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Article II:
Health and Human Services

Article II agencies include the Texas Department of Health, Health and Human Services Commission, Department of Human Services and several other agencies and programs. This article includes four of the state’s eight most expensive individual programs in fiscal 2002:

  • Payments to nursing homes for elderly Medicaid recipients ($2.0 billion);
  • Payments for prescription drugs for Medicaid recipients: ($1.6 billion);
  • Medical services for blind and disabled Medicaid recipients: ($1.2 billion); and
  • Long-term care community client services: ($1.1 billion).

Total expenditures for programs in Article II agencies rose from $5.5 billion in fiscal 1990 to $17.5 billion in 2002, an increase of 216 percent. In real 1990 dollars, the total rose to $12.9 billion, a 133.6 percent increase. Actual 2002 Article II expenditures accounted for 32.5 percent of the total expenditures used in the statewide index calculation.

The review team created 83 separate expenditure indices for Article II agencies using workload measures to measure the demand for a particular service. For example, the Department of Health Medical Transportation Expenditure index was calculated in terms of expenditures per one-way trip made by recipients.

The total Article II expenditure index was 1.52 in 2002, representing a 52 percent increase in expenditures per workload unit over the 1990-2002 period.

The largest individual Article II indices for 2002 include:

8.33, for Department of Protective and Regulatory Services At-Risk Prevention Services spending. Total actual expenditures rose from $4.5 million in fiscal 1990 to $61.8 million in 2002. Real expenditures rose to $45.8 million in 2002. Real expenditures per young Texan rose by 732.6 percent over the study period. This budget strategy contains 15 diverse, specialized programs. The largest of these, Services to At-Risk Youth (STAR), originally served runaways and truants, but was enlarged in 1995 to include children aged from seven to 17 who fit several different at-risk criteria. STAR also expanded its service area from 55 counties to the entire state. The second-largest program within the index, Community Youth Development, was created by the 1995 Legislature to provide grants to support community programs addressing juvenile crime.

7.05, for Department of Human Services disaster relief spending. Total actual expenditures rose from $7.4 million in fiscal 1990 to $88.5 million in 2002. Real expenditures rose to $65.5 million. Real expenditures per 10,000 Texans rose by 604.9 percent, prompted in large part by Tropical Storm Allison in 2001. Expenditures for this index accounted for 0.5 percent of all Article II spending in 2002.

3.99, for Health and Human Services Commission medically needy children Medicaid service expenditures. Spending rose from $59.3 million in fiscal 1990 to $268.4 million in 2002; real expenditures rose to $198.8 million. The average number of medically needy children served by this program per month dropped by 15.9 percent from 1990 to 2002, while real expenditures per child served rose by 299 percent. Expenditures for this index accounted for 1.5 percent of all Article II spending in 2002.

The indices with the largest share of Article II expenditures in 2002 were:

Department of Human Services payments to nursing facilities, which accounted for 11.6 percent of all Article II spending. Expenditures for this index rose from $682.9 million in fiscal 1990 to $2 billion in 2002, a 197.2 percent increase. Real expenditures rose to $1.5 billion, a 120.1 percent increase. The index is based on the average number of nursing home clients per month, which rose from 58,553 to 68,280 over the study period (a 16.6 percent increase). Real expenditures per nursing home client rose by 88.8 percent, giving the index a 2002 value of 1.89.

The Medicaid Vendor Drug Program, which accounted for 8.9 percent of all Article II spending. (The 2001 Legislature transferred this program from the Texas Department of Health to HHSC). Expenditures in this category rose from $198.8 million in fiscal 1990 to $1.6 billion in 2002, a 683.4 percent increase; real (1990) expenditures rose by 480.2 percent, to $1.2 billion. The workload measure for this index, the number of prescriptions covered, rose by 207.6 percent, from 9.8 million to 30.1 million. Real expenditures per prescription rose by 88.6 percent from 1990 to 2002, producing a 2002 index value of 1.89.

Medicaid services for blind and disabled persons, which accounted for nearly 7.1 percent of total spending. (The 2001 Legislature also transferred this program from the Texas Department of Health to HHSC.) Total expenditures in this category rose from $289.4 million in fiscal 1990 to $1.2 billion in 2002, a 331.6 percent increase; real (1990) expenditures rose to $925.1 million (219.6 percent). The average number of disabled and blind Medicaid recipients per month rose by 88 percent, from 103,044 to 193,706. Real expenditures per recipient rose by 70 percent from 1990 to 2002, for an index value of 1.70.

Department of Human Services long-term care community client services, which accounted for 6.1 percent of total spending. Total expenditures in this category rose from $185.1 million in fiscal 1990 to $1.1 billion in 2002, a 475 percent increase; real (1990) expenditures rose to $788.6 million (a 325.9 percent rise). The average number of long-term community care recipients per month rose by 141.6 percent, from 57,473 to 138,847. Real expenditures per recipient rose by 76.3 percent from 1990 to 2002, producing an index of 1.76.