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Merge 4 state agencies, Scott transition team says

By Jim Saunders and Carol Gentry
Gov.-elect Rick Scott's transition team is calling for a dramatic change in Florida's health-care governance, merging the Department of Health and the Agency for Health Care Administration into a mammoth new agency.

The Department of Elder Affairs and the Agency for Persons with Disabilities would be folded in, as well. So would the mental-health and substance-abuse programs of the Department of Children and Families.

It would return Florida to the centralized service model that was broken up during the 1990s, with the demise of the old Department of Health and Rehabilitative Services. But Alan Levine, who headed Scott's health and human services transition team, said there's no intention of recreating HRS.

Child welfare got lost in the old HRS, he said. Department of Children and Families will retain its independence in the suggested reorganization.

Levine said the merger of DOH, AHCA and the others aims to align "functions" -- putting people together who do similar jobs. That's the way to create more efficient government and reduce duplication, he said.

The report predicted "large savings" if the plan is enacted, a necessity in hard economic times, with the state facing a deficit of around $3.8 billion. Lawmakers have already done some cost-cutting and tapped state trust funds.

A proposed organizational chart calls the new agency, the "Department of Health and Human Services,'' an echo of the federal health agency.

Levine said he knows there will be opposition from "stakeholders" who have strong ties to agencies they are accustomed to dealing with. "I said, 'Let's not worry about the politics of it. Let's tee it up for the Legislature and governor to debate.'"

Such a major change would require legislative approval and would take at least a year to plan and put in place, the document says. House Appropriations Chairwoman Denise Grimsley, a Sebring Republican who is a key player on health issues, said in an e-mail this morning that she backs the concept.

"I do favor consolidation if we can show cost savings, and I believe we can,'' Grimsley said.

But Doug Martin, the Tallahassee-based legislative director of the American Federation of State, County and Municipal Employees, said he thinks such a merger would take several years if the Scott administration wants it to work.

"If they just want to jam stuff together like a potato salad, they could do it in a year,'' he said.

Martin also raised the specter of creating something like HRS, which he called "just an impenetrable bureaucratic maze.''

The 68-page plan, released late Monday, also calls for a statewide expansion of managed care in the Medicaid program. Levine, who served as AHCA secretary and as a top aide to former Gov. Jeb Bush, was an architect of a pilot managed-care program for Medicaid.

The team also recommended that Scott appoint someone in the governor's office who could "quarterback" three issues: the merger of the agencies, reforming the Medicaid system and carrying out the new federal health overhaul. However, the report also urged Scott to play a leadership role to repeal that federal law, the Patient Protection and Affordable Care Act, saying its massive expansion of Medicaid will bankrupt the state and undermine the private market.

Scott made a fortune in the health-care industry, building the Columbia/HCA hospital chain before stepping down amid allegations that the company defrauded Medicare. But his health-care positions during this year's gubernatorial campaign were mostly broad statements of support for more privatization and expansion of managed care in Medicaid.

The transition-team recommendations call for far more sweeping changes in how government interacts with the health-care system.

They call for more privatization of government services, taking county health departments out of the business of primary care, privatizing three state mental hospitals and closing the A.G. Holley state tuberculosis hospital.

Also, the recommendations strongly call for a statewide expansion of the Medicaid pilot program, which currently requires most beneficiaries in five counties to enroll in managed-care plans. Along with the expansion, the recommendations call for using managed care in the state's long-term care programs.

The report also expands on criticism that some lawmakers have heaped on the Department of Health. Members of the transition team said the department lacks a clear mission and headlined one section of the report as, "Challenge: Cultural Barrier to Excellence.''

"One of the largest challenges that the incoming administration will face, in both the short and long term, is how to redefine the culture of the department to promote excellence,'' part of the report said. "It is obvious that the current state of affairs is a product of a multitude of issues, including but not limited to, a lack of understanding with respect to the department's mission, an absence of defined and measurable outcomes and ineffective department leadership.''

The report includes examples of dysfunction at the department. In one of the examples, a transition-team member asked an employee for directions to the surgeon general's office.

"The employee pointed to the clock and noted that it was 6:58 a.m. and they did not begin work until 7 a.m., so they were unable to be of any assistance,'' the report says.

Levine said the problems at DOH are "cultural." When the team asked which employees were best, the answer was that all were "satisfactory." When the team asked DOH to create a priority list of its functions, it couldn't, viewing all of its tasks as equally important.

"Left to its own devices," Levine said, "the agency will not recognize that it has problems."