Across the nation, state public health departments are facing rapid changes. The emergence of managed care for publicly insured populations under both Medicaid and Medicare, welfare reform, and the shift in political ideology to neoliberalism have all contributed to an extremely turbulent and highly uncertain environment. All of these changes in federal policies have had impacts on state and local public health. This paper will explore the implications of changes in federal health and social policies on the structures and function of state and local health departments. Managed care has been widely adopted by state legislatures as a response to rapidly escalating Medicaid budgets. Medicaid is a shared state-federal program and state Medicaid expenditures have contributed to budget deficits. As states adopt Medicaid managed care plans, the role of the state health department evolves from direct provision of health care services to Medicaid populations to providing fiscal and programmatic oversight for the Managed Care Organizations (MCOs). The state Medicaid authority relies on the expertise of the state public health department to monitor the MCO contracts concerning access and quality care.( Pennel) State health departments often can provide expertise to the state Medicaid authorities in such critical areas of contract compliance as measurement of outcomes, monitoring access for rural and urban undeserved populations, assisting with the development of grievance and appeals procedures, and evaluating the efficiency and effectiveness of individual MCOs. As state health departments develop these new and expanded roles, changes in the public health work force will be necessary. Public health workers will need to be recruited who have expertise and experience in the private health care market, especially with MCOs. This recruitment effort will initially be difficult because until recently, there has been a historic and distinct separation between public health and private medicine. Other changes in human resources policy will also be required. Some traditional public health workers may be resistant to this new partnership of public health and private medicine, in some cases corporatized for-profit health care. They may be threatened by the changes in role and concerned about their job longevity. Efforts should be initiated to address the issues of motivation and job security.
The pressure to privatize is affecting health care just as it has already impacted other sectors of the economy. Advocates, under the theoretical arguments of neoliberalism posit that privatization of health services will result in higher levels of productivity and greater efficiency.(1) Opponents argue that privatization has its own limits and problems.(2) They do not view privatization as a universal answer to problems of government. Privatization, to be successfully implemented, must be selectively applied. There is some concern and evidence that privatization tends to lead to corruption because of its susceptibility to political influence, difficulties in monitoring contract performance and outcomes, reduced control over services, and limited numbers of competitors who are willing or able to provide services. These examples of market failure are precisely the factors that led early reformers to call for the "publicization" of many privately provided services in the first place. (Shafritz and Russell) Thus, municipal governments became involved in services such as trash collection and street cleaning, while state governments developed bureaucracies to provide child welfare and protection services and public health services to those who were not served by the private sector, traditionally poor, uninsured minorities. ...
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