1. 1 Legislative Appropriations Request for Fiscal Years 2010-11 Governors Office of Budget, Policy and Planning Legislative Budget Board Friday, September 19, 2008 David L. Lakey, M.D. Commissioner

2. 2 Presentation Overview Health Challenges in Texas The DSHS Budget Exceptional Items

3. 3 Health Challenges Maintaining public health activities, such as immunizations, sanitation and food quality Preventing and treating chronic disease Preventing and treating substance abuse and mental illness Preparing for and responding to public health threats, such as hurricanes, pandemic influenza and bioterrorism Monitoring and controlling infectious diseases Supporting the states health services delivery system Using health care data to improve services and guide decision- making

4. 4 U.S. Life Expectancy at Birth 1918 Flu Epidemic

5. 5 Increased Life Expectancy Driven by Public Health Improvements Source: Ten Great Public Health Achievements – United States, 1900-1999 MMWR, April 02, 1999 / 48(12);241-243 http://www.cdc.gov/mmwr/preview/mmwrhtml/00056796.htm 47 years 77 years 0 20 40 60 80 19002000 Increased years due to medical care advances: 5 Increased years due to public health measures : 25

6. 6 Leading Causes of Death 1900 Pneumonia Tuberculosis Diarrhea Heart Disease Intracranial Lesions 2005 Heart Disease Cancers Cerebrovascular Disease Chronic Lower Respiratory Diseases Accidents

7. 7 Leading Causes of Death DSHS Center for Health Statistics Texas 2001

8. 8 Actual Causes of Death* Shaped by Behavior Chronic Disease in Texas 2007, DSHS *Texas 2001

9. 9 Impact of Mental Illness Individuals with schizophrenia have a 20 percent shorter life expectancy than the overall population Significant mental illness is often linked to obesity, smoking and substance abuse Underserved populations with MH or SA issues often go to ERs for treatment

10. 10 Disaster Preparedness and Response INSERT SLIDE ON HURRICANES Storms lined up across the Atlantic – September 2008

11. 11 TB Case Rates in Texas, 2005

12. 12 FY 2008-9 DSHS budget by source $5.5 billion biennial budget

13. 13 Exceptional Items Stakeholder meetings In priority order, ranked according to: –Maintaining operating capacity in existing programs –Ensuring compliance with current state and federal requirements –Moving health forward in Texas

14. 14 Maintaining Operational Capacity Exceptional Item 1 Biennial funding for crisis services Progress in delivery of crisis services FY 2007 FY2008 –AAS Accredited Hotlines 138 –Mobile Crisis Outreach Teams 4 38 –Crisis Stabilization Units 33 –Extended Observation Units 36 –Crisis Residential Facilities 1013 –Crisis Respite Facilities 414 –Outpatient Competency Restoration 14

15. 15 SFY2008 Annual Target = 17% Sources: DSHS Client Assignment and Registration (CARE) system. Note: SFY2008 YTD includes persons served with old + new GR. Percent of Persons Receiving Crisis Services Followed by a Psychiatric Hospitalization within 30 Days Already Better than Target Maintaining Operational Capacity Exceptional Item 1 – Crisis Services

16. 16 Maintaining Operational Capacity Exceptional Item 1 – Trauma Funding Maintain funding for trauma reimbursement –Uncompensated trauma care at designated facilities –Grants to EMS providers and regional systems Since the enactment of trauma reimbursement (2003-8): –1 additional Level I and 1 additional Level II trauma center –4 additional Level III centers and 53 new Level IVs –Coverage has increased by 59 centers (31%) –31 additional counties served since 2003

17. 17 Texas Designated Trauma Facilities 2008

18. 18 Maintaining Operational Capacity Exceptional Item 1 Annualized funding for Alberto N settlement services –Personal care services for children on Medicaid Align family planning reimbursement rates and service package with Medicaid –Potential loss of primary care services Cover increase in transportation costs for the rabies bait drop –Potential rabies in South and West Texas

19. 19 Maintaining Operational Capacity Exceptional Item 1 Rising costs across the agency –Laboratory –Hospital pharmaceuticals, medical supplies and food –Travel/fuel costs –Utilities

20. 20 Maintaining Operational Capacity Exceptional Item 1 FY2010*FY2011* 08-09 Phased-In Services – Crisis Maintenance$13.7 08-09 Phased-In Services – Trauma Funds$23.2 08-09 Phased-In Services – Alberto N$1.1 Increased Costs$10.6$13.3 Total:$25.4$51.4 * All figures in millions

21. 21 Ensuring Compliance Exceptional Item 2 – Regulatory Services DSHS Regulatory Division ensure the safety of the products and services Texans use every day –Food –Hospitals, surgical centers and dialysis centers –Health professionals, including EMS, Medical Radiologic Technicians, Professional Counselors –Medical Devices –Radiation

22. 22 Regulatory programs are supported by fees Texas is a growing state –From 2002 and 2007, the number of licenses in some programs increased by as much as 80% New licenses require compliance inspections, response to complaints, enforcement DSHS already uses risk-based inspections in most programs Total, Exceptional Item 2 –FY 2010:$7.3 million –FY 2011: $11.5 million Ensuring Compliance Exceptional Item 2 – Regulatory Services

23. 23 Ensuring Compliance Exceptional Item 2 – Regulatory Services Increase in licenses for the Division of Regulatory Services 2002 thru 2007 30.76% 76.60% 32.52% 10.73% 24.49% 83.07% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 55.00% 60.00% 65.00% 70.00% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00% Licenses by Regulatory Strategy Percentage of Increase Summary of all Regulatory licenses 13038 - Food and Drug 13039 - Environmental 13040 - Radiation 13041 - Professional Licensing 13042 - Health Care Facilities

24. 24 Cancer Registry –Childrens cancer research –Helping communities assess risk Kelly Air Force Base, San Antonio Houston Ship Channel El Campo trichlorethylene –Improving access to breast cancer services Ensuring Compliance Exceptional Item 3 – Health Care Data

25. 25 Birth Defects Registry –Evaluation of strategies to reduce risk of birth defects –Evaluation of factors playing a role in survival of children with birth defects –Participation in CDCs National Birth Defects Prevention Study –Identify areas where children with birth defects have little access to pediatric genetics clinics Ensuring Compliance Exceptional Item 3 – Health Care Data

26. 26 EMS/Trauma Registry –Evaluate local injury prevention planning –Analyze ambulance diversion patterns –Compare patients across service areas to improve timeliness and quality of patient care –Identify hazardous environments, such as dangerous intersections Ensuring Compliance Exceptional Item 3 – Health Care Data

27. 27 Healthcare Associated Infections (HAI) –Leading cause of death from infectious disease –200,000 infections and 8-9,000 deaths in Texas each year –HAI deaths in Texas exceed those in automobile accidents and homicides combined –Up to 60 percent of infections are preventable –Annual cost in Texas: more than $500 million Ensuring Compliance Exceptional Item 3 – Health Care Data

28. 28 Health Care Data and Analysis Exceptional Item 3 FY2010*FY2011* Disease Registries – Chronic$4.1$2.6 Disease Registries – Healthcare Acquired Infections Reporting $1.5$2.8 Newborn Screening Linkage$0.81$0.26 Center for Health Statistics$0.122$0.128 Recruitment and Retention$0.051 Total:$6.6$5.8 * All figures in millions

29. 29 Ensuring Compliance Exceptional Item 4 – Vital Records Vital Records – birth and death certificates REAL ID Act of 2005 –Requires states to issue secure drivers licenses and identity cards –Will require other states to verify validity of birth certificates for individuals born in Texas –Consequences of not complying – Texans will have to prove identity beyond a drivers license in banks and federal buildings and prior to domestic flights –Total: FY 2010$3.5 million FY 2011$3.2 million

30. 30 Ensuring Compliance Exceptional Item 5 – Data Systems Maintain and Enhance Technology 400 programs in 9 health regions, 11 state hospitals, and a major laboratory Patient records, client case files, pharmacy inventories and disease registries at risk Internet connectivity between offices unreliable Major telephone outages Impacts: –Patient health care and client management for mental and behavioral health –Preparedness and response activities –Protection of sensitive data –Data center consolidation

31. 31 * All figures in millions FY2010*FY2011* Network Interoperability, Video & Voice Communications and Security $6.2$5.5 Seat Management$1.5 Consolidated Health Care Data Collection$1.2$1.0 Clinical Management for Behavioral Health Services $2.7$3.8 Client Record System – Capacity & Bandwidth$0.36$0.30 Hospital Automated Medication Dispensing System$3.6$2.5 Total:$15.7$14.6 Data Systems Exceptional Item 5

32. 32 Ensuring Compliance Exceptional Item 6 – Disaster Response Disaster Recovery and Public Health Preparedness –Expanding core response for all-hazards, natural or manmade – hurricanes to salmonella –Improve timeliness of laboratory tests, environmental analysis and disease surveillance –Need to maintain skilled workforce for rapid deployment in event of emergency or disease outbreak –Local Health Department Expansion

33. Salmonella Saintpaul Outbreak

34. 34 Impact of Hurricane Ike

35. 35 Disaster Recovery and Public Health Preparedness Exceptional Item 6 FY2010*FY2011* Laboratory$2.0$1.0 Local Health Department Expansion$0.45 Behavioral Health positions in DSHS Regional Offices$0.64$0.7 Public Health Emergency Preparedness Response$3.9$3.4 Recruitment and Retention$0.76 Total:$7.8$6.3 * All figures in millions

36. 36 Ensuring Compliance Exceptional Item 7 Stipends for Psychiatric and Preventive Medicine Residents –Residency placement slots in state hospitals Only 6.4 psychiatrists per 100,000 Texans –Preventive Medicine residencies to strengthen the workforce 67.9 physicians per 100,000 Texans –Cost-effective means of increasing medical care in underserved areas and in hospitals –Physicians often remain in the community where they served as a medical resident FY 2010$1.4 million FY 2011$1.35 million

37. 37 Psychiatrists and Child Psychiatrists, Texas, 2007

38. 38 Ensuring Compliance Exceptional Item 8 Building & Equipment Repair & Replacement Hospitals must comply with Life Safety Code Joint Commission accreditation Replace only broken, unsafe or unusable equipment and patient furniture

39. 39 Eleven State Mental Health Facility campuses 3,032 acres, 552 buildings, 4.9 million square feet $866 million replacement value Average age is 55.2 years old. Most buildings were well built and remain structurally sound, but are in need of renovation to meet todays standards and programmatic requirements. Over 84% of total building area is dedicated to patients and patient support. Infrastructure Description Ensuring Compliance Exceptional Item 8

40. 40 Identified deficiencies (deferred maintenance): $233 million $198.3 million in capital construction needs have been identified for FY10-11 funding for State Hospitals. Of that, $67 million has been identified as the most critical. FY10-11 Capital Construction Needs Ensuring Compliance Exceptional Item 8

41. 41 Average Life Expectancy of most of the State Hospital capital equipment is 5 to 8 years. Average years of actual use for much of the State Hospital capital equipment is 11+ years, far surpassing its life expectancy, creating a potential risk to patients and staff. Categories of Capital Equipment Grounds Heating Air conditioning Motorized Emergency Other Furniture Medical/Adaptive Food Service Ensuring Compliance Exceptional Item 8

42. 42 Moving Health Forward Exceptional Item 9 – Substance Abuse Increase treatment rates to maintain provider base Increase treatment capacity to serve individuals Expand prevention services Provide Medicaid outpatient benefit to leveragefederal funds

43. 43 Note: The % of need met is [the unique number of served] divided by [the number in need of treatment], Where [the unique number of served] is the distinct count of clients served in DSHS-funded substance abuse treatment programs during a year, and [the number in need of treatment] is the estimated number of persons with a substance abuse problem and in poverty during a year. And, [the number in need of treatment] is measured by applying the prevalence rates derived from various surveys to the general population in Texas. Data Sources: 1. [the unique number of served]: Behavioral Health Integrated Provider System (BHIPS), DSHS. 2. [the number in need of treatment]: (a) Population projections in Texas, (b) National Survey on Drug Use and Health for Texas, and (c) Texas School Survey of Substance Use. 2007 Texas Population (age 12+) 19,463,968 2007 Estimated Number with Chemical Dependency 1,825,591 SFY2007 Number Served in DSHS-Funded Substance Abuse Treatment Programs (including NorthSTAR) 63,929 (7.5%) Who Are Also Poor 853,982 Percent of need met in Texas for DSHS-funded substance abuse treatment in SFY2007, adjusting for poverty (200% FPL). Moving Health Forward Exceptional Item 9 – Substance Abuse

44. 44 ER COST OFFSET - $47 Average per Client per Month 35% REDUCTION Fiscal Year 2005 Texas average monthly emergency room costs were 35 percent lower for Medicaid clients with substance abuse problems who received needed DSHS substance abuse treatment. Source: FY2005 ER Cost per Medicaid Client per Month for Those Who Needed Substance Abuse Services But Did Not Receive Them (Untreated) vs. Those Who Needed Substance Abuse Services and Did Receive Them (Treated): Initial data set consisted of all persons who had Medicaid paid Substance Abuse ER visits during FY2005. Clients were divided into those who received DSHS Substance Abuse services based on match between DSHS Substance Abuse dataset with Medicaid dataset. Dependent variable was Total ER costs or dates or service during FY2005. Data sources: DSHS Substance Abuse services = BHIPS, Medicaid ER = TMHP AHQP Claims Universe. Prepared by Research Team, Strategic Decision Support, HHSC, 3/23/2006. Moving Health Forward Exceptional Item 9 – Substance Abuse

45. 45 Reduced use of medical services, leading to cost savings Lower medical costs by reducing low birth weight babies, Fetal Alcohol Spectrum Disorders and use of neonatal ICU Benefit to the child welfare system through services to women of childbearing age In 2006, twenty percent of inmates in TDCJ were convicted of drug offenses –That doesnt count those convicted of other offenses to which substance abuse was a contributing factor Services eligible for Medicaid leverage state funds with federal funds (40 percent state/60 percent federal) Moving Health Forward Exceptional Item 9 – Substance Abuse

46. 46 Substance Abuse Exceptional Item 9 FY2010*FY2011* Treatment Services$21.6 Prevention Services$4.5 Medicaid for Outpatient Substance Abuse Services$13.8 Increased Contract Management Costs$0.91$0.99 Total:$40.8$40.9 * All figures in millions

47. 47 Offering services in the community 1)Expand community mental health crisis services 2)Develop transitional services for difficult-to- engage high-need individuals 3)Increase capacity for intensive services for current clients Moving Health Forward EI 10 – Community Mental Health

48. 48 Part 1: Community mental health services Expand options to underserved communities with crisis funds, assuring targeted services to children and adolescents Provide more Psychiatric Emergency Services Centers and Childrens Crisis Projects (e.g., Respite) Serve an additional 8736 individuals/year Serve an additional 226 children/year Moving Health Forward EI 10 – Community Mental Health

49. 49 Part 2: Transitional services for difficult to engage high-need individuals Goal is to break the cycle of crisis-stabilization-crisis Serves 4,163 adults/year Serves 630 children/year Moving Health Forward EI 10 – Community Mental Health

50. 50 Part 3: Increase capacity for intensive services for current clients Focus on difficult-to-serve clients transitioning from crisis Serves 1,984 persons in FY10 and 3,967 in FY11 Moving Health Forward EI 10 – Community Mental Health

51. 51 Fiscal Year 2005 Texas average monthly emergency room costs were 27 percent lower for Medicaid clients with mental illness who received needed DSHS mental health treatment services. ER COST OFFSET - $25 Average per Client per Month 27% REDUCTION Source: FY2005 ER Cost per Medicaid Client per Month for Those Who Needed Community Mental Health Services But Did Not Receive Them (Untreated) vs. Those Who Needed Community Mental Health Services and Did Receive Them (Treated): Initial data set consisted of all persons who had Medicaid paid Mental Health ER visits during FY2005. Clients were divided into those who received DSHS Mental Health services based on match between DSHS Mental Health dataset with Medicaid dataset. Dependent variable was Total ER costs or dates or service during FY2005. Data Sources: DSHS Mental Health services = CARE, Medicaid ER = TMHP AHQP Claims Universe. Prepared by Research Team, Strategic Decision Support, HHSC, 3/23/2006. Moving Health Forward EI 10 – Community Mental Health

52. 52 Sources: DSHS Client Assignment and Registration (CARE) system. Note: SFY2008 YTD includes persons served with old + new GR. Average Monthly Number of Persons Receiving Community Mental Health Front-Door Crisis Services Increasing IMPLEMENTATION OF CRISIS REDESIGN Moving Health Forward EI 10 – Community Mental Health

53. 53 Community Mental Health Exceptional Item 10 FY2010*FY2011* Psychiatric Emergency Centers & Children's Respite Services$14.2 Transitional Services$14.5 Intensive ongoing services targeting recipients of transition services $9.6$19.1 Increased contract management0.860.94 External Evaluation of Crisis Projects$0.21 Total:$39.3$49.0 * All figures in millions

54. 54 Moving Health Forward Exceptional Item 11 – Chronic Disease –70% of deaths are related to chronic disease –10% of population have major limitations in daily living –About 75% of health care costs come from obesity, high blood pressure, cholesterol and Type 2 diabetes –Tobacco is implicated in 25,000 deaths in Texas annually –Cost of $3.3 billion to Texas businesses in 2005

55. 55 Many of these conditions are preventable. We can reduce the disease burden and the economic burden by promoting: –Avoidance of tobacco –Healthy eating –Physical activity –Maintaining a healthy weight –Controlling blood pressure and cholesterol Moving Health Forward Exceptional Item 11 – Chronic Disease

56. 56 1998 Obesity Trends* Among U.S. Adults (*BMI 30, or about 30 lbs. overweight for 54 person) 2007 1990 No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% 30% Source: CDC Behavioral Risk Factor Surveillance System

57. 57 Obesity –Interventions to improve nutrition and increase physical activity –Improved screening, diagnosis and treatment for cardiovascular disease and stroke –Support of the Mayors Fitness Council Grant program Tobacco –Expand cessation services for Texans who want to quit –Increase partnerships with communities with anti-smoking activities Newborn Screening –Expand detection of cystic fibrosis and case management Moving Health Forward Exceptional Item 11 – Chronic Disease

58. 58 Chronic Disease Exceptional Item 11 FY2010*FY2011* Obesity Prevention$3.3$5.9 Tobacco Prevention$3.8$4.7 Cardiovascular Council Projects$1.0 Cystic Fibrosis$2.9$3.4 Total:$10.9$15.0 * All figures in millions

59. 59 CDC recommends expanded testing for HIV –Earlier detection leads to earlier, more effective treatment –Reduces the rate of transmission Texas is second nationally in TB cases Exceptional 12 item includes –Improved HIV testing –Expand improved testing for TB and STDs –Tuberculosis services –Upgrade cervical cancer screening Moving Health Forward EI 12 – Infectious Disease

60. HIV/AIDS in Texas: Persons Living with HIV/AIDS, New Diagnoses of HIV/AIDS, and Deaths among those with HIV/AIDS New diagnoses are holding steady. The number of persons living with HIV/AIDS is rising because they are surviving longer. Moving Health Forward EI 12 – Infectious Disease

61. 61 Racial Disparity in Persons Living with HIV/AIDS in Texas, 2001 - 2006 The number (left graph) of black persons living with HIV/AIDS surpassed that of whites in 2005. The rate (right graph) in 2006 was 5 times higher for blacks than for others. Moving Health Forward EI 12 – Infectious Disease

62. 62 Reduce the Spread of Tuberculosis In 2005, the incidence of Tuberculosis in Texas was 39% higher than the U.S. incidence rate.

63. 63 Infectious Disease Prevention Exceptional Item 12 FY2010*FY2011* HIV/STD Viral Hepatitis Testing$4.4$4.7 Tuberculosis Services$3.2$3.6 Cervical Cancer Screen$0.53 Total:$8.1$8.8 * All figures in millions

64. 64 Other Agency Legislative Appropriations Requests Health and Human Services Commission –Critical health care shortage positions Physicians, psychiatrists, nurses –Waiting lists for Children with Special Health Care Needs, Childrens Mental Health Services –Consolidated enterprise requests for technology and vehicles Department of Assistive and Rehabilitation Commission –Accessibility of information technology Comptrollers Judiciary Section –Sexually Violent Predator monitoring program

65. 65 Concluding Thoughts In the 21 st century, Texas faces new and evolving health challenges There are effective ways of reducing the personal and economic toll of the disease burden What DSHS is presenting in its LAR represents our best effort to improve health for individual Texans and the state as a whole