Minimal Fallout Expected From State Auditor's Mental Health Spending Report

by George Lauer, California Healthline Features Editor

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Potential paths after an auditor's report criticized the way California agencies and government officials have overseen spending of mental health funding range from staying the course to replacing the entire oversight commission.

Repercussions from the California State Auditor's report on the Mental Health Services Act released last week will probably fall closer to the former than the latter, most experts agree.

The report concludes that government representatives have "provided little oversight of counties' implementation of MHSA programs, particularly as it relates to evaluating whether these programs are effective."

The auditor makes several recommendations, and for the most part, the agencies charged with keeping track of mental health spending -- including the Mental Health Services Oversight and Accountability Commission and the Department of Health Care Services -- agree with State Auditor Elaine Howle.

The auditor's report deals with the past six years of collecting and spending tax money from Proposition 63 approved in 2004 by California voters. Prop. 63 -- also known as the Mental Health Services Act -- was designed to expand mental health programs and services and to develop and use innovative methods more likely to identify and treat mental illness.

The law has raised nearly $9 billion by levying a 1% tax on residents with annual incomes greater than $1 million.

The report examined four counties in detail -- Los Angeles, Sacramento, San Bernardino and Santa Clara -- and found deficiencies in evaluating programs receiving funding.

Patricia Ryan, executive director of the California Mental Health Directors Association, noted that counties are aware of deficiencies and are working to correct them. She also pointed out that the report contained no "negative findings" regarding counties' use of the money.

"The auditor made recommendations in some of the counties regarding better articulation of program goals and a more consistent approach to performance outcomes collection and reporting, which the counties themselves have agreed to work on," Ryan said.

"I do want to point out, however, that after spending many months in each of the four counties audited, the state auditor reported no negative findings regarding counties' expenditure of funds. They are also audited at the local level on an annual basis, and submit detailed cost reports that account for all county expenditures," Ryan said. Dan Logue (R-Linda), vice chair of the Assembly Health Committee, said he plans to introduce legislation that would require regular state audits for each county using Prop. 63 money.

'Efforts Already Underway'

Jennifer Whitney, director of communications for the Mental Health Services Oversight and Accountability Commission, said her organization plans to comply with the auditor's recommendations.

"Efforts are already underway to implement a five-year evaluation master plan and we've begun the process of developing PEI (Prevention and Early Intervention) and Innovation regulations," Whitney said. "Department of Health Care Services has a strong commitment to collect reliable data from counties which supports the commission's evaluation efforts," Whitney said.   

Rusty Selix, executive director of the California Council of Community Mental Health Agencies, said he hopes the report will speed things up.

"The Mental Health Services Oversight and Accountability Commission had already developed an evaluation master plan, which if implemented would address the concerns from the report," Selix said. "I hope and believe that the report will be a catalyst for both the oversight commission and the Department of Health Care Services to accelerate their efforts to implement that plan and take related actions to address the gaps in documentation that the report noted."  

Other End Of Spectrum

At the other end of the "what-should-happen-next" spectrum is D.J. Jaffe, executive director of Mental Illness Policy Org, who suggests all 16 members of the commission established to oversee the spending of Proposition 63 money should be replaced.

"The state auditor said they failed. Therefore they should be replaced with new appointees immediately. It is the fastest way to take action," Jaffe said. 

Jaffe's organization, based in New York state, released a study of its own last week -- "California's Mental Health Service Act; A Ten Year $10 Billion Bait and Switch."

Jaffe said board members appointed by the governor and Legislature should not only meet "legislatively defined credentials, they should not be associated with organizations that have received MHSA funds or expect to receive funds. In any other area of government this would be a basic requirement," Jaffe said.

Structural Changes Have Bearing

Two major structural changes have happened -- and are still happening -- in California that have a bearing on most mental health programs, including the MHSA:

  • Realignment: State and county governments are realigning responsibilities and funding for mental health care; and
  • Reorganizing Mental Health Department: In 2011, the state Legislature did a major overhaul of the state Mental Health Department, redistributing the work to three other state agencies.

Although the auditor's report does not deal directly with the effects of these two shifts, stakeholders and experts say there are connections -- direct and indirect -- to MHSA spending.

Selix -- who co-authored Prop. 63 with Darrell Steinberg (D-Sacramento), now Senate President Pro Tem and one of the loudest legislative voices calling for the audit -- said lack of progress in setting up oversight for spending , as well as the reorganization of the mental health department, had a part in the call for an audit.

"There has been a lot of frustration on my part and my co-author of Proposition 63, Senate President Pro Tem Darrell Steinberg, over the state's failure to develop the oversight and outcomes reporting system recommended by this audit report.

"While there is probably some connection to these failures in the decision to eliminate the (mental health) department, it was the broader problem of the fact that the department spent most of its energy on the few thousand people in the state hospitals and only very limited attention to the hundreds of thousands of people in the community mental health system," Selix said.

He added, "There was a consensus that the two missions should be separated. The main reason that it was moved to the Department of Health Care Services instead of being a separate department was because of the fact that nearly all people served are part of Medi-Cal and to address the need to integrate and coordinate mental health with alcohol and drug and with physical health."

DHCS oversees Medi-Cal, California's Medicaid program.

Ryan from the mental health directors association said a new game plan for realigned state and county responsibilities is nearly complete.

"We know that the state-county performance contract required by law -- which we have supported all along -- is already in the final stages of being implemented by DHCS," Ryan said.

"We also expect and hope that the recommendations regarding statewide performance outcomes and improved data reporting will lead to a much more thoughtful, cost-effective DHCS/MHSOAC/county mental health partnership to universally collect, aggregate, analyze, and disseminate county data whether it be financial, program activities, or outcomes," Ryan said.

Ryan said MHSA commissioners are heading in the right direction.

"The recently adopted MHSOAC evaluation framework, which was and is supported by CMHDA -- is an important step in the right direction. California's counties have always welcomed the opportunity to demonstrate the value of the community mental health services they provide through the Mental Health Services Act," Ryan said. 

Changes already made are improving oversight, according to Whitney, who said there is evidence that California taxpayers are getting their Prop. 63 money's worth. She said a 2012 study by the UCLA Center for Healthier Children, Youth and Families, showed that Full Service Partnerships -- "the lynchpin of Prop. 63," according to Whitney -- produced "a cost savings of $1.27 for every Prop. 63 dollar spent."

The MHSA Full Service Partnerships are aimed at helping Californians facing severe mental health challenges because of illness or circumstance, an historically underserved population, according to MHSA officials.


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