Detroit Nears Transfer of Health Dept. Functions to Nonprofit

September 24, 2012; Source: Detroit News

On October 1st, Detroit is scheduled to complete a controversial transfer of the functions of the City’s Department of Health and Wellness Promotion to a new nonprofit entity, the Institute for Population Health, which will oversee and operate health programs such as substance abuse treatment, HIV testing, immunizations, and food safety. At first blush, a reader might think that this is the story of yet another Detroit municipal government service to be spun off to an outside organization because of the City’s fiscal crisis or managerial ineptitude. Surprisingly, Detroit’s Department of Health and Wellness Promotion is the only remaining city-run health department in Michigan.

The move to shed pieces of the municipal bureaucracy is part of a consent agreement with the state government, but nothing comes easy in Detroit, and sometimes the “new” isn’t quite that new; the institute will be run by Loretta Davis, the City’s current health department director. Because there will still be a small health department at the City even after the transfer, Davis will head that as well. Here’s where the controversy comes in: shutting the bulk of the health department means laying off 200 contractors and 100 City workers by the end of the month (70 former health department employees will be among the 190 to be hired by the new nonprofit institute). The unions see the layoffs as a violation of the City’s union contract, which Albert Garrett, head of AFSCME Local 25, implies may be one of the purposes of the transfer. “Basically this is just another one of [Gov. Rick] Snyder and [Mayor Dave] Bing’s so-called ‘kill the union’ programs,” Garrett said.  “We think it’s a bad idea.”

No fan of giving up control of government funds, the Detroit City Council has cast a wary eye on the health department transfer. This past summer, City Councilmember JoAnn Watson said that the health department spinoff idea “smells.” More recently, the Council complained that fees earned by the City health department had been transferred into one of the new nonprofit’s accounts without the approval of the Council (prior to the upcoming consummation of the transfer). The institute returned the money after the Council blew a gasket, but the unions want a criminal investigation of how this occurred.

Detroit will be the fifth major city in the U.S. to shift its health department functions to a nonprofit public health institute. The others are New York, New Orleans, Philadelphia, and Chicago. Based on the experience of those four large cities—and 37 cities nationwide—what should Detroiters expect in the way of changes as the health department migrates from city hall to a private nonprofit?—Rick Cohen