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HomeMy WebLinkAboutMINUTES - 11062001 - SD.9 TO: BOARD OF SUPERVISORS '- Contra FROM: John Sweeten •f_- i _ County AdministratorMt Costa DATE: November 6, 2001 ° s; r.c� `� County SUBJECT: Progress Update on the Management Audit of the Health Services Department SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDED ACTION I. AUTHORIZE the County Administrator to issue a Request For Proposals to engage professional services from independent consultants and/or CPA finns for contract(s)totaling up to $200,000 to: A. Determine the approved net County cost budget, supplemental appropriations, and actual net County cost of the Health Services Department for the 1998-99 through the 2000-01 fiscal years. B. Assess the strengths and weaknesses of the organizational structure of the Health Services Department in relation to the legal and fiscal environment in which it operates. C. Review Department purchasing practices for pharmaceuticals and the use of group purchasing agreements for medical supplies. D. Review Department staffing ratios at the Martinez Detention facility. E. Review Department efforts to avoid out-of-county placements in mental health facilities. F. Review the Hospital Medicare and Medi-Cal cost report to identify ways, if any, by which revenues may be enhanced. G. Review the Department's collaborative efforts to secure and maintain the enrollment of children in the Healthy Families Program, and to maximize revenue in this program. II. DIRECT the County Administrator to include status and outcome findings in upcoming quarterly budget status reports. CONTINUED ON ATTACHMENT: X YES SIGN TURE: -------�- ---------------------------------------------------------------------------------------------------------------------------- ----- - -------------------------- .,-'RECOMMENDATION ---------------- ✓RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE - -APPROVE OTHER SIGNATURE(S): r --------------------------- - ACTION OF BOA /y. /ii°yyl �/G 2Gb/APPROVE AS RECOMMENDED OTHER _ CONTZNU to December 11 , 2001 . VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN, ABSENT: ABSTAIN: ATTESTED LL,(���� CONTACT: JOHN LSWEETEN,-CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR CC: William Walker,MD,Director,Health Services Pat Godley,CFO,Health Services BY DEPUTY 2 BACKGROUND The 2000-01 Contra Costa County Grand Jury, in report No. 0103, made several findings and recommendations regarding alleged budget overruns and Health Services Department financial mismanagement. While acknowledging that the Grand Jury report may have been based on incomplete and factually misunderstood data, on July 17, 2001, the Board directed the County Administrator to identify specific program areas for a management audit. To ensure that the Health Services Department operates as efficiently as possible,we recommend pursuing an audit divided into three major components. 1. Findings of Fact Regarding Budget Administration In order to address a primary concern in the Grand Jury's report, the first component of this audit should be a retrospective finding of fact concerning the Department's budget administration. The Grand Jury contended that the Department exceeded its authorized budget by millions of dollars over a number of years, thus leading to the conclusion that a management audit was needed. An independent C.P.A. firm, in conjunction with the Auditor-Controller, should provide a written report answering the following questions: For fiscal years 1998-99 through 2000-01: a) What were the aggregate expenditures, revenues and resulting Net County costs authorized in the adopted Final Budgets for the Department? b) What expenditure,revenue and resulting net County cost adjustments were made mid-year to the adopted Final Budgets for the Department by the Board of Supervisors? c) What were the Department's actual net County costs for those years? d) Did the Department's actual net County costs for those years exceed the amounts authorized by the Board of Supervisors? 2. Organizational Assessment of the Health Services Department in Relation to Its Legal and Fiscal Environment The second audit component should assess organizational structure of the Department and its operating divisions. Health Services encompasses a 164-bed medical center; twelve ambulatory care centers; an interdisciplinary medical staff with more than 80 family practice physicians and 150 specialty physicians; a 50,000-member health plan; a mental health system for the most vulnerable in our population; a public health system charged with disease surveillance and prevention; a substance abuse program offering prevention, treatment and recovery services; a jail medical service at the Martinez Detention facility and Juvenile Hall; an environmental health program including a hazardous materials program and community warning system; a conservatorship/guardian program; and the Californian Children's Service program. Given the Department's size and complexity, we recommend review of. • The legal responsibilities of the Health Services Department in the context of the health delivery system as a whole: nationally, statewide and locally. • Current State and federal policies affecting the financing of indigent care. • Anticipated changes in State and federal policies affecting the financing of indigent care. • Other variables affecting health care costs at the State and national levels. Based upon the general findings and conclusions reached above, the audit should assess the strengths and weaknesses of the current organizational structure in meeting current and projected service delivery challenges. That assessment should include a comparison of: a) The divisional structure of the Department with the structure of other county health systems. b) The Contra Costa Health Plan organizational structure with that of other local initiatives and county organized health systems. 3. Assessing Impact of County Expenditures in Selected Programs A third audit component should review selected programs that impact County expenditures, specifically: 3 a) The Department's pharmaceutical purchasing practices. The Department spends more than $20 million annually on pharmacy items. A review will determine if additional discounts can be secured through an alternate purchasing arrangement. b) The Department's group purchasing practices. The Department currently uses the University Hospital Buying Consortium to purchase more than $12 million in medical supplies annually. A review will determine if additional discounts can be secured through an alternate purchasing arrangement. c) Martinez Detention Facility staffing levels versus industry standards. Of the over$7 million in medical services provided at the Martinez Detention Facility annually, 98%are net County costs. A comparative review of medical and psychiatric staffing ratios to the inmate population would provide information needed for current and future budget discussions. d) Cost benefit analysis of the use of administrative days at the Contra Costa Regional Medical Center(CCRMC)psychiatric unit versus placement in residential treatment facilities. The CCRMC psychiatric unit stabilizes patients for appropriate placement in mental health treatment facilities. If patients cannot be placed because other facilities do not have openings, they occupy "administrative days"at CCRMC, for which Medi-Cal reimbursement is 28.75%of the actual cost. The audit should be helpful in determining cost savings which might result in building and operating a crisis residential treatment facility in lieu of patient placement in CCRMC. e) An analysis of the Hospital Medicare and Medi-Cal revenue maximization at CCRMC. The Contra Costa Regional Medical Center files an annual cost report that results in a net revenue settlement for the Medi-Cal and Medicare programs. With more than $20 million in claimable costs the report should help to determine if revenues are being maximized. f) Healthy Families Program(HFP)enrollment and outreach efforts. Currently, the Health Services Department facilitates coordination of HFP outreach and enrollment through the Contra Costa Health Access Coalition. The audit should suggest ways to raise the level of coordination, including follow-up with providers and individual families to ensure that enrolled children use available health care. The audit should also suggest ways in which families can be encouraged to maintain their enrollment in the program. The County is interested in ensuring good health care for all eligible children, while reducing unnecessary net County costs. Conclusion During Board discussions of the audit's scope and structure on July 17, 2001,Board members acknowledged the level of complexity of the entire Health Services operation. As a result, it was thought to be helpful to focus on certain areas of operation where net County costs might be contained or reduced measurably as a result of an independent outside review. With the Board's approval, a Request For Proposals will be constructed highlighting the elements identified above. This RFP will be sent to 32 firms nationwide, and published in five professional journals as well as in local newspapers. The RFP's will be reviewed by a screening committee that includes representatives of the Health Services Department, County Administrator's Office, and Auditor-Controller's Office. The results of the RFP along with a proposed consultant services agreement(s) will be brought back before the Board for approval. • REQUEST TO SPEAR FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum bef re apdressinT the Board. Name: Phone: Address: City: I am speaking for myself or organization: v (name of organization) CHECK ONE: �f I wish to speak on Agenda Item # �/2 lDate: My comments will be: general for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: SPEAKERS 1. Deposit the "Request to Speak" form (on the reverse side) in the box next to the speaker's microphone before your agenda item is to be considered. 2. You will be called on to make your presentation. Please speak into the microphone at the podium. 3. Begin by stating your name and address and whether you are speaking for yourself or as the representative of an organization. 4 . Give the Clerk a copy of your presentation or support documentation if available before speaking. 5. Limit your presentation to three minutes. Avoid repeating comments made by previous speakers. (The Chair may limit length of presentations so all persons may be heard) .