An Experiment in Privatization

Indiana expects that the modernization will radically improve its
ability to reduce mistaken benefit expenditures for ineligible
applicants. The resulting savings—plus the fact that the vendor will be
responsible for errors in eligibility determina­tions—mean that the
true reduction in costs will be considerably higher. Governor Daniels
estimates total savings will equal $1 billion over ten years.

While it is too early to determine whether Indiana’s daring plan
will succeed in bringing about such substantial cost reductions, saving
taxpayers’ dollars cannot be regarded as the sole criterion of success.
It will be just as essential for the pro­gram to show that a true,
effective transformation of government services has been
accomplished—an achievement that will provide a blueprint for other
public officials as they try to meet escalating demands on resources.