Implementing Budget Cuts in the Basic Health Plan: A Case Study

Summary: Basic Health is a state-sponsored program providing health insurance coverage to low-income families in Washington state. Because of significant state revenue shortfalls, the state legislature reduced Basic Health’s funding for the 2009–11 biennium by 43 percent. The administrator of the agency overseeing Basic Health was given wide latitude to decide the criteria by which 40,000 people would be removed from the program in order to balance the reduced budget. This case study describes the administrator’s decision-making process, the ramifications of various options, the rationale for his final decision, and the effects of the decision one year later. The case study questions invite students to consider how they would handle the situation in his position.

Purpose: The purpose of the case study is to allow students to use their analytical decision-making skills given incomplete information, not to come to the same conclusions that the agency administrator did. Students can compare their reasoning and decisions with the actual decisions made in the case and consider what they would do similarly or differently.

Structure: The case study is divided into three chronological narrative sections and one supplemental information section. Each of the three narrative sections includes only the (incomplete) information that the administrator of the agency overseeing Basic Health had at that point in time. Students are asked to make a decision at each of the three decision points he faced. They discuss the questions at the end of each section in small groups, then report back to the rest of the class.

Course Use: This case study is typically used in graduate courses related to public health, public policy, health policy, budgeting, and management.