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State Senator Nelson filed SB 571 (see it here: , which deals with efficiencies and cost-savings in the Texas health and human services agencies. In many ways it is a strange bill, it isn’t connected to any part of statutes and it is very loose and nonspecific, i.e. significantly open to interpretation. The idea of identifying cost savings and efficiencies is a laudable one, but for this to be dictated by the Legislature is concerning as they don’t understand how everything works on anything more than a superficial level.

The first thing to understand is that this bill (as of 2/11/11) is only filed. It will need to go to committee, be heard in committee, passed in committee, go to the Senate, be heard in the Senate, passed in the Senate, the whole process repeats in the House, then the Governor would need to sign. All this would need to be done before this bill becomes law.

With that said, it’s worth looking at this bill in some detail. The first part of the bill is part philosophical statement. In it, the Senator affirms the Legislature’s right to determine appropriations and to reduce or eliminate appropriations if it is necessary to achieve a balanced budget. Should this bill pass, it will trump any other statute to the contrary.

The second part of the bill is addressed to all health and human services agencies, though these aren’t identified. One would assume this means all Article II agencies, but since this isn’t specified it could be more broadly applied if desired. This part of the bill states that all these agencies “shall” identify efficiencies and reduce expenditures, and then includes manners in which this will be accomplished. To me this implies a need to report these things back to the Legislature. The means for accomplishing this include:
• Eliminating or modifying programs not funded or funded at a reduced level as a result of the FY12 and 13 budgets.
• Streamling functions, consolidating administrative and service functions
• Evaluating the fees for current programs and (my assumption) raising them if necessary to cover costs
• Maximize co-payment opportunities
• Renegotiate contracts
• Evaluate regulatory requirements (goes back to streamilining)
• Get Federal permission to streamline when necessary
• Shift the onus to primary care
• Evaluate the state medical assistance and children as well as the child health plan program (I’m assuming this refers to all the Medicaid and CHIP programs)
• Implement additional initiatives identified by the agencies

In addition, there are instructions to each of the Article II agencies.

For the Health and Human Services Commission:
• Streamline the eligibility determination process
• Evaluate the elimination of Temporary Assistance for Needy Families exemptions not required by Federal law (this is a Federal block grant): This is about $63 million a year for FY12 and 13.

For Department of Aging and Disabilities Services:
• Evaluate forensic commitment requirements to ensure that alleged offenders with intellectual disabilities are being served in the most appropriate and cost-effective setting (goes back to closing state supported living centers)
• Ensure clients are in the most cost-effective wavier program appropriate
• Streamline the waiver programs
• Perform utilization management and review for all community entitlement and wavier programs (in other words, eliminate the ones that do not have many people enrolled)
• Increase community based long-term care services while containing costs (this is interesting as both the Senate and House bills cut funding for this)
• Outsource waiver services to the community when possible

Both the Senate and House budgets are going to seriously decrease the services received to Texans. The long term implications will be abuse for elderly and disabled Texans at the hands of poorly paid, overworked providers. Lack of state assistance in the care of the elderly and disabled will burden families and insurance companies.

For the Department of State Health Services:
• Evaluate forensic commitment requirements to ensure that alleged offenders with a mental illness are being served in the most appropriate and cost-effective setting
• Streamline public health efforts
• Utilize residential units in state hospitals to provide cost-effective care and to maintain bed capacity
• Require hospitals which accept the state medical assistance program to charge state mental hospitals no more than the state medical assistance program fee for services
• Expand cost-effective models of care for mental illness
• Manage expenditures for drugs provided through the state mental hospitals
• Privatize a state mental hospital

There are pro’s and con’s to privatizing a hospital. Certainly outsourcing is a good way to reduce costs. The major cons are that you have a lack of accountability, a lack of control, and (of course) the hospital will be run with the idea of making a profit.

The assumption that anything having to do with the state can be made cost-effective is naïve and reflects a lack of understanding of how the state does business.

For the Department of Assistive and Rehabilitative Services:
• Evaluate the feasibility and cost-effectiveness of providing early childhood intervention services through the state medical assistance and child health plan program (i.e. Medicaid).

This would certainly shift the expenses involved with this program, it would also limit the people that would be served by it as Medicaid has eligibility requirements. Those people who would not be covered by these programs would be on their own. In addition, this shift is being evaluated at a time when the Senator has instructed HHSC to evaluate “… the state medical assistance and children as well as the child health plan program…”

For the Department of Family and Protective Services:
• Maximize use of the Department of State Health Services to provide mental health and substance abuse services that are purchased through CPS and adult protective services program.
• Make child care regulation more efficient.
• Redesign the foster care system so that it improves outcomes for children and families.
The first bullet directs DFPS to rely on DSHS during a time when DSHS is being told (in this bill) to privatize a hospital, make care more cost-effective, make drugs cost less, and pay providers less money. It seems a bit contradictory.

The second bullet probably isn’t possible given how the state of Texas operates, but it’s nice to say.

I think there’s a good intent behind this bill, but the bill is largely ignorant of how the state operates, it’s written in a way that it contradicts itself in several areas, and if it happened the way that it is written would have a serious impact on the services that Texans receive.

I think there needs to be a real serious dialog about what services Texas should provide to which citizens. Then there needs to be a real serious dialog about what state agencies are critical to providing those services, what can be eliminated, and what can be merged/streamlined. The Legislature also needs to realize that every one of the bills they file (almost) has a reporting requirement attached to it, which means that staff has to be hired/focused on generating those reports. This also needs to be prioritized so that the important information that the Legislature actually reads is delivered and the rest is dropped.



  1. Thanks for the analysis. Very helpful.

    Do you think the ECI recommendation lines up with Gov’s budget to move all of DARS under DADS or DSHS? Seems like it would push it toward a medical model rather than skills building/educational. I don’t see any mention of TEA – which is probably a good thing.


    • I think your choices here are:
      1. The Senator doesn’t know what’s in her legislation (in one part we recommend moving ECI to a program that we recommend investigating to possibly cut/downsize in another). This is very possible btw.
      2. We intend for a serious cutback of ECI in the future with seriously reduced eligibility.
      3. Perhaps it is the first salvo in moving DARS into another agency. I had not thought of that.


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