By Jim McLean, KHI News Service, January 20, 2011
TOPEKA — Kansas Department of Health and Environment Secretary Robert Moser says work has begun on merging the Kansas Health Policy Authority with his agency.
Moser, speaking to the House Health And Human Services Committee on Wednesday, said inter-agency planning for the transition is underway.
"We’re currently in the process of developing a transition team and having meetings and discussing lots of issues and possibilities with our goal at the end to obviously make sure we’re still serving our patients," Moser told the House Health and Human Services Committee.
Brownback, during a Wednesday press conference, said his earlier announced Executive Reorganization Orders merging several state agencies would be issued within the new few days, some perhaps as early as Friday.
Brownback proposed folding KHPA into KDHE as part of a larger initiative to get a handle on rising Medicaid and state health care costs. The proposed consolidation of KHPA and KDHE is the largest of six efficiency initiatives designed to save $9.2 million in the coming fiscal year, according to administration estimates. KHPA was formed in 2005 with a push from Republican legislators hoping to get a handle on rising Medicaid expenses.
KDHE currently has about 1,000 employees in its health, environment and laboratories divisions. It has an annual budget of about $260 million, though only about $30 million of that comes from the state general fund.
KHPA currently has about 285 employees and an annual budget of about $2 billion. It oversees the HealthWave program, which provides health coverage benefits to individuals on Medicaid and in the Children’s Health Insurance Program.
Brownback is proposing a fiscal 2012 budget of about $1.8 billion for the combined agencies.
Tall order
Rep. Terry Calloway, R-Pittsburg, one of many first-term lawmakers who won election by promising to reduce government spending, asked Moser "as the CEO of a company that’s in bankruptcy" how he planned to reduce spending.
Moser said that hitting the savings target set for the combined agencies will be difficult. He said his preliminary assessment of KDHE and KHPA operations revealed already lean administrative budgets.
"I will tell you as I look at this – new guy coming in – the administrative side of things is always where you would expect to find some savings, that’s been tapped into a lot." Moser said.
Moser told committee members because "there is not a lot of wiggle room left" in the administrative budgets in the agencies, the desired savings might have to come from cutting or eliminating programs.
"It’s coming down really to where we’ve got to decide what programs we value – that we want to keep – and which ones we are willing to let go of," he said.
Moser said he is currently working to understand which KDHE and KHPA programs are required by state law and which must be maintained at current levels to preserve federal funding. When that inventory is done it will be time to start talking about which programs might be expendable, he said.
Legislators last session were offered a list of state Medicaid spending not required by the federal government but declined to eliminate any of them since most were popular - such as hospice care - or were thought to be cost-effective over time.
Competing objectives
Rep. Jim Ward, D-Wichita, asked Moser how the new, combined agency expected to simultaneously meet its savings target and eliminate a significant backlog in HealthWave eligibility applications.
"When I hear pronouncements from the administration that we’re going to save money by consolidating that usually means that we cut people and that’s what got us in the hole to begin with," Ward said, referring to earlier staff and budget cuts that contributed to the growth in the backlog.
Moser said KHPA Executive Director Andy Allison has assured him that the agency remains on track to eliminate its backlog of about 20,000 applications by its previously announced March deadline.
"My understanding is that they are to have that number down, back to normal by March," Moser said. "And my understanding from talking to Mr. Allison is that is still on schedule."