After initial savings, human services redesign could cost Goodhue County millions

Until recently, combining Goodhue County’s human services with 11 others in the region sounded like a successful way to cut costs.

A delivery model developed by Accenture — a management consulting and technology services company — described how the counties could attain a collective cost avoidance of $30 million in the first five years.

It’s what would happen in the succeeding 10 years that makes the concept far less appealing to Goodhue County.

“I’m not trying to be negative, but I’m not sold by any means,” Goodhue County Administrator Scott Arneson said. “There’s a reason why we’re using the words ‘cost avoidance’ rather than ‘cost savings.’”

At a workshop held Tuesday in Red Wing, Mark Howard, the project’s principal investigator for Accenture, explained the choice of words.

“If we use the word savings it implies that somebody actually ends up with extra dollars in their pocket,” Howard said.

Instead, the model just projects that each county would spend a given amount of money in one scenario and a lesser amount in the regional redesign scenario.

However, using Accenture’s formula, Goodhue County won’t stand to spend a lesser amount at all.

While a savings of about $715,000 is expected for the county during the first five years, the cost avoidance for the following 10 years is negative $6.3 million, meaning the county’s financial obligations would actually increase.

A majority of the 12 counties involved — Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Steele, Wabasha, Waseca and Winona — would experience expensive outcomes as well, but Howard points out those numbers aren’t what Accenture is recommending.

“We’re not happy with the results of the formula,” he said, adding that the model was developed using strictly a formula approach.

“Once we got into the fact that the formula wasn’t going to work, we realized that we were not the right people to decide between the counties how they might trade off how to distribute the costs,” Howard explained. “So what we felt is that the finance directors and the elected officials were really the people that had to be making that call. We needed more people at the table.”

For that reason, Goodhue County commissioners and staff gathered Tuesday to try to determine whether participating in the redesign was the right step to take. The 15-year projection under Accenture’s formula made it a simple conclusion for some.

“Unless I’m missing something, I don’t see that it is that big of a decision,” Commissioner Dan Rechtzigel said.

“Where do you need to see it go to say, ‘OK, now it makes sense for us?’” Commissioner Ted Seifert asked.

“We need to win,” Rechtzigel responded. “If we’re going to carry out the same service and pay more, that doesn’t make any sense.”

“So far I haven’t seen any benefit for Goodhue County,” Health and Human Services Board member Gary Iocco agreed.

Aside from financial gains and losses, officials considered other aspects. Integration has been a key word in the county’s vocabulary for the past several years as officials worked to combine public health and social services departments into one smooth operation.

If Goodhue County participates in the regional redesign, past local integration efforts will be thrown out the window because the regional redesign focuses only on human services.

“How is this thing going to affect our public health then?” Iocco asked.

“At this point it’s not known,” HHS Director Nina Arneson said.

Nina Arneson recently consulted with former Social Services Director Greg Schoener and former Public Health Director Karen Main to get their input since they began the original integration of the two departments.

“Staying Health and Human Services makes sense to me, and also to the past directors,” Arneson reported.

No decision has to be made yet, but if Goodhue County ultimately decides not to move forward with the redesign, officials indicated they likely will focus on further local integration. That would mean combining HHS staff into one building and possibly constructing a new facility to house them.

Commissioners have debated for months whether the cost of a new building is affordable.

“Just for comparison, the cost avoidance in those 10 years (of the redesign formula) is pretty close to what a new building would cost,” HHS Joint Deputy Director Mike Zorn pointed out.

Tags: goodhue county, health, minnesota