The Smart Money: DHHS and its significant challenges

Posted Wednesday, January 23, 2013 in Analysis

The Smart Money: DHHS and its significant challenges

Mary Mayhew

by Gina Hamilton

Gov. Paul LePage's proposed 2013-14 budget was received and will be given proper scrutiny, but the truth is that the final budget that passes the Legislature is unlikely to look anything like the document LePage and his chief economic adviser, Sawin Millett, sent to the Statehouse on January 11. 

The Legislature has changed dramatically since November, with both houses flipping to Democratic control.  LePage is also losing control of some of the more moderate voices in the Republican leadership, and, if a recent testy encounter between the governor and independent legislators is any guide, has few friends among those who might be the swing votes in the Senate, either.

That doesn't mean the Democrats will have an easy time of it; LePage still has to sign any bill that gets passed, which means that the Legislature will have to work together on a budget that will override a veto this time around.  LePage is up for reelection at the end of this biennial budget; he's not an odds-on favorite to be governor in 2015.  However, the Legislature should be able to mitigate some of the worst aspects of the LePage-Miller budget. 

A huge portion of the problem is not knowing what the real issue is at the Department of Health and Human Services.  Mary Mayhew, DHHS commissioner, has variously claimed that a computer glitch and middle management sabotage prevented her and her advisers from understanding where money - almost half the state budget - was going.  Since 2011, there have been known budget shortfalls at that agency of nearly half a billion dollars, and unknown budget issues crop up all the time.  After several studies, there is still no good explanation.  The governor's own analysis of the shortfalls couldn't identify increasing access to MaineCare as a cost driver. It appears that many of the budget shortfall problems appear to be magical thinking on the part of DHHS administrators -- for example, assuming and building a budget based on the idea that the federal government would grant a waiver for MaineCare eligibility when the state had been told, more or less point-blank, that no such waivers would be in the offing.  Another error was hoping that the Supreme Court would toss the Affordable Care Act in its entirety and budgeting as though that were the case.  When it didn't happen, the department was caught flat-footed.

A legislative task force charged with finding a little more than $5 million in savings in the summer turned in a report in December.  Like much of the information coming out of DHHS, it too was somewhat confused and confusing, but it put to rest many of the assumptions that the administration made about MaineCare use by the young and healthy.  In short, they weren't using MaineCare very much, and when they did, it was generally a short-term use -- a broken bone set, a strep infection treated.  There were issues around costly procedures, such as MRIs, and recommendations that pregnant women try vaginal birth before c-section, and that prescription drugs for smoking cessation, which had been eliminated, should be factored back in, since over the long term it would save money.  They also recommended adding $3.15 million for dental procedures that were currently being done in emergency rooms.  Most of it, however, was small change, and couldn't be the cause for the huge shortfalls the agency was seeing.

One figure did emerge and should be seriously considered.  About five percent of MaineCare recipients use nearly 54 percent of its resources. The most expensive patients cost the program, on average, $68,562 annually, compared to $937 annually for the bottom 80 percent of MaineCare patients. For the most part, the "expensive patients"  are nursing home patients and other institutionalized people who require round-the-clock skilled nursing care. 

Part of the expense is that the state eliminated paying nursing homes for "leave days", when a patient is in the hospital to be treated for an acute condition.  The homes had to fill the beds immediately, leaving the patient stranded in the far more expensive hospital until another placement could be found.

It's also possible that at least some nursing home patients could be managed at home with a combination of family and part-time home health aides, but as anyone who has sought home health help knows, it is difficult to find good help these days, and if the aging parent lives alone, if the caregiver has a full-time job of his or her own, or if the patient has a mental issue, such as Alzheimer's, it's not always possible to make the match happen. 

However, many nursing home patients could live at home with help, and the majority would prefer it.  So looking at moving patients into their own or their children's homes with home health aides or even skilled LPNs is certainly one place to start.  The average cost to the state, even with full time help, would drop by about a third for those patients. 

DHHS also has a foster care problem.  More than $4.2 million of the shortfall is costs associated with increasing foster care expenses.  Part of this is that the number of children who are pulled from homes are pulled later than they would have taken in the past.  The state, after a series of foster care scandals, is trying to work with parents and children in their homes first, before taking children into care.  However, there's a downside to this for the children.  Instead of having minor issues of loss and separation at early ages, the kids, now much older and having been subjected to abuse or neglect for longer periods of time, have more serious mental health concerns, and need specialized homes, called therapeutic foster homes, to take them.  These homes, predictably, cost more, and the children require more services in terms of mental health care than the toddlers pulled from the abusive home at an early age.  While the young kids might have had a chance to be adopted, the older kids never get adopted, and bounce from home to home until they age out of the system.  Another issue is one that's facing the nation as a whole -- greater incidence of serious developmental problems, including autism, among children in general, are more prevalent in children in foster care, too.  But while private insurance deals with the child in a private home setting, the state picks up the whole tab if the child is in foster care.

While the state is rethinking foster care and nursing care, the bills still have to be paid.

For now, the state plans to raid the rainy day fund to pay the latest shortfall.  But real, long-term changes are necessary at DHHS and MaineCare.   After two years at the helm, Commissioner Mayhew and Gov. LePage may have to acknowledge that they not only don't have the answers, they don't really even have a handle on the questions at DHHS.  This may be the moment for a new standing committee in the Legislature to take on, full-time, restructuring DHHS and MaineCare.

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