harriet dichter, acting secretary of public welfare | 2010-11 executive budget commonwealth of...

Harriet Dichter, Acting Secretary of Public Welfare | www.dpw.state.pa.us

2010-11 Executive Budget

Commonwealth of Pennsylvania Department of Public Welfare

Budget Briefing

February 2010

Edward G. Rendell, Governor


The recession continues pressure on revenues and state budgets

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State tax collections from the first three quarters of 2009 showed the largest decline since 1963.

Source: Nelson A. Rockefeller Institute of Government. Original Sources - U.S. Census Bureau (tax revenue) and Bureau of Economic Analysis (GDP price index).

Year-Over-Year Percent Change in State Tax Collections: Nationwide Four-Quarter Moving Average



In tight times, DPW’s investments generate jobs and immediate economic rewards

The Economic Multiplier Effect:

• Every dollar of Medical Assistance healthcare spending generates $2.77 dollars in economic activity across Pennsylvania

• For every dollar Pennsylvania invests in early childhood programs, more than two dollars is circulated throughout our local economies

Creating and Sustaining Jobs:

• Medical Assistance spending for FY10-11 will support an estimated 218,000 Pennsylvania jobs

Return on Investment:

• Every $1 spent on substance abuse treatment saves $4 in reduced future health care costs and $7 in reduced future criminal justice costs



State investments leverage $12.2 billion in federal dollars

Program Office FY10-11 Federal Dollars

Child Development and Early Learning $524 million

Children Youth and Families $459 million

Developmental Programs $1.65 billion

Income Maintenance $1.33 billion

Medical Assistance Programs $8.0 billion

Mental Health and Substance Abuse Programs $274 million

FEDERAL DOLLARS LEVERAGED $12.2 billion



More Pennsylvanians Need Help2.1 million children and adults rely on

Medical Assistance for health care

2.1 million(Jan 2010)



TANF Cash Assistance Increases as the Recession Hits PA

267,682(Oct 2005)

197,027(Mar 2009)

217,820(Dec 2009)



Short term extension of enhanced FMAP will help Pennsylvania meet rising needs

• Original sunset: 12/31/10• Now: Expect states will

receive enhanced FMAP through FY10-11

• Worth $5.3 billion total – up from $4 billion

• Federal dollars will help us avoid most – but not all – painful cuts in this budget

Additional FMAP (billions)



Risks to the Budget1. The Economy – if the recovery is slower than

expected, revenues will be below target

2. MCO Pharmacy Rebates – if Congress fails to act, we will have less pharmacy savings

3. Enhanced FMAP – if the Congress fails to extend the enhanced match for Medical Assistance, the budget will not balance



DPW Guiding Principles • Support sustainability—

preserve services for those who need them

• Improve quality and results—ensure services improve the lives of those who receive them

• Ensure accountability—ensure efficient use of tax dollars



Budget Overview$388 million increase in state dollars

4.9% increase from 2009-2010

FY10-11 Budget: Control Growth and Assure

Sustainability, Quality, Results and Accountability



$363 M Safety net services and increases required by federal law

+$385 M Federal and other revenue replacement

$748 M Additional State Dollars Needed

Constructing a Budget that Works

Step 1: The Budget Drivers

Step 2: Cost Containment $748 M Budget Drivers

-$360 M Cost Containment and Adjustments

$388 M Total Growth



DPW has reduced staff and personnel each year since 2003

Total Savings: $230 million in salary and benefits savings since 2003

Reduction in DPW Workforce from 2003 to 2010

Institutional Workforce (including from closures)

1,840 fewer workers

Non-Institutional Workforce 1,340 fewer workers

Total 3,180 fewer workers

Ensuring efficient use of tax dollars



Over $825 million cost savings in last year

Ensuring efficient use of tax dollars

MA fraud, abuse and efficiency efforts

$656M cost avoided

MA Third Party Payor collections

$110M collected

Improvements to contract negotiation processes

$50M cost avoided (over the life of the contract)

Improvements to auditing processes

$10M cost avoided(over the life of the contract)



The FY10-11 budget prepares PA to meet rising demand

– MA enrollment is expected to grow 3%– In child welfare, the number of children needing out-

of-home placement will continue to decline, allowing more children to be served in their homes

– 150 new individuals will be able to access MR community services to avoid institutionalization

– More children will be able to participate in early learning programs, and more individuals will be able to access needed mental health and substance abuse services



Many states have been forced to make cuts• Arizona is repealing Medicaid coverage for childless adults and

adults with serious mental illness, and eliminating portions of its cash assistance and preschool programs

• Texas has cut the number of children receiving child care subsidy

• California has cut nearly all funding for services supporting HIV/AIDS patients, and it completely eliminated funding for domestic violence shelters and maternal, child, and adolescent health programs

Preserving services for those who need them



The Continuing Commonwealth Commitment

• With each budget the Commonwealth has remained committed to maintaining the health care and human services safety net

• That sustained investment in access, quality and accountability has yielded impressive results since 2003

• The FY10-11 Budget funds the continuation of these critical initiatives



Selected Highlights 2003-2009

Office of Medical Assistance Programs

providing quality, cost-efficient healthcare for millions of Pennsylvanians

The HealthChoices program, serving approximately 1.1 million people, achieved significant quality improvements from 2006 to 2009:• cholesterol management for individuals with cardiovascular disease increased 13%• frequency of prenatal care increased 10%• comprehensive diabetes care increased 7%

Office of Mental Health and Substance Abuse Programs

supporting individuals with mental health and substance abuse needs

Expanded Behavioral Health HealthChoices statewide improving access and quality for 350,000 Pennsylvanians

Improving quality and results



Selected Highlights 2003-2009

Office of Child Development and Early Learning

improving the early learning of PA children

In 2003 less than one in five PA children aged three and four had access to quality early education; now one in three does

Office of Income Maintenance

supporting PA families as they move toward self sufficiency

The TANF caseload reached the lowest point since 1961; even with the recession, the caseload is down 18.6% since 2005

Cross-Office Work

efforts that reach across multiple DPW offices

In the child welfare and early learning systems a single state-of-the art child screening tool has been adopted statewide; MA has created a new payment to support better assessments of children

Improving quality and results



Office of Mental Health and Substance Abuse Services (OMHSAS)Deputy Secretary Joan Erney

FY 10-11 Priorities

Complete closure of Allentown State Mental Hospital allowing more individuals to achieve life in the community

Improve services to children by implementing the Systems of Care Grant, supporting families with children with serious mental illness in 15 PA counties

Expand Positive Behavior Support Model, reaching kids school-wide, to 40 more schools for a total of 10

Improve statewide service consistency by adding Psychiatric Rehabilitation & D&A Services to the State Plan

Increase the number of counties serving the homeless population through the PATH Program

Improve effectiveness by converting five community treatment teams to Evidenced Based Assertive Treatment Teams

Expand access to care by increasing the number of publicly funded tele-psychiatry programs by more than 50%



Office of Developmental Programs (ODP)Deputy Secretary Kevin Casey

FY 10-11 Priorities

Further advance access and quality in autism services across PA through autism-specific services for adults and three regional ASERT Centers

Move 150 new individuals with MR into critical community services

Implement a data-driven quality management program for the MR system

Continue to transition to new payment system including the development of draft regulations

Implement further reforms and improvements to increase DPW’s ability to protect the health and safety of individuals living in personal care homes



Office of Children, Youth and Families (OCYF)Deputy Secretary Richard Gold

FY 10-11 Priorities

Improve abuse screening by completing statewide roll-out of state-of-the art safety assessment tool by adding all children receiving services in out-of-home placements

Implement new federal financing under Fostering Connections for permanent legal custody permanency option

Continue implementation of a five-year strategic plan which will create a state-wide child welfare data system

Continue to reduce the need for out-of-home placements by funding special grants in all 67 counties

Implement a statewide Quality Services Review/Continuous Quality Improvement Process

In 16 targeted counties, safely reduce the number of children in out-of-home care by 20%



Office of Income Maintenance (OIM)Deputy Secretary Linda Blanchette

FY 10-11 Priorities

Maintain focus on employment and expand opportunities for TANF recipients to gain valuable workplace skills

Assuring Pennsylvanians don’t go hungry by continuing to improve SNAP participation

Update and improve computerized data exchanges to increase program integrity and accuracy

Complete implementation of Modern Office which includes a team-based workload approach, knowledge-sharing and redesigned work processes to improve business operations and increase efficiency in the 12 largest County Assistance Offices

Deploy statewide a new eligibility system including expanding and enhancing document imaging to move one step closer to an electronic eligibility record



Next Steps

The Budget is online at www.dpw.state.pa.us

Educate yourselfand others aboutthe needs ofPennsylvania, theimpact of theprograms, and theimpact of the budget

harriet dichter, acting secretary of public welfare | 2010-11 executive budget commonwealth of...

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