Analysis of the 2007-08 Budget Bill: Health and Social Services

Department of Public Health (4265)

Effective July 1, 2007, the budget plan implements Chapter 241, Statutes of 2006 (SB 162, Ortiz), which creates a new state Department of Public Health (DPH) and renames the existing Department of Health Services (DHS) as the Department of Health Care Services (DHCS). The new DPH will deliver a broad range of public health programs. Some of these programs complement and support the activities of local health agencies in controlling environmental hazards, preventing and controlling disease, and providing health services to populations who have special needs. Others are solely state-operated programs, such as those that license health care facilities.

The Governor’s budget proposes about $3 billion from all funds for state operations and local assistance for DPH in the budget year. Total proposed local assistance expenditures are about $2.3 billion, of which $278 million is from the General Fund. The General Fund amount is 51 percent less ($285 million) than the revised current-year level of spending. This decrease is largely due to the elimination of one-time funding of $180 million General Fund to build capacity to provide health care services during an emergency.

Key Budget Proposals

The Governor’s proposed budget for public health programs includes the following significant changes:

New Department of Public health

The Governor’s budget plan implements enacted legislation that creates a new Department of Public Health. We find the administration’s proposed organization structure is reasonable, but find that the department should be more transparent in its budgeting. For this reason, we withhold recommendation on this proposal pending receipt of key budget documentation.

Background

Effective July 1, 2007, the budget plan implements Chapter 241, Statutes of 2006 (SB 162, Ortiz), which creates a new state DPH and renames the existing DHS as DHCS. The DPH will be established under the existing Health and Human Services Agency.

The DPH will administer a broad range of public and environmental health programs. These programs seek to prevent illness in, and promote the health of, the public at large. In contrast, DHCS will deliver health care services to eligible individuals, through the state’s Medicaid program (known as Medi-Cal in California) and through other programs, such as the Genetically Handicapped Persons Program and the California Children’s Services Program. The creation of a separate DPH is intended to elevate the visibility and importance of public health issues. It is also intended to result in increased accountability and improvements in the effectiveness of DPH programs and DHCS programs by allowing each department to administer a narrower range of activities and focus on their respective core missions. The legislation creating the two new departments requires that the change be cost neutral to the state.

Proposed New Organizational Structure

Seven Distinct Programs. As part of the creation of the new department, DPH has reorganized its structure into five programmatic centers, each of which emphasizes a distinct aspect of public health—(1) preventing chronic disease, injury, and environmental and occupational exposures; (2) combating infectious diseases; (3) regulating the environment; (4) promoting family health; and (5) providing quality services through licensed providers. These centers are intended to provide high-level visibility on important public health issues to all constituents. The other two public health programmatic functions—Emergency Preparedness and Health Information and Strategic Planning—are separate areas within DPH. The five new centers and the Emergency Preparedness and Health Information and Strategic Planning areas will report directly to the Chief Deputy Director of Policy and Programs. Figure 1 shows the programmatic organization of DPH.

 

Figure 1

New Department of Public Health
Programmatic Organization

Center for Chronic Disease Prevention and Health Promotion

·   Chronic Disease and Injury Control

·   Environmental and Occupational Disease Control

Center for Infectious Disease

·   Office of AIDS

·   Communicable Disease Control

Center for Environmental Health

·   Food, Drug, and Radiation Safety

·   Drinking Water and Environmental Management

Center for Family Health

·   Women, Infants, and Children

·   Maternal, Child, and Adolescent Health

·   Genetic Disease

·   Office of Family Planning

Center for Healthcare Quality

·   Licensing and Certification

Health Information and Strategic Planning

 

Public Health Emergency Preparedness

 

 

Operations. The Chief Deputy Director of Operations will oversee such functions as administration, legal services, information technology services, and internal audits. In addition to the two Chief Deputy Directors, an Assistant to the Director will monitor external affairs, including DPH’s interaction with the California Conference of Local Health Officers, the Office of Multicultural Health, and the Office of Binational Border Health. The Office of Women’s Health will be located at DHCS, but will continue to serve the needs of DPH through an interagency agreement. Figure 2 shows the new organizational structure at DPH.

Public Health Advisory Committee. Chapter 241 also requires the establishment of a Public Health Advisory Committee. The purpose of this committee is to provide expert advice and make recommendations on the development of policies and programs that improve public health effectiveness, identify emerging public health issues, and make recommendations on programs and policies to improve the health and safety of Californians. This committee serves an advisory role to the Director of DPH.

Budget Implications

Chapter 241 Requires Budget Neutrality. As discussed earlier, Chapter 241 requires that the reorganization be budget neutral. That is, there should not be any baseline increases in state funding for either DPH or DHCS. Similarly, Chapter 241 did not allow for increases in position authority to implement its provisions. The intent of Chapter 241’s budget neutrality requirement is for the fiscal impact of the reorganization to be absorbed within DHS’ current resources.

Costs to Reorganize. In order to carryout the reorganization, the DHS estimates that it will incur one-time costs of $1 million in the current year for three purposes: (1) $800,000 for office construction and moving expenses, (2) $100,000 for equipment, and (3) $100,000 for a change management consultant. The DHS indicates that it is absorbing these costs within existing resources, but has not been able to provide details on how these costs are being funded. For example, it is unclear whether these reorganization costs are being funded from redirected local assistance funding or from savings generated due to vacancies in the current year.

The administration is proposing to redirect 57 positions for key management and administrative functions. The cost for these positions is approximately $5 million.

Reorganization Milestones

The administration has completed the following key reorganization milestones: (1) the development of organizational structures, mission statements, and budget details to display DPH and DHCS separately in the Governor’s budget; (2) the procurement of a change management consultant to help with the reorganization; and (3) the publishing of updates on the reorganization to inform DHS staff and external stakeholders of the progress of the reorganization.

At the time this analysis was prepared the department still had to complete the following key reorganization milestones: (1) redirect, reclassify, and fill positions before June 30, 2007; (2) create the Public Health Advisory Committee; (3) split out accounting systems and IT systems between DPH and DHCS; (4) finalize plans for relocating employees associated with the new DPH; (5) create new websites; and (6) identify issues that require Interagency Agreements.

DPH’s New Structure Likely an Improvement, but Accountability Still an Issue

Flattened Organizational Structure Potentially More Responsive. Historically, the public health programs, managed by DHS, existed within a more hierarchical administrative structure compared to the flatter administrative structure proposed for the new DPH. We find that the flattening out of the organization into centers that report directly to the Chief Deputy Director of Policy and Programs has the potential to expedite policy and budget decisions at DPH. Additionally, we find that the separation of chronic disease, infectious disease, and environmental health into discrete centers would allow these program areas in the organization structure to be more specialized and focus on a distinct aspect of public health. (These three areas were all contained in the Prevention Services area at DHS.) Furthermore, we find that a flatter organizational structure could increase overall responsiveness to constituency groups because each programmatic area would have a more direct reporting relationship to key policymakers.

No Increased Fiscal Accountability. As discussed earlier, the intent of creating a DPH was to increase the accountability of public health programs. However, creating a new department alone will not increase accountability. Rather the department will need to take steps to be transparent in its administration and budgeting. In past years, the administration provided supplemental schedules that gave detailed information about federal fund and local assistance expenditures, a local assistance appropriation summary, and a vacant position report soon after the budget was released. However, at the time this analysis was prepared, the local assistance appropriation summary and the vacant position report had not yet been provided to the Legislature. Without this information, it is difficult to complete a thorough analysis of the administration’s budget proposal for DPH and DHCS. For example, we note that the State Controller’s Office (SCO) vacancy report for DHS showed a 17 percent vacancy rate for the entire department. However, at this point, it is unclear if this same vacancy rate applies to positions which will move to DPH. Staffing information by division and branch is critical when evaluating whether or not the new department will be able to adequately perform its core functions and whether or not requested positions are justified.

Key Budget Information Unavailable. As we discussed in our Analysis of the 2006-07 Budget Bill, detailed information on the actual past year, estimated current year, and proposed budget year level of spending for each of the public health subprograms is not available to the Legislature in the Governor’s budget documents. (Each of the five program centers we discussed above may encompass two or more subprograms.) Lack of timely and regular expenditure information about these subprograms undermines the ability of the Legislature to exercise oversight of these funds, which amount to hundreds of millions of dollars annually. This information also is critical as a benchmark by which to monitor the growth of the department over time.

Analyst’s Recommendations

Withhold Recommendation on Administration’s Reorganization. While we generally approve of the administration’s proposed organizational structure for the new DPH, without detailed budget information it is impossible to complete a thorough review and analysis of the administration’s proposal. Furthermore, pending receipt of information regarding how the department plans to absorb the reorganization costs, we cannot determine if the proposal is cost neutral to the state. Therefore, we withhold recommendation on the administration’s proposal, pending receipt of the local assistance appropriation summary, vacancy report, and detailed information on how the reorganization costs will be funded.

Budget Should Include Detailed Information. We recommend that additional information detailing DPH’s (1) local assistance expenditures by program and subprogram and (2) allocation of federal funds by program and subprogram be included in the Governor’s budget document as a schedule. Accordingly, we recommend the adoption of the following budget bill language, Item 4265-001-0001:

Provision X. The Department of Finance shall revise the Governor’s budget documents display for the state Department of Public Health to include a display of the following information: (1) the supplemental local assistance schedule, including past year, estimated current year, and proposed budget year expenditures for each program and subprogram and (2) the supplemental federal fund/reimbursements schedule, including past year, estimated current year, and proposed budget year expenditures for each program and subprogram

We also recommend supplemental report language requiring DPH to annually submit a vacancy report to the Legislature by January 10. As discussed earlier, the vacancy report can be used to evaluate whether or not position requests are justified and if the department is having a difficult time filling certain position types. This vacancy report shall include a listing of all filled and vacant positions in the department by division and branch. (This organizational unit information is not available in the SCO vacancy report.)

Public Health Advisory Committee Report to Legislature Annually. We recommend trailer bill language requiring the Public Health Advisory Committee to report annually to the Legislature on the state’s public health priorities and ways state resources could be used more effectively to address these priorities. Having the committee report annually to the Legislature would facilitate legislative oversight not only of DPH but the overall status of public health in California.

Report at Budget Hearings on Remaining Milestones. Finally, we recommend that DHS report at budget hearings on its progress in creating the new DPH and DHCS. While some key milestones have been completed, the completion of the remaining milestones over the next few months will be critical to ensuring that the new DPH is operational July 1, 2007. For this reason, we think it is important for the Legislature to be updated on the status of at least the following activities, (1) the creation of the Public Health Advisory Committee, (2) the reclassifying and filling of positions, (3) the creation of Interagency Agreements between DPH and DHCS, and (4) the split of accounting and IT systems.

Licensing Proposals

The Governor’s budget proposes a number of changes to the licensing and certification (L&C) program at the Department of Public Health (DPH) to implement recently enacted legislation and to improve the state’s oversight of certain health care facilities. We recommend that some of the request for funding for additional staff be approved, but recommend a reduction of $291,000 in special funds because other components of the proposal are not justified on a workload basis. We also present an alternative for reducing the number of vacant positions, thereby ensuring that health care facilities are regularly inspected. (Reduce Item 4265-001-3098 by $291,000.)

Background

Main Responsibilities. The L&C Division within DPH is responsible for ensuring and promoting a high standard of medical care in approximately 7,000 public and private health care facilities throughout the state. These facilities include hospitals, skilled nursing facilities, and home health agencies. The L&C’s primary responsibilities are to:

2006-07 Budget Act Authorized L&C Expansion. The 2006-07 Budget Act authorized 141 new positions in L&C for increased licensing and certification workload. Additionally, the act established a fee structure to require state-regulated facilities to pay a greater share of licensing costs through fees in order to phase-out General Fund support for licensing and certification functions. The General Fund was to provide $7.2 million in 2007-08 and $3.6 million in 2008-09.

Governor’s Proposals

The 2007-08 Governor’s Budget proposes to improve the licensing efforts of DPH. The proposals include (1) 8.5 positions and $888,000 in federal and special funds for increased legal and administrative support for the 141 new L&C staff added in the 2006-07 Budget Act, (2) 2.5 positions and $57,000 from a special fund to investigate complaints and citations of nursing home administrators, and (3) accelerated implementation of the statutory requirement for the program to become fee-supported, resulting in an estimated General Fund savings of $7.2 million in 2007-08 and $3.6 million in 2008-09.

The Governor’s budget also proposes resources to implement various new laws. In part, these proposals would increase the number of Health Facility Evaluator Nurses (HFENs) by 32 positions which we discuss later in this analysis. With regard to other statutes, the budget proposes the following:

Nursing Positions Difficult to Fill

As previously mentioned, the 2006-07 Budget Act added 141 new positions to L&C. Of these new positions, 81 positions have been filled as of January 1, 2007. Figure 3 shows the positions that were approved last year and how many of these positions have been filled.

 

Figure 3

Status of Licensing Certification Positions Added in 2006‑07 Budget Act

 

Positions Approved in 2006‑07 Budget Act

Positions
Filled

Positions
Vacant

Nurse Evaluators

94a

56

38

Pharmacists

7

6

1

Support Staff

40

19

21

  Totals

141

81

60

 

a  Ninety-six Health Facility Evaluator Nurses were approved in the 2006‑07 Budget Act, but two of these positions were subsequently reclassified.

 

Nurse Vacancies. As shown in Figure 4, in addition to the 94 health facilities evaluator nurses (HFENs) that were added in last year’s budget, the department had 22 vacancies in this classification at the beginning of fiscal year 2006-07, for a total of 116 HFEN vacancies. (A HFEN must be a registered nurse.) As of January 1, 2007, L&C had hired 56 HFENs to fill these positions, but 60 HFEN positions remained vacant including the 38 vacant positions shown in Figure 3.

 

Figure 4

Status of Health Facility Evaluator Nurses Positions

 

Positions Approved
In 2006‑07
Budget Act

Vacant
Positions as of
July 1, 2006

Positions
Filled

Positions
Vacant

Health Facility Evaluator Nurses

94a

22

56

60

 

a  Ninety-six Health Facility Evaluator Nurses were approved in the 2006‑07 Budget Act, but two of these positions were subsequently reclassified.

 

The L&C has taken several steps to recruit nurses in order to fill these vacant positions. For example, L&C mailed a postcard to every registered nurse in the state in order to solicit recruits for positions at L&C. Additionally, L&C has shortened the length of time it takes to get a newly hired nurse trained and tested from 18 to 24 months to 12 to 18 months. Despite these efforts, L&C has not been able to recruit enough qualified candidates to fill these vacancies.

Filling the remaining vacant HFEN positions at L&C is likely to be difficult, given the demand for nurses and the competition from the private sector and other state departments that are currently recruiting to fill vacant nurse positions. Furthermore, we note that nurse salaries are proposed to be increased at three other departments (the Department of Veterans Affairs, the Department of Mental Health, and the Department of Developmental Services). This will create a salary differential between L&C and these departments that may make L&C less competitive in its recruitment efforts than it would be if it were able to offer salaries comparable to other state departments.

Implementing the Reinstatement of Inspections Against State Standards

The administration is proposing trailer bill language (which was not available at the time this analysis was prepared) to facilitate L&C’s implementation of Chapter 895’s inspection requirements.

Analyst’s Recommendations

Some of the administration’s position requests warrant approval, but others lack justification on a workload basis. In addition, the high vacancy rate now being experienced by L&C for HFENs calls into question whether the addition of 32 new HFENs is appropriate at this time. Based on our review, we provide an alternative to the requested HFEN positions and recommend reducing a number of the positions requested by the administration.

Alternative to Health Facilities Evaluator Nurse Positions. Based on our review, we believe that a number of the HFEN positions should be reclassified to Health Facility Evaluator I (HFEI) positions for two reasons. First, HFEI positions can be filled by licensed vocational nurses or psychiatric technicians, whereas HFEN positions may only be filled by registered nurses. Second, the training and certification required of HFEIs is the same as that required of HFENs. Both would undergo training in state licensing and federal certification requirements and would have to successfully pass a minimum qualifications test. We recognize that some of the 32 requested positions must remain HEFN given that a HFEN must be on every survey team, but the use of HEFIs is a potential means of accomplishing the Legislature’s goal of timely and thorough inspections of health care facilities because these positions are likely easier to fill. Therefore, we recommend L&C report at budget hearings on the feasibility of using HFEIs and the number of HFEN positions that would be required for survey teams.

Health Facilities Reporting and Inspection Requirements. The Governor proposes two associate information system analysts to provide desktop support and system training to the staff added to implement Chapter 647. We recommend rejection of one associate information system analyst on a workload basis because we find the administration has overestimated the number of hours necessary for system training.

Automated Drug Delivery System Recommendations. The Governor proposes two one-year limited term pharmaceutical consultants, one permanent pharmaceutical consultant, and one office technician to implement Chapter 775. We recommend the approval of only one of the two requested limited term pharmaceutical consultants given that the estimated number of hours to complete specified one-time activities equates to one position. We further recommend rejection of the office technician position. We find that the workload proposed for this position can be absorbed by other newly requested positions and existing positions in L&C.

Withhold Recommendation on Trailer Bill Language. We withhold recommendation on the trailer bill language proposed to implement the reinstatement of inspections using state standards, pending receipt and review of the proposed language. The Legislature’s intent is that these reinstated licensing inspections be done concurrently with federal certification inspections. From our review, it is unclear why trailer bill language is necessary given current law.

Foodborne Illness Emergency Response

The budget request for the Department of Public Health includes $2.1 million General Fund to expand emergency response capabilities to foodborne illness and to support food safety research. We recommend that $1.3 million of the funding request for additional staff and research be approved, but recommend a reduction of $800,000 General Fund because some of the requested positions are not justified on a workload basis. (Reduce Item 4265-001-0001 by $800,000.)

Background

The DPH Has Some Responsibility for Food Safety. The Food and Drug Branch (FDB) of DPH is responsible for ensuring that certain foods are safe, are not adulterated, misbranded, or falsely advertised. One way it does this is by regulating and routinely inspecting the approximately 5,500 food processors and distributors in California. State law also gives DPH broad authority to investigate outbreaks and incidents of foodborne illness. (Foodborne illness is caused by consuming foods or beverages that have been contaminated by disease causing microbes, pathogens, poisonous chemicals, or other harmful substances.) The Emergency Response Unit within the FDB completes these investigations of foodborne illness. Under state law, DPH may take all necessary steps to investigate foodborne illnesses, including inspecting food processors and obtaining and reviewing their records, reviewing growing and harvesting practices on farms, and embargoing contaminated products. In addition to DPH, other state departments are involved in food safety issues. In Figure 5, we briefly summarize the role of these departments.

 

Figure 5

State Departments Responsible for Food Safety

Department

Responsibility

Department of Public Health

·   Ensures safety of raw agricultural commodities.

California Department of Food and
Agriculture

·   Ensures safety of milk and dairy foods and of meat and poultry products
exempt from federal inspection.

Department of Pesticide Regulation

·   Samples fresh produce to test for
pesticide residue.

University of California

·   Conducts research on food safety
issues.

 

 The DPH also works closely with the Federal Food and Drug Administration (FDA) when investigating interstate foodborne illness outbreaks. To facilitate these investigations DPH and the FDA have created the California Food Emergency Response Team (CalFERT), a specially trained group of federal and state staff with expertise in farm food safety investigations whose members jointly conduct investigations and share all related records and reports. The CalFERT was established more than a year ago following investigations of E. coli outbreaks traced back to California spinach. In 2006, the FDA and DPH also launched a Lettuce Safety Initiative in response to outbreaks of E. coli associated with fresh and fresh-cut lettuce. The initiative was developed with the goal of minimizing the incidence of foodborne illness associated with the consumption of fresh lettuce and to make industry aware that the FDA and DPH are committed to and concerned about the safety of lettuce.

Recent Foodborne Illness Outbreaks. Recent foodborne illness outbreaks have been associated with California agricultural products primarily lettuce or spinach. The FDA is aware of 20 outbreaks of foodborne illness during the last 11 years that were caused by E. coli and for which fresh or fresh-cut lettuce or spinach was implicated as the outbreak vehicle. These 20 outbreaks accounted for an estimated 12,000 illnesses and at least three deaths, according to FDA. Although tracebacks to growers were not completed in all 20 outbreak investigations, completed traceback investigations of nine of the outbreaks were associated with lettuce and spinach from the Salinas Valley in California. (The Salinas Valley produces 75 percent of the nation’s lettuce.)

DPH’s Response to Recent Outbreaks. As a result of the outbreaks over the last decade, DPH met with the produce industry on numerous occasions from 2001 through 2005 to convey findings from previous outbreak investigations in order to identify the problem, to work with the industry in identifying needed interventions, and to encourage the industry to provide funding for research. Additionally, in late 2005 and early 2006, the department and FDA issued letters to the produce industries to reinforce their concerns regarding continuing outbreaks associated with produce from California and to encourage these industries to take action. However, despite these efforts, a comprehensive and collaborative plan to address the issue has not yet been developed.

Industry Response to Recent Outbreaks—Proposed “Seal of Approval.” In response to the recent outbreaks of foodborne illness, the Western Growers Association proposed in January 2007 a seal of approval for California’s leafy green vegetables. The criteria for earning this seal will not be determined until this spring, but the seal is meant to signify to consumers that leafy green vegetables have been handled properly during their journey from farm to grocery store. This program would be run by the California Department of Food and Agriculture’s Marketing Branch, which is responsible for market development programs for fruit and other crops. The purpose of a marketing program is to provide agricultural producers and handlers an organizational structure, operating under government sanction, that allows them to solve production and marketing problems collectively that they could not address individually. Marketing programs are industry initiated and usually do not go into effect without approval by an industry vote. Generally, these programs focus on standards for freshness, size, and appearance and do not directly relate to food safety.

Administration Proposes More Resources for Foodborne Illness Emergency Response

The Governor’s 2007-08 budget proposes $2.1 million General Fund and nine positions to expand DPH’s emergency response capabilities to foodborne illnesses. The proposal would also support food safety research into risk factors and prevention measures for foodborne illness associated with ready-to-eat California produce.

This proposal would expand the DPH’s FDB Emergency Response Unit and establish three trained teams of investigators to investigate foodborne illnesses and foodborne illness outbreaks. One team would be responsible for tracing the contaminated product back to a distributor, processor, and farm. The second team would be responsible for investigating the processors involved in the outbreak. The third team would be responsible for completing farm investigations. These teams would also provide training and support to local jurisdictions in the investigation of restaurant-associated foodborne illnesses.

Finally, it would add administrative and laboratory support to meet the increased workload of the unit. (The current Emergency Response Unit is composed of one team of two investigators and one scientist. Staff from other branches in the department have been redirected to assist on the recent outbreak investigations.)

Balanced Approach of Investigation and Prevention Needed

As previously discussed, for the last five years DPH has been encouraging industry to develop a plan that implements best agricultural practices to prevent or reduce the risk of food contamination. However, this plan has not yet been developed. Although industry has just recently developed a proposal for a seal of approval, the criteria for earning this seal have not yet been developed. Therefore, the state can not assess the extent to which such a seal will prevent future outbreaks. Furthermore, the plan under discussion at this point only applies to distributors and processors of leafy green vegetables, not to growers.

Assessing the Governor’s Proposal. We find the Governor’s proposal has merit for two reasons. First, it provides funding for research in areas related to the safety of fresh produce. This research can be used to develop possible preventative measures for reducing the risk of food contamination. Second, it expands DPH’s ability to more quickly investigate an outbreak of a foodborne illness.

However, we find that, the Governor’s proposal does not do enough to address the underlying problem of preventing future outbreaks. Rather, this proposal primarily focuses on responding to outbreaks by adding emergency response staff that will investigate after an outbreak has occurred and does not focus enough on prevention. We would note that FDA, which is responsible for food safety nationwide, has as its first objective regarding food safety to prevent the contamination of fresh produce.

Analyst’s Recommendation

Based on our review we recommend the Legislature take the following actions.

Approve Four Positions for the FDB Emergency Response Unit. We recommend approval of four of the nine positions for the FDB Emergency Response Unit (one senior food and drug investigator, one food and drug program specialist, one research scientist, and one Food and Drug Lab scientist). This would add another team (for a total of two teams) of investigators in the FDB Emergency Response Unit and laboratory support for the team. Given that there are three outstanding outbreak investigations from 2006 and that these investigations can last over a year, we think the addition of one more team of investigators is justified. However, we think it is unnecessary to create a team dedicated to investigating food processors involved in an outbreak. This is because the department regulates and routinely inspects food processors for sanitary conditions, and as such it should be able to use this expertise on an as needed basis during outbreaks. Furthermore, we do not think that the other requested two positions for administrative and laboratory support are justified on a workload basis since we are recommending only an additional four positions to FDB. Approval of just one new team and its laboratory support would result in a savings of about $800,000 General Fund.

Approve Funding for Research. We recommend approval of the $500,000 General Fund requested for research related to the safety of fresh ready-to-eat produce from California. This research would be used to refine existing good agricultural practices to improve food safety and prevent foodborne illness outbreaks.

Require DPH to Report at Budget Hearings. We further recommend DPH report at budget hearings on its assessment of the industry proposed seal of approval for green leafy vegetables. In particular, given DPH’s scientific expertise in agricultural food safety, DPH should comment on the extent to which the criteria for earning the seal will prevent the contamination of this produce.

Prostate Cancer Treatment Program

The Governor’s budget includes $3.5 million General Fund to provide treatment services through the prostate cancer treatment program. We withhold recommendation on this proposal pending receipt from the administration of a statutorily required report evaluating the cost-effectiveness of the program.

Background. The Improving Access, Counseling, and Treatment for Californians with Prostate Cancer (IMPACT) program was established in 2001 and provides prostate cancer treatment for low-income and uninsured men. It was a five-year pilot program and implemented through a contract with the University of California, Los Angeles. Chapter 442, Statutes of 2005 (SB 650, Ortiz), reestablished IMPACT as a permanent program and required that the program be cost-effective. This chapter also directed DHS to report to the Legislature by July 1, 2006 evaluating the IMPACT program, including the service and delivery model and the cost-per-patient.

The 2006-07 Budget Act included $3.5 million General Fund as one-time funding for the program. The administration proposed to evaluate the need for ongoing funding for the program after a review by the Legislature of the above-mentioned report.

Governor’s Proposal. The Governor’s budget includes $3.5 million General Fund in ongoing support for the IMPACT program.

Analyst’s Recommendations. We withhold recommendation on the administration’s request to fund the IMPACT program. At the time this analysis was prepared, the Legislature had not yet received the above-mentioned report. Without this report, the Legislature does not have key information necessary to evaluate if the program is meeting the cost-effective criteria specified in Chapter 442.

Health Care Infection Control Program

The Governor’s budget includes $2 million ($1.6 million General Fund) and 14 positions to implement a program for the surveillance and prevention of health care associated infections. We find that there is an alternative funding source to implement this program that would result in lower General Fund costs. (Reduce Item 4265-001-0001 by $1.4 million. Increase Item 4265-001-3098 by $1.4 million.)

Background. Health care associated infections (HAI) are a major public health problem in California. According to DPH, in California’s 450 hospitals, HAIs account for an estimated 240,000 infections, 13,500 deaths, and $3.1 billion in excess health care costs annually. Chapter 526, Statutes of 2006 (SB 739, Speier), requires DPH to implement a HAI surveillance and prevention program for health care facilities. (Health care facilities include hospitals, long-term care facilities, nursing homes, intermediate care facilities, ambulatory surgical centers, dialysis centers, assisted living facilities, and outpatient clinics.)

Governor’s Proposal. The Governor’s budget includes $2 million ($1.6 million General Fund) and 14 positions to implement Chapter 526. The new program will consist of three units: one in the Division of Communicable Disease Control (DCDC) Infectious Disease Branch (IDB), one in the DCDC Microbial Diseases Laboratory Branch (MDLB), and one in L&C program. The governor proposes to fund DCDC activities with General Fund and L&C activities with the L&C special fund. Health care licensing fees are deposited into the L&C fund and this fund can only be used to support L&C program operations.

Users That Benefit Should Contribute. Consistent with the “beneficiary pays” principle—individuals or groups who directly benefit from government services should be charged fees for those services—we find that there are direct beneficiaries of this proposal and for this reason, it should be fee-supported. We find that the HAI surveillance and prevention program will directly benefit health care facilities. This new program will help ensure that the health of patients at all types of health care facilities would be protected to a greater extent from the threat of HAIs and will save health care facilities the costs associated with HAIs.

Analyst’s Recommendations. We recommend approval of the administration’s proposed implementation of Chapter 526. However, we recommend that activities of the IDB and MDLB be partially funded by the L&C fund, instead of General Fund as proposed by the administration. This would result in a $1.4 million General Fund savings. Accordingly, we recommend the adoption of trailer bill language that adds HAI surveillance and prevention program as one of the allowable uses of the L&C fund.

We note that state-operated health care facilities would also benefit from the new HAI surveillance and prevention program. Therefore, we estimate that HAI surveillance activities in these facilities would require General Fund support of $170,000.

Oral Health Assessment

The Governor proposes $221,000 General Fund and two limited term positions to prepare a report regarding the improvements in the oral health of children resulting from recently enacted legislation. We believe that the report be funded from other funds consistent with existing law that the department should seek private funds to prepare for this report, resulting in a General Fund savings of $221,000. (Reduce Item 4265-001-0001 by $221,000.)

Background. Chapter 413, Statutes of 2006 (AB 1433, Emmerson), requires a pupil, while enrolled in kindergarten or first grade (under certain circumstances) in a public school, to present proof of having received an oral health assessment prepared by a dentist or licensed or registered dental professional. It also requires all public schools to annually send a report to the local health officer detailing the number of pupils who are subject to this requirement, the number of pupils who received the assessment, and the number of pupils who did not receive the assessment.

Chapter 413 also requires the Office of Oral Health (OOH) at DPH to report to the Legislature by January 1, 2010 and discuss any improvements in the oral health of children resulting from these new requirements. Chapter 413 also provides that, the OOH may receive private funds or may contract with the University of California (UC) to complete this evaluation.

Governor’s Proposal. The Governor’s budget plan includes $221,000 General Fund and two limited-term positions to prepare the above-mentioned report.

Analyst’s Recommendations. Chapter 413 provides that the OOH may receive private funds and contract with UC to prepare this report. In view of this, we recommend deletion of the $221,000 General Fund and recommend the Legislature direct DPH to seek private funds in order to support preparation of this report.

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