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The historic split of Alaska’s massive health department is now law. What’s next?

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The historic division of Alaska’s sprawling health department into two new agencies is now law, despite last-minute legislative opposition and lingering constitutional questions.

The reorganization goes into effect July 1.

It splits up the Alaska Department of Health and Social Services, the state’s largest agency with a $3 billion budget and 3,200 employees, managed by a five-person executive team.

The department includes numerous sometimes-troubled divisions that Alaskans encounter directly, such as the Office of Children’s Services, the Alaska Psychiatric Institute, public health nursing and public assistance.

Rather than enacting immediate change, however, the split is intended to streamline government by creating smaller agencies aligned around funding, each with its own commissioner more able to focus on priorities, state officials say.

gov. Mike Dunleavy enacted the division not through legislation that could be amended by lawmakers but by executive order — the most sweeping departmental change enacted via a governor’s order since Alaska became a state.

The reorganization is estimated to cost about $2 million a year at first.

Dunleavy said during a media briefing Monday he thought that the split would “drive down costs over, we think, a short period of time.”

“The idea is that with better oversight and better focus, that we will get better outcomes,” he said, later saying the success of the split will be measured based on staff and public feedback as well as data like staff turnover and vacancy rates.

The reorganization was designed to minimize disruption to people using the department’s services, officials say.

The new Department of Health contains divisions aligned by payment to include those taking Medicaid: Public Health; public assistance; behavioral health; health care services; and Senior and Disability Services.

The new Department of Family and Community Services contains divisions that oversee child welfare or offer direct care: Juvenile Justice; the Alaska Psychiatric Institute; Pioneer Homes; and the Office of Children’s Services.

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Critics including some lawmakers say the department needs overhaul, but there’s no proof the agency reorganization will improve services for the public.

A spokesman said the nonprofit Alaska Public Research Interest Group will follow the transition closely to ensure vulnerable residents aren’t cut off from critical services.

“We maintain the belief that the Dunleavy administration should have consulted with the legislature and sought more input from the public before splitting the largest stage agency through executive order,” spokesman Robin O’Donoghue said in an email. “This process was conducted in great haste and Alaskans will unfortunately have to grapple with any mistakes made by the administration.”

A state reorganization website includes an implementation plan and an email address the public can use to get involved.

The department spent the past year working on the plan and now is in a transitional phase that includes technical fixes and reaching out to stakeholder groups to make sure “processes are explained or adapted as needed,” Health and Social Services Commissioner Adam Crum said at Monday’s briefing

Asked how the reorganization will improve services to Alaskans, Crum cited the Office of Children’s Services, which has an employee turnover rate near 60%.

Separating OCS from divisions getting Medicaid funding will allow the new department’s commissioner and staff to “make sure that we’re working with the community on upstream prevention items and not have to worry about the budget-driving aspects of Medicaid.”

Attorneys with the state Department of Law say Dunleavy has the authority to order the split. The governor withdrew a similar proposal to divide the health department last year.

Prior governors have considered breaking up the health department in an attempt to make it more efficient. And previous orders have created agencies including one in 1983 that pulled the state Department of Corrections out of the health department.

But the scope of Dunleavy’s 100-plus-page order is so substantial it may represent an overreach of executive power, according to a February analysis by legislative attorneys.

An executive order is either “disapproved” by a joint session of the legislature or allowed to become law. Of 120 proposed since statehood, only seven have been disapproved, according to a 2021 Legal Services memo.

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The health department split automatically went into effect just after midnight Saturday when a joint session deadline passed.

Senate leaders in recent weeks made it clear they favored the reorganization. Senate President Peter Micciche, R-Soldotna, participated in Monday’s briefing and said he’d suggested a similar idea some years ago.

House leaders earlier this month and as recently as late last week unsuccessfully asked their Senate counterparts to hold hearings on a resolution calling for a disapproval of the order.

On Monday, House Health and Social Services committee co-chair Rep. Liz Snyder, D-Anchorage, said she was disappointed the order that sets “a significant precedent” became law without individual legislators getting to vote in a joint session.

Snyder said that, given the lack of immediate help for agency problems, she hoped the governor signs off on health-related budget amendments including funding positions in public assistance and public health nursing.

“Our biggest concern is Alaskans and making sure we’re providing high-quality service,” she said.

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