HomeMy WebLinkAboutMINUTES - 01161996 - SD4 TO: BOARD OF SUPERVISORS
FROM: Phil Batchelor, County Administrator
William Walker, Health Services Director
.DATE: January 16, 1996
SUBJECT: Phase III Budget Reductions - Health Service Department
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION(5
1. ACKNOWLEDGE that the County began FY 95-96 with major budgetary challenges in both
the Health and Social Service Departments with an estimated $6 to $12 million shortfall in
Health and a potential $4 million shortfall in the General Assistance budget. At the same time,
both departments face major revenue losses and program restructuring under Health and
Welfare reform. This overall budgetary constraint has been exacerbated by the loss of
approximately $3.3 million in Title IV-A-EA revenues in the Probation Department.
2. RECOGNIZE that, over the past three years, the Health Services Department has met its
budgetary requirements through generation of one-time revenue from federally qualified
health center (FQHC) back payments, SB 910 Medi-Cal Administrative Claiming, and
disproportionate share hospital funding under SB 855 and SB 1255.
3. ACKNOWLEDGE that additional one-time revenues are unlikely for the remainder of FY 95-
96, due to pending health care reform and the anticipated diversion of state resources to
support Los Angeles and Orange Counties.
CONTINUED ON ATTACHMENT: YES SIGNATURE: ��) 7z
RECOMMENDATION OF COUNTY ADMINISTRATOR_RECOMMENDATION OF BO COMMITTE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON J a n. 19 9 6 APPROVED AS RECOMMENDED)L OTHER X
SEE ADDENDUM A FOR ACTIONS TAKEN BY THE BOARD AND THE
VOTE OF BOARD MEMBERS.
SEE ADDENDUM B FOR THE LIST OF SPEAKERS.
VOTE OF SUPERVISORS
(See Addendum A) I HEREBY CERTIFY THAT THIS IS A
_UNANIMOUS(ABSENT 1 TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED
ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact:Sara Hoffman,646-1390 ATTESTED January 16, 19 9 6
PHIL BATCHELOR,CLERK OF
THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
cc:CAO
Health Svcs Director, BY DEPUTY
Auditor-Controller
Human Resources Director
County Counsel
4. ACKNOWLEDGE that the Phase I and Phase II budget reductions, taken by the Board in June
and November 1995, significantly reduced the Health Services Department's projected
shortfall which is now estimated at between $6 and $8 million for FY 95-96.
5. ACKNOWLEDGE that the budget reductions are necessary, not only to maintain the fiscal
integrity of the Health Services Department, but also as part of restructuring the department to
prepare for medical and psychiatric managed care and to remain competitive in the health
care market.
6. ACKNOWLEDGE the need to examine ways to increase the cost efficiency of health care
services, such as renegotiation of the pharmacy contract with the Pharmacy Care Network,
currently in progress.
7. ACKNOWLEDGE that the feasibility of contracting for services depends not only upon the
results of financial analysis but also discussion with employee organizations and County
Counsel and DIRECT the Health Services Department to explore the feasibility of other cost
efficiencies by issuing Requests for Information for the provision of services for security, food
service, medical records, central supply floor stock function and emergency room physician
coverage.
8. ACKNOWLEDGE that these requests for information and contract renegotiations are very
necessary to position the department to be able to maximize cost-efficiencies, but will not
substantially impact the FY 95-96 budget and that additional actions are necessary now in
order to mitigate the need for deeper cuts in the Health Services Department at a later date.
9. ACKNOWLEDGE that the recommendations listed below would reduce the department's
shortfall by approximately $1.99 million annually and $810,000 in FY 95-96, and that,
consequently, further phases of budget reductions will be necessary in order to eliminate the
remaining shortfall.
10. AUTHORIZE a reduction in Hospital physician contracts by terminating the following
contracts, reducing them by five percent and reissuing them under new payment rates
effective January 15, 1996:
CONTRACTOR FEE REDUCTION
From To
Alhambra Radiology Group $75,101 $71,346
Alhambra Radiology Group 77,354 73,486
Lorre Henderson, M.D. 25,000 23,750
Tsu-Weng Debuene Chang, M.D. 9,000 8,550
Violet Smallhorne, M.D. 13,733 13,046
Thomas Hargrave, M.D. 6,600 6,270
Jason Appel, M.D. 19,432 18,460
Stephen D. Weiss, M.D. 13,733 13,046
Avrun V. Gratch, M.D. 19,432 18,460
Diablo Infectious Disease Medical 5,417 5,146-
RATE REDUCTION
Gregory Fouts, M.D.
Rodney Chan, DPM
John Kofoed, M.D. o Reduce Hourly Rate by 5%.
Colleen M. Kenney, DPM o Reduce Fee Schedule by 5%
John Roark, M.D. o Reduce other rates, e.g.,
Stephen Weinstein, M.D. on-call by 5%
Scott Manders, M.D. o Convert Fee Schedule to
Jason Appel, M.D. Equivalent Medicare Resource
Gloria Asuncion, M.D. Based Relative Value System
2
James Stanton, M.D.
Patrick Maher, M.D.
Paul Reif, M.D.
Timothy J. Marten, M.D.
11. AUTHORIZE reduction of three Inpatient Nursing Clinical Nurse Specialist positions
(one vacant) and.DIRECT the Health Services Director to prepare resolutions setting
forth the specific positions by classification for Board action on January 23, 1996.
12. AUTHORIZE the cancellation of the contract with Dr. Sturtz, an orthopedic physician in
the Ambulatory Care Clinics effective February 16, 1996.
13. AUTHORIZE addition of three public Health Aide positions and transfer of two Public
Health Nurse positions from the Ambulatory Care Healthy Start program to the
California Children's Services and Child Health and Disability Program (100% revenue
offset).
14. APPROVE reductions in Behavioral Medicine Support to the Residency program
through modifications to the contracts of Linda Nakell, Ph.D. and Katherine Hughes,
Ph.D. on their contract renewal dates of January 31, 1996 and February 29, 1996,
respectively.
15. AUTHORIZE reduction of six RN and two LVN positions of the 58 full time equivalent
positions in the Medical Detention Facility to help reduce the current projected
$550,000 overexpenditure of the approved budget. DIRECT the Health Services
Director to prepare resolutions setting forth the specific positions by classification for
Board action on January 23, 1996.
16. AUTHORIZE the reduction of the following 8 positions (6 vacant) and DIRECT the
Health Services Director to prepare resolutions setting forth the specific positions by
classification for Board action on January 23, 1996:
PROGRAM AREA CLASS
Hospital/Clinics Senior Health Education Specialist
Medical Risk Specialist
General Accounting Secretary
Substance Abuse Health Services Administrator-B
Program Manager
Patient Accounting Patient Financial Service Manager
Public Health Recreational Therapist
CCHP Health Plan Sales Manager
17. ACKNOWLEDGE that the Board directed that further-substance abuse program
reductions come from Discovery House before any additional cuts to contractors, and
that state inaction in distributing methadone treatment revenue reserves to other
substance abuse programs has resulted in a remaining shortfall of $350 - $400,000 in
the Substance Abuse Division.
18. If sufficient state substance abuse funding is not received, AUTHORIZE the Health
Services Director to close the Discovery House Substance Abuse Recovery Program
effective March 1, 1996; AUTHORIZE reduction of one Program Director position, one
Clerk position and six Substance Abuse Counselor positions and DIRECT the Health
3
Services Director to prepare resolutions setting further the specific positions by
classification for Board action on January 23, 1996.
19. DIRECT the Health Services Director and County Administrator to closely monitor the
Health Services budget and return to the Board with further recommendations
necessary to achieve a balanced budget.
20. RECOGNIZE that on November 20, 1995, the Board of Supervisors directed the Health
Services Department to identify issues that would define the scope of a study to assess
the impact of health care reform on the public health and medical care system.
APPROVE the following issues for the study and DIRECT the Health Services Director
to use these issues in defining the scope of work for the study:
A. Describe the current health care market - locally, statewide, and national.
B. Identify the model options available to the County to respond to rapidly changing
market conditions.
C. Identify the model options currently utilized and under discussion by public
organizations locally, statewide, and nationally.
D. Identify the options which assure continued medical access to the County's
Welfare and Institutions Code Section 17000 indigent obligation.
E. Identify the options which will foster the full integration of the County's health
care services in a cost efficient manner.
21. In order to expedite the study, DIRECT the County Administrator and the Health
Services Director to engage the following consultant team for cost not to exceed
$50,000 with a completion date of May 15, 1996. This team is recommended because
of their collective base of knowledge regarding the Contra Costa County Health
Services Department and their ability to begin the process without a prolonged learning
curve.
• Liston Witherill, who has recently completed a similar review for Alameda
County; is actively involved in a Health System structural review in Mariposa
County, Arizona; and is familiar with Contra Costa County through his prior
contractual relationship with Nu-Med, Inc.
• Henry Zaretsky, Ph.D., who has an in-depth understanding of Contra Costa
through his past work with the Department of Health Services and is
knowledgeable in the changing economics in the health arena and has
experience in the public sector environment.
• Joan Meisel, Ph.D, a former associate with Lewin/ICF, who has done extensive
work with the Department in that capacity; and has a wide variety of experience
in health care restructuring and reform.
BACKGROUND/REASON(S) FOR RECOMMENDATION
The Health Services Department began the fiscal year with anticipated short fall of$6 to $12
million. This shortfall stems primarily from two causes:
• Reducing net county cost by $2 million below 1994-95 levels;
• Absorbing the cost of service and supply price increases, retirement expenses,
interdepartmental charges, merit increases and step increases.
4
In Health Service's Phase I and Phase II budget reductions, the Board took actions to reduce
expenditures in the hospital and clinics, public health, mental health and substance abuse.
Based on these reductions, the estimated shortfall of the department is now between $6 and
$8 million for FY 95-96.
The department also faces significant fiscal and programmatic uncertainties due to pending
health care reform. The department currently receives approximately $15.9 million annually
in Medicare funding. Under current reform proposals, the department could lose $600,000 to
$700,000 in the first year of implementation with a total of$5.9 to $7.4 million over a period of
seven years. From Medi-Cal, the department currently receives $60.3 million per year. Medi-
Cal losses are estimated in a range from a low $2 to $4 million to as much as $13 million
annually. While it is assumed that these losses will not begin until the 1997 federal fiscal year
(October 1, 1996), it is imperative that the county begin taking actions now to develop
strategic plans and to maximize cost efficiencies. A complicating factor in the health care
equation is the possibility that the state will modify eligibility standards, limit the current Medi-
Cal benefit package and/or reduce payments to providers to reduce their costs under the
federal block grant.
The Department is proceeding on several fronts to strategically prepare itself for health care
reform. In accordance with Board direction, the Department issued Requests for Information
(RFI) on Jail Medical and Psychiatric Services November 24, 1995 with a required response
date of January 10, 1996. It is anticipated that at least 10 firms will respond to the RFI. The
purpose of the RFI is to determine whether contracting could stabilize health care detention
costs, which have been increasing steadily over the last few years. This is of particular
concern to the department because of its high net county cost. The department recognizes
that the feasibility of each action is dependent not only upon the financial analysis, but also
discussions with employee organizations and County Counsel.
The department is also recommending that it be authorized to explore the feasibility of
increasing its cost efficiencies in other areas of the department, including security, food
service, medical records, central floor supply stock function and emergency room physician
coverage.
As part of its cost-efficiency efforts, the department is also actively pursuing renegotiation of
the pharmacy contract with the Pharmacy Care Network. This contract is for both the
purchase and dispensing of pharmaceuticals. Discussions to date have been very positive
and included possible linkages with both Foundation Health Plan and the San Francisco Local
Initiative. A pharmacy price modification could be achieved as early as March 1996.
On November 20, 1995, the Board of Supervisors directed the Health Services Department to
identify issues that would define the scope of a study to assess the impact of federal health
care reform on the public health and medical care system. The department has identified the
issues in accordance with direction from the Board, as well as three contractors able to
complete the study in an expedited time frame with an anticipated completion date of May
1996.
This study would cover the following issues:
A. Describe the current health care market - locally, statewide, and national.
B. Identify the model options available to the County to respond to rapidly changing
market conditions.
C. Identify the model options currently utilized and under discussion by public
organizations locally, statewide, and nationally.
D. Identify the options which assure continued medical access to the County's
Welfare and Institutions Code Section 17000 indigent obligation.
5
E. Identify the options which will foster the full integration of the County's health
care services in a cost efficient manner.
The position reductions recommended in this board order cover a wide range of program
areas: hospitals and clinics, detention, accounting, substance abuse, public health. Positions
were selected based on the department's desire to:
• maintain service levels
• minimize staff lay offs
• maximize net county cost reductions.
The department recommends reducing 8 of 58 full time positions in the medical detention
facility. Currently budgeted at $5.98 million, the budget is running approximately $550,000
over the approved level. This is particularly serious because this is almost all net county cost.
When the Board of Supervisors took action to acknowledge the loss of state funding for
substance abuse, primarily due to the Sobky vs Smoley lawsuit, the Board directed that further
necessary reductions in substance abuse programs should come from reductions of the
Discovery House prior to any additional cuts to contractors. Discovery House provides a six-
month residential treatment program for approximately 75 clients per year. Approximately
60% of these clients are referred by the criminal justice system and 40% are classified as dual
diagnosed (substance abuse and mental health diagnosis). The program is staffed by a
program director, one clerk and six substance abuse counselors.
At this time, a shortfall of$350,000 to $450,000 remains in the substance abuse program.
The state is holding $22 million which it could distribute to substance abuse programs beyond
which is necessary for the methadone treatment program. For this reason, this department
has held off from recommending the elimination of Discovery House. If the state does
distribute the monies, Contra Costa's share would most likely cover the substance abuse
shortfall. However, the department believes it can no longer afford to fund the program in light
of the current fiscal uncertainty.
If state funding is received, the department recommends that this program cut not be taken.
6
A D D E N D U M A
Phase III Budget Reductions - Health Service Department
January 16, 1996; Item No. SD.4
At the beginning of the Board's consideration of this
matter, Phil Batchelor, County Administrator, announced that
Recommendations Nos. 7 and 8 were deleted from consideration.
IT IS BY THE BOARD ORDERED that Recommendations Nos. 1, 2,
3 , 4, 5, 6, 9, 10**, 11, 12**, 13, 14, 15, 16, 19, 20 are
APPROVED as presented by the following vote:
Ayes: Supervisors Rogers, Bishop, DeSaulnier, Torlakson,
Smith
Noes: None
Absent: None
Abstain: None, **with the exception of Supervisor Smith on
Recommendations Nos. 10 and 12 .
IT IS BY THE BOARD ORDERED that Recommendation No. 21 is
APPROVED as amended with staff directed to contact Bert Margolian
to determine his interest and level of participation as part of
the consultant team on the study to assess the impact of federal
health care reform on the public health and medical care system.
The vote was as follows:
Ayes: Supervisors Rogers, Bishop, DeSaulnier, Torlakson;
Smith
Noes: None
Absent: None
Abstain: None
IT IS BY THE BOARD ORDERED that Recommendatins Nos. 17 and
18 are APPROVED with the understanding that before the cuts in
the Discovery House Program are initiated, this issue is to be
considered by the Board of Supervisors to determine if there is
any other revenue available (or revenue that can be allocated
from another drug program) before it is actually cut. The vote
was as follows:
Ayes: Supervisors Rogers, Bishop, DeSaulnier, Torlakson;
Smith
Noes• None
Absent: None
Abstain: None
This concludes the actions taken on this item.
A D D E N D U M B
Phase III Budget Reductions - Health Service Department
January 16, 1996; Item No. SD.4
Persons spoke of their disapproval of a proposal to contract
for security, food service, medical records, central supply floor
stock function and emergency room physician coverage; speakers
commented on the success of the Discovery House Program and urged
that it continue to be funded. The following persons spoke:
Cathy Seihel, 508 Faria Street, Antioch 94509;
Bobbie Harmon, 244 Aloha Way, Pittsburg 94565;
Robin Ginrette, 847 Rose Avenue, Pleasanton;
Carol Sautter, 2955 Roosevelt Land, Antioch 94509;
Martin Garro, 635 Laird Lane, Lafayette 94523;
Carol Hatch who presented a letter from Congressman
George Miller;
Matt Mason, 4639 Pacheco Boulevard, Martinez 94553 ;
Ed DiSibio, 4639 Pacheco Boulevard, Martinez 94553;
Michael Dorsey, 1476 Creekside Drive, Walnut Creek;
John Jones, 432 Warwick Drive, Benicia;
Cyril Hinds, 164 Robles Drive #204 , Vallejo;
Christopher Young, 2885 Concord Bouldvard, Concord;
Brian Johnson, 1515 Beechwood, Martinez 94553 ;
Stephen Gamble, 4639 Pacheco Boulevard, Martinez 94553;
David Markham, 4939 Pacheco Boulevard, Martinez 94553;
Doug Bray, 1413 Mira Vista Court, Antioch 94509;
Patricia Ralston, 1130 Dove Way, Fairfield;
Allen J. Grengs, 4639 Pacheco Bouldvard, Martinez 94553;
Jeff Teague, 4:639 Pacheco Bouldvard, Martinez 94553;
Steve Nelson, 1515 Beechwood Drive, Martinez 94553;
Chris Vetterti _4639. Pacheco Boulevard, Martinez 94553;
Mark Engelman, 47 Austen 'Way, Martinez 94553;
Frank Beasley, (no address given) ;
Richard Daigh, 4639 Pacheco poulevard, Martinez 94553;
Dawn Day, 1935 Carlotta Drive #5, Concord;
Jason McKenzie, 4639 Pacheco Boulevard, Martinez 94553 ;
Scott Hadsell, 4639 Pacheco;,B.oulevard, Martinez 94553;
Jip Hicks, AFSCME, 100.0 Court Street, Martinez 94553;
iris''Clawson, '-510'4 Recd Qak `Drive, Concord;
Lea Giampapa, 2925 Avon.tAvenue, Concord;
Bridget Clifton, 244 Lake Street, Martinez 94553 ; and
Michael Donohue, 2925 Avon Avenue, CORPOrd.
../'•'GEORGE MILLER DISTRICT OFFICES:
7TH DISTRICT,CALIFORNIA 367 CIVIC DRIVE,#14
2205 RAYBURN HOUSE OFFICE BUILDING /�► PLEASANT HILL,18 94523
WASHINGTON,DC 20515-0507 ,11 or�gregg of t je .r�iteb �tate� (5RY 6LANSI 0
(202)225-2095 MARY LANSING
DANIEL WEISS DISTRICT DIRECTOR
ADMINISTRATIVE ASSISTANT f r �y} }
Ouse Of Repregentatibeg 3220'BLUME DR.
COMMITTEE ON RESOURCES SUITE 281
RICHMOND,CA 94806
COMMITTEE ON ECONOMIC AND Wimobi lgton, ;X 20515-0507 (510)262-6500
EDUCATIONAL OPPORTUNITIES 1407 TENNESSEE ST.
VICE CHAIR VALLEJO,CA 94590
DEMOCRATIC POLICY COMMITTEE (707)645-1888
TTY(202)225-1904
January 16, 1996
. I �. �� ,
Jeff Smith, Chair
Contra Costa Board of Supervisors lax UFO F_VWVS
651 Pine Street _ COSTA CO. ;;
Martinez, CA 94553
Dear Supervisor Smith:
I am writing today to join with many county employees in
expressing my concern over the request that the Board of
Supervisors consider filling a number of County positions with
contract labor.
While I can certainly appreciate the need for the County to
investigate alternative and innovative methods. of meeting ever
increasing budgetary demands, I strongly recommend that the Board
take no action until such time as the potentially affected Health
Services Department employees and their representatives have an
opportunity to review all implications as to whether or not this
is a wise proposal . Furthermore, I would caution the Board about
over-emphasizing the short-term incentives of contract labor and
encourage you to look closely at the true value of a long-term,
stable work force .
Contra Costa County has indeed been fortunate to have dedicated,
loyal employees, and I urge you to seek other alternatives that
do not so adversely impact employees who have made a strong
commitment to public service.
I am confident that the Board will -give this matter its due
consideration and thank you for this opportunity to demonstrate
my strong support for the employees of AFSCME, Local 1, SEIU and
CNA.
Sincerely,
� I
George Miller
Member of Congress
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