New Budget Makes Service Providers Shudder, HHS Moves On

Way back in the fall, before the current budget was a twinkle in anyone’s eye, the Department of Health and Human Services developed a so-called ‘Maintenance Budget.’

In that document, the department funded services and personnel at levels that would effectively sustain business as usual.

To do that, HHS estimated that it would need $1.7 billion dollars in general funds over the next two year period.

And that figure came out before welfare, Medicaid and Food Stamp caseloads soared.

This June, after the budget had wound its way through the Legislative process, lawmakers had set aside about $150 million dollars less than the maintenance budget had lain out.

Given that, it’s no surprise service providers who work with the state from the Seacoast Mental Health Center to Dartmouth Hitchcock in the Upper Valley are upset over this budget.

TAPE: the direct short-term impact to us from the budget is $11 million dollars.

Jason Aldous is a spokesperson for Dartmouth Hitchcock.

Dartmouth Hitchcock is one of 13 hospitals in the state that must continue to contend with Medicaid reimbursement rate reductions that began late in 2008.

Those reductions, in part, mean the state covering 54 cents on the dollar for a Medicaid patient instead of 81 cents on the dollar.

Statewide, the Department estimates it can book about $34 million dollars in savings over the biennium by freezing the rates.

Add unfunded Medicaid costs to cuts in several other areas and Aldous says Dartmouth Hitchcock is going to be $45 million dollars in the red this year.

TAPE: I don’t think there’s going to be any impact on services short-term but, with those numbers, it’s getting increasingly unsustainable.

Aldous isn’t the only provider who’s worried about cutting services to make ends meet.

But unlike Dartmouth Hitchcock, Roland Lamy says level funding community mental health centers could mean service cuts soon.

TAPE: it’s likely that in the early part of the next calendar year is to start to when we come to the realization there’s not enough funds for the remainder of the fiscal year.

Lamy, who heads up the New Hampshire Community Behavioral Health Association, says the budget anticipates a 1% growth in caseloads.

But especially given the pressure of a down economy- he thinks there’s going to be 5-8% increase.

Money for community mental health centers is indicative of the larger HHS budget; it’s built on a lot of crossed fingers.

The best example of that may be the significant reduction in money for kids who are abused and neglected.

Jack Lightfoot, with Child and Family Services, says the budget guts money to cover the cost of taking a child out of their home, or what he calls out of home services.

TAPE: they cut the appropriation for out of home services by 25%. But they did not increase the budget for in home services...So what’s going to happen? My fear is... that some children who are now receiving services in their own home might not receive services at all. Because the children who are coming out of group homes and foster families are going to need all of the available resources.

Those who represent abused children, hospitals and the community mental health centers are just a few of the providers deeply troubled by the impact of this budget.

Health and Human Services Commissioner Nick Toumpas is well aware of the concern.

But in an interview in his office earlier this week, Toumpas pulled out a spread sheet and pointed to one number: $1.5 billion dollars.

That’s how much the department will receive in general funds under the new budget.

And it represents an 8% increase in general fund dollars compared to the last budget cycle.

Toumpas says the Department can do a lot with $1.5 billion dollars.

TAPE: with the passage of this budget...I hope is the key thing that will bring stakeholders and others out in the community to the table to say ‘this is the reality, now how are we going to deal with it,’ by focusing on the people that we serve.

Toumpas’s reality is that he’s got a lot on his plate.

He says business as usual at the Department of Health and Human Services is no longer sustainable.

Significant changes are needed, and lawmaker’s demand that he slash $20 million dollars from his budget serves as a constant reminder.

To do that, one of the first steps will take is to leave many of the estimated 260 vacancies in his department open.

But he says even that move doesn’t get him all the way to $20 million dollars.

So he has instructed his lieutenant’s to find savings within their own divisions.

TAPE: there are no sacred cows. We need to take a look at our own operations. It’s not like I am looking at all the contracts...it’s our regulatory management...it is our administrative processes, our claims, we need to take a look at all of that. This is a time we have to examine everything we do and how we go about doing it.

Toumpas says part of that examination will include how to better deliver services to people.

TAPE: in the area of mental illness for example, we will contract with people who provide housing services, mental health services, the state hospital that is part of the mix, you have employment services, family support services...you have a number of different components.

Toumpas believes it’s possible to get service providers to somehow work together and make a sort of one-stop-shop experience for people.

Those changes, he believes, alone, won’t make HHS operations sustainable, but it’s going to help.

Steve Norton of the Center for Public Policy Studies says HHS Commissioner’s have been trying to streamline, modernize, or realize efficiencies over the last ten years.

But at the end of the day, Norton says the Department can only do so much.

TAPE: we’re not talking about a 15% reduction in Health and Human Services budget as a result of this. If you look at their budget, about 70% is direct payments to providers, that leaves 30% that you can manage in an efficient way. While important, it’s not going to solve the budget problems. It’s not going to solve the future budget problems either.

Norton says he expects state government to constantly manage costs and revenues over the next two years due to the Recession.

Most budget observers already are forecasting more than a half a billion dollar shortfall in 2012.

That is the backdrop as HHS is scheduled to hold talks with social service providers next week on how to do more with less.

For NHPR News, I’m DG.