Some “Nuts and Bolts” of Financing for Systems of Care
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Some “Nuts and Bolts” of Financing for Systems of Care
Technical AssistancePartnership for Child and
Family Mental Health
August 10, 2011
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Presenter:
Frank Rider- Technical Assistance Coordinator, Technical AssistancePartnership for Child and Family Mental Health
Some “Nuts and Bolts” of Financing for Systems of Care
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Do You Have the Tools You Need?
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Context/Overview
The Economics of Systems of Care:
∞ Macro-Economics∞ Micro-Economics∞ The Pursuit of A
Unified Theory?
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Polling Question #1At what stage of financial development is your SOC initiative?∆ Graduated site – federal funding already ended∆ Graduating in just 50 days/funded October 2005∆ In 5th Year of 6/funded October 2006∆ In 3rd Year of 6/funded October 2008∆ In 2nd Year of 6/funded October 2009∆ In 1st Year of 6/funded October 2010∆ Forging ahead without any federal grant funding.
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Strategic Financing Approach: A Few Key Questions
1. Clarify “Financing for What?”2. Estimate Your Fiscal Needs3. Map Current Relevant Funding4. Assess Gaps5. Identify Financing Strategies and
Funding Sources
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1. Clarify “Financing for What?”
Scope of Supports and Services Scale of Supports and Services Other Relevant Factors and
Cost Assumptions
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Strategies and activities that we want to develop
and sustain
Over what time period will we
develop, implement and sustain them?
At what scale and pace will we build and sustain them?
Year 1 Year 2 Year 3
Financing for What? Worksheet
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Questions?
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2. Estimating Fiscal Needs
Develop Information to Support:$ Program costs
¢ Start-up costs¢ Operating costs
$ Infrastructure costs$ Ramp-up Strategy/Going to Scale$ Assumptions
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2010-11 2011-12 2012-13 2013-14Strategies/ActivitiesTraining and ConsultationStaff SuppliesTravelSubtotalEvaluation/Data CollectionStaff Travel SubtotalManagement & AdministrationStaff Total
Sample Cost Estimates Worksheet
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3. Map Current Spending
Know What You Have to Work with Today: What are your current sources of funding~ Cash~ In-Kind
Are they restricted? Over what timeframe are they available? How stable and reliable is each source?
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Kaiser Commission on Medicaid and the Uninsured (April 2011), MENTAL HEALTH
FINANCING IN THE UNITED STATES: A PRIMER
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Strategies/ Activities
Available Resources
Source of Funds and In-Kind
Contributions
Amount Restriction on Uses of Funds,
if any
Expected Timeframe Funding is Available
Training and Consultation
Evaluation/Data Collection
Management & Administration
Resource Mapping Worksheet
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Show Me the Money!$ Cooperative agreement funds$ Other grants$ Federal, state and local service
programs$ Partnering agencies: private
providers, community organizations , universities (e.g. in-kind services)
$ Private insurance claiming $ Redeployed funds into lower cost
services$ And leverage natural and other
informal supports!
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4. Assessing the Spending Gap
What is the gap between our current spending and our projected fiscal needs?$ by strategy/activity$ by fiscal year
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Strategies/ Activities
2011-12 2012-13 2013-14
Total Costs
Available Resources
Gap Total Costs
Available Resources
Gap Total Costs
Available Resources
Gap
Staff Positions
Training and Consultation
Evaluation/ Data Collection
Management & Administration
Funding Gap Analysis Worksheet
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Questions?
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Micro-Economics of Systems of Care (CMHI Cooperative Agreements)
¢ “Venture Capital”¢ Annual Budgeting and
Accountability:$ Required Reports$ Continuing Application
¢ Carryforward and No-Cost Extensions
¢ Matching Funds¢ The Rules
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What Are the Rules?Cooperative Agreement Requirements:• Semi-annual progress reports • Annual reapplication (continuing application)• Annual Financial Status Reports (SF-425) • Matching Funds requirements
Secure approval by CMHS for:• Change in scope of cooperative agreement• Change in contractor or subcontractors• Major budget modifications • Carryover funds/no-cost extension
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Cooperative Agreement Funds: Information References
• SAMHSA Request for Applications (RFA)• US DHHS Grants Policy Statement (2007)• CMHS/Bazelon Center (2008):
Building Sustainable Systems Change: A Guide to Non-Federal Match Funding
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Shifting Gears Now…
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Macro-Economics of Systems of CareCost of Providing BH Treatment and Support:
$ MH Service Delivery $ Maintaining “Ready” Capacity$ Lost Opportunity Costs
Cost of Not Providing Effective Treatment and Support :$ Costs of Providing Ineffective MH Services$ Immediate Related Costs $ Long-term/Societal Costs$ Intergenerational Costs
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Review Strategic Financing Steps
Clarify what you need and when Review current funding mix Analyze promising options to pursue as
additional funding sources Determine most appropriate funding
sources to support your goals.
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Four Potential Financing Strategies
1. Redeploy Existing Resources
2. Refinance to Maximizing Public Funds
3. Raise New Revenues
4. Create New (Boundary-Crossing) Funding Structures
Pires, S.A. (Second edition, 2010), Building Systems of Care: A Primer
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1. Redeploy Existing Resources
…from service areas that are producing high costs and/or poor outcomes (e.g. out of home placements), to invest in promising new approaches.
Example: Maine – July 2011 QI Data Snapshot: “The (Wraparound) results showed a 28% reduction in overall average per child MH expenditures in 12-month period and significant reductions in crisis intervention, residential treatment and in-patient hospital services.”
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2. Refinance to Maximize Public Funds (e.g. Medicaid)
Multi-systemic therapyWraparound processFacilitationTeam Member Participation Intensive in-home servicesFamily psycho-educational
services Integrated MH-SA treatmentAssertive Community
Treatment (ACT) teams
Therapeutic foster care Respite care Family Peer Support Youth Peer Support Illness/Disability Self-
Management Telemedicine-Delivered BH
Services Traditional Healing
Modalities
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Polling Question #2Of the 15 services listed on the previous slide, how many are covered services in your state’s Medicaid program?___ None___ Some, but fewer than 5___ About half of them/6 to 10___ All 15, or nearly all___ I don’t know enough about the services in my state’s Medicaid program to answer this
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3. Raise New Revenues
• Fees, third party billing (e.g. ACA affordable benefits exchanges)
• Grants• United Way• Sponsorships• Trust funds
• Special taxes:– California -
Proposition 63– Missouri, Illinois -
County Tax Levies • Fundraising
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4. Create New Funding Structures• Blended Funding Pools
(e.g. flex funds)• Case Rates (examples:
Wraparound Milwaukee, Impact SOC, MI)
• Braided Funding (example: Arizona ‘s Therapeutic Foster Care)
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Look to the FutureUse the opportunity of federal cooperative agreement funding to lay a strong foundation for the future:
– Develop, test, demonstrate better approaches– Leverage cross-system investments, and secure
commitments now for later years’ funding– Build strategies to modify what permanent funding
streams will pay for later.– Provide services now to avoid costly high-end
placements, and secure commitments for reinvestment of saved funds to increase capacity for cost-effective supports and services that work!
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And Remember…
Not ALL Worthwhile Sustainability Depends of Financing!
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Questions?
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Polling Question #3Financing is a difficult area to master. Which of the following dimensions do you feel the strongest need to learn more about? ___ Medicaid___ Non-Federal Matching Funds___ Flexible Funds (“Flex Funds”)___ Private Health Insurance ___ Primary Funding Streams of Non-Mental Health Child Service Systems (Child Welfare, Education, Juvenile Justice, etc.)