Mayes, whose husband and child receive Medicaid, a state health insurance program for pregnant or disabled adults and poor children.

The state's new Healthy Indiana Plan is health insurance for low-income adults like Mayes who don't have other insurance and don't qualify for Medicaid. ..".

This program, managed by DFR's program management office, went from the drawing board to production in 5 months employing the platforms and management processes developed for the Eligibility Modernization.















"

Originality
Is it the first, the only, the best or the most effective application of its kind?   All of the above

What are the exceptional aspects of your project?
Why is the Indiana Client Eligibility modernization unique? With the support of the governor, and the critical oversight of the governor’s office, Federal agencies, advocate groups, unions, the press and the general public, DFR, under Zach Main’s leadership was able to forge a partnership with a coalition of public companies to transform the face of the ‘welfare offices’ in Indiana.

Focusing on the procurement and approval process illustrates the originality and the challenges faced to bring this initiative to life. Our procurement followed a few basic tenets gleaned from close evaluation of best practices and past experiences:

• Speed – Time is money. Inaccurate determinations are costing tens of millions of dollars a year. Every month delayed means millions of dollars.

• Speed – Indiana’s merit employment system makes fluid organizational changes nearly impossible.

• Speed – Indiana’s FSSA has had 14 Leaders in the past 15 years. Any project with a shelf life of more than 2 years is doomed.

• Don’t try to do too much at once.

After an analysis of the available data , DFR executive management, supported by Subject Matter Experts (SMEs), developed general traits for a new model to address not only the problems of the past, summarized in section II, but also the future vision of an operating environment consistent with FSSA’s mission statement. We relied on outside advice and lessons learned, both positive and negative from early adopters of modernization, both in Indiana and other states – particularly the HHS Privatization in Texas and Florida’s re-engineering activities. To support these comparisons, DFR had extensive personal contact with parties involved in these efforts and the Federal Agencies overseeing them. We also reviewed business cases and contracts from these efforts.

From Texas, we took away practices to avoid in modernization. In the opinions of Texas state officials and vendor management personnel, Texas difficulties can be distilled to the following list, which we strove to avoid:

• Multiple significant changes implemented concurrently.
• New Eligibility IT System.
• Dramatic policy changes.
• Jump starting benefits by laying off 3,200 employees in transition, losing institutional knowledge.
• Weak governance structure, allowing for weak sub-contractor management.
• Excessive number of non-relevant metrics and penalties making execution contentious and difficult.

Florida elected to in-source their transformation. We distilled the following best practices from Florida:

• Transforming the operation through an evolutionary process took roughly 10 years.
• The internet is an effective means of interacting with the affected client base.
• Community and faith-based organizations can be effective as extensions of the county offices.

Based on these principles and direction form leadership with expert opinion from the outside, we designed a process model, rather than an operational solution for a new DFR. This formed the basis for our procurement. We approached this with several basic principles:

• We outlined our process model and explicitly stated the outcomes desired. We relied on the expertise of world-class service firms to develop the solution.
• Our financial approach was exacting and enabled our quantitative understanding of differing approaches by the vendor teams.
• Within the confines of the procurement we were highly responsive to questions and access to our facilities and people.
• We defined our activities by process and clearly communicated to the vendors that they had responsibility for the rest of the activities in the process.
• We aggressively quizzed the respondents for over 40 hours each.
• We required the respondents to develop their solutions in an iterative and evolutionary process.


Difficulty
What were the most important obstacles that had to be overcome in order for your work to be successful? Technical problems? Resources? Expertise? Organizational problems?
The Indiana Client Eligibility Modernization is a deeply complex project, requiring the cooperation of major outsourcing companies; Federal required State employee participation; extensive business process re-engineering; the establishment of community based organization network; the construction of new facilities, call and data centers; the implementation of a brand new workflow and document management system, which must, again by federal requirement, be tightly integrated with a 20+ year old mainframe legacy system; and changing the ingrained habits of literally hundreds of thousands of employees and constituents. This all is accomplished under on-going critical oversight, in an environment where all documentation, e-Mails, etc is subject to open records laws.

Rather than focus on technical challenges, we will focus on the organizational changes required to move a government agency to transform its operations to meet the needs of the future, while maintaining it services at a level that meets federal guidelines.

Realizing these challenges, DFR carefully constructed a series of procurement steps to enable leading vendors to develop an ecosystem to achieve success. There is an oft quoted saying around FSSA/DFR that will ‘do this right, not quickly”, as we have 50 years of inertia to overcome. From the project beginning in 2005, the solution was grounded in political realities and a focus on output based metrics and organizational governance was put in place.

Organizationally, the Division of Family Resources executives had to re-organize to focus on vendor and contract management, while continuing a focus on ‘business as usual’ as the project rolled out. At any point in time, this forces all parties to interact in two distinct environments – old and new. This introduced a hither to unknown management challenge into government; the formalization of roles and responsibilities; the creation of two sets of operating manuals and the introduction of Program Management into a State agency. It is worthy to note that the operations manuals produced were the first ever in this $600 Million + agency.

To enable our Program Management office and to give us access to skills beyond those readily available at the State, DFR contracted with an ‘OV&V’ – operations validations and verification --vendor to establish processes and metrics and to help DFR program management executives with the difficult tasks of metric establishment and evaluations, deliverable approvals, and all the myriad tasks required for the successful management of a long term contract. DFR coined the OV&V term to denote a longer term relationship and accountability to the operation rather than focus on the audit function of a typical IV&V engagement.

Change management disciplines have been successfully adopted by DFR as has the management of this disparate organization by ‘the numbers’ rather than by intuition. Staff has visibility into a plethora of systems and processes that simply did not exist prior to our implementation. For example, staff at the capital, can now manage workflow and resource assignment on a near real time basis, enabling the government to move resources where they are needed rather than over hiring to meet contingency or seasonal needs.

A key constituency to educate is, of course, our clientele, approximately One Million Hoosiers who rely on the agency to provide benefits to those that are eligible. WE had anticipated problems, driven largely by advocates' insistence, that our particular demographic would have neither access to nor an interest in using different forms of access, notably the internet or IVR/Call Centers. Quite to the contrary, in our pilot region of 12 counties, was quickly overwhelmed with calls and internet hits. This has caused us some re-balancing, but is enabling our handling of a fifteen percent increase in application volume.



Often the most innovative projects encounter the greatest resistance when they are originally proposed. If you had to fight for approval or funding, please provide a summary of the objections you faced and how you overcame them.
We faced obstacles that are peculiar to a federally funded State government initiative. We had no ready access to capital to build out the system, which drove us to a privatized solution. Government is cash based budget driven operation. Our inability to use accrual techniques to match up costs and expenditures severely limits the availability for government to innovate. Our operations and the benefits are largely funded from the federal government. There are rigorous documentation, risk management and approvals cycles required by Federal oversight. While these actions provide some level of oversight, they generally tend to limit the degree of change that can be accomplished. An active partnership with these agencies on a local and national basis required to shepherd the project through the approval and on-going review processes.

Success
Has your project achieved or exceeded its goals?   Achieved

Is it fully operational?   No

How do you see your project's innovation benefiting other applications, organizations, or global communities?
Indiana as taken steps, not merely to modernize an antiquated government system, but to transform the way people and organizations interact with the government. I term of public assistance eligibility, we are aware of several state governments, waiting on the sidelines to follow Indiana’s lead. IBM and its coalition are making significant investment into the success of this venture, as this represents a significant market to them.

Our clients gain by getting greater access to public assistance. The use of the web, enables people to apply or view relevant information on a 7 x 24 basis. They can interact with the call center, one of the thousand or so VCAN’s or, with a county office. Their options previously were to go to a specific county office to meet with a specific case worker; the risk of missing this meting was borne by the client.

The most important lesson learned in this endeavor is that the major impediment to change in government is the lack of creativity in the approach and lack of political will at the top to implement change. We are fortunate to have the support of visionary public executives in the State of Indiana.


How quickly has your targeted audience of users embraced your innovation? Or, how rapidly do you predict they will?
Our experiences in the pilot region indicate that the take-up from our clientele will be rapid. Our volumes are running significantly ahead of the same period of a year ago. Clearly we have a long way to go, but the early signs are encouraging.

From a management perspective the view is much more positive. Employees are looking forward to getting the system. They see the value of splitting out the work and a system that lets them serve their clients better and more quickly is very appealing. The old system of a one on one relationship between client and caseworker put a considerable strain on the worker as well.

The capability of managing to metrics and facts rather than opinions is making a terrific impact on DFR executive management. As the system matures, this reporting will roll downhill to field management as well. They will understand the work to be done, the status and the productivity of their staffs.

Our goal in the pilot was to thoroughly test the systems and processes in a live environment. Of necessity, the changes could not negatively impact the delivery of services. The pilot has succeeded and the rollout is imminent.

Digital/Visual Materials
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