Panel: Merging health, human services would save money

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The LAC, at the request of the General Assembly, studied restructuring of the agencies, whose combined 2003 expenditures were $5.7 billion, including federal funds.

In its report released Tuesday, the LAC said the agencies often duplicate services, resulting in unnecessary personnel, equipment and other costs, such as computer services. Furthermore, it said the agencies operate under fragmented budgeting and planning processes, that some agencies do not collect all the payments they could, and that competitive purchasing policies are not uniformly employed.

It all translates into waste, said George L. Schroeder, director of the LAC, which recommended that all the agencies operate under a single cabinet secretary.

"The amount of money that could be saved by doing this would depend on how specific the new cabinet-level health agency director would be in trimming administrative positions," he said. "But I'm sure it would be in the millions."

Gov. Mark Sanford said the report echoes the themes of a plan he announced last week — fiscal responsibility and accountability.

"We don't accept waste and duplication in the business world and we shouldn't accept it from state government either," he said. "We're in a situation with the budget where we can't afford inefficiency and a lack of accountability."

The agencies involved had reactions ranging from one paragraph to four pages, expressing support for some recommendations while panning others.

The LAC concluded, for instance, that the Department of Mental Health could earn $840,000 a year for each 10-percent increase it collects in payments at community mental health centers. Those centers now get about 10 percent of the amount billed to clients and 15 percent of the amount billed to insurance.

Dr. Al Edwards, director of the Greenville County Mental Health Center, said that half his center's 5,000 patients have no insurance and of those only about 10 percent pay some portion of their bill.

"Anything that would increase efficiency and delivery of care, I would be for," he said. "But if we could collect all of our billings, we wouldn't need any state money."

Mental Health Director George Gintoli conceded that collections are a problem, in part because clients are unable to pay but also because of budget cuts and workforce reductions. Nonetheless, he said, the agency would investigate ways to improve.

Dave Almeida, executive director of the South Carolina chapter of the National Alliance for the Mentally Ill, called increased collections "optimistic," saying most people in need of services are low-income, uninsured or have hit the cap allowed by their insurers.

Nonetheless, Almeida said the LAC was on target in its assessment of scattered services, particularly for emotionally disturbed children.

"For years we've been advocating for defragmentation of this system because children typically need to be served by multiple agencies," he said, "and caregivers have to navigate each system individually and frequently don't get the care they need."

The Department of Social Services, however, said Mental Health provides limited services that fail to address the intensive needs of these children.

The LAC also said the Department of Health and Environmental Control fails to collect all that it is owed. But, much like Mental Health, while collections are attempted, health services are provided regardless of ability to pay to limit the spread of disease.

"We certainly understand the desire for comprehensive planning and budgeting, as well as the coordinated provision of services," said DHEC Commissioner Earl Hunter, "but would hope that a great deal of study be given to the issue before any hasty decisions are made."

A super health agency could lead to savings, said Frank Adams, spokesman for the Department of Health and Human Services. But HHS, too, is withholding endorsement until further study.

The LAC also recommended merging senior and long-term care programs now operated by various agencies, uniting rehabilation services provided by the state Commission for the Blind and the Vocational Rehabilitation Department, and operating addiction treatment services, now provided by three agencies, through Mental Health.

John Hart, spokesman for the state Department of Alcohol and Other Drug Abuse Services, said the report did not offer a full picture of DAODAS and its network of providers. But he said attempts to save money are understandable and that DAODAS is open to changes that are in the best interest of the clients.

But Rep. Richard M. Quinn, R-Columbia, called the report encouraging, saying that in conjunction with Medicaid reforms the LAC outlined last week, it could result in "some real change" not only in South Carolina's budget, but in the way services are provided.