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.
Department of Health letterView
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