Photo courtesy Seattle Municipal Archives

By Rose Hoban

In the past five years, state budget dollars for public health departments have been cut, a federal fund for public health prevention has been exhausted and health departments face retroactive cuts to Medicaid reimbursements back to 2011. Now the income stream provided to health departments by Medicaid is likely to change dramatically under the state’s reform plan.

Brian Evans, 9th grader at Southeast Raleigh and Connie Griffin Hughes, volunteer with Community Health Coalition.
Public health departments provide a variety of services that are state mandated but not always reimbursed. Photo credit: Hyun Namkoong

It’s enough to give a county health director nightmares.

Instead, many leaders of North Carolina’s 85 public health agencies expressed cautious optimism last week as they met for their annual conference at the North Raleigh Hilton.

Their chief cheerleader was the state secretary of the Department of Health and Human Services, Rick Brajer, who told the group that public health departments were poised to be “conveners” around implementation of population-health improvement, which is one of the stated goals of the Medicaid reform plan that passed the General Assembly last fall.

“Something you all have as a distinct competitive advantage is having been in a low-cost position,” Brajer said, acknowledging that being in that position has been difficult for health departments. “But being able to shift quickly and to operate and deliver care and improved health outcomes, and to have credibility in a community in a low-cost position, I think is a lot. You can start building out a differentiated competitive position.”

But in such a fluid and rapidly changing environment, health directors noted, they have significant challenges ahead.

Come one, come all

While acknowledging their flexibility, health directors said they’re concerned about the fact that they’re mandated by law to provide care for almost anyone who walks in, regardless of ability to pay. They’re particularly concerned about situations in which they must vaccinate hundreds of people, as was the case in Alamance County during a pertussis outbreak three years ago, or in outbreaks of sexually transmitted diseases such as syphillis, as is now the case in Mecklenburg County.

Health departments are tasked to perform a number of other functions, including inspecting restaurants and well water.

“There are so many functions of a health department that we don’t always think of,” said Greg Griggs, head of the North Carolina Academy of Family Physicians. “The worst person to be is the health director when an elected official’s dog bites someone and it isn’t up to date on its rabies shot.”

NC restaurant inspection grades.
Local public health departments inspect restaurants for safety, but in some locations the cost of providing this service is more than what departments receive to do it. Image courtesy Forsyth County Environmental Health

According to Lynette Tolson, head of the Association of Local Health Directors, many county and regional departments used funds they earned by caring for Medicaid patients to cover costs for those other activities.

“The local health department and the community are not there for a profit,” said Tolson. “They’re not there to compete with local doctors and hospitals; they’re there to provide the services in that community.”

But Tolson said there’s considerable anxiety about what will happen when Medicaid moves from a fee-for-service model to “bundled” payments, whereby a provider is mandated to cover all of a specific population’s Medicaid costs. That might not leave enough funding for those other functions.

On the other hand, Tolson said health directors are heartened by a new federal emphasis on local health departments becoming the “chief health strategists” of a community.

“That’s getting us away from the sick-care paradigm and talking about optimal health,” she said.

A lot of health departments’ futures depend on how the application for reform that North Carolina is currently preparing for federal Medicaid officials looks and what it calls for.

Tolson said that “if state leaders understand that health has to be a part of this health reform that they’re pushing,” she’ll be hopeful. But “if they’re only going to focus on how much it costs the state to provide Medicaid as insurance for the poor, then that’s a different topic and a different discussion.”


Some health departments already have latitude from their county commissioners to be more creative in how they make and spend money.

In most counties, health departments have been part of the Community Care of North Carolina network, which currently manages many of the patients in the state’s Medicaid program.

2.3 million North Carolinians rely on wells for their drinking water, but some 20 percent of the wells surveyed in the study had manganese levels that exceeded the EPA's recommended limit. Image courtesy of Wikimedia Commons.
About 2.3 million North Carolinians rely on wells for their drinking water. Local health departments work with the Department of Environmental Quality to make sure those wells have water that’s safe to drink. Image courtesy of Wikimedia Commons

In Johnston County, Marilyn Pearson, who is also a family physician, has had a Medicaid case manager through the local Community Care network who works with high-risk patients, doing home visits and medication reviews. Her department has been able to share medical records of patients they see with a variety of other practitioners, including mental health care providers and local hospitals.

“Being able to see medications that have been prescribed by their psychiatrist, I can see when their next appointment is, so I reinforce that with the patient,” Pearson said. “If our patients show up in the ED, [the staff] can see our records.”

“Expanded Medicaid under the Affordable Care Act will continue to reduce the number of non-funded patients and thus reduce public health funding,” said Mark Picton, health director for Caldwell County.

But the good news, Picton said, is that under the Medicaid reform law passed by the legislature, health departments will be part of whatever networks those new entities – be they not-for-profit or private for-profit – create to manage the care for Medicaid patients.

Catawba County’s approach has been different for some time, in that the health department has divested itself from many primary care functions. It used to provide well-child visits for uninsured kids, but stopped doing so after working with local pediatricians to get all those kids into medical homes. In exchange, the health department channeled some county dollars to the pediatric practices.

Doug Urland, Catawba County’s health director, posed the question: “Should we try to invest more and more in what we’re doing, or is it better to leverage that resource in the community and say, ‘We can do better in another way’”?

His department eventually made similar arrangements to provide prenatal care and dental care for uninsured patients.

“The important thing to note … is the flexibility that we have in North Carolina with a decentralized system, and the autonomy in each community needs to be recognized,” Urland said.

Cooperation over competition

Primary care doctors and public health departments have always been on the same page, Greg Griggs said: “Just look at the number of family physicians who have been local health directors.”

“We’ve always known that what happens in the clinician’s office is only a small fraction of what impacts someone’s health,” he said. “As we’re looking more at greater population-health management, it’s making us look at the public health side even more.”

Baked into Medicaid reform at the state, and even the federal, level are increased requirements of accountability, transparency and quality, something Griggs welcomes. He also is optimistic about federal involvement in the transition.

“[The Centers for Medicare and Medicaid Services] is not going to let the state just capitate; they need to innovate,” he said. “They need to show how they’ll do things better, not just cost savings. We also have to utilize and build on the things that have worked in the state already.”

The federal government pays two-thirds of North Carolina’s Medicaid costs, so they have considerable influence in how the plan will look.

But the transition could be bumpy, especially the unanswered questions about how to get from today to the “value-based” payment system envisioned in the Medicaid reform bill, which could be as much as five years away.

“Everyone has their feet in two different boats, but we’re about to capsize in the meantime,” Griggs said.

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