Detroit Nears Transfer of Health Dept. Functions to Nonprofit

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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

  • C. Fuji Kreider

    In 1995, Union County, Oregon went through a similar process, after a twenty month period of public and employee input, research, detailed planning, and implementation. At the time we knew of only one other non-profilt Health Department given “the authority” by the regulating government entity. It was a very successful (and at the time, innovative) move by the County Commission and Health Department leadership. Services increased, customer satisfaction improved, and all employees were retained with the same or similar benefits. Over time, compensations increased for employees as well. New innovations, particularly with the backdrop of major healthcare financing reforms in the State of Oregon, were enabled by the new governance model. Swift changes and quality adaptations became common. I say all of this because I believe that if the City of Detroit does the spin-off in a good way, it will be a successful model. However, to do it well, they should involve all stakeholders in setting the community values and planning the process; they should have high expectations of the employees/providers of services and new organization (even with the same employees); create a few unique measures that will be reviewed regularly (even though the federal financing comes with lots of measures and standards that will still be necessary to comply with); they should set up a citizen advisory (oversight) group that reports to the City Council, staffed by someone on the council or public administrator and include a board member or adminsitrator of the new non-profit. These latter two do not need to be voting members (ex-officio) however they can work to maintain transparacy and prevent rumours or the many other threats that will come from angry activists or competing private sector interests, etc… There’s lot more to write; but I will leave it at that… Hopefully, they have had consultation with others who have been through it before. Finally, I would just say that once all the hard work and negotiations is complete and the transfers happen (lots of devils in those details), it’s time to celebrate! Buuut, only briefly, because the real work comes in sustaining the model and proving that you can provide the best public health services that any city can offer! The reward will be imense pride (for employees and stakeholders) and better health outcomes and livable community (for the citizens). All the best to you, Detroit! Go for it!

  • Chicagoan

    Chicago has shifted no public health functions to the local public health institute. Health department have a variety of relationships with institutes.

  • rick cohen

    Dear C: Thanks for the long note. It would be great to have you consider writing a piece for us on the Union County experience and what that might tell Detroit about the right and wrong ways of doing this.