Consolidation – a trend that is gathering speed

SPI President & CEO Mary Scott Nabers

SPI President & CEO Mary Scott Nabers

Consolidation is a common change occurring in governmental entities throughout the United States. At the beginning of this decade, 20 states had already closed or consolidated some agencies.

Since then, many other states have also consolidated services, divisions and agencies. Cities and counties are also in the midst of consolidation.

Why the changes? It’s because of public funding. Budgets have been reduced and public officials can no longer cover the cost of government services without making significant changes. Consolidation definitely cuts costs and is usually successful.

Consolidation, however, is rarely popular.  People almost always resist change and there are other consequences. Many government employees lose jobs and citizens often complain of diminished service delivery after consolidation.

Gov. Scott Walker, as a candidate in Wisconsin, promised to freeze tuition rates and cut property taxes.  But, to fulfill those pledges, consolidation was required. The same scenario exists in many other states.

Some services, such as IT, are consolidated easily, but it is difficult to consolidate other types of services. Health services, especially those that serve the elderly, children or those with mental health disabilities, don’t consolidate easily. Making any change that threatens the quality of service for citizens unable to advocate for themselves is controversial. And, almost all constituent-facing services are difficult to bundle.

In spite of that, consolidation seems more rampant currently in health and human service agencies throughout the country. The state of Michigan, in 2014, created the Mid-State Health Network, which is now the Medicaid managed care organization for a portion of the state’s behavioral health services. The consolidation involved only specific divisions such as administrative, regulatory and financial. The client-facing interactions remained the same, so citizens have not been forced to adjust to new programs or new implementation. It has proven to be a successful effort.

Delivery of health care services to prisons is also changing significantly. Where once taxpayer supported health clinics and public hospitals provided medical services, a number of states now rely heavily on telemedicine.

In Iowa, Gov. Terry Branstad has talked about consolidating various entities that make up the state’s mental health network. The state is currently spending about $260,000 per bed per year. With 844 beds, that totals more than $219 million. A consolidation would cut costs but would force families to travel greater distances to visit their loved ones. Consolidation usually has its pros and cons.

In Texas, the Sunset Advisory Commission has recommended a massive overhaul of the state’s Health and Human Services Commission. Consolidation at some level appears inevitable. The report listed various overlapping programs that would be administered more efficiently under one roof. Legislators will ultimately decide what to consolidate.

The trend of consolidation will continue as states, cities, counties and school districts grapple with decreasing funds and increasing service demands. However, consolidation is only one way government is changing. Innovation, tied to technology, is also creating change. Government services in the next decade will be provided in new and very different ways.