Gov. Sam Brownback late today followed through on a promise to reorganize the Kansas Health Policy Authority.

The governor signed an executive reorganization order abolishing the five-year-old agency and transferring its operations to the Kansas Department of Health and Environment. The order moves the responsibility for administering the $2.5 billion Medicaid program and the State Employees’ Health Benefit Plan to the new Division of Health Care Finance within KDHE.

“Kansans are looking for government to be more efficient,” Brownback said in news release issued shortly after 5 p.m. “Much of the $550 million (project FY 2012) budget deficit is related to increased caseloads in Medicaid. This reorganization not only saves millions of dollars, but also unifies the expertise in KHPA with the accountability of KDHE as we implement major reforms to our Medicaid delivery model.”

The transition puts KDHE Secretary Bob Moser, a former family physician in the far western Kansas community of Tribune, in charge of a massive state agency that in addition to Medicaid has responsibility for virtually all of the state’s public health programs.

Brownback said he expected the combination of the two health agencies to result in $3 million in administrative savings in the 2012 budget year, which begins July 1 of this year.

The health policy authority was established by a unanimous vote of the Legislature in 2005 to administer the Medicaid program and coordinate health policy across state government. With that, the vast majority of state health spending came under its roof. Its independent ruling board, made up of members appointed by the governor and legislative leaders, was intended to put arm's length between politics and the agency's policy formulations.

Former Republican Sen. Jim Barnett, an Emporia physician, was the driving force behind the creation of the agency and its independent board.

“One of the reasons was to take it out of the political environment,” Barnett said in a recent interview with Kansas Public Radio. “And I think that was going down the right path.”

But the goal of a politically independent agency was never fully realized. The Legislature remained in control of the KHPA’s budget and lawmakers, especially Republicans, became increasingly unhappy with its performance even though some, if not most, of the shortcomings they complained about resulted from budget cuts they imposed. And the agency's policy recommendations, such as its call to increase cigarette taxes and establish a new private health insurance program for low-income adults, rarely got warm receptions from the Legislature.