Waste, fraud and abuse, at least the search for it, has become a legislative cliché — and often a political cudgel — for Republicans to beat up on “big-government” Democrats.
But now that cliché will no longer be only the stuff of campaign brochures. As part of the deal struck to resolve the 2019-21 Minnesota state budget, Gov. Tim Walz and legislative leaders agreed to create a “Blue Ribbon Commission on Health and Human Services.” Its charge? To find $100 million in savings from those two spending categories.
Between the Department of Human Services and the Department of Health, the state administers dozens of programs for low-income residents, including nursing care for the elderly as well as medical assistance and child abuse prevention and intervention. About 1.1 million residents receive medical coverage via state Medicaid and another 89,000 through MinnesotaCare. On an average day, more than 10,000 children and young adults are in foster care, 31,000 families receive monthly assistance from the Minnesota Family Investment Program, and 25,000 seniors over age 85 are in state-subsidized nursing homes.
The 17-member commission has until October of 2020 to find the savings. If they fail, an equal amount will be taken from state reserves in the 2021-23 state budget, unless a future Legislature does something different. The commission will be co-chaired by Health Commissioner Jan Malcolm and Human Services Commissioner Tony Lourey, though under the budget language Lourey will convene the first meeting.
A $100 million target might not seem like a lot of money in a state general fund budget that spends more than $48 billion over two years ($15 billion of which goes toward health and human services programs). But the waste, fraud and abuse concept continues to occupy much of partisan legislative debate over the growth in state spending.
Backers of the panel say designating an amount makes it seem more real. “We wanted some incentive and something to shoot for that were literal savings that would be a result of having this blue ribbon panel,” said Senate Majority Leader Paul Gazelka, R-Nisswa. “It’s a kind of a step for all of us to say we want to work together to depress waste and fraud and use that money for the people who actually want and need the services.”
Both parties speak about cost savings, though often in different ways, and they had no common estimates for possible savings. Without agreeing yet on how, the leaders decided to set a target for how much.
Rep. Tina Liebling, the DFLer from Rochester who is chair of the House Health and Human Services Finance subcommittee, said she thinks the commission will help the DFL and GOP at least have common language about the numbers. She was critical of GOP budget proposals that she said include “fake savings” in health and human services spending.
“That’s where the idea got its start,” she said of the commission. “In order to come to some closure on the budget, we’d have to have a mechanism for examining some different savings ideas to see if they really could be fleshed out.”
Gazelka, Walz and House Speaker Melissa Hortman are likely to announce their appointments to the panel in the next few weeks, with the legislative leaders getting two each and Walz naming the rest.
Walz is charged with getting representatives with expertise in health care and social services; “cultural responsiveness”; innovation; and from people with experience in purchasing services. A labor leader must be included, as must experts in health and human services technology.
Lourey said Tuesday he expects the panel will include private sector leaders as well as academics with expertise in health and social programs, along with health care providers and consumers. Malcolm suggested county officials who deliver services in partnership with the state.
Lourey, a veteran member of the state Senate before being appointed to run the Department of Human Services late last year, said he thinks the commission is “real” and not just a political response to GOP criticism of spending. “It’s a shared concern about making sure that we have sustainable programs,” he said. “We need to be cognizant of the growth trends. We need to understand where they come from, largely it is driven by demographics but, that said, we might have learnings from other groups that could help us.
“It wasn’t just something to get us through this session,” he said.
And while he admitted to initially being conflicted about whether it was a good idea to have elected legislators on the commission, he now says he thinks it will be helpful. “Having legislative leaders at the table during these discussions really helps when you get into the Legislature,” Lourey said. “Disagreeing over what the numbers are — how much things cost, what is driving increases, what a particular change will save, if anything — has been a barrier to productive conversations in the past.” Sitting together might get the parties more quickly to a common set of numbers, he said.
Malcolm agreed. “We often don’t have core agreement on concepts and definitions and clarity of the purpose of programs and associated numbers,” she said. “We often presume too much of people’s shared understandings of the concepts. That is in and of itself a helpful goal for this process.”
Malcolm, who was state health commissioner from 1999 to 2003 before returning to run the Department of Health in 2018, said the commission has a short timeline, but that she accepts the challenge. “It’s not going to be an easy thing, but we think it’s an achievable thing to find that $100 million in the out biennium,” she said. “But we don’t want to stop there. That’s a short-term goal, but we want to really go beyond that and look at a longer-term strategy to change the cost-curve in fundamental ways. I hope we don’t let the shortness of the timeline constrain us from some of the ideas that might take a longer time to develop.”
Malcolm also said she wants to look for ways to work more closely with Lourey’s department, since the goals or both are similar. In fact, many of the counties that deliver programs don’t break them down between human services and health, she said.
There are only two deadlines for the commission: Oct. 1, 2020, when the commission must report its findings to Walz and the Legislature; and Oct. 2, 2020, when it must dissolve. Lourey said he hopes to have the first meetings of the commission by fall. He also said he wants to provide an opportunity for public involvement, even though the budget language doesn’t require it.
While both Lourey and Malcolm can name designees to serve in their place, both said they intend to take on the job themselves.
It is up to Lourey and Malcolm to decide when the commission meets and how it will work, though the bill setting up the body tells gave them some hints, directing it to: increase administrative efficiencies; identify duplicity of services among counties, tribes and the state; look at “cost-drivers” in health and human services programs; and “reducing fraud and improving program integrity.”
While allegations of fraud and abuse in the child care assistance program (CCAP) got most of the attention during the 2019 legislative session, the budgets passed by lawmakers this year already took specific aim at that program. And any savings from CCAP going forward would not count against the $100 million target. Instead, the money would stay within the program to reduce a long waiting list for child care assistance.
“With all the things that DHS touches and the fact that we really haven’t done much of this in this area, I think we can make a difference when there’s willing partners,” Gazelka said. “I’m looking forward to the possiblities of dealing with some bureaucracies that I don’t think we really have for the last eight years.”
Liebling agreed. “We have very different ideas about what does it mean to trim the HHS budget,” Leibling said. So the commission was not charged to “go forth and find good ideas” but to actually hit a target that could be written into the budget. “It’s a place to really hash out where can money actually be saved.”
Leibling said DFL budget writers don’t doubt that there are savings to be found in the massive programs that spend billions of dollars. “But the question is can you find it, how much can you find, and what did it cost you to find it,” she said. “It isn’t a question of can we find some, it’s a question of how can we structure ourselves to really do that in a way that’s gonna work.”
As with the budget deal itself, Gazelka pointed to the mid-session agreement to address the troubled MNLARS licensing computer system, as key to creating the commission. Walz and legislative leaders of both parties agreed to try to end the political bickering over MNLARS, which had been built by Minnesota Driver and Vehicle Services within the Department of Public Safety, and ask for outside expertise, which led the state to look to private companies for a new system.
That agreement — and the relationship built with Walz by forging it — gave Gazelka confidence that he had a “willing partner” in Walz for looking at government spending in different ways.“I’m hoping that’s the pattern across the agencies,” Gazelka said.
That’s why he is willing to suspend use of the potent political messaging that DFLers don’t care about waste in government spending. “I gave the governor credit for working with us on MNLARS and therefore cooperation on new funding streams to make that work,” he said. “That’s a pattern that we think is good for Minnesota and the governor should get just as much credit as us in focusing on that.”