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Health Care, a 50-State Challenge for Nation’s Public Administrators

This article series ran
in the November/December 2010 print issue of PA TIMES. Contact Editor
Christine Jewett McCrehin ([email protected]) for more information on
how to receive the print issue.

Elections and Fiscal Woes Combine with New Legislation to Create Challenges

Elizabeth K. Kellar, President & CEO, Center for State and Local Government Excellence

Imagine that you are a state official, perhaps a Medicaid administrator or an insurance commissioner. Your state is dealing with the greatest sustained fiscal challenges in more than 50 years just as the Patient Protection and Affordable Care Act (ACA) is signed into law in March 2010. And if that were not enough, the November 2010 elections added political upheaval to your overfull plate. It is an historic change. Not since 1928 have Republicans controlled this many state legislatures, adding 675 seats to their side of the aisle.

Now that the dust has settled, state officials are adjusting to the new landscape. Some will be leaving office shortly; others expect to stay in their jobs but are unsure what policy changes may be in the works. It’s clear that some states will shift gears in their approach to health care reform while others expect smooth transitions, even if a new governor was elected.

Some quick facts set the stage: 11 of 13 incumbent governors were reelected. Of the 37 governorships up for grabs, 23 states elected Republicans and 11 states elected Democrats. Democrats took governorships from Republicans in California, Hawaii, Connecticut, and Vermont; the Democrat edged out the Republican candidate in Minnesota with a vote recount underway; Republicans took seats formerly held by Democrats in Iowa, Kansas, Michigan, New Mexico, Ohio, Oklahoma, Pennsylvania, Tennessee, Wisconsin, and Wyoming. Independent Lincoln Chafee was elected governor in Rhode Island.

The bottom line: Republicans hold the governor’s seat and the state legislature in 20 states; Democrats control in 11 states; control is divided in 17 states.

An Intense Workload and a Sense of Urgency. What does this mean for the people on the front lines working to implement the new health care reform law? In most cases, public administrators will carry out their responsibilities with the same sense of urgency as they did before. That is what the Center for State and Local Government Excellence learned when we interviewed state officials in Connecticut, Michigan, Massachusetts, North Carolina, and Washington for the Kaiser Family Foundation in the summer of 2010.

At the time of the interviews, all states were struggling to meet deadlines associated with the federal health care reform law, the Patient Protection and Affordable Care Act (ACA). They had to meet immediate requirements in the law, even as they considered how best to expand Medicaid enrollment, upgrade eligibility systems and set up new health insurance exchanges.

In Connecticut, for example, where the incumbent governor was not running for reelection, state officials were working at a fast pace to meet deadlines and ensure a smooth transition to a new administration. State officials expected to establish a health care reform policy framework before a new governor takes office in January 2011. Top priorities for the Connecticut Health Care Cabinet are to involve career service employees extensively to ensure continuity with the new administration. In July 2010, Governor Rell named Deputy Public Health Commissioner Cristine Vogel to serve as Special Advisor for Health Care Reform and to oversee the integration of health reform initiatives.

Similarly, in Michigan, where a new governor will take office in January, Governor Granholm appointed Michigan Department of Community Health Director Janet Olszewski, a long-time public health director, to lead the state’s efforts.

Help from Universities and Nonpartisan Institutes. The law provides much-needed funding for grants that states can use to upgrade their technology and streamline their eligibility systems. Without the funding that federal grants offer, state officials say they will not have enough people or resources to get the job done. But it takes time and expertise to apply for grants. Some states found consultants who could help them prepare grant applications. Others found help from universities, medical schools, and research institutes for grant writing and other assistance.

The North Carolina Institute of Medicine staffs the state’s health care reform advisory committee and serves as a central information resource for the state. Massachusetts has relied on medical schools and foundations for project management and analytic support. The Michigan Public Health Institute has provided a range of assistance, including grant writing.

Aging Workforce and Competition for Expertise. States say they have expertise they need to do the job–just not enough of it. Agency and division directors were quick to describe their highly skilled staff, who have been thinking creatively, asking the right questions, and handling heavy workloads. Although many states have not undertaken a workforce analysis to assess what they need to implement health care reform, they are concerned that many of the people they rely on today are eligible to retire now or in the near future.

Another problem is that salary schedules in state government for highly skilled professionals have fallen behind similar positions in the private sector. A Washington state personnel survey found that while entry and lower level jobs in the state pay 10 percent or more than comparable jobs in the private sector, higher level positions are paid as much as 20 percent less. State officials say that their biggest recruitment challenges are for information technology professionals, nurses, physicians, health instructors, social service case workers, financial analysts, procurement/acquisition specialists, agency directors, and other senior managers.

In response to an online national survey, “The Great Recession and the State and Local Workforce,” published by the Center in January 2010, 90 percent of state human resources officials indicated that their governments had implemented hiring freezes, 65 percent had instituted pay freezes, and 46 percent had furloughed employees. Employee layoffs had been implemented by 39 percent of governments, while 28 percent had used retirement incentives to trim their workforce.

State officials fear that ongoing publicity about state budget challenges will make state employment less attractive, even if funding for new or frozen positions becomes available. Job security, once a hallmark of government employment, is no longer a selling point.

Daunting Challenges and Silver Linings. Many state leaders see opportunities in the health care reform law to tackle problems that they need to address. There are good reasons for them to do so. States already have lean administrative resources to operate Medicaid. Staff capacity and expertise will be stretched to create more sophisticated information systems needed to expedite eligibility determinations and enrollments. And yet, state leaders are quietly excited by the prospect. Those interviewed for the Kaiser Family Foundation study said that streamlining and automating eligibility determinations and enrollment processes will improve Medicaid operations and could lead to efficiencies over time.

Creating the new health insurance exchanges is exciting and challenging. One senior official called designing the health insurance exchange “the biggest workforce challenge of health care reform.” Questions about the health insurance exchanges have dominated calls with the U.S. Department of Health and Human Services (HHS). Although the exchanges do not have to be operational until January 1, 2014, states must notify HHS if they intend to establish and operate a state-based exchange by January 1, 2013. If states opt out, or are not making sufficient progress to set up an exchange, HHS will set up a federally-operated exchange in those states.

The clock is ticking and public administrators are running as fast as they can to lay the groundwork for improvements in their state’s health care system. Utah and Massachusetts already have state exchanges and California Governor Arnold Schwarzenegger signed legislation to establish an exchange in that state. States are often called the laboratories of democracy. This health reform law is a huge federalism effort, that will play out differently across the country.

The Kaiser Family Foundation report, Health Reform and State Workforce Challenges: An Early Look at Five States, is available online at www.kff.org/healthreform/upload/8106.pdf.

Elizabeth K. Kellar is president & CEO of the Center for State and Local Government Excellence, www.slge.org. Email: [email protected]

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