1. Copyright © Allyn & Bacon 2002 An Introduction to Human Services: Policy and Practice Privatization §This multimedia product and its contents are protected under copyright law. The following are prohibited by law: Any public performance or display, including transmission of any image over a network; Preparation of any derivative work, including the extraction, in whole or in part, of any images; Any rental, lease, or lending of the program.

2. Copyright © Allyn & Bacon 2002 Private vs. Public §In the past two decades, many governmental social services have been privatized by contracting out to private corporations. §This has happened in many human service fields. §The push for privatization is accompanied by a push for downsizing government and transferring governmental functions to for-profit enterprises.

3. Copyright © Allyn & Bacon 2002 Subsidizing §Medicaid stimulated the growth of private nursing homes and was paid for partly by the federal government. §This encouraged states to discharge patients to private nursing and boarding homes. §Patients were federally subsidized by Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). §Yet money to develop community facilities was not allocated.

4. Copyright © Allyn & Bacon 2002 Corporate Management §Corporations have entered the social welfare field, particularly since the inception of Medicare and Medicaid in 1965. §This has occurred on a large scale in health care, especially in hospitals, nursing homes, and group medical care. §Hospital chains such as Hospital Corporation of America and Humana are making large profits.

5. Copyright © Allyn & Bacon 2002 Corporate Profits §Corporations are making profits from the 1996 welfare law. §Maximus, Inc., a consulting company, did $100 million in business in 1996, running several welfare to work programs. §Lockheed Martin, a weapons industry, has large contracts in many states to run welfare programs. §A union survey of privatized programs revealed fraud, cost-overruns, high error rates, and improper benefit denials.

6. Copyright © Allyn & Bacon 2002 Social Security §Social Security has been a successful anti-poverty program. §Despite the success of the program, there have been efforts to dismantle it as a public program. §Conservatives have sought to privatize the program by having people invest some or all of their savings in the stock market. §As the stock market declined, there was less talk of privatizing Social Security.

7. Copyright © Allyn & Bacon 2002 Religious Social Services §The welfare reform act of 1996 contains a “Charitable Choice” provision which requires states to include religious organizations as contractors for welfare programs. §President Bush has long been a devotee of religious social services. §Opponents of charitable choice fear that it will undermine the U.S. tradition of separation of church and state. §They also fear that will lead to religious proselytizing and discrimination in hiring.