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Less than two years after combining the state departments of Health and Human Services, the Arkansas legislature appears ready to abandon the strategy supporters had said would improve services while cutting costs.

"You cannot take two of the largest, most important agencies in the state and put one under the other," said Sen. Tracy Steele, D-North Little Rock. "I think you can put them together, but you can't put one under the other because both of their functions and missions are critical."

At the time of the merger, the Human Services Department employed around 8,000 people and oversaw an annual budget of $4 billion. The Health Department employed 2,700 people and had an annual budget of close to $300 million.
The state legislature adopted the merger at the request of former Gov. Mike Huckabee. At the time, Huckabee said the Health Department and the Department of Human Services served many of the same clients.

"The merger will eliminate duplication and allow each department to capitalize on (its) strengths," Huckabee said in a June 2005 column.

He also said that the merger and the leaders overseeing the combined department would make Arkansas a national leader in the area of public health.

But, Steele said, there was a lack of follow-through.

"I think that in a nutshell we were told one thing and something different actually occurred," Steele said.

The much-touted efficiencies never materialized.

Although there were some cost savings — around $3.5 million in the most recent fiscal year — those took place mainly because dozens of vacant administrative positions were not filled in the former Health Department, Steele said.

Steele said he received complaints, mainly from the residents of rural communities, that service suffered. The new Division of Health was no longer the same; it was worse.

"There was too much administrative red tape, a faulty communication system," Steele said. "That even occurred with some legislators. You're trying to get in touch with someone from the Department of Health, you actually had to call the old Human Services, and this went on for months and months and months."

The combination of the Health and Human Services departments was not a true merger, Steele said, since Health took a subordinate position.

The envisioned merged department was supposed to bring two agencies together, with equal power and equal responsibility, delivering better services while ultimately saving taxpayers' money, Steele said, but that proved not to be the case.

Morale among Health Department employees suffered, Steele said, because there were fewer opportunities for advancement.

Steele said it did not take long for him to realize the merger had been a mistake.

Other senators agreed. Steele's bill, SB 191, passed the Senate 22-4. The opponents were Republican Sens. Kim Hendren, Bill Pritchard, Sharon Trusty and Shawn Womack.

Hendren said he has a number of concerns about unwinding the merger, such as that it's unclear whether it's too soon to describe the combined department as a failure, or whether Arkansas will gain anything by reverting to a system most people wanted to change just two years ago, he said. There are also questions about the added cost of operating two departments.

"We just don't know the answers at this point in time," Hendren said.
Steele said he does not know how much the demerger will cost but sees the expense as minimal, with the exception of filling the vacant positions and reestablishing the Health Department's financial division.

Steele's bill includes an emergency clause that allows Gov. Mike Beebe to split the departments immediately.

According to the bill, decoupling the Division of Health from the Department of Health and Human Services could cause "disruptions of services and unnecessary time, effort and expense" due to reallocating appropriations, budgets, personnel, equipment and capital expenditures.

Delaying the split beyond the beginning of the fiscal year, July 1, will interrupt the essential programs and services the departments provide, the bill says.

"We are approaching the end of a fiscal year, and that may be the best time to change over financial operations, the books and so forth, if he (Beebe) chooses," Steele said.

The governor can meet with the division heads of Health and Human Services after the legislative session, to crunch the numbers and see whether the costs can be absorbed, Steele said.

Steele said he wanted to offer the bill now rather than waiting while the Health and Human Services Department generated a report on costs.

The bill was forwarded March 1 by the House Public Health, Welfare and Labor Committee with a recommendation that it be passed. A vote by the full House had not been scheduled at press time.


April 2007

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