Faced with ever-declining state funding, but also a record-high number of West Virginians with health insurance, the Tomblin administration will propose legislation to make it easier for local health departments to bill insurers.
The administration is not currently considering consolidating local health departments, but did commission a study of the potential savings from doing so.
Tomblin's proposed budget includes nearly a 25 percent cut in state funding for county health departments.
To compensate for that, his administration is proposing a bill (which has not yet been in introduced) to make it easier for local health departments to bring in insurance money and to cooperate with each other, in search of efficiencies.
County health departments can already bill insurance for the services they provide, but the process is cumbersome and filled with bureaucratic delays, state Health and Human Resources Secretary Karen Bowling said Tuesday.
The legislation, which will have Republican sponsorship in both the House and the Senate, Bowling said, will make it easier for health departments to bill insurers at the maximum allowable rate.
For years, local health departments have offered free or low-priced care to the uninsured. While they continue to do that, the Affordable Care Act, particularly the Medicaid expansion, has brought the state's uninsured rate to a record low.
"As more residents than ever before are insured, it's time we move forward with shifting this financial burden from the backs of West Virginia taxpayers to insurance companies," said Dr. Rahul Gupta, commissioner of the state Bureau for Public Health.
Chad Bundy, with the West Virginia Association of Local Health Departments, was worried about the switch from state funding to billing insurers.
"I'm certain it will be a year or two years before we can ever come close to maximizing what that billing process can do for us," Bundy said. "In the interim, I'm very concerned about that 25 percent cut in funding."
The legislation will also make it easier for health departments to cooperate with each other. Gupta cited his time as director of the Kanawha-Charleston Health Department.
During his tenure there, the KCHD took over the troubled Putnam County Health Department, and the co-mingled departments now operate more efficiently, Gupta said. He said the proposed legislation would make it easier for other local health departments to adopt a similar model.
While Gupta and Bowling stressed that they were not currently considering consolidating any county health departments, such a move could be coming in the years ahead.
"Nationally, this is the trend, this is the future of public health," Gupta said.
The DHHR touted a recently completed study by John Deskins, director of the West Virginia University Bureau of Business and Economic Research, that begins to make the case for consolidations.
Deskins said that a county needs to have a population of at least 100,000 for a local health department to operate at peak efficiency. Only three West Virginia counties have populations that large.
"We have millions of dollars that are sitting on the table that we could gain from moving the various public health departments toward the Kanawha-Putnam model," Deskins said.
His report, funded by the DHHR, concludes that consolidation reduces costs and "yields improvements in the delivery of health services to areas previously suffering from resource constraints."
Deskins writes that state officials "have begun to examine" consolidating local health departments into multi-county regional departments. He examines one proposal to make nine regional health departments and concludes that it is a good starting point, but more research is necessary.
Local health departments have largely been spared in recent rounds of budget cuts, while similar programs - free clinics and federally qualified health centers - have seen their state funding slashed.
The DHHR has had its state funding cut by about $72 million over the last two fiscal years.
Tomblin's proposed budget for next year includes a further $26 million in cuts.
Many of the savings have come from moving some Medicaid patients to managed care programs. Others have come from cuts to behavioral health programs and free clinics.
While the state's Medicaid rolls have increased dramatically under the Affordable Care Act's expansion, the cost per patient has significantly declined.
In 2013, West Virginia was spending about $8,900 annually per Medicaid patient; last year it was about $7,200.
So far, the federal government has borne the entire cost of the Medicaid expansion. Next year, the state will be responsible for 5 percent of the expansion costs, with that number eventually rising to 10 percent.
Some cuts have come from specific programs, which the department deemed to be underperforming.
For instance next year's budget will see a $1.8 million cut in funding for tobacco education.
West Virginia has the worst smoking rate in the nation. But while the youth smoking rate has plummeted - from 38 percent in 2000 to 16 percent last year - the adult smoking rate has not. More than one in four adults smoke. One in four pregnant women smokes. In southern counties and among low-income pregnant women, that number is closer to one in two, Gupta said. Those numbers have barely budged since 2000.
"If we're not seeing the needle move, despite the investment, we have to make a change," Jeremiah Samples, a deputy DHHR secretary, said Monday.
About 70 percent of DHHR's $5.3 billion budget comes from the federal government, and most of that comes with strict restrictions for how it must be used.
Samples said that additional state funding cuts could threaten the successful "Birth to Three" program for infants with developmental problems, programs for the disabled, layoffs in county offices and hospital and nursing home reimbursement rates.
Further state cuts could also endanger some federal money, that comes in the form of matching funds.
"We're really at the precipice here," Samples said. "Our agency can only provide services to the extent to which it's funded."
Reach David Gutman at david.gutman@wvgazettemail.com, 304-348-5119 or follow @davidlgutman on Twitter.