Nebraska and Michigan among 26 states restructuring agencies
Restructuring Agencies
May 31, 1997
Hoping to shatter the stereotype that government is slow and unresponsive, 26 states were planning or implementing restructurings of health agencies in 1996, according to a new survey by the National Governors’ Association (NGA).
The restructurings are a "significant trend" among states, says Randolph Desonia, director of the NGA’s Center for Best Practices in Health Policy Studies.
Led by governors who want a more client-based and streamlined health care system, some states are "fundamentally changing the way health care services are organized, administered, financed, and delivered," in order to get better value for their health care dollars, the NGA reports.
Among those states that have undergone the most ambitious transformations are Michigan and Nebraska, both of which have consolidated multiple government agencies into one.
NGA surveyed all 50 states in 1996 and found that 26 were planning or implementing inter- and intra-agency restructurings. The reasons for reform: to improve administrative efficiency and delivery of services; to shift the categorical focus of most state health programs in order to better integrate services; to blend social support with health services; and to encourage innovation by accepting risk. Twenty two states had no formal plans at the time of the July survey.
Interagency restructurings pose a special challenge. The 13 states that have undertaken the more difficult task of interagency restructuring are NE, MI, IL, NH, NY, MT, RU, VT, NM, FL, KY, WI, and NJ. Six states (CT, MA, NC, OK, TN, and WV) considered the same approach, but the idea was postponed or rejected by the legislatures last year. Many of these states are revisiting the issue in 1997.
A variety of approaches
The states that have brought groups of agency under one umbrella have pursued different tacks. Some have combined or separated divisions or units (8 states); combined only the public health and Medicaid programs (2 states); consolidated multiple government agencies under one umbrella (2 states); and decentralized the state health agency, transferring out the public health function. (Florida last year split the department of health and rehabilitative services into two new departments to improve delivery of health and social services and respond more quickly to clients’ needs).
Michigan and Nebraska
Michigan Department of Community Health Director James Haveman says the transformation in his state has made a huge difference in the way health care is delivered to residents, not only reducing the likelihood of duplication of services, but providing a more cohesive direction for state health policy.
In 1991, 14 of 20 state departments were delivering health care services. Mr. Haveman says as a result, the state was "ping-ponging people around" to get the services they needed. Through a series of executive orders issued by Republican Gov. John Engler, the state has consolidated the once separate departments of mental health and public health, the offices of drug control policy and services to the aging, and the Medicaid agency into one department. Haveman says the consolidation gives the Department of Community Health a budget of $7.2 billion (about 21% of the state’s budget), boosts the state’s purchasing power and allows it to manage health spending growth in a more predictable way.
In a span of six months, Nebraska has consolidated five agencies— health, aging, juvenile services, Medicaid, and public institutions —into one health and human services agency. The new agency is now responsible for financing and support; service delivery; and regulations and licensure. Donald Leuenberger, director of the Nebraska Department of Social Services, says the state is simply "trying to gain better results for people." Already, caseworkers report that they can deal more effectively with child abuse cases. They aren’t duplicating efforts and can spend more time on social work issues than on juggling paperwork demands from disparate divisions.
Restructuring an agency involves a lot of tasks, including rewriting job descriptions, laying off or reassigning staff whose jobs are no longer needed, reallocating work spaces, getting buy-in from key stakeholders, working out legislative and statutory issues, and developing an implementation plan.
One of the biggest investments Nebraska and other states will have to make as a result of their transformations is on data systems. With the new focus on accountability, the data systems will be critical in helping to measure outcomes. Nebraska already has designated about a dozen staff members to handle the job of measuring quality and service outcomes.
Mr. Leuenberger notes that all of this has to occur parallel to the daily activities of running a state agency that serves thousands of individuals. "You’re doing this on the run, there’s no shutting down the factory."
—Janet Firshein
Transforming State Health Agencies to Meet Current and Future Challenge was authored by Tracy Orloff, Marie Maralit, and Randolph Desonia. For a copy or for more information, call 301-498-3738.
Nebraska and Michigan among 26 states restructuring agencies
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