For the past seven years, as local governments struggled with the effects of the Great Recession, the Erie County Health Department has given its employees a pay hike every year.
The agency also added services, including opening a dental clinic this year. And it’s done that without raising taxes.
Pete Schade, Erie County’s health commissioner, and Joe Palmucci, the agency’s director of administrative services and chief budget officer, said there are several reasons for this, although they pointed to two key moves since Schade took over in 2005 as health commissioner.
The health department has been able to capture more dollars from Medicaid, the federal program that funds health coverage for the low-income people who form a major part of the health department’s client base. The department also got rid of its home health care program, which was costing money and didn’t fill a need, health officials said.
In addition, the health department has trimmed employees while trying to ensure that those who are still there are paid better.
According to figures the health department provided the Register after a public records request, Medicaid dollars brought in by the department’s medical and dental clinics have risen from about $288,000 in 2007 to $674,000 in 2012.
Although Medicaid payments to doctors and dentists are notoriously low, the health department qualified for much higher enhanced payment rates by demonstrating that it treats many people who are uninsured and can pay little, Palmucci said.
The enhanced revenue allowed the department to hire a dentist and other dental workers and open up a new dental clinic this year that provides service to everyone, including poor people who don’t have a regular dentist.
In addition, the health department earns an additional $150,000 a year in Medicaid money by submitting to cumbersome time studies that document additional help the health department provides to lower income people.
If an employee takes time to help a client find a way to obtain eyeglasses, for example, it’s a beneficial service but it wouldn’t ordinarily be covered because that’s not a medical procedure, Schade said.
The health department awarded 2 percent merit pay raises to employees in 2007, 2008, 2011, 2012 and 2013, and 4 percent raises in 2010 and 2009.
But the number of fulltime equivalent employees has fallen from about 76 in 2007 to about 69 this year.
Largely because the department phased out its home health care program, Medicare revenue at the health department has fallen from $448,814 in 2007 to just $30,667 last year.
The health department was competing against many local companies that also offered home health care, so it wasn’t providing a unique service. Instead, the health department was getting stuck with all of the people who couldn’t afford to pay.
“We were just subsidizing them,” Palmucci said, referring to local private companies.
The move didn’t take away a needed program because everyone can still enroll in a private program, he said. The department’s income is a mixture of federal funds, state funds, local fees and local tax levies.
The department hiked one of its levies in 2005, Schade’s first year as health commissioner, but since then has only sought renewals, keeping the tax rate the same.