Managing Health and Human Services Costs
A Minnesota model Congress should adopt
Everyone was amazed! The 2012 Health and Human Services (HHS) omnibus bills received overwhelming bi-partisan support, passing with nearly unanimous votes, and enthusiastically signed into law by Governor Dayton. Rep. Abeler is pictured with DHS Commissioner Lucinda Jesson, program recipients, key stakeholders, state administrators and lawmakers from both parties. This type of collaboration had not happened for major HHS bills in recent memory, and it underscores outstanding progress and reform over the last two years.
Long the bane of state and federal budgets, Minnesota has recently led the way in taming health and human services (HHS) costs and actually bringing them in line with a balanced budget. Over the past two years, in the throes of a massive multi-billion budget deficit and a hotly partisan environment, a bipartisan team did the impossible: get HHS costs under control. Congress should take note.
How successful were we? For fiscal years 2012-2015, total reductions in forecasted HHS spending are over $3.8 billion. This constitutes a massive change, yet more money than ever before will continue to be spent in each of these years. What’s more, these reductions helped set our state on a sustainable path for fiscal recovery, leading to positive projections for 2016 and beyond.
For the first time in anybody’s memory, the growth in this essential part of government is actually less than the forecasted growth in the K-12 education budget. At its new growth rate of 1.5 to 2 percent per year, this is a rate of growth the economy can actually handle. More importantly, it was achieved without throwing grandma on the street or starving anybody.
Rather, it was done by examining every aspect of the nearly $25 billion biennial budget in order to find ways to deliver our services in a more focused, efficient manner. It was done so well that in the recent hotly contested election, few if any critical concerns were raised about the changes that were made.
Our collaborative team focused on the nearly one million clients who receive services in our system, rather than finding ways to keep providers happy. Certainly we need providers to deliver lifesaving services, but to continue service models that are decades old and ineffective is a luxury we can no longer embrace.
What drove our work? More focused services, more frequent evaluations of disabled clients in order to foster greater independence and quality of life, competitive bidding, and greater scrutiny of client outcomes. While many of the service providers have been challenged in past years by budgetary constriction and inflationary realities, by reducing the growth in the system to its current level, we are now free to focus future spending and investments where they will do the most good.
If Congress adopted Minnesota’s recent approach to cost management, or at least similar ideas, the federal government would save nearly $2 trillion through the next decade. And people would continue to be served! Grandma would be healthy and sound in her home or assisted living center, and nursing home services would be available when that day came.
Our disabled clients would find themselves with new options for independence rather than simply being warehoused in a four unit dwelling. Our sick and needy would find their health care better coordinated and their own health improving.
Because of the kind of changes we have made, I hope we have primed the pump for even greater innovation and an even higher level of service to those citizens we deem our most vulnerable. Do we care about them? You bet. Can we afford to serve them? Yes, and we can’t afford not to. But now those services will give some of the outcomes Minnesotans expect, with respect for the life and talents of those who found themselves needing our help through no choice of their own.
And that is a legacy that can make all of us proud. Congress should take note. Minnesota is once again leading the way to show our nation how to grapple not only our fiscal problems but our political divisions as well.