Budget pressure pushing counties to consider cost of health care

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February 28, 2012 - 6:00pm

Nebraska's economy may be in good shape overall, but many county budgets are still feeling the impact of the economic downturn. Counties are looking for cuts; and the state's two most populous are looking closely at what they spend providing health care for those who can least afford it. It means managing a delicate balance between keeping taxes low and assuring public health.

While counties are mandated to pay for things like roads and jails, most health services are optional, and they're getting a second look in a time of tight budgets.

The Community Mental Health Center serves five thousand people each year through about a dozen programs including the crisis center, job placement, and homeless outreach according to Executive Director, Dean Settle.

"Last year for example we gave almost 3 million dollars' worth of sample medications away," Settle said. "So there is a lot of resource that we are able to marshal for folks without any resources. And I think that's really important."

Photo by Grant Gerlock, NET News

Five thousand people use the Community Mental Health Center in Lincoln each year.

Photo by Grant Gerlock, NET News

The Lancaster County Board of Commissioners takes testimony on recommendations for the Mental Health Center.

Hilary Stohs-Krause, NET News

Click here for a graph showing funding at the federal, state and county levels for the Mental Health Center from 2008 to 2012.

Lancaster County put $2.3 million into the Mental Health Center this year. That amounts to about a third of the center's budget. The other two-thirds are divided between the state and federal governments. Dean Settle has less money to work with now compared to recent years. But he believes the need for assistance may rise with the population of Lancaster county.

"Same funding. Same number of staff," Settle said. "But the potential for more and more people needing mental health services and not having their own resources is greater."

Money is getting tight for officials in Lancaster County the $2 million helping fund the Mental Health Center is looking less affordable. But the board does not want to raise property taxes. Board Chair, Deb Schorr, says costs have gone up in recent years as the state has cut back on support. Cuts have been made across the county. But more cuts may be necessary if state lawmakers accept a proposal from Governor Dave Heineman to do away the inheritance tax, which goes to counties.

"We are dealing with $6.7 million budget deficit for the coming fiscal year," Schorr said. "And if the inheritance tax elimination were to pass, that would be another $6 million deficit. So we'd be looking at nearly $13 million."

Clare Duda, a Commissioner in Douglas County, also said funding is driving the push for changes there.

"Douglas County has cut its budget last two years from $325 million, to about $320 million, to $311 million now, Duda said. We have over 100 fewer employees that two years ago."

The two counties are both considering a different path for their safety net services: privatization.

The Lancaster County Board has agreed to maintain the current location and programs at the Mental Health Center in place for at least two years. But the Board has begun talks with Region V Systems, about temporarily taking over the center. Region V is one of six agencies in Nebraska responsible for distributing state and federal money for mental health services. Within two years the Mental Health Center's programs now being run by Lancaster County are likely to be outsourced to one or more private non-profits.

Outsourcing is an attractive idea because, like any business, people are the most expensive part of running county government.

"You know, raises are built in to the budget so it becomes more difficult when you consider about 85% of our budgets are personnel in our local government," Schorr said.

A non-profit could hire the same county workers without the obligation to meet the county salary requirements. Dean Settle said the uncertainty is difficult for staff members who may have to take a pay cut to do the same job.

"They don't know who their employer will be," Settle said. "They don't know who will be their health insurance carrier. In the past year I have had probably had 15 resignations. Today I had 2. So people are making plans."

Douglas County is following a similar path. A board-appointed panel in Douglas County offered its own recommendations. They included outsourcing primary and mental health care to local clinics and non-profits and possibly selling 254 bed long-term care facility. Lancaster County sold its nursing home, Lancaster Manor, in 2009. One difference in Douglas County is that more residents struggle with mental illness or severe dementia. Duda says that complicates the decision.

"Can we say that these people are covered by Medicaid and we can wash our hands and turn our back on them? And maybe legally we can, at least with many of them, but does that mean it's the right thing to do," Duda asked.

For Duda, the idea of privatizing does not come without some concern, particularly in light of the cost overruns and broken contracts that have come from the state's attempt at privatizing the child welfare system.

"We recognize that privatization can have its own set of troubles and you still have the population there that you're responsible for," Duda said.

The final changes might not come for several years, but officials must decide now how to balance what they think is right for taxpayers and what's best for some of the most vulnerable members of the community.



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