As Mississippi faces worst budget deficit since Great Depression, one solution may be shifting Medicaid recipients into community-based services

From the intro to a longer story in the Jackson Free Press in Miss.:

Mississippi legislators skulked back into the state capitol Jan. 5, keeping their body movements at a minimum and their heads low in case somebody noticed them and asked them questions containing the words "budget shortfall."

In November, Gov. Haley Barbour announced that Mississippi is on its way to the kind of revenue deficit unseen since the Great Depression. Revenue estimates ended low for more than 16 months in a row, falling more than $136 million since July, with officials predicting a $360 million shortage by the end of fiscal year 2010.

Barbour responded to the news with a new round of budget cuts this winter, which, added to earlier cuts he instituted in September, amounts to more than $220 million in budget reductions. This is nothing new as the national economy continues to slump. The governor cut $200 million from the budget in fiscal year 2010, and some state agencies are now operating at about 10 percent below their funding from last year. Many state workers are nervously submitting resumes to the private sector or out of state, in anticipation of salary freezes, slashed hours or even lost jobs.

The news got around quickly. The Joint Legislative Budget Committee followed through with its own plan to deal with revenue shortfalls last month. Committee members agreed to defund all vacant state job positions and permanently delete 3,656 of them. They also agreed to reduce travel and contractual service.

The committee's fiscal year 2011 budget recommendations include a 10 percent blanket reduction for all state agencies and, most painfully, nearly a 6 percent reduction from the Mississippi Adequate Education Program. MAEP is the formula through which the state steers money to low-revenue school districts that do not produce enough cash through sales taxes to adequately fund teachers' salaries and learning materials.

Nancy Loome, executive director of K-12 advocate group The Parent's Campaign, warned that cuts to the funding formula mean cuts that can't easily be recouped in subsequent years.

"When you have cuts of that magnitude, it pretty well necessitates a reduction in staff, so you're talking about increases in class size, and we know that class size has a direct impact on student achievement," Loome said. "When students fall behind in one year, they are losing some of that foundation that they need for subsequent years."

Though painful, the legislative budget plan for education is slightly more generous than Barbour's own suggestion to reduce MAEP by 10.9 percent in fiscal year 2011—and his recommendation to cut K-12 education 12 percent across the board. Barbour's cut would actually amount to a cut of about 15 percent according to House Education Committee Chairman Cecil Brown, D-Jackson. Brown agrees with Loome's argument that MAEP was rightfully due for an increase next year, which certainly won't be happening under the current circumstances. Barbour also recommended a cut of almost 70 percent to vocational education programs, as well as programs for special education and the gifted—equal to a $176 million loss in federal funds.

Lobbyist Stan Flynt said the overall push of the legislative session this year will unquestioningly center on making ends meet.

"The shortage of money will be the driving force this time around, and I think we'll all be amazed at how well legislators will come together to try to battle this issue," said Flynt, who predicted that any rogue attitudes not specifically attuned to the greater crusade of removing red ink will suffer for it the following year.

"I attribute it to self-preservation more than anything—crisis-generated cooperation. If that turns out not to be the case, then my political instinct tells me that it will be to the detriment to all involved. The year 2011 is an election year," Flynt said.

"Don't think these politicians don't know it. Anybody who doesn't get with the greater program will have competitors beating them for that attitude in the primaries. Voters will do their part, too, because if these guys don't get along—and get along fast on the budget problems—voters will adopt a blanket 'throw the bums out' attitude toward them in 2011."

Flynt used the Joint Legislative Budget Committee's recent plan as an example of how willing legislators are to work together to battle the common foe of budget shortfalls. The joint committee—comprised of a progressive cadre of Democratic House members and a considerably conservative branch of the Republican-dominated Senate—shook hands on a budget plan within the course of 72 hours. The usual process takes days, sometimes weeks of back-and-forth reconnaissance, as well as the occasional complaint to the media about the other team's unwillingness to play ball.

Savings will be a big call to arms this year, and Public Health Committee Chairman Rep. Steve Holland, D-Plantersville, said he will see if Barbour is taking serious his own call to steer Medicaid money to home- and community-based nursing, rather than the more expensive institutional nursing care that the state's high number of nursing homes offer.

Holland said a simple slashing of Medicaid is the wrong way to fix a shortfall, especially considering that Medicaid is a program where the federal government matches every dollar the state invests three times over.

"Cutting the Medicaid budget is a three-to-one loss to the state," Holland said. "I never understood the argument to reduce it."

Barbour advised the state to divert Medicaid money to more affordable home-based nursing services instead of nursing homes as a means to cut state costs. Barbour's demand arrived two years after Holland and lobbyists for the handicapped and disabled passed "money follows the person" laws allowing the state to use Medicaid money for private nursing. Holland said the Division of Medicaid has been slow to actually use the law, influenced perhaps by the powerful nursing-home lobby, which is partly comprised of the even more commanding health-care lobby.

For the two years money-follows-the-person laws have been in the books, the nursing-home lobby has argued that the state does not have the infrastructure to monitor a growing mass of private nursing businesses, and that the largely rural state still does not offer home-care nursing services in many of its sparsely populated communities. About 80 percent of the population has access to some form of home-care based health-service, but there currently are not enough nursing services to handle the kind of institution to home-care changeover the governor envisions.

Flynt says legislators will probably be trying to assemble that infrastructure soon in an effort to cut the costs that the governor now demands.

"There are two ways to save the state money when it comes to essential programs, and Medicaid is going to be one of the center issues in this session," Flynt predicted. "We can save anywhere between $60,000 to $150,000 per Medicaid recipient per year through home-care nursing, and provide them services that are closer to home and relatives and their network, with the possibility that they can even go out and work and generate income and taxes."

Barbour also called for the expansion of the Mississippi Coordinated Access Network, known as Mississippi CAN. The governor said the coordinated-care program, which serves state Medicaid beneficiaries, should "improve access to needed medical services by connecting beneficiaries to providers for preventative and primary care," and will provide "support services for managing illnesses and empower beneficiaries."

Mary Troupe, executive director for the Mississippi Coalition for Citizens with Disabilities, lauds the proposed expansion, arguing that beneficiaries need an organizer to help them fully utilize Medicaid services.

Many kidney dialysis patients who are Medicaid beneficiaries, for example, do not know that the state offers free transportation to the location of dialysis treatment. Many of these patients, Troupe said, end up calling the offices of the Mississippi Coalition for Citizens with Disabilities to learn this kind of information—information that should already be widely available through a coordinated program manager.

Both legislators and health advocates acknowledge that expanding Mississippi CAN and extending private nursing service to previously un-serviced areas will not be a one-year project. Legislators could spend this session hashing out a plan to take services where they do not currently exist, while next year could potentially be when the infrastructure for such a plan begins to come together. Full utilization could take years, especially since the state has been working for decades under an entirely different kind of health infrastructure that demands the existence of brick-and-mortar nursing homes and institutions, complete with expenses such as air-conditioning, security service, lawn care and countless other forms of maintenance fees.

Flynt and Holland said changing a fossilized health-care system like this is no easy process, although the current financial calamity is precisely the kind of environment that could begin the process.

"Chaos is the friend of change," Flynt said. "When the status quo is rocking along, it's virtually impossible to accomplish significant change. It's only during chaos and crisis—when a significant number of people are hurting, everybody is questioning their fundamental operating principals and having to be forced to reevaluate everything—that change comes."