Time to Change? Virginia House Examines a 70-Year-Old Funding Formula

A House bill seeks to re-evaluate matching funds for Virginia’s local health departments.

RICHMOND – Health departments in Virginia still operate under the same funding formula first proposed about 70 years ago. Does it still work? Or should that be changed? Virginia House Del. Lamont Bagby wants to answer those questions.

If it ain’t broke, don’t fix it – but a modification or two might not hurt. That’s the gist of House Bill 1963, which passed the House of Delegates’ House Health, Wellness and Institution Committee on Tuesday.

The bill suggests adding an amendment to the Code of Virginia. It relates to the cooperative local health budget and looks into local health departments’ reporting of funding numbers.

Local health departments currently receive a match rate of 18% to 45% of the combined state and local contributions.

The delegate sought not to change the minimum and maximum match rates, but rather to research the allocations and make appropriate adjustments.

“The bill requires the Virginia Department of Health to conduct a biennial reevaluation of the local match rates – which have not changed, believe it or not, since their development in the 1950s – and report its findings and recommendations to the governor” and General Assembly, Bagby said.

Steve Sullivan, director of business processes for Community Health Services, noted that if codified, the bill led to structural reporting. That would provide regular opportunities for updates on the dynamics of the local health department budgets and local financing contributions.

RELATED: Bill Would Change How Virginia Schools Provide Healthcare

Support From Health Professionals

Robert “Bob” Hicks, deputy commissioner for Community Health Services, oversees the Commonwealth’s 35 health districts. He explained that the budget combines local input and funding with the general fund from the state.

“The administration supports this bill,” Hicks said. “This is a way to put in the Code what has been done over the years without any adjustments.”

Hicks expressed the overdue need for reevaluation throughout the state.

“Those formulas and the adjustments for each locality has not been done for decades,” Hicks said. “And so many of our localities, when this was originally done, their financial ability to earn revenue and their income has changed drastically.”

Hicks noted that data exists on which localities would change if the bill became law. He stated that some would go up, while others would go down.

If HB1963 passes, the rates will change for the majority of Virginia’s local health departments.

Shameera Carr, Community Health Services chief of staff, discussed the specific number of local health departments the proposal impacted.

“VDH anticipates that following the review of the match rates, the rates of approximately 59 localities will decrease and the rates of 54 localities will increase,” Carr said. “And the rate of 20 will remain at the 45% maximum.”

Carr also relayed information on the average changes the team projected.

“VDH anticipates that the average decrease will be 10.7%, while the average increase will be 6%,” Carr said.

House Presents a Clearer Vision

If passed, those with disruptions to their current budgets would not feel the immediate impact. The committee did not ask that health departments cut their average spending by more than 10% overnight. Instead, they included a grace period to make the transition.

“What we’re doing with the budget amendment is to hold harmless for the first year those localities that would have to make adjustments, giving them time to make more adjustments,” Hicks said.

Del. Robert Orrock requested a list of positively and negatively impacted health departments for himself and the other committee members. He also noted that the funds for the grace period only covered the first year, but questioned the longer outlook.

“…But as we’re going down the road, absent further modifications from the state budget, there are going to be winners and losers and I would just like to have that information,” Orrock said.

Hicks agreed to provide the list. He also offered to send a map showing which health departments’ funding would change or remain neutral.

The bill received 19 yes votes and one no, the only opposition being Del. Hyland “Buddy” Fowler, Jr. Additionally, Del. Karrie Delaney and Del. Wendell Walker did not cast a vote. The two delegates also did not respond to their names during roll call.

The bill currently awaits its next round in the House Appropriations Sub-Committee: Health and Human Resources.

Amie Knowles reports for The Dogwood. You can reach her at [email protected]