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The two-year experiment that merged Arkansas’s Health and Human Services departments officially ended July 1.

“I’ve heard from people all over the state. People are elated and pleased about it,” said state Sen. Tracy Steele, D-North Little Rock and author of the bill uncoupling the state’s two largest agencies. “I’ve even talked to some employees, some of those who had many years who were going to retire or take early retirement, but now say, ‘I may stay a little while longer.’”

Steele’s bill zipped through both houses during the legislative session with little opposition. The bill authorized Gov. Mike Beebe to undo the merger, which he did by signing an executive order on May 3.

Working together strengthened both agencies, Beebe said in a prepared statement. But it made more sense to separate the agencies and return the Department of Health to a cabinet-level agency.

Arkansans’ health is too important of an issue for it to lack independent representation in his administration, Beebe said.

John Selig, director of the Department of Health and Human Services (DHHS), agreed with Beebe’s assessment of the agencies’ shared experience.

Arkansas residents will continue to benefit from some of the changes that took place because of the merger after the agencies separate, such as the streamlining of services, Selig said in a prepared statement.

Paul Halverson, director of the Health Division, said the division is stronger for having incorporated some of Human Services’ administrative processes to make procedures, such as contracts and accounting, more efficient.

Selig said DHHS will develop detailed plans by July 1 for detaching the two agencies’ infrastructures so they can operate independently.

Matt DeCample, a spokesman for Beebe, said that before signing the order, the governor asked for and received assurances that the split could be achieved with the money in the existing budget of DHHS, or budgets of both departments.

Beebe also asked for and received guarantees that there would be no reduction in services from the agencies, DeCample said.

“So the costs are internal. It’s not costing additional money to the state,” DeCample said.

The combined agencies’ budget for the next two fiscal years is $4.4 billion, with the roughly $4 billion of that under the Human Services’ Division.

The state legislature had merged the departments at the urging of then-governor Mike Huckabee. At the time, Huckabee said the merger would eliminate the duplication of services and actually improve care by focusing each department more tightly on its strengths and core mission.

The Health Department and the Department of Human Services served many of the same clients, and there were some administrative accountability issues, Huckabee had said.

Steele said the promised efficiencies never really took place. The savings that resulted — estimated at $2.5 million to $3.5 million — came from leaving administrative positions in the former Health Department unfilled.

Residents of rural communities complained that they weren’t getting the same level of service. Steele said the combined department generated too much administrative red tape, and the added bureaucracy hampered communications.

Meanwhile, morale among Health Department employees plummeted.

“The Health Department folks were pretty proud to be a stand-alone agency in Arkansas, and they were for a very long time,” DeCample said. “When that was taken away, which was done at the time for valid administrative concerns, it did harm morale.”

The Health Department employees were basically assimilated into a larger agency, DeCample said.

Steele said the combined department, touted as a merger of two equals, was more of a takeover.

Steele said he likes the path the state is taking to unwind the transaction: dividing the responsibilities without adding a significant number of employees.
The combined departments employ more than 10,000 people and provide services to more than 1 million Arkansas residents.

Beebe has said the accountability issues have been addressed, and he is comfortable that the current administration of the Health Department is “on the right track.”

The governor’s office said ensuring the continued certification of the Public Health Laboratory played a role in the decision to separate the agencies.

The Department of Health lost its Clinical Laboratory Improvement Amendments certification from the Federal Center for Medicare and Medicaid Services in April 2005.

Improvements made to the Public Health Lab since that time have drawn praise from CMS, according to the governor’s office. The lab will retain its re-certification under the new Department of Health.

Steele said uncoupling the agencies will not be instantaneous.

“Know that it’s going to take a little time to do it thoroughly and completely, and we just ask for everybody’s patience,” he said.



July 2007

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