A wide-ranging evaluation of the Clatsop County Health and Human Services Department will likely result in some layoffs and program reductions, but will also enable the department to provide service levels more in line with actual funding, county officials say. In a detailed memo, County Manager Scott Derickson informed the Clatsop County commissioners Wednesday that the HHS department is likely to face continued revenue shortfalls in the new fiscal year, and he offered a list of recommended service cuts and other cost-saving measures aimed at keeping spending levels in line with projected funding.

Among the suggested cuts is eliminating the Healthy Start program, changing clinic operations and increasing fees for various services. “These moves may cause inconvenience for some of our clients, but in the end we believe the adjustments we’re making now will put the department back on solid financial footing,” Derickson said. Derickson submitted an official notice to the Oregon Commission on Children and Families on Monday informing it that the county intends to drop the Healthy Start program in 60 days unless the state increases funding or another local contractor can be found to manage the program.

Two of the program’s employees have also been given layoff notices. Healthy Start provides home visits for first-time parents to help ensure healthy, thriving children and nurturing families. New state rules prohibit the county from targeting clients who are eligible for Medicaid reimbursement, with the result that county officials are projecting a $45,000 deficit for the Healthy Start program for the 2008-09 fiscal year. Derickson emphasized that the cancellation notice to the state can be rescinded if another means of keeping the program operating can be found. “Staff is going to work hard at finding other alternatives to keep this program in the community,” he said.

Last month the Clatsop County commissioners were obliged to transfer $175,000 from the county’s General Fund to Health and Human Services to make up for revenue shortfalls that left several HHS programs in the red at the end of the 2007-08 fiscal year. The shortfalls were the result of lower-than-expected reimbursements from the state and client payments for service. Though several cost-cutting measures have been implemented, state funding for many HHS programs is expected to drop this year, resulting in an overall reduction in the department’s budget of almost 20 percent, and the county is anticipating more shortfalls for the new fiscal year unless additional spending cuts are made, Derickson said. The Health and Human Services Department, with a budget of $4,218,000 for Fiscal Year 2008-09, is funded primarily with pass-through dollars from the state.

“Last year’s shortfall was not the result of the department overspending its budget,” Derickson said. “The department kept its spending within the amounts originally budgeted – the problem was that all the revenue needed to cover that spending did not come in as originally hoped.” Last fall the county administration assigned Assistant Finance Director Andrea Trenner to the Health and Human Services Department and charged her with improving the department’s overall management and financial systems. Trenner initiated staffing changes that allowed for some
reductions in personnel, implemented a new clinic management program designed to increase efficiency, and pursued uncollected revenue, among other efforts. The department has also implemented more stringent inventory control procedures and internal billing procedures. Not all the anticipated savings were realized, in part because of labor contract requirements that prevented some staff members from being laid off until the end of the fiscal year.

More recently a team of county officials was assembled to evaluate each HHS program and determine if further reductions or restructuring was necessary. The group has also been preparing for an operational audit the county hopes to kick off next month. “Our goal is to make sure that each of the department’s programs is properly sized to match the anticipated level of revenue,” Derickson said.

Along with the elimination of Healthy Start, other recommendations made by the county team include increasing the number of daily appointments for family planning services and implementing fee increases in the Environmental Health program and reorganizing its staff. Derickson pointed out that a recent audit by the Oregon Department of Human Services gave the HHS Department passing marks in all but two areas: Title 10 family planning changes and a “cost analysis” program. Health Department officials and other county staff have recently completed a draft document that addresses both areas, he said. In its report, DHS called the department’s staff “a committed team of professionals who deliver quality public health services to the community,” Derickson noted.