The state's human services agency, known for its fiscal foul-ups, says it will save taxpayers at least $1.5 million over one year using a quality control program known as Six Sigma.
Fortune 500 companies swear by this cost-cutting tool. But critics question the time and money the Indiana Family and Social Services Administration has devoted to training 30 workers to use it.
The agency's leader, John Hamilton, says savings should more than cover the $250,000 spent on Six Sigma, even as his agency has made deep cuts in social programs, including $500 million in Medicaid. The initial cost-saving projects included finding faster ways to process child support and eliminating overpayments to companies that provide in-home care for people with mental disabilities.
Rhonda Hall, a 27-year-old social services coordinator for a Franklin nursing home, has never heard of Six Sigma. But the Greenwood woman favors trying anything that would help her get the $74-a-week support payment ordered for her son, Kyle, 4.
"They took his father's tax refund six months ago, and I just got it," said Hall, who received about $3,000 from her son's father, who now lives in Tennessee.
It's too early to say what potential cost savings from Six Sigma will be. But to address skeptics, the agency has asked managers with four companies in Indiana that use Six Sigma -- Cummins Inc., International Truck and Engine Corp., ITT Aerospace and Roche -- to validate the savings.
"We wanted from the beginning to have some outside voices see what we're doing," said Hamilton, who spearheaded the controversial training effort.
Six Sigma requires workers to go beyond using gut instinct and experience to solve problems. It involves using advanced statistical techniques to identify what really causes errors so they can be fixed. The aim is to achieve near perfection on the assembly line or with administrative tasks.
"Everyone thinks it's a program just for manufacturers," said Peter Maniago, a former state health official who works as a government process manager for Roche, a maker of drug and medical diagnostic products.
"It's not just about widgets," he said. "And it's perfectly applicable to state government."
The outside advisory group met this week for the first time and will continue to meet quarterly. Its members want more data before they sign off on the agency's savings, but they offered praise -- and some criticism -- as state managers went over the first three projects.
"It's neat to see a government agency embracing continuous improvement and a technique that will get you there," said Paul Gambino, an Indianapolis-based manager of quality systems for International Truck and Engine Corp. "These are our tax dollars."
But the outside advisers also urged the agency to develop ways to monitor whether its cost-cutting efforts are hampering the delivery of services people desperately need.
Gov. Frank O'Bannon has given Hamilton the freedom to pursue Six Sigma, but he wants to see results, said Andrew Stoner, the governor's executive assistant for human services and an administration spokesman.
"If we're going to spend that kind of money," Stoner said, "we need to show it was worth it."
Six Sigma was pioneered by Allied Signal, General Electric Co. and Motorola Inc. in the mid-1980s. Indiana may be the only state using it and the first to apply it to human services, according to the Denver-based National Conference of State Legislatures.
In July, Hamilton asked state workers to pitch in and help managers who have been through the two- or four-month training sessions with their cost-cutting projects.
The program designates the level of training using martial arts terms. Black belts get four months of advanced statistical training to oversee big projects, and green belts get half as much to assist.
Matt Raibley, a black belt, manages Indiana's welfare, food stamp and welfare-to-work programs. He oversaw a team that reduced the time workers spent manually researching noncustodial parents' payment histories for 92 county prosecutors. There was a 39-day backlog of research requests, with each case taking an average of three hours.
Before any money can be disbursed, researchers must pore over 120 million documents on microfiche and electronic records kept since 1996 to ensure state and federal governments are first repaid for such expenses as prior welfare benefits and overdue taxes.
Raibley's team saved $153,940 by limiting overtime work to the most experienced researchers for several months. But a dispute with the Unity Team, the union that represents human services workers, stalled the project last month, with the backlog cut to fewer than 21 days.
State officials hope to reach a compromise that would allow the overtime savings to continue.
The same team also:
?Found a $350,000 federal grant that could help automate the research process.
?Saved $57,024 by encouraging employers to deposit child support payments withheld from workers' pay electronically, using the state's Internet site.
?Found a $350,000 grant to experiment with making support payments using debit cards.
Raibley is relieved the project is almost behind him -- and he can't wait to start another.
"It's been very beneficial to my own personal development," said Raibley, who's worked for the state for nine years. "There's a lot of pressure, but it's somewhat of a relief to know that these tools do work."
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