Merging 4 agencies seen as way to cut red tape, not programs

Markets Associated Press

Gov. Tom Wolf's administration said Monday that consolidating four state public health agencies into a single department will eliminate red tape and keep benefits intact with minimal layoffs as the Democratic governor tries to balance a massive projected deficit.

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The proposal would merge the departments of Human Services, Health, Aging and Drug and Alcohol Programs into one Department of Health and Human Services.

The move would require approval from the Republican-controlled Legislature, and Senate Health and Human Services Committee Chairwoman Lisa Baker, R-Luzerne, vowed Monday to hold hearings on it.

Administration officials declined to give a projection of how much money it would save, saying that would be part of Wolf's budget plan he releases next week. They also said that any layoffs would be minimal — the agencies employ nearly 19,000, mostly in the Department of Human Services — because of an earlier move in December to pare back the number of positions at each agency.

The public comments Monday were the first by the administration after officials notified agency employees by email Friday of the plan.

Administration officials said regulated providers, such as hospitals, nursing homes and child care centers, could see a reduction in their current burden of requiring multiple licenses, audits and inspections.

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Wolf's policy secretary, Sarah Galbally, said the move would create "one-stop shopping" for services. For example, there are at least 21 separate services across the departments that deal with care for the elderly and the physically disabled, the administration said.

Administration officials also suggested that a single state authority for Medicaid, addiction services and mental health counseling programs will enable the state to qualify for more federal matching aid. Still, legislative budget analysts say consolidation will put little dent in the nearly $3 billion projected budget gap the state is facing.

Wolf himself did not present the details of the plan or join the administration's briefing on it, and key lawmakers were still waiting for details.

The Department of Human Services already has the biggest budget of any state agency, with more than $30 billion in state and federal money flowing through it, primarily for the 2.8 million Pennsylvanians on Medicaid. Combining it with the three other departments would create an agency that handles closer to $40 billion in federal and state money, or nearly half the annual total in Pennsylvania state government.

One department secretary will lead the agency, administration officials said. However, with Wolf stressing his commitment to fighting the state's wave of heroin and opioid addiction, he is planning to keep a cabinet-level appointee dedicated to that cause, the administration said.

The agencies have a wide range of responsibilities, including administering Medicaid, the health program for the poor and disabled; responding to public health emergencies; inspecting health care facilities; and distributing billions in aid to county social services programs.

Reaction was varied, with groups saying they support the overarching goal of saving time and money on bureaucracy. Some, including the Hospital and Healthsystem Association of Pennsylvania, said they did not have enough detail to comment on it.

The Pennsylvania Health Care Association, which represents nursing homes and other service providers for the elderly, suggested that any savings could help wipe out what it says are below-cost Medicaid reimbursement levels for nursing homes.

SEIU Healthcare Pennsylvania, the labor union that represents about 1,300 registered nurses who work for state agencies, said the ball is now in the court of a tax-averse Legislature to "do their part to pass a budget that meets the needs of all Pennsylvanians with a fair tax system that requires corporations and the wealthy to pay their fair share."

Baker said nearly all the programs in the four departments have struggled to get the funding to meet growing demand.

"If this consolidation can be shown to eliminate duplication and improve efficiency, then those who depend on human services and local providers will come out ahead," Baker said in a statement.