July 1995

Will Michigan See a Combined Public Health/Mental Health Department?

by Martin Ackley, Consultant for Health Policy

When Gov. John Engler appointed Department of Mental Health Director Jim Haveman as interim director of the Department of Public Health, the quiet musings about joining the two departments turned into vocal speculation and debate.

In Engler’s May 10 press release on the resignation of Public Health Director Vernice Davis Anthony, Chief Medical Officer Ron Davis, M.D., was tabbed as the acting director. So why on June 26, did the governor name Haveman as the acting director—while he still heads up the Department of Mental Health? That has fueled a conclusion that a merger was on the horizon.

In the announcement, Haveman said: "I look forward to continuing the theme of collaboration that we are developing among Michigan’s health care and human services departments."

Yet the governor’s special advisor for strategic initiatives, Dennis Schornack, says no decision has been made to merge the two departments. "We are considering the consolidation of functions in order to make a more clearly defined mission for health services," Schornack explained.

Follow the Footprints

There has been a concerted effort over the past three years to bring the various state departments and agencies together to pursue a common goal—an efficient blending of services at the local level. Programs like Communities First, Michigan Interagency Family Preservation Initiative, and Strong Families/Strong Children have laid the groundwork for interacting services provided by the departments of Social Services (DSS), Mental Health (DMH), and Public Health (DPH).

State psychiatric facilities have been closed, while funding and responsibility for those clients has been redirected to the Community Mental Health (CMH) systems. State funding to local public health departments nearly doubled last year to comply with a 50/50 cost-sharing requirement in state law. More and more Medicaid services for poor families, the mentally ill, and substance abusers are delivered by local managed care systems.

The directors of the five state human services departments (DSS, DMH, DPH, Education, and Services to the Aging) are committed to implementing a task force report to reform the human services system in Michigan. One task force recommendation that the directors want implemented by October 1, 1995, is the formation of a single multipurpose collaborative body in each community in the state. This body is to include representatives from the DSS, CMH, local public health, intermediate school districts, and area agencies on aging.

"This reform is envisioned to focus on ‘new ways of doing business’ to achieve better results... across multiple human service and educational systems," according to Systems Reform for Children and Their Families, issued by the multidepartmental Systems Reform Task Force.

This "new way of doing business" was also the core of the Secchia Commission report, which read: "Collaborative efforts at the state and local level are key to providing services to individuals in an efficient manner." The governor may decide that merging of the Mental Health and Public Health departments is an efficient collaboration at the state level.

Mergin the Incompatible?

Many observers cannot see the logic of merging the Mental Health and Public Health departments. The DMH oversees the direct life-care and services for people with mental illness, while the DPH is geared more toward the prevention and control of broad population-based health concerns like air and water quality and immunizations.

Compatible or not, the departure of Vernice Davis Anthony provided the governor with an opportunity to reevaluate the mission and function of the health service departments. This is especially true in the context of possible federal changes with direct block grants to the states. Haveman has direction from the governor to see where there is overlap and duplication between the two departments, and to help coordinate efficiencies where they interact.

"There are 24 or 25 separate [Medicaid] programs that are administered by three departments," Schornack said. "[With federal block grants] we could contemplate a health care financing authority at the state level to roll up some of these programs, for a program like managed care, where we’d be in the business of contract management as opposed to claims processing. It would make sense to put it under one department."

Then there is substance abuse. Fifty-two percent of DMH clients have substance abuse problems and receive state-funded care. Three years ago, the statewide association of CMH boards supported Haveman’s efforts to shift substance abuse funding to his DMH budget. The governor has even proposed eliminating local substance abuse coordinating agencies, considering them an unnecessary layer of bureaucracy.

Around the country, there is a growing movement to integrate mental health and substance abuse services, said Michigan Association of Community Mental Health Boards Executive Director Dave LaLumia. "There’s a huge overlap of persons being served," LaLumia said. "CMH has a 24-hour crisis network and the infrastructure to handle [substance abuse]. I’m not saying we have to take it over, but the services ought to be integrated. Maybe Jim’s placement over there will help in that integration."

Another possible scenario is the transfer of these federal block grants directly to the local level. "A lot of funding comes in federal block grants to DPH," said Michigan Association of Local Public Health (MALPH) Executive Director Mark Bertler. "We are looking into creating a system to get block grants from the state to deliver services at the local level." LaLumia also wondered if any of the federal block grants would "trickle down to the local level."

Tried and Trusted

Haveman has proven that he can make the tough decisions and weather the storms. Shortly after his appointment as interim director at the DPH, Haveman met with Bertler and secured an agenda slot at the group’s annual conference in August—for local health officials to meet and greet the new acting director.

"He expects to do more than ‘warm the chair’ of the [DPH] director," Bertler said. "He intends to manage the department while he’s there. Putting Jim in now really helps the governor. He is someone the governor trusts and depends on."

Having Haveman direct both departments on an interim basis gives the governor the luxury of having a combined department without battling opponents in the legislature and addressing the concerns of advocacy groups. And if the governor likes the outcome, a merger is only an executive order away.