KHI News Service

Goodbye KHPA, hello KDHE

KHPA experiment will end July 1

By Mike Shields | June 20, 2011

One of the biggest experiments in the history of Kansas government will officially end July 1 when the Kansas Health Policy Authority is folded into the Kansas Department of Health and Environment.

The merger, expected since Gov. Sam Brownback ordered it in February with Executive Reorganization Order 38, will happen on schedule, according to KDHE Secretary Bob Moser.

The administration’s plan was to eliminate about 30 full-time jobs with the consolidation, thereby saving about $2.4 million. The anticipated reductions and savings will be realized, Moser said, with about $1 million in State General Fund savings already booked.

So far, 15 full-time equivalent positions have been cut at the health policy authority and 11 at KDHE, officials said.

Executive trio staying

Three key members of the health policy authority executive team will keep their jobs, which are being transferred into the new Division of Health Care Finance at KDHE:

• Andy Allison, currently executive director will become the new division director;

• Scott Brunner, who has been chief financial officer at the health policy authority; and

• Barb Langer, Medicaid director.

Each will retain similar positions within the KDHE health care finance division.

Some other top health policy authority officials have already left state government or soon will.

Doug Farmer, who was deputy director at the agency and managed the State Employee’s Health Benefit Plan, left earlier this year for a job with the Sunflower Foundation.

Hareesh Mavoori, director of data policy and evaluation, has resigned. The search for his replacement is underway.

A replacement also is sought for Nick Kramer who has resigned as director of the Office of Inspector General at the health policy authority.

Kramer’s replacement will answer directly to the KDHE secretary and the Legislature, Moser said.

LeAnn Bell, senior manager of the Medicaid pharmacy program, left the health policy authority for a job with the Kansas Health Institute. She has been replaced by Kelley Melton, a recent pharmacy school graduate.

KDHE changes

The changing of the guard in the executive suite at KDHE has resulted from the change in administration, not because of the pending merger.

KDHE Deputy Secretary Aaron Dunkel remains in place.

John Mitchell will continue as director of the agency's Division of Environment.

Kari Bruffett was hired in January as assistant secretary of policy and external affairs, which puts her in frequent contact with the Legislature.

Miranda Myrick was hired in March as director of communications.

Leo Henning will remain as interim acting director of the state laboratory in addition to other duties.

But Moser, a former family practice physician, is doing triple duty as KDHE secretary, state health officer and as CLIA (Clinical Laboratory Improvements Amendments) director for the state laboratories.

Dr. Jason Eberhart-Phillips, the previous state health officer, was fired after the new administration took office in January. The former CLIA director was a third-party contractor. Moser has the necessary credentials for the job, which is largely titular, and so was able to replace him.

Caleb Stegall, chief counsel to the governor, will do double duty as chief counsel for KDHE.

“We’re getting some dual hatting as it were,” Moser said.

The new KDHE division will be located in the Landon State Office Building in the same offices used by the health policy authority. In that respect, the consolidation means nothing more than changing signs and stationary.

Blending cultures

But otherwise, the merger brings together two dissimilar agencies, each with its own bureaucratic culture.

The undoing of the Kansas Health Policy Authority

The health policy authority, which was created by the Legislature in 2005, has overseen the state's Medicaid and Workers Compensation programs in addition to the State Employees' Health Benefit Plan, which means it has overseen most of the health care spending done by state government. It has had about 280 employees and an annual budget of about $2 billion, most of which is spent for health services for Medicaid beneficiaries.

KDHE has had an annual budget of about $265 million and about 1,060 employees. About half the agency's workers are in its health division. It also has had divisions of environment and laboratories. Because KDHE’s health and environment divisions have very different missions, some have viewed them as two de facto agencies within an agency. And there have been periodic calls from policymakers to split KDHE along those lines, though the last serious effort to do so came during the administration of Gov. Joan Finney.

Operational overlaps between KDHE and the health policy authority have been minimal, though Moser said he sees particularly strong potential in capitalizing on the synergies that exist among the KDHE bureaus of Health Promotion, Family Health, and Disease Control and Prevention and the health care services that have been provided through Medicaid and Children’s Health Insurance Program at the health policy authority.

“We’re looking at where we have a lot of programs that have a little bit of overlap or similarities where we might be able to augment some other efforts or get a little more efficiency,” Moser said.

Focus on prevention

That potential is especially ripe, he said, for focusing on prevention as a means to help reduce health care costs.

“A good portion of what (the health policy authority) has focused on has been kind of community-oriented and workplace-focused and prevention-oriented health care to try to reduce health-care costs through lower utilization and hopefully just getting patients involved in healthy lifestyles.”

That, he said, could dovetail with existing KDHE prevention and public health promotion programs.

The merger also will coincide with ongoing efforts by the new administration to overhaul the Medicaid program with the goal of cutting state spending on it by $200 million in time for fiscal 2013, which begins July 1, 2012.

“Obviously,” Moser said, “I think the Medicaid reform process that we’re starting next week with the stakeholder process headed up by Lt. Gov. (Jeff) Colyer will address a lot of the issues as far as controlling some of the rise in cost of Medicaid on a year-by year basis.”

But Moser said he thought there might be ways the newly merged agency, could work with local public health departments on issues such as implementing medical homes, particularly with respect to patient education.

“If you look at the ACO (Accountable Care Organization), patient-centered medical home models,” he said, “a lot of that comes back to seeing how can we use everyone’s expertise to the maximum allowed. Public health is big and very good at patient-education, prevention and promotion. I have talked with groups about the possibility of bringing in the local health department as the patient educator, the transition coordinator. That can help with what resources are available in the community.”

Moser said that might help improve health outcomes such as reducing hospital re-admissions.

“But somewhere along the line,” he said, “if they’re helping us, we have to figure out how the dollars trickle down for that effort. The Accountable Care Organization is one model (in which) everyone who addresses care of the patient benefits from that somewhere.”

Privatize the labs?

Moser said some consideration is being given to perhaps privatizing the state laboratories, which have been plagued with problems, including aging facilities at Forbes Field in Topeka, though he said it was unlikely commercial labs would be interested in taking on all the functions currently handled by the KDHE labs.

He said there also was the possibility KDHE could partner with some other states such as Oklahoma on some environmental lab work, thereby realizing some efficiencies.

Related story:
The undoing of the Kansas Health Policy Authority