Reform Goes Local: America’s Counties Emerging….


Issue Date: October 2011
The Manderscheid Report

Reform goes local
America’s counties emerging as key agents for healthcare service delivery
by Ron Manderscheid, PhD

In the new era of healthcare reform, we must revisit our assumptions about how behavioral health services are organized and how they actually operate in the field. I suspect that we continue to assume that models from the Reagan Era and earlier still apply. Yet, many changes are underway in the field that invalidate such time-worn assumptions. Let me make a few observations that help to begin a much larger and more detailed dialogue.

First, it is important to note that major changes in the organization and operation of the behavioral healthcare delivery were already underway before the advent of health reform. Clearly, the fulcrum for mental health services continues to move toward the Centers for Medicare and Medicaid Services and state Medicaid agencies.

Already, the Medicaid program spends more than $100 billion per year on enrollees with mental health conditions, far outstripping all other sources of payment. And, while an estimated two-thirds of today’s substance use and prevention services are paid for through the Substance Abuse Prevention and Treatment block grant, that pattern is likely to change as new personal health insurance payments supplant the block grant as a primary funding source for SUD treatment.

Second, as federal and insurance funding evolves, the Great Recession continues to drain state general revenue funds, leaving less and less available for healthcare. For a time, federal stopgap funds-the “enhanced” Federal Medical Assistance Percentage (FMAP) that expired on June 30-reduced, but could not fill this void. The result is a continued drain on state funds that has important health reform implications:

  • States continue to struggle in meeting Medicaid match obligations for behavioral health services.

  • As state resources shrink, the operational roles of state mental health and substance use agencies are progressively more circumscribed.

  • Medicaid match obligations traditionally met by states are either falling to smaller local entities or falling by the wayside altogether.

Amid this context, national health reform continues. One of reform’s principal goals is to provide personal health insurance to 32 million more Americans through a combination of Medicaid expansion and state-based Health Insurance Exchanges (HIEs). Of course, realizing the goal of personal health insurance for (nearly) all will obviate many of the federal and state programs that today provide so much behavioral health funding. In other words, the federal and state trends identified above will be amplified throughout the ongoing reform process.

What role will counties and other local authorities fill in this changing context? As the federal and state behavioral health contexts continue to morph, counties can be expected to play a progressively larger role in healthcare delivery. Some of the dimensions of this involvement will include:

  • More counties paying the state Medicaid match. Numerous examples already exist where this is being done. We can expect these examples to multiply. As they do, we can also expect counties to exert greater control over state Medicaid programs.

  • More counties organizing local systems of care. As reform incentivizes the integration of care, we can expect counties to play a pivotal role in organizing county-wide integrated health homes that span mental health, substance use, primary care, and public health services. At the same time, county-based programs will place greater emphasis on population health and wellbeing.

  • More counties partnering with federal programs. As the federal government undertakes an unprecedented expansion of the Federally Qualified Health Center (FQHC) program and develops effective interventions for disease prevention and health promotion, counties will become logical partners in a changing healthcare delivery system. Their size and scope of operations offers a great advantage when it comes to supporting programs on a community scale.

Together with the anticipated expansion of private health insurance, the growing involvement of counties offers great potential for improving the depth and quality of care delivery. Given the axiom that all healthcare, like all politics, is “local,” the continuation of current health reform can only help in the effort to assure that Americans in every county enjoy available, accessible, and high-quality behavioral healthcare.

Behavioral Healthcare 2011 October;31(7):40

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