Pataki's Sick Department of Health

How a Collusive Contagion Has Infected a $34 Billion Bureaucracy

The combined power of these associations has no doubt helped CarePlus prosper at DOH. Going back to the original bid process in 1997 and 1998, the department had to reopen the door to let CarePlus in, having rejected them when the 24 contracts were first awarded. The company got the worst fiscal rating from the evaluation team of any of the 32 bidders, failing to fully disclose their board, expense and revenue projections, target population, budget, subcontractor reimbursement plan, and other key matters. It was given points for complying with a financial statement requirement though it simultaneously contended it couldn't provide one in a suit filed by two executives who'd left the company dismayed.

A DOH memo, dated four months after the contract period had started, explained that CarePlus alone was being added to the bid winners this late because "additional service capacity is needed in the areas they proposed to serve." One other contractor was selected past the deadline—but that had occurred at least a month earlier—and, ironically, it turned out to get the second lowest ratings in subsequent consumer surveys. But the worst provider, with the consistently lowest scores, snuck in as the final bidder—more a matter of juice than justice.

The emergence of CarePlus from the sinkhole of DOH is merely a slice of life in the Pataki reign—an era that will be remembered as a sad moment in the ethical history of the state.

Research assistance by Sandy Amos, Yi Chen, Jen DiMascio, Rebecca Eisenberg, Ross Goldberg, Matteen Mokalla, Will St. John, Clementine Wallace, and Emily Weinstein

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