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By Market Intelligence Team

Over the past several years, I’m sure you’ve heard a great deal about the state of California’s budget. Right now, we’re facing almost a $25 million budget gap, and the new governor, Jerry Brown, recently released his proposal for dealing with the budget problem. (For more details on the proposed cuts in California, see New California Governor Proposes Major Program Cuts & Changes to Health & Human Services .)

One interesting aspect of the Governor’s proposal is the realignment of certain government functions—shifting management responsibilities for some programs from the state to the county level. The Governor’s rationale is that savings will be gleaned by improving operations and efficiencies through local government management. Specifically, the proposed California realignment would affect three programs:

  1. EPSDT (Early Periodic, Screening, Diagnosis, and Treatment) is a set of mandatory services and benefits for individuals under age 21, which provides screening services to detect physical and mental conditions.

  2. AB 3632 is a special education mental health services programs for youth; funding supports mental health services for special education students through county mental health agencies, in accordance with the federal Individuals with Disabilities Education Act (IDEA).

  3. The Medi-Cal managed care program is part of California’s Medicaid program, which covers specialty mental health services, such as inpatient hospitalization, outpatient mental health professional services, rehabilitative mental health, and targeted case management.

While other state’s budget situations may not be as dire as California, everyone is certainly familiar with tight budgets and funding cuts. In the 25+ states with county management of health and human services of some type, county executives are considering competitive bidding and privatization of selected services to reduce costs.

In times of economic recession (like now), tradition and regulatory requirements often are sacrificed in the interest of better outcomes for lower costs. Every management team needs to think about service models with new and less expensive ways of serving consumers. Adding new services to already existing programs may be an option for your organization to increase census, add a new funding stream, and add a little more to your bottom line. Remember if you don’t do it, your competitors just might!

To learn more about innovation in challenging times, join us this June in Baltimore at the 2011 OPEN MINDS Planning and Innovation Institute, or e-mail me at


Richard Louis III
Senior Associate, OPEN MINDS


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To read more about how state budgets are affecting the health and human services field, check out: Pressure Mounts as Budgets Shrink all members 

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