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The Arkansas Department of Health on Monday alerted about 500 state employees and 1,800 contract workers that the department's in-home services program will move to a private-sector provider sometime in 2016.

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Department of Health letter

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The notification came via a letter from Dr. Nathaniel Smith, department director. The program, started in 1981, offers hospice, home health care, personal care and other services to about 13,000 patients.

"We have determined that the program is no longer sustainable for the agency due to financial constraints and competition from the private sector," Smith wrote.

Department officials don't expect a disruption in services while transferring the program from the state to one or more private vendors, Smith said in an interview Monday. The transition is expected to take about six months.

"Up until the moment we make that transition, we're going to continue to provide high-quality services to our patients regardless of where they live and regardless of their payment source," Smith said.

Department spokesman Kerry Krell said the agency will help the state workers find new positions.

"We're going to make it a priority for them to either find other positions here at the Health Department or hopefully help them find another position in state government -- if that's what they would like to do," she said. "It's also possible that whoever this private-sector provider is, they may want to retain those employees.

"These are skilled people; they are Arkansans; they know the work; they know their patients."

Krell said the department is still working on how best to assist the contract workers in finding new jobs.

"We do want to be able to provide some sort of resource for them, whether that's an opportunity to connect with another employee or that kind of thing," she said.

"Ideally, we would like it if that new private-sector provider could just absorb those people as well. It's hard to say at this point."

Revenue from the program in fiscal 2015, which ended June 30, was approximately $58.6 million, according to Krell, which matched "closely" the cost of the program. But the program has seen an 18 percent decline in revenue since fiscal 2011.

Most patients pay for the services through Medicare or Medicaid, with some patients using private insurance, Smith said.

The number of patients using the program also has declined as private providers have expanded in the market, he said.

The program has lost about 28 percent of its patients over the past five years.

"Our intention has never been to compete with the private sector," Smith said. "As the private sector steps up, we need to step down."

The process of moving the program to the private sector will take at least six months, he said.

Gov. Asa Hutchinson voiced support for the move in a Health Department news release.

"This is an example of a government program that is no longer sustainable and can be ended because the private sector has stepped in to meet demand," he said.

"In the long run, this transition will preserve jobs, save taxpayer dollars and result in a more efficient, viable and sustainable in-home care program for Arkansans. It makes sense.

"Government should not be in the business of competing with the private sector, especially when the private sector can provide the same level of quality care," the governor said.

The Health Department hadn't finalized plans for selecting a private-sector provider as of Monday afternoon. It will use a transition consultant that knows the industry to assist with the transition.

"We hope that process will be seamless," Krell said. "Whenever this private-sector provider is identified, the caseload that we currently have will be just handed over to them, and they will notify the patients or we will help them notify the patients of their new provider."

It's possible more than one provider might be selected, she said.

Monday's announcement was "just the first step in a very long process," Krell said.

"One of the reasons we started it this way was we wanted to make sure that the employees had ample notice," she said. "And that may not matter. They may all transition perfectly into a new job. That new private provider might absorb all their positions. But we knew this was happening, and we wanted the employees to have ample time."

A Section on 08/11/2015

Print Headline: In-home care in '16 to go private

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Comments

  • Goad
    August 11, 2015 at 7:58 a.m.

    Typical move to put profit in healthcare. Will end up costing more with no better service. Has operated for years alongside private sector with no problem. What has changed?

  • BEARTRAP919
    August 11, 2015 at 9:34 a.m.

    What has changed is the State has been taken over by Republicans, That means more Tax cuts for the Rich and more Benefit cuts for the Poor. More Cuts in Services and Higher cost in the Private Sector. We already have seen it at work, with the tax cuts, the raises in salaries, and the cuts in services for the Middle class and the Poor. Insurance coverage being thrown out now for the Medicaid recipients, Keep reading the Paper to discover how you have been voting against your own best interests. Surprised are you??

  • DEE672
    August 11, 2015 at 9:49 a.m.

    The Repugs have captured all the political power in the state from Governor to all Representatives and Senators. Those who dumbly voted for them will suffer the consequences but those of us who didn't suffer more.

  • LevyRat
    August 11, 2015 at 10:12 a.m.

    LYING TAX AND SPEND DEMOCRATS ONLY KNOW HOW TO WHINE .... AND just can't stand it when the state doesn't do everything. Well it's time for that to end.
    IF YOU THINK YOU ARE NOT PAYING ENOUGH IN TAXES, YOU CAN SEND IN THE REST OF YOUR PAYCHECK TO THE GOVERNMENT.

  • carpenterretired
    August 11, 2015 at 12:12 p.m.

    Recall when the Arkansas highway department did its own mowing of shoulders and litter pick up with government employees, than the mowing and litter pick up was privatized and anyone driving down a state highway can see the result and perhaps on occasion a guy on an old junk tractor mowing an occasional spot of grass and maybe a guy piking up a little litter but the guy with the contract has a profit that put good cash in his pocket that's capitalism. Now old guys may remember the service level of the post office before the mail was privatized into a stand alone corporation . Before privatization of forest service building maintenance (painting, repair ,even lawn mowing and even washing vehicles ) during fire season at work centers forest service guys stayed busy doing these jobs while waiting for the next fire now however with privatization their can sleep ,rest and play cards while private contractors make good money doing the maintenance work as fast and cheaply as possible in order to make as much profit ( been there done that) and after the government loses the ability to do the work and becomes dependent on the contractor than the game is for the contractor to ice his cake every year by going up a little on his price.

  • LR1955
    August 11, 2015 at 2:45 p.m.

    The State government is getting rid of a system with 5.65 patients per state/contract employee and anybody can see that is not very efficient at all. Most patients pay for the services through Medicare or Medicaid, from the Feds. Talk about trickle down economics...

  • Murphy01
    August 11, 2015 at 3:06 p.m.

    "Revenue from the program in fiscal 2015, which ended June 30, was approximately $58.6 million, according to Krell, which matched "closely" the cost of the program. But the program has seen an 18 percent decline in revenue since fiscal 2011."

    So the state should keep pumping money into a program that's loosing money?

  • FreeSpiritMan
    August 11, 2015 at 9:25 p.m.

    ha smart one's you money was coming out of medicare and medicaid, now more will come out to pay the private agencies more for doing the same job.

  • DontDrinkDatKoolAid
    August 11, 2015 at 11:05 p.m.

    FSM, is that your eight grade education working for you?

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