State of the economy: The impact of budget cuts on a Medicaid-funded Home and Community-Based Demonstration Program in South Carolina

The puzzle of how best to allocate scarce resources is the fundamental challenge of public policy. In order for policymakers to make informed decisions about how to provide public services when resources are finite, they must be able to compare the effect of the proposed alternatives. One means of piloting and comparing programs across multiple geographic areas is the implementation of demonstration projects. The Centers for Medicare and Medicaid Services is funding a demonstration program for nine grantee states treating severe emotional disturbance in children and youth to use home and community-based services (HCBS) as an alternative to psychiatric residential treatment facilities (PRTF).

Although the literature supports the value of HCBS over residential treatment, systems change does not come easy. Despite similarities in program structure in these demonstration projects, organizational and policy challenges beleaguer implementation of these programs, making cross-comparisons difficult. Using a social ecological approach, the proposed presentation will describe implementation and administrative challenges faced by one of the demonstration states, South Carolina, a state that has been hit hard by the downturn in the economy. Like other states experiencing budgetary shortfalls, funding reductions have negatively impacted HCBS programs, resulting in the reductions of vital resources. Based on interviews, field notes, and policy briefs, this presentation will provide evidence of the barriers encountered at every level of program implementation with special emphasis placed on what we have found to be the most difficult arena in which to effect change—policy.