Analysis: SC’s contentious healthcare restructuring bill

Sam Aaron

Written by
May 31, 2024

Analysis: SC’s contentious healthcare restructuring bill

If you have seen our weekly updates, read the local paper, or spent time on social media, you have probably heard about a contentious bill that would consolidate numerous health departments under a single executive agency. The measure (S.915) is the second phase of a two-part restructuring effort that began last year when the General Assembly voted to split up the S.C. Department of Health and Environmental Control (DHEC). 

After suffering a surprise defeat on the final regular day of session, legislative leaders and the governor are now backing a plan to resurrect the bill so that it can be passed in special session. Given this effort, we believe the public deserves a true understanding of the bill, and that’s what this analysis aims to provide.  

 

Summary 

S.915 is a major government restructuring bill with both clear benefits and areas of uncertainty. Its best aspects include new limitations on the police and emergency powers of the state health department; however, many of these changes are specific to the Senate’s version of the bill. Its most substantial change involves the merging of six independent health departments under a new executive agency, with a goal of centralizing management and creating a direct line of accountability to the governor. We found some improvements in this regard, but must note that current or pending laws already provide ample accountability for some of the agencies to be merged. There is the potential for cost savings through consolidation, but these figures are at best undetermined. A new position of health secretary is created to run the agency, which would absorb significant authority to direct and coordinate health policy.  

 

RESTRUCTURING OVERVIEW

S.915 would consolidate six state health departments under a new Executive Office of Public Health (EOPH). These departments include:  

  • Department of Public Health (DPH) * 
  • Department of Disabilities and Special Needs (DDSN)  
  • Department of Health and Human Services (DHHS)  
  • Department of Mental Health (DMH)  
  • Department of Alcohol and Other Drug Abuse Services (DAODAS)  
  • Department on Aging (DOA)  
     

Note: The pending Department of Public Health is the result of a 2023 law to split up DHEC.  

Overseeing the executive office would be a health secretary appointed by the governor with Senate confirmation. The health secretary would then appoint, with Senate confirmation, the directors of five divisions: Public Health, Health Financing, Aging, Intellectual and Related Disabilities, and Behavioral Health. (The bill refers to these as departments, but for clarity's sake we have labeled them divisions.) Crucially, the health secretary could be removed by the governor at will. 

 

CENTRALIZING ACCOUNTABILITY

By merging separate agencies under a new executive office, the bill aims to centralize the management of healthcare matters and establish a direct line of accountability to the governor. However, to fully understand the changes taking place, it is important to know how things are structured under current and pending law: 

  • DHEC is currently governed by an eight-member board, whose members are appointed by the governor with Senate confirmation. Seven are selected by state congressional district, while one member serves at large.  
  • The DHEC director is selected by the board with the governor’s approval and Senate confirmation. It is difficult to hold this hiring choice accountable because of the many decision makers involved. Moreover, the board may only remove the director with the governor’s approval. 
  • Under a law (Act 60) enacted last year to split up DHEC, the board will be abolished, and its director will be appointed by the governor with Senate confirmation. The law takes effect July 1, 2024.  
  • Moreover, three of the departments to be merged (DAODAS, DHHS, and DOA) already have their directors appointed by the governor with Senate confirmation per existing law. 
     

With this in mind, S.915 would:  

  • Combine six state health departments, including the S.C. Department of Public Health (formerly DHEC), under a new executive office. The departments effectively become their own divisions under this office.  
  • Establish a health secretary position to lead the executive office and appoint five division directors, each requiring Senate confirmation. The governor, who appoints the secretary with Senate confirmation, can remove the secretary at will.  
  • Charge the health secretary with executive-level duties, including approving proposed regulations of a division before submission to the Legislature and developing the EOPH budget.  

The bottom line: 

  • While it is true the bill would make each of the division directors accountable to a single health secretary (who in turn would be accountable to the governor), pending law is about to abolish the DHEC board and make its director a governor-appointed role. Moreover, three of the departments to be merged (DAODAS, DHHS, and DOA) already have their directors appointed by the governor with Senate confirmation.  

 

COST SAVINGS UNDETERMINED

Under S.915, the health secretary is mandated to consolidate administrative services “to the extent practicable.” These roles include, but are not necessarily limited to, accounting, budgetary, human resources and information technology positions. Given this directive it is likely that redundancies would be eliminated to some extent.  

However, the bill’s fiscal impact statement gives mixed signals: DMH anticipates potential cost increases, and DDSN anticipates an unknown fiscal impact depending on the new responsibilities it might assume. DHHS anticipates potential cost savings, though no amount is provided.  

The underlying question is whether we will see net savings across the merged departments. But it is too early to know at this point. 

 

THE POWER OF THE HEALTH SECRETARY

Through the consolidation of six independent agencies, the health secretary would serve as one of the most powerful public officials in the state. This authority extends beyond the hiring of division directors. S.915 also empowers the secretary to: 

  • Serve as the sole advisor of the state regarding all questions that involve the protection of public health; 
  • Determine the course of treatment for patients whose diagnosis involves two or more health divisions (however, a physician-patient treatment agreement cannot be overridden); 
  • Develop a comprehensive State Health Services Plan; 
  • Develop the budget of an agency that effectively comprises six independent health departments; and  
  • Sign off on proposed division regulations before they are submitted to the General Assembly for approval (having more barriers to regulation is generally a positive so this change is welcome). 

Serving as a check on his power, S.915 enables the governor to fire the health secretary at will. That means if he’s involved in a public scandal, abuses his power during a health emergency, or simply does a poor job, he can be swiftly fired via executive order. Of course, there is no guarantee of what our current or future governors will do, but this low bar to removal is a positive aspect considering the secretary’s broad powers.  

 

LIMITING POLICE AND EMERGENCY POWERS

We find that the most positive aspect of S.915 are its checks on the police and emergency powers of the state health department. However, several improvements are specific to the Senate version of the bill, and there is no guarantee they would make it into the final law.  

Police powers 

Under the section of law requiring law enforcement to carry health department orders, the term “must” is replaced with “may,” effectively making their compliance voluntary. In addition, such directives would now require an order by the governor. Here is the relevant section as proposed by the Senate bill (underlined is new language): 

“If so ordered by the Governor, all sheriffs and constables in the several counties of this State and police officers and health officers of cities and towns may aid and assist the Director of the Department of Public Health and may carry out and obey his orders, or those of the Department of Public Health to enforce and carry out any and all restrictive measures and quarantine regulations that may be prescribed.” 

Moreover, if a public safety authority requests the assistance of the S.C. National Guard during a state of public health emergency, the guard may only be deployed following an order by the governor.  

Other emergency powers  

Instead of being able to isolate or quarantine anyone during a public health emergency, as permitted by current law, S.915 says the state health department may only exercise these powers over persons who are symptomatic or have been exposed to the disease in question.  

It would also require the written informed consent of anyone receiving a vaccine or treatment by the state health department. These welcome changes are borrowed from a separate, more comprehensive medical freedom bill (S.975) that failed to make it out of the Senate.  

 

Why is the bill so long? 

Some have raised concerns about the length of the bill, which exceeds 200 pages. While this is significantly longer than typical legislation, it is mainly due to the bill's numerous conforming changes. In other words, many of the changes involve updating names and references to departments, directors and so on. This is a feature of all restructuring measures.  

There is, of course, a risk of meaningful policy changes being overlooked in such a bill. There is also a potential for unintended consequences in any legislation of this scale.  

*** 

The General Assembly is set to meet in special session at least three times in June, beginning with their first meeting on Wednesday, June 5. According to this year’s sine die resolution, the body is limited to a handful of legislative items, including the new state budget and bills in conference committee. Lawmakers would need to amend the resolution (or file a new one) to take up S.915. Our companion report covers the sine die process in more detail.