Financial Positioning

Local health departments today are faced with a variety of external economic factors which impact the ability to ensure and provide quality services. Major issues are welfare to work, Medicaid managed care, and tax reform at all levels of government in the face of the demand for more services. Without a careful and comprehensive strategy for meeting financial challenges, no health department can continue to serve. The basic question is, who will pay for services?

The DuPage County Health Department is committed to being able to serve the community’s most vulnerable residents. Sometimes, referrals and case management are not enough. Many DuPage residents receive direct services through children’s clinic, immunization clinic, family planning, and prenatal clinic, as well as clinical services from Behavioral and Mental Health Services. The ability to bill Medicaid, insurance provided for low-income families and individuals through the Illinois Department of Public Aid, has given the Health Department the needed financial boost to continue. Local property taxes and grants alone are not enough.

Financial positioning becomes even more crucial considering the shift in public health emphasis. As the focus of public health moves from providing direct services to ensuring access to quality healthcare, it becomes more evident that local health departments must lead the way in assessing not only the community’s needs, but its ability to pay.

How does this impact DuPage and what is the Health Department doing regarding funding public health for the 21st century? Here are some 1997 facts and responses:

Fact: Property tax revenue for the Health Department’s budget stayed at $16 million for the third consecutive year, while the demand for services increased.

Response: The Board of Health tapped funds from excess reserves (monies in excess of the level of reserves established by the Board of Health) to finance program enhancements, while staff members continue to search for and implement cost savings in service delivery. Some middle management positions voluntarily vacated were not filled.

Response: As part of the strategic planning process, Kathleen Kustra of Medicaid Strategies reviewed Medicaid billing procedures at the Health Department and made suggestions for capturing more Medicaid dollars. Her consultation included a workshop for Health Department employees on improving strategies and procedures for Medicaid billing. She also discussed the need for planning and partnerships regarding the approach of managed care for Medicaid participants.

Fact: The Health Department learned that the Illinois Department of Public Aid plans to have all Medicaid participants covered by managed care by early 1998.

Response: Guided by Kathleen Kustra, the Health Department formed a managed care task force comprised of employees from various management levels. Key members of the task force will begin meeting with managed care companies moving into DuPage County.

Fact: Subsequent to the federal balanced budget act signed by President Clinton in August, Gov. Jim Edgar of Illinois announced in December that insurance coverage will expand to include uninsured children up to 133% of the federal poverty level and pregnant women up to 200% of the federal poverty level. (The federal poverty level for a family of three is $13,332 a year; at 133% the level is $17,732, at 200% the amount is $26,664.) Coverage will include expansion of Medicaid for a portion of the population. Other insurance plans are being discussed for the remainder.

Response: Staff is being trained to 1) identify clients who are presumed eligible, and 2) process the Medicaid applications at Health Department locations, thus eliminating the need for the applicant to visit the Public Aid office. The goal is creation of a client-friendly, stream-lined procedure. Case managers and case monitors will continue to reach out to and advocate for residents without coverage.

Response: Consultation has been obtained to finalize plans to professionalize and centralize medical records. An expected result is an increase in opportunities to obtain reimbursement for costs.

Funding Behavioral and Mental Health Services

Managed care coverage will profoundly impact funding of mental health services, albeit in ways that differ slightly from other medical coverage. Conventional medical insurance of the 20th century has often limited costly but essential mental health benefits.

During the late 1990s, rising costs, limited local tax support and mandates from the Illinois Department of Mental Health constricted the mission for the Mental Health Division (now Behavioral and Mental Health Services). Priority had to be given to the chronically and persistently mentally ill. This population has enormous and lasting needs for treatment and services. It is also the population for whom funding from private insurance carriers is almost nonexistent.

Mental health professionals believe the chronically mentally ill will be served, in the 21st century, through capitated private and public contracts rather than state grants or fees for service. For Behavioral and Mental Health Services at the Health Department, positioning for managed care means networking with other providers. Thus the Northern Lights Behavioral Health System was created.

"Northern Lights is a regional network of mental health and substance abuse treatment providers,” explained William Coats, Associate Director of Behavioral and Mental Health Services for the Health Department. “Founding this network is an important part of financial planning in two ways. First, being part of a network makes access easy for managed care companies. Managed care organizations look to providers who are already part of a network. Second, we are seeking to consolidate our costs. As an example, we can cut our administrative costs through avoiding duplication by centralizing claims processing.”

In addition to the Health Department, the founding members of Northern Lights are the Association for Individual Development, the Ecker Center for Mental Health, Finch University of Health Science, Kenneth Young Center, the Lake County Health Department and the McHenry County Community Mental Health Board. Advocate Behavioral Health Systems, Interventions, and Alexian Brothers Northwest Mental Health Center are new members.

"We want to sustain the quality services we have available for our clients, which include our most vulnerable citizens,” said Coats.

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