Dear Colleagues:
I am writing this after listening to two weeks of Testimony and presentations on the proposed 2010/11, DCH Budget during which dozens and dozens of people spoke on the need for increased Medicaid funding, the losing battle in Neighborhood Service Organizations, rising Infant Morbidity, increased teenage pregnancies, home foreclosures, job losses, family breakdowns, reductions in Medicaid reimbursement and Medicaid Providers and continued losses in General Fund dollars for Mental Health.  The Public Health system once a showplace of Care and efficiency, has been steadily strangled according to its Division Chief, over the past 8 years and is dying. I worry about what may happen in the near future and how these clear needs expressed by many people who were suffering will be meet.  Like the Adult Dental Services which the Governor eliminated last Fall.  I have spoken to both the House and Senate on this issue and currently it is in the new Budget Bill with support in both Houses…..but……will the Governor Veto it? I know not.
For the 46 Statewide Community Mental Health Services Program established in this State to serve all 83 Counties, there are 18 prepaid inpatient health plans (PIHP’s) functioning as managed care entities that administer the medicaid specialty services and supports, managed care waiver for mental health and substance abuse services.
From FY 2004 through FY 2009, there has been a $70 million reduction in Federally matched Service dollars due to reduced State General Fund moneys. This represents a cut of almost $40 million in State Mental Health dollars and a 33% loss of service capacity to persons who may not qualify for Medicaid because they may have some part-time work or low paying job.
In addition, in light of the Governor’s request to push experienced, State employees into retirement by October 1st, 2010, between 60% and 70% of State Hospital Directors, 18% of all hospital staff are going to be eligible eligible to retire. Some State hospitals have close to 29% of their employees eligible to retire by 10/1/10.
All this in a time when Adult Psychiatric Hospital Admissions were up over 5% in the past year. The State’s lone Children’s Psychiatric Facility (Hawthorne Center) Admissions increased by 30% in 2009.
Mental Health Services delivery, as once known, are being changed to accommodate these General Fund reductions by forcing waiting lists in many areas of our State and eliminating some Services to persons previously served who were poor and in need but lacked Medicaid eligibility.
If the proposed Senate cuts to Mental Health dollars are implemented ( an additional $56 million) in 2010/2011, it is my opinion that proposed service delivery systems over the next 15 months could develop dramatic flaws that would take years to recover, if at all.  For once you cut out the Services to people and eliminate the system flow of professional providers delivering those services……. if you do not have alternatives for delivery and the need remains great, people will suffer.  That is just plain wrong.
Let me be clear.  I do not have a problem with pruning the Tree of Life.  I do not have a problem with clearing out limbs that have not served well, or eliminating decay, waste or dry rot. Especially in times of drought.  I do not have a problem with trimming back so that the Tree can carry itself better and withstand the winds of Time.  What I am referring to is cutting out the roots.  Doing this saying there is no monies while at the same time you put $52 million into a New “State Police Building”, and pumping another $150 million in direct subsidies to “Movie Industry” , which I am told is seen to be delivering 10 cents on a dollar invested over TEN years!  What are our priorities?
 On top of all that….then presenting a “Balanced Budget” based on moneys anticipated by hiring a “Medicaid Inspector General” (to clamp down on Fraud and collect $75 million and put it in the State Bank) and showing income derived from charging a “Physicians Tax” (QAAP) that was defeated last Fall and will not see the Light of day before the start of the new Fiscal Year on October 1st, 2010, and has not sufficient votes in either House. Thus their is a clear deficit of over $750 million in the “2010/11, “balanced Budget” before it is even passed by the Legislature.
So where do we go from here?  Well, I personally believe that State Revenues will pick up over the next 6 months, from last years figures.  I also believe that the Legislature will look longingly at raising Revenue for 2011, during the Lame Duck session, which occurs AFTER THE FALL ELECTION.  The problem with that is that if the Republicans gain a victory in the Governor’s Seat the Democrats will not want to pass legislation to make the newly elected Governor quickly look good over the next year……..when Blanchard lost he did nothing to improve the State of the Economy for the incoming elected Governor, his last two months, to my knowledge.
I thus do not see a major overhaul in the Tax Structure in Michigan this Fall, but there may be some tweaks to help ease the Transition into 2011 as far as raising Revenues to help meet anticipated shortfalls that cannot be covered by the Stashed Stimulus Funds (about $350 million) and slight improvements in collected taxes due to some increases in auto sales and housing improvements/remodeling and possible new construction.
All this will be setting the scene for this Fall, while at the same time hundreds of Teachers and State Employees will probably Retire and carry out with it the bulk of Institutional knowledge of how this State is run and its children educated, with most of the retirees being Middle and upper Managers in the Systems. 
How will the State maintain continuity?  What will be the norm for a while?  CONTRACTS will be developed between former employees and the State and if that is forbidden by Legislative Language in the retirement Bill, than small companies will be formed to contract for services with the State and those small companies will then pay the retired experienced State employees who choose to continue to work, for their services probably in the same Arenas where they worked before.  The savings to the State will be their Benefits will be paid through the Retirement system and thus no benefits cost to the State payroll.  New employees will have lower salaries and less benefits so that too will be a cost savings.  All this has to take place however over a 60 day period to keep the system flowing and I doubt that such a smooth transition can occur and keep Services running without any bumps in the process.
The Governor still has some additional Cards to play in that she can issue another EXECUTIVE Order, creating additional “Furlough Days” and hiring Freezes into November, and she can call for Additional reductions over the Summer, depending on the Status of the Budget Bills presently before the Legislature and scheduled to be on her desk by July 1st, 2010.
Time will Tell………….The Beat Goes On!
Sorry this turned out to be so long, but it needed saying.
I would appreciate your comments or additional concerns.
Please write or call at your earliest convenience

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