Health and Human Services

Health and human services constitute state government s second-largest functional area, accounting for $9.5 billion or 32.5 percent of all state spending in fiscal 1992.

Responsibility for these services is fragmented among 15 state agencies, including the Interagency Council on Early Childhood Intervention Services, the Department on Aging, th e Texas Commission on Alcohol and Drug Abuse, the Commission for the Blind, the Commi ssion for the Deaf and Hearing Impaired, the Texas Department of Health, the Texas Department of Mental Health and Mental Retardation, the Department of Protective and Regulatory Services, the Texas Rehabilitation Commission and the Texas Youth Commission. These agencies are overseen by the Texas Health and Human Services Commission, which is intended to coordinate their programs.

TPR s recommendations in this area focus o n several major concerns. Several proposals would help the state claim more federal funding for a number of programs. In particular, TPR outlines a plan that would replace major elements of Texas current disproportionate share program, which channels hu ndreds of millions of dollars in matched state and federal aid to hospitals that treat disproportionately large shares of Medicaid recipients and others who lack financial resources and private insurance. Major parts of Texas program recently have been invalidated by recent changes in federal statutes, placing a half-billion dollars in annual federal aid at risk. TPR s revised disproportionate share program would meet the new federal requirements while providing increased flexibility to the meet the state s human resource needs.

TPR also proposes moving some mental patients out of expensive institutional settings, into less-expensive nursing homes. Another recommendation concerns a promising new drug therapy that would allow a number of state mental patien ts to leave institutions and live independently.

Other recommendations would allow the state to lower its Medicaid costs by selectively contracting for some services, as do health maintenance organizations (HMOs), and by increasing reimbursements for Medicaid services from private insurers, workers compensation programs and the like. TPR also recommends the use of automated systems to reduce caseworker time and to detect fraud in major health and human services programs.

Still other proposals would comba t spiralling health care costs by lowering the cost of pharmaceuticals for Texans over 65, and by helping small businesses obtain better prices on employee health insurance. Finally, TPR recommends delaying an August 1995 payment to the state s private Medicaid insurance contractor until September, to improve the state s financial position in the next biennium.

In all, TPR s recommendations for health and human services would increase the amount available for certification under the Comptroller s revenue e stimate by nearly $1.8 billion in fiscal 1994-95, and would reduce state employment by about 1,800 positions. Dedicated state accounts and funds would lose $149 million, primarily as a result of funding shifts to the General Revenue Fund. The federal gover nment also would benefit from TPR s proposals, saving about $136 million over the biennium because of reduced demands on federal programs by Texans.

Over the next five years (1994-1998), TPR s recommendations for health and human services would increase a vailable general revenue by nearly $4.2 billion. Total employment reduction would be essentially the same as for the 1994-95 biennium. Texas dedicated accounts and funds would show a slight gain of $50.5 million. The federal government would save nearly $470 million over the five-year period.