LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 23, 1995 TO: Honorable Judith Zaffirini, Chair IN RE: Committee Substitute Committee on Health & Human Services for Senate Senate Bill Austin, Texas No. 406 FROM: John Keel, Director In response to your request for a Fiscal Note on Senate Bill No. 406 (Relating to health care purchasing by state agencies.) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would require a state agency to purchase goods and services in support of the agency's health care programs by the method that provides the greatest volume discount for the goods or service, including group purchasing programs, state agency purchasing consortiums, or competitive sealed proposals. The bill defines "state agency purchasing consortium" as a group of three or more state agencies acting pursuant to a written agreement to receive discount prices from vendors based on volume purchases of goods and services. The bill would exclude the state Medicaid program from the health care purchasing requirements. The bill requires the central administration of the University of Texas System to report to the Seventy-fifth Legislature about the health care purchasing activities of state agencies. It is assumed that no additional staff or administrative costs would be required to implement the provisions of this bill. It is assumed that savings will accrue to the State with improved purchasing practices for health care goods and services. The savings estimates incorporated into this estimate were developed by the Comptroller of Public Accounts and published as HHS 1 in Gaining Ground. Savings anticipated by agency for each year of the fiscal note include: Commission on Alcohol and Drug Abuse: $76,100 Department of Health (non-Medicaid): $6,480,400 Department of Human Services: $3,235,900 Department of Mental Health and Mental Retardation: $2,898,200 Texas Rehabilitation Commission: $109,200 The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Savings Year to General Revenue Fund 001 1996 $12,799,800 1997 12,799,800 1998 12,799,800 1999 12,799,800 2000 12,799,800 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be determined. Source: Comptroller of Public Accounts, University of Texas System LBB Staff: JK, AZ, DF