Politics and Government

Commission struggles in early going to find health and human services savings

The task: find $100 million in savings in state health spending.

The timeline: one year.

That’s the edict for a new commission created by lawmakers last session to try to trim the rising cost of state health care programs. The Health and Human Services Blue Ribbon Commission, a 17-member panel, includes experts in health care, social services, equity and health care technology. Four members are appointed by the Legislature, and the rest are picked by Gov. Tim Walz.

It was created earlier this spring to end gridlock on the state budget. Republicans spent all session railing on Democrats for what they called waste, fraud and abuse in state health care spending, and they wanted a concrete plan to start reducing costs.

The commission’s work has now started, but it’s slow going, and some members are already daunted by the work. Lawmakers also asked the group to set out long-term goals: reducing fraud, improving the integrity of state programs and addressing geographic, racial and ethic disparities.

“We’ve got these shorter-term ideas and longer term, how would we really make a more robust change in the system, and that is going to be our tension — having time to discuss both the short-term and the really transformational ideas,” said Jan Malcolm, commissioner of the Department of Health, one of two state agencies the commission is scrutinizing. The other is the Department of Human Services.

Jan Malcolm, Department of Health commissioner.
Jan Malcolm, Department of Health commissioner.
Elizabeth Dunbar | MPR News file

“It’s a very large budget, as we know, and there’s a pretty strong belief that there are inefficiencies in the system, and there are services we are paying for that don’t have the kind of impact, positive impact on health outcomes,” said Malcolm.

“Maybe we do less of some things and more of other things to get better outcomes at less cost.”

At the commission's fourth meeting last week, the group was still in the early stages of figuring out how to engage the public in the process. The “slow” pace is frustrating for state Sen. Rich Draheim, R-Madison Lake, one of the only Republican members of the commission.

"We're supposed to be working on saving $100 million and we really haven't gotten to it yet, and that's going to be the hardest part,” he said. "I think we can find $100 million. I don't think that's the problem. We have to have the will to do it. I'm not really feeling the will so far out of this group.”

The commission's action plan is due to the Legislature and the governor on Oct. 1, 2020, for savings in the next two-year budget cycle.

And there are limitations to what the commission can do. The group’s recommendations can't impact anyone's eligibility for state programs or exacerbate disparities in the health system. It also has to take into consideration staffing and other needs of the departments administering the services.

The most expensive parts of health care budgets are staff and Medical Assistance. The Department of Human Services alone has a nearly $18 billion budget every two years and 6,700 employees. And it serves more than 1.1 million Minnesotans, including some of the most vulnerable populations in the state.

“We’re really looking at a cut to the health and human services budget at the state level that impacts what’s available to communities through county level health and human services and possibly in terms of grants and funding,” said Sida Ly-Xiong, national program manager at Nexus Community Partners and a member of the commission.

“I don’t think this is necessarily the right way but it is the way that we have now, and so how do we make the most of it?” she added. “And that’s why I’m here, just to figure out how do we not screw this up.”

There are specific places the commission is directed to look, including trying to simplify programs and administrative inefficiencies.

The commission recently solicited suggestions on where to find the $100 million. More than 200 ideas have come in, mostly from the public. Some of the ideas come directly from human services and the Department of Health.

Whatever they can't save from finding inefficiencies will come out of the state's budget reserve. And the process comes as human services is under fire for $29 million in overpayments made to two state tribes for addiction treatments over a span of more than a decade, as well as possible law violations related to how they administered state contracts.

New Department of Human Services Commissioner Jodi Harpstead
Commissioner Jodi Harpstead takes questions from state senators on Sept. 4, 2019.
Anthony Souffle | Star Tribune via AP file

Human Services Commissioner Jodi Harpstead has been on the job since September after former Commissioner Tony Lourey and a number of other top leaders resigned.

She thinks the conversations about recent issues in the department could be tied more closely to the commission's work.

"Some of the issues about our process controls that we've been very transparent about since I started, you could certainly put in the category of waste,” she said.

“As we fix those problems, we are controlling waste. We haven't tied them together specifically, but I've been wondering if we shouldn't take a look at that."