This year, Milwaukee County's expenditures total more than $1.3 billion. While there has been much discussion about how to plug the $51 million budget deficit projected for 2012, we believe a powerful tool has not yet been exercised: restructuring county government on the basis of efficiency and innovation. 



Roughly half of the County's budget ($585 million) supports health and human services. This is a huge source of potential savings. We have quantified savings of $38 million that can be realized in 2012 by applying market principles to two health care programs: mental health care for County residents, and health care benefits for County employees.  

Mental Health

Board Chairman Lee Holloway and others have made the case for urgency to act, to better serve those who use the Behavioral Health Division. Last year, the Human Services Research Institute released its voluminous, two-year study of Milwaukee County's mental health care delivery system. The HSRI study found that the system is uncoordinated and dysfunctional, with a very heavy reliance on emergency detentions and inpatient psychiatric services.

The HSRI study calls for moving from a provider to a purchaser of mental health services. This requires redesigning the system to one that is decentralized, relies primarily on community-based residential and outpatient services, and reduces the current adult psychiatric hospital from 96 beds to 16-24 beds.  The 2011 budget for Behavioral Health is $188 million. We estimate that, in 2012, we can identify $20 million in efficiencies and reinvest these savings in improved care for an expanded group of people.  This is a smarter way to provide care, and its puts less pressure on increasing usage of the tax levy in future years.

Employee health benefits

The Wisconsin Legislature and Governor Walker have ended collective bargaining on healthcare benefits, effective last month.

The cost of employee health benefits is estimated at $126 million in 2011. The program has a rich benefit design, with minimum premium-sharing, co-pays and deductibles. In fact, the base plan has no deductibles, and provides for 100% coverage except for minimal co-payments for office visits, emergency services and prescription drugs. County employees pay for only 5-7% of health care expenses compared to 15% for federal employees and 20-25% for private sector employees.

The current County health plans encourage employees and their dependents to over-utilize the plan. We advocate shifting to higher-deductible, consumer-driven healthcare (CDHC). This encourages consumer awareness, informed choice and decision-making based on open, transparent and credible information. CDHC empowers consumers to take greater control and achieve greater satisfaction from their healthcare experience.  It turns consumers into customers. CDHC is the norm in the private sector.

Research suggests we could save 14 percent under a higher-deductible plan. After four years, the cumulative savings would be $32.8 million or 26 percent.



Moving County employees to a higher-deductible consumer-driven healthcare plan will inject market discipline into employee health care benefits. The cost to employees will be slightly higher than what they pay now, but this is already required by the new state collective bargaining law. Redesigning and streamlining the plan will yield significant cost savings, while continuing to provide employees with high-quality health care.

There is no time left for more bureaucratic studies, meetings, task forces, and committees. The County is faced with a serious fiscal crisis. What is required now is the political will to take the action that is necessary to implement change.

Milwaukee County Supervisor Johnny Thomas is chair of the Finance and Audit Committee, and

Supervisor Joe Sanfelippo is chair of the Personnel Committee and chair of the New Behavioral Health Facility Study Committee.