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Director's Message April 12, 2004To: DHS Employees From: Gary Weeks, Director In this week's message: 1. E-Board approves DHS budget rebalance and disappropriation plan 2. Food for thought 3. Staff news 1. E-Board approves DHS budget rebalance and disappropriation plan Last week, we appeared before a subcommittee of the Legislature's Emergency Board to answer questions about the budget rebalance and disappropriation plan we submitted on March 19.This message is being sent to you today, because I wanted to wait until we received final word on the plan, which was not voted on by the full Board until Friday. I am now pleased to report to you that the plan was approved. As you know, the plan covers the normal, periodic rebalance of our agency's budget, adjusting those areas where our spending either exceeded or fell below budgeted levels. In this instance, however, it also included the difficult choices we had to make in program cuts due to the failure of the Measure 30. Our goal was to preserve the highest level of program services we could while responding to the need to cut $179 million from our General Fund budget. I believe we presented the best possible plan given the resources we had available to us. This was due in no small measure to the efforts of staff throughout DHS who worked tirelessly in helping us prepare estimates, consider options and choose priorities. Here are the key points of the approved plan. 1. We were able to retain the bulk of a planned increase in funds to help communities with the care of adult psychiatric patients awaiting beds in the state hospital. The increase for 2003-2005 would be $17.2 million.In addition to approving our plan, the Emergency Board invested $1 million of its emergency fund in Oregon Project Independence (OPI). OPI serves seniors with in-home support who aren't eligible for Medicaid. Savings in administrative costs. Part of the reason we were able to avoid additional program cuts was the fact that we achieved a $7.6 million savings in administrative costs, specifically in services, supplies and personnel. These savings were primarily attributable to the cost- and time-saving efforts made by many of you. I am very grateful to all of you who worked so hard to make that happen. As you've noted in the Director's messages over the previous weeks, this is work we will continue to do, because the savings provide additional funds that will help serve our clients. Unanticipated savings. Part of our ability to maintain client programs was due to savings that we had not anticipated. In attempting to contain costs due to the state's fiscal crisis, the Legislature directed that we make major changes last year in the benefits received by the Standard population and established premiums and copayments for the program. The effect of these changes and other uncertainties around OHP was that fewer people enrolled in the program, and many were terminated for non-payment of premiums. Regardless of the reasons for the drop in enrollment, let us not forget that there are thousands of Oregonians who no longer receive benefits through OHP, and their health care needs do not go away. Rather, we will likely see more unreimbursed care delivered by hospitals and others, which in turn will mean higher costs. Because the drop in the OHP Standard population was greater than we anticipated, substantial savings resulted from the difference between forecasted vs. actual expenses. While these savings helped in our disappropriation efforts, the degree to which they differed from our estimates seriously undermined our credibility with the public. Given the state's financial situation, our ability to accurately forecast caseloads and costs is absolutely critical. As we move forward, it will be one of this agency's highest priorities to provide the Governor, the Legislature and the public with caseload and cost forecasts that are as precise and accurate as possible. It is important to understand that our current forecasting model was developed in partnership with many parties including the Legislative Fiscal Office. Like any other forecasting model, it needs constant review and refinement to assure the most accurate forecasts possible. We greatly appreciated the opportunity to work with the Legislative Fiscal Office and the Department of Administrative Services' Office of Budget and Management in developing the rebalance plan and subsequent Emergency Board presentation. And, of course, we are grateful to the members of the Emergency Board for approving our plan. The work ahead. Now, the job ahead of us is to carry out the plan. That means to continually seek greater efficiencies in our operations and to ensure that our forecasting is as accurate as possible. I ask for your cooperation in doing this and, of course, in continuing your efforts each day to help all Oregonians become and remain independent, healthy and safe. "Challenges are what make life interesting; overcoming them is what makes life meaningful." — Joshua J. Marine View the current issue of DHS Staff news on the Web. Back to top |
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