Exit interview: DHS director John Selig looks back on successes, challenges

It’s been an eventful decade since John Selig was appointed Department of Human Services director in 2005 by Gov. Mike Huckabee. He led DHS through a merger with the Department of Health under Huckabee, a move that was reversed under Gov. Mike Beebe.

Working with insurance payers and medical providers, he helped create the Arkansas Payment Improvement Initiative, which has had some success controlling costs using patient-centered medical homes and episodes of care models. Then there was the Affordable Care Act, also known as Obamacare, and the private option, which uses federal Medicaid dollars to purchase private insurance for adults earning up to 138% of the federal poverty level. It now enrolls more than 200,000 Arkansans.

There have been challenges leading an agency with 7,200 employees and a $8.4 billion budget. The private option has been politically controversial since its creation. DHS has struggled with creating systems for enrolling and re-enrolling Medicaid and private option beneficiaries. A computer system planned to cost $100 million instead is costing $200 million. A report by The Stephen Group consulting firm found 43,000 enrollees may not have lived in Arkansas.

Selig announced last fall that he was leaving the post. His successor, Cindy Gillespie, begins work March 1. In late February, Talk Business & Politics sat down with Selig in his office to review his tenure.

TB&P: DHS has been the subject of some bad headlines lately such as the redetermination issue and the computer system that’s a hundred million dollars over budget. What’s wrong with DHS that makes it susceptible to this kind of thing?

John Selig: Part of it is, DHS, just the nature of what we take on, is often emotional issues, and, there’s just, the folks we serve, there are crises that happen. Whether it’s in behavioral health or the child welfare system, you’re going to have that. We have huge systems like this eligibility system, so if something goes wrong, you’re talking big money just by the nature of it. I think this eligibility system that’s had a lot of press in the last year or two has probably been the biggest challenge in my 10 years as director. It was just kind of the perfect storm of problems with healthcare.gov, problems with our contractors, with our ability to manage it, so that’s been a real challenge for us. But I think if you look at the department as a whole, look at how we’re spending our money, I think things are running pretty well. I mean, look at the Medicaid budget. We’ve never had what now is almost four years of almost zero growth. And Medicaid is 80% of our budget. To me, that’s a huge accomplishment.

TB&P: For a computer system to be thought to cost $100 million, and instead it’s going to cost $200 million, how does that happen?

Selig: Well, first of all, the $100 million, I think, was never a realistic expectation. The federal government said, we think these are going to cost $250 million to put in place. The bid we had for part of the system was about $60 million, and with the other activities it would be $100 [million], but it was pretty clear that $100 million was not going to do what we needed. We’re frankly, we’re now closer to the estimate that the federal government said. That said, clearly there has been some money that could have been spent more effectively, I think. But you’ve heard people say you’ve got a system that doesn’t work or it’s been a waste of time. I mean, the system works. It doesn’t work as well as we want and not to our satisfaction. Everything we’ve done with the Medicaid expansion population has happened because of that system. A big part of our regular Medicaid population is on that system, and it’s working today. So people who say it’s just been a waste just don’t understand how these systems work.

TB&P: How much of this has to do with the fact that DHS is dealing with the hardest personal situations in Arkansas, and dealing with those situations is always going to be difficult?

Selig: That’s a big part of it. When I think about the department, when my successor comes in, there are certain areas that are just going to be high risk. People with serious mental illness, you’re trying to serve them as best you can, you’re doing it with limited resources, and our providers are doing it with limited resources. The child welfare system. Medicaid is just so big that if you have any fraud or waste or abuse, even if it’s a tenth of one percent, it’s a big number. Part of it is the nature of the population we serve. It’s the amount of money we have.

And then we really struggle to attract and keep talented employees, because as you point out, we don’t pay particularly well, and so we often are a training ground. And we see that whether we’re trying to write a contract, and our people who are working on the contract are making a fifth or a tenth of what people on the other side of the contract are making. We struggle when we’re trying to make reforms in behavioral health, and we have maybe two or three people who are actually working on it, and they’ve got lots of other job duties also. We don’t have huge staffs working on these different program areas. If you talk to people around here, I’m very tight with money. I don’t like to spend it. But I do think in some cases you’ve got to spend money if you’re going to manage your money wisely.

TB&P: How big a success has the private option been?

Selig: Well, I think it’s a huge success here. And frankly, when you look at so many other states modeling their programs after ours, it has worked in almost every aspect, maybe in every aspect, even better than we projected. The insurance market is much stronger in Arkansas. Insurance rates haven’t gone up as fast. We’ve got five statewide carriers now when we really had one or two before. We’re under budget. And we hear every day from families who didn’t have coverage, who have a more stable life, who aren’t going bankrupt because they fell off the roof and lost their job or whatever it is.

TB&P: With the Payment Improvement Initiative, how hard was it to get government, private payers, and providers all on the same page?

Selig: You know, it was not as hard as I would have thought. When we first started talking with Blue Cross and the others, they pretty quickly said, ‘You know, we’ve been wanting to do some of this, but we were hoping government would go first.’ We said, ‘We were kind of hoping the private market would go first in terms of making these reforms.’ And because you’re potentially goring big oxen and it’s just complicated work, when we realized we kind of had the same goals, that everybody wanted to move away from fee for service and get better value, and frankly not use managed care if we didn’t need to, it was pretty easy to get people to the table.

The other thing that helped us get people to the table and keep people at the table is, we all made a commitment from the start that we weren’t going to create some kind of governing body between the public and private sector that was at some point going to force each other to do something. This was really just a collaborative approach. We said, ‘Let’s try to reach solutions that work together well, but at any point any player can say, ‘That works for us, or it doesn’t work well.’ So nobody felt like they were going to get locked into something. And as it turns out, we’ve had a lot of common goals. Don’t let me overstate: It’s taken a heck of a lot of work. But people have continued to work together well, and it really seems to be paying off.

TB&P: What do you plan to do next?

Selig: Don’t know. I’ve been so busy trying to finish up here, I’ve just really started thinking about it.