Connecticut government’s ‘take it or leave it’ approach to providers

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Everyone is familiar with the definition of a monopoly. It’s a situation where a single company or group owns or controls all of a certain product or service, creating a competition vacuum, thereby controlling the price of that produce or service, often resulting in artificially high prices.

But who has heard of a monopsony? A monopsony is where there is a single purchaser of a service from a pool of many sellers. This dynamic allows the buyer to set a level for how much it is willing to pay for a product or service. The State of Connecticut’s purchase of service contracting system, particularly its purchase of human service related programs, is a monopsony. It means the state (the sole purchaser) can set limits on how much it will pay nonprofits (the sellers) for a service.

When Connecticut builds a highway, it goes out to bid. There are certain rules on how those bids must be constructed, but in the end the bidders are allowed to submit bids that presumably not only cover their costs, but even allow for a profit. They may get the job, they may not; but they do control what they submit.

In Connecticut we are rich with hundreds of nonprofit organizations whose mission-driven existence is predicated on providing human services to our fellow citizens in need. We exist to assist and ensure that the state can deliver on any legal mandates and moral obligations it has to take care of those who can’t, or are struggling, to take care of themselves. For the state to directly provide all of these services (i.e. Southbury Training School) is prohibitively expensive.

In a monopsony environment, the state basically runs a “take it or leave it” business model. It matters little to the state how much providing that service actually costs. It matters little to the state how much you can pay your employees. It matters little to the state what level of benefits you can offer those employees or whether you can keep up with the increasing cost of offering those benefits.

It only seems to matter how tight the state can twist their purse strings knowing that, like anyone who is hungry, we will eat whatever morsels are thrown our way, believing that if we hang in there long enough, we will be shown the same dignity and respect we try to show those we serve.

Nonprofits starve, waiting lists grow longer and the beat goes on.

Year after year we are told to testify, communicate with our politicians, turn out numbers at the Legislative Office Building, tell our stories, send emails and letters and postcards, make phone calls, wear stickers, hold rallies, and so on. We have commissions, cabinets, legislative studies, work groups, liaisons, lobbyists and more. We are thanked for our work and told how vital our work is and how appreciated we are.

“Maybe this is our year,” we dream. then we wake up to the reality or another year of treading water at best, and cuts and rescissions at worst.

It’s another year of take it or leave it.

Denis Geary is the executive director of the Jewish Association for Community Living. 

 

 

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