Mental Health Department FY08 Budget Planning Update

1. Mental Health DepartmentFY08 Budget Planning Update The current budget targets are going to require going places we do not want to go MHSA Stakeholder and Leadership Committee Meeting February 9, 2007

2. Budget Reduction Context • FY07 Shortfall Recurring in FY08 (Worst Case) $10,115,088 • FY08 Department Reduction Target $33,933,000 • Total Budget Reduction Potential $44,048,088

3. Budget Reduction Planning Parameters • Expenditure Structure County staff, CBO contracts, 24 Hour Care, BAP/EPS, Custody MH and drugs constitute the vast majority of MHD expenses • Mandated vs. Non-Mandated Services While some services are mandated and some are not, there are not specific budget level requirements for mandated service. Levels of service are driven by mandated population and level of service needed. Obligation is to provide least restrictive service options. • MHSA Supplantation Concerns • MHSA funds cannot be used for institutional and/or involuntary care • MHD overmatch is not included in the MHSA baseline per DMH Policy Letter • Any changes in use of MHSA funding must go through local and state approval processes

4. Steps in FY08 Planning Planning • October/November 2006- • 2006 engage stakeholders and obtain input • Formulate budget reduction principles to guide planning • Outline public planning process • Prepare budget overview • Provide orientation to stakeholders through MHB and Committees • Identify potential reduction strategies in line with principles • December –March 2007 – • MHD draft reduction plan and system impact • Stakeholder input through MHB and Committees to reduction plan • MHD finalize draft reduction plan • Reduction plan to County Exec • Formal public review process through MHB, BOS, committees

5. Steps to FY08 Budget Development • Outline principles to guide planning • Describe current budget: funding sources, programs, budgets, FTE’s • Define and quantify estimated mandated populations that must be served • Define array of service that will be available to each mandated population and estimate annual service amount by service type/year • Establish basic service array/amount needed to provide mandated services • Estimate budget (expense and revenues) to run (county vs. contract) and determine annual cost per client • Design downsized system structure • Develop implementation plan • Initiate implementation

6. Budget Planning Principles Proposed Overarching Principles • The reduced service system must be clearly outlined along three dimensions: • WHO is eligible for service(mandated populations X mental health criteria)  • WHAT service is offered(service array X mandated population) • HOW MUCH is available(amount and duration X mandated population) • Services must be funded based on objective information available regarding cost, quality, and outcomes in order to serve the most consumers with funds we have • Access to remaining services must be designed to reduce disparities • We must continue the mission to continue with system transformation

7. Budget Planning Principles Proposed Additional Principles • Reductions should preserve recovery oriented least restrictive service necessary to meet consumer need and preserve independence • Reductions should maintain efficient “span of control” of management structure while insuring effective administrative support •  Efforts should be maintained to continue technology development and support to maximize quality and efficiency • Reductions should be least disruptive to the system

8. Mandated Populations • Consumers treated under LPS: Est. 10,000 (per year) Crisis Intervention for 5150 Applications: 10,000 5150 Crisis Stabilization Evaluations: 10,000 5250 Inpatient Hospitalization 2,600 Post Hospital Locked (State Hosp., IMD, SNF) 400 Ongoing Care for LPS Conserved 800 • Medi-Cal beneficiaries: Est. 14,361 (per year @6.27% state avg. penetration rate) Children 0-15 3,923 TAY 16-25 2,174 Adults 26-59 6,549 Older Adults 1,550 • AB3632 Students: Est. 870 (per year under 22 years) • Must Provide MHSA CSS Plan Services FSP: Est. 400+ (per year) • Adult Custody Services: Est. 2700 (per year @ 900 census) • Juvenile Hall, Ranch Services, and Shelter Services: Est. 2,100 (per year @ census) • Indigent: (uninsured “to the extent resources are available”)

9. Categories Amount State (Realignment, Short Doyle, MHSA Planning, Adult SOC, SB855, SB90) $68,588,713 Local County General Funds $67,865,707 Federal (Medi-Cal, Medicare, IDEA, SAMHSA/PATH) $65,867,333 Other (Grants, Fees, Reimbursement, Other) $5,805,226 Total $208,126,979 Overview of Budget by Funding Source

10. Budget Reduction Context: FY07 BudgetSources and Uses of Funds Target: $33.93 Million GF = 72% of county discretionary funds (per State MOE for MHSA) Above Chart Does not include FY07 MHSA funds $13.4 Million annual

11. Budgeted County General Fund and Realignment • While the realignment budget is $40.8m, the MHSA realignment MOE is $52.0m • Alternative attributions of realignment and CGF are possible, e.g. MediCal cost report attributes it differently to maximize MediCal and SB90 revenue Can re-attribute Realignment/CGF $ in Millions

12. Reduction Areas and Targets

13. Reduction Target Rationale Admin Management responsibilities same in reduced system APS Serious expense increase needs containment 24-Hour Serious expense increase needs containment Jail MH Extreme increase in pharmacy expense Adult OP Greatest non-mandated service in the system F&C OP Highest revenue; less non-mandated service Pharmacy Costs increasing; need for discount support

14. Reduction Approach • Reduce or eliminate service to non-mandated populations • Maintain minimally needed safety net through medication, self help, and urgent care service countywide • Restructure remaining services to align with county Medi-Cal population (primary mandate) with respect to geography, language needs, age • Implement “generic” tracks of outpatient services to children, adults and older adults. • Consider county versus contract cost differences in reducing service • Consider least disruptive means to consumers in reducing service • Maintain language competencies to address Medi-Cal need • Implement pharmacy discount strategies • Implement cost saving strategies in acute and 24-hour care services

15. Budget Reduction Approach • Maximize MHSA plans to support continued transformation and to mitigate negative impact of reductions through enhancement of: • Urgent Care and Crisis Service • Medication and Recovery Services • Unlocked Residential Treatment and Non-Treatment • Expanded SMI FSP • Improved Foster Care and Juvenile Justice Systems • Improved Young Child Assessment Service • Enhanced Eligibility Service