Health reporting agency on track for 30 percent staff reduction
As Massachusetts grasps for ways to tame rising costs, the state's health care data analytics agency has shed about a quarter of its staff over the past 18 months and is reconsidering its Back Bay lease as part of continued cost-cutting.
A health care financing deal this summer called for the redirection of millions of dollars away from the Center for Health Information and Analysis (CHIA), and its new executive director on Thursday outlined steps the agency is taking to balance its budget.
An independent state agency, CHIA started out the fiscal year with a "significant challenge" after lawmakers and Gov. Charlie Baker agreed to siphon away some of the agency's funding to instead deliver financial support to hospitals, executive director Ray Campbell said.
The law signed in late May to avert a ballot campaign around restructuring hospital pricing called for $45 million from existing assessments to be distributed over the next five years to hospitals with relative prices below 120 percent of the statewide median. The hospital funding will be redirected away from CHIA, starting with $5 million in fiscal 2017 and a full $10 million reduction in fiscal 2018.
Campbell pointed to "headcount reductions" and lowered IT expenditures as among the biggest factors in scaling back spending. CHIA's headcount includes both state employees and contractors and hit a "high-water mark" of 197 people in the summer of 2015, Campbell said.
He said that number was now down 19 percent to about 155 people and projected it would decrease further to around 135 people by the end of the fiscal year. Campbell said the decrease in staffing involved no layoffs and was achieved through "significant attrition" and the ending of contracts.
"State agencies make do with kind of extraordinarily thin staffs and short resources, and it's not something to aspire to but it's a reality and we need to be part of that reality," Campbell said.
Campbell told an oversight council that manages CHIA's budget the cost cutting may lead to a surplus.
"We've been monitoring it very closely and we feel confident that we're heading towards a balanced budget for fiscal '17, including making the $5 million transfer to the hospital trust fund...so we feel we're on track," Campbell said. "We actually think we have a slight surplus possibly, that we're trending towards, so we're looking at some pressing needs that we can devote those funds to."
Before the Senate voted unanimously for the hospital pricing law, Sen. Michael Barrett of Lexington lamented "a gratuitous bit of violence" against CHIA.
"This is significant collateral damage done to an innocent bystander, an entity that was doing the job we asked it to do. So while we have to get this question off the November ballot, we should recognize that for reasons not having to do with the Senate's choices this very destructive act directed at a watchdog agency that was keeping the executive branch honest - this very destructive act - is going down," he said.
Created as part of a 2012 health care cost-containment law, CHIA is the successor agency to the former Division of Health Care Finance and Policy. Its charge is to collect health care cost and quality information and provide objective analysis of data to assist with health care policy formation. The agency is also charged with compiling annual cost trend reports, managing the state health data repository and monitoring the financial stability of hospitals and health plans. The agency was funded at $31,140,523 in the 2016 fiscal year and $28,131,406 in this year's budget.
The oversight council meeting was held at CHIA's offices in the Back Bay. Campbell said the agency is looking "very carefully" at its lease as it searches for future administrative savings.
He said the Boylston Street office was selected by the Division of Capital Asset Management and Maintenance and provides more space than CHIA needs. CHIA is working to see if other state agencies would like to take over some of the extra space, Campbell said.
"Worst-case scenario if there's no state agencies that want to come in here, rents in the neighborhood are up since we've moved in so we're pretty confident that our landlord would be willing to put up a wall and get rid of some of the space and reduce our rent that way," he said.
House Majority Leader Ronald Mariano on Tuesday expressed concern about CHIA's budget, but Health and Human Services Secretary Marylou Sudders said during a meeting on health care cost control that the agency routinely reverts at least $5 million a year in unspent funds and said the Baker administration is committed to making sure the agency can run efficiently and effectively.
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