Current Trends and Future Outlook

Budget Cutting

Now that the recession has hit the American economy hard, people here have been losing their jobs, and the need for public services has increased, especially in the mental health area.  At the same time there has been a reduction of monies available and, in some sectors, a drop in the political will to fund public programs.  Across Wisconsin, and in most other states as well, the prospect is that funding for public programs will be cut, perhaps drastically (look at California).  Big reductions of funding for public services will create a “laboratory” for everyone to see how Americans like it when public services are reduced or eliminated.  Chances are nobody will be happy with that scenario.
 
The below image shows the effect of budget cuts in recent years on hours of services provided by Northland employees to residents of Marquette County through our contract with the Department of Human Services.  So far, the downturn in hours is caused mostly by the failure of program funding to keep up with the cost of inflation.  This has been the trend since 2006.  The loss of funding for public human services is likely to continue for several more years, perhaps five years longer, until this loss of support is reversed with changes in agenda at the legislature, and in local government.  In the meantime, however, budget cuts may reach so deep that essential infrastructure is lost.  As a business manager at a local county department recently said, “These reductions in funding are obviously a short-term strategy.”
 
                                                           
 
In the meantime, dedicated human services professionals, Northland included, will work to continue programming for residents of this area.  Likely, the county departments and Northland will have to find ways to work even more in concert to continue essential services.  

More Categories for Less Money

This is another trend in public mental health across the state.  State and local governments create new categories of service, or new funding designations, without increasing monies available.  Usually, monies are being shifted, taken from an old category.  Administrative costs for the provider agency are increased in this way, because each additional category requires new procedures to access the money, and other restrictions.  Sometimes, also, the new category of service requires a significant change in philosophy in how the services are provided.  Sometimes what works for the funding source, works poorly for the provider agency, or its customers.  The new department for children at the state level represents a new category, but what about this new department is “value added” is hard to see.  The proliferation of HMOs in Medicare and Medicaid, each with their own benefit plans, restrictions, and formularies, also are examples of this trend.  
 
Usually, these categories are added because some political interest group puts pressure on state or local agencies, or the new category is represented as providing a cost savings.    Often these changes are not well thought out before being implemented by policy makers.  Today, public human service agencies are expected to make rapid changes, with fewer resources.
 
The new Family Care benefit is another example of this increase in categories.  Now, essentially, the State of Wisconsin, is setting up two human services departments within each county, one for elderly and disabled (Family Care), and the other for everyone else (county departments of human services).
 
Northland attempts to evaluate these changes in terms of impact on local services, and impact on our customers.  We typically push back if we believe the change is not beneficial, causes deprivations of services to customers, sows confusion, or costs more money than the old way, due to hidden or unintended consequences.  We don’t always succeed in our efforts to convince policy makers to modify their views, but sometimes we do.  Northland would like to find ways to make services more comprehensive and complete, rather than more fragmented.  Frequently, we can join with local county departments on this kind of agenda.

Big is Better

This trend has become especially prominent in the last fifteen years, and momentum in this direction will probably continue to increase for awhile.  A large part of this effort is promoted by the state, which is heartily sick of dealing with 72 administrative entities across the state, in the form of local county departments.  Recently, a state worker summed up this problem of dealing with a bunch of county agencies, by saying, “We will get 72 answers to every question.”  The state would love to create regional authorities, thereby reducing the number of administrative units in the state.  This same issue is affecting public schools, with many schools across the state facing the option of closing, or consolidating into a larger school.  Of course, that new, larger school would probably be a longer drive away from home for most of the school children than the local school.  Some people see this approach of consolidation and merger as producing a cost savings.  Others see it as a way to improve services because the larger entity could offer more options. 
 
One consequence of having larger more distant entities providing services is that people in them will be more invisible; faces and names will disappear; connections will be harder to see.  Those of us who are skeptical of this idea that bigger is better wonder if with an expansion of size, covering a larger geographic region, the bigger agency (or school) will also operate with a better philosophy of service, along with the bigger physical size.  One does not necessarily follow from the other.  Loss of local control, and larger bureaucracies, may decrease rather than add value to the product.
 
I indicated above that Northland has many functions spread across a few staff.  In a larger, regional agency, full-time employees, possibly whole units, would be dedicated to each  function. Thus, expansion of size would probably result in an increase in specialization.  Although there are some advantages to specialization, there are also many problems associated with it, in particular, the tendency for greater fragmentation, as specialty services tend to focus narrowly.  Look at our health care system, with its myriad of specialties, and people running from office to office to get their medical needs served.
Experts have great skills in specific areas, but a limited range of knowledge for dealing with multiple problems.

Private is Better than Public

This refers to the idea that government is bad, which means public, and business does things better, which means private.  Often this conversation ignores the question of what is the proper role of each type of entity.
 
Large, private corporations are the ones getting the nod today in human services, in the form of managed care organizations.  Government is out; the HMO is in.  Much of the Medicaid program has been turned over to private insurance companies.  So has Medicare Part D, the drug subscription plan. 
 
This same idea also hits public education.  Public schools are seen as failures in this narrative; we need charter schools, because government can’t do it right.  So, in this drive to corporatize human service agencies and schools, government can get rid of its employees, and things will get done better and cheaper. 
 
Interestingly, each one of these private entities does it their own way.  Each HMO has its own set of rules, formularies, and procedures, buried in the fine print.  Each charter school also has its own characteristics.  As choice increases, the details get lost in the blizzard of information.  Seniors in this country often don’t know what Medicare plan they have.  The consumer will have to take it on faith, that corporations can do it better, and cheaper, and good riddance to the public options.
 
Technically, Northland is a private company, albeit, a very small one.  However, much of what we do is government work.  Public services is at the root of our programs.  We are quasi-governmental in the majority of our operations, especially in Marquette County, where we provide all of the public mental health services for residents.  Northland does not assume all governmental roles of the county department, however, only a selected portion of them, on the operations side, not the funding side.  
 
In the last several years, Northland has seen a proliferation of different managed care plans, which is part of this refrain that private is better than public.  In this scenario, large corporations take over the management of formerly public options, especially in Medicaid.  Each of them has its own methods of qualifying a provider to be on their panel, and methods of paying for services.  Since 1990, we have seen a huge increase in paperwork required to complete all of the prior authorizations, reviews, and sign-ups. We have set up more and more administrative procedures to track hours of service and type of service  from intake to termination.  In 1990, most people with Medicaid had the same plan.  Now there are a dozen or more Medicaid plans.  Multiple options create better services?  Value-added services?  You bet.

Health Care Reform

The American health care system is sick, in the eyes of many Americans.  Reform is inevitable, because eventually we will have to do something about our dysfunctional ways. 
 
There are basically two parts of this system, the part that pays for services, and the part that provides the services.  Northland is in the latter category, as are medical clinics and hospitals.  The payors are the government, using taxpayor dollars, and the private insurance companies, using the employer paid insurance premiums.  There are also two kinds of care, short-term acute, and long-term chronic.  Northland provides both of these types of services.  Traditionally, government has funded services to the long-term care population, in the areas of both physical health and mental health, via the Medicare and Medicaid programs.  Private payors have emphasized short-term acute services.  Employer mandated insurance policies were designed for a healthy population of workers, who might occasionally have a need for acute care.  However, things are getting mixed.  Today, chronic physical health conditions are breaking the bank, so to speak, in the private sector, which is seeing more people with chronic conditions enrolled in their insurance plans (take Type II diabetes for one example). The government is being forced to step in more and more when the insurance benefits run out, won’t cover, or are lost.  Additionally, acute care issues, if not addressed in a timely manner, have a way of becoming more severe and chronic, i.e., problems on the “deep end”.  As a result, the government is being forced to step in to provide more early intervention as well.  These trends are roughly the same in physical health care and in mental health care.  Thus, our current health care dilemma:  more taxpayor dollars and less private dollars for serving citizens.
 
We will soon see how this reform will unfold.  Will it be planned?  Will it wait until more and more people are hurt because they can‘t get the proper care in a timely manner, or because policies don’t address the most important questions?  Who knows at this point.  In the end, it will be a joint government, private sector operation, just like the building of the railroads in the 1800s.

We don’t yet know exactly how the new national health care law will affect Northland.  We believe that generally it will be beneficial because more of the local residents will have health insurance.  This could benefit the county department of human services which is now solely responsible for providing mental health services to people who do not have insurance.  Reimbursement through national health care will reduce the number of people on the sliding scale, which is subsidized heavily by the county departments all across the state.  Additionally, many Northland employees are not eligible for our company health insurance plan, because they are part-time employees, or because they are categorically excluded.  It will help these individuals to have affordable health insurance through the new program, which will allow them to see their physician without increasing unduly their financial burdens.  Thus, many employees at Northland should benefit from the new program.  We don’t know what the effect will be on our group health insurance plan, that covers full-time employees and their families.  However, the costs of this program have increased tremendously in the past 15 years, at a double digit rate every year.  This craziness cannot be maintained indefinitely by American companies trying to provide health insurance benefits to their employees.  We will soon find out what the impact will be on our group health insurance plan.  So, stay tuned for an update.  We will track it here. 
 
Northland is dedicated to providing both types of care to local citizens, acute and long-term.  However, we won’t be able to do it without significant government funding.  The private sector is not even close to managing the needs of the long-term care population without major government subsidies.

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