St. Paul - In a time of chronic budget deficits, rising health care costs, and increasing demand for government services, Governor Dayton announced progress today on major reforms to reduce costs and improve government service, and outlined his administration's approach to government reform.

Dayton said, "We, who serve in government, have an important obligation to improve how it works. Our state government must provide better services, more efficiently, and at lower costs. These initiatives, which we will announce today and in the coming weeks, will build upon the progress we have already achieved during the first nine months of my administration."

Governor Dayton named improving government services as a top priority when he took office in January of 2011, and he charged his commissioners with making continuous improvement part of the DNA of their leadership and management. "People who live and do business in Minnesota rightly expect government to work faster, better, and more efficiently," said Dayton. "Government needs to work at the speed of commerce."

Dayton has asked Chief of Staff Tina Smith and Lt. Governor Yvonne Prettner Solon, along with Administration Commissioner Spencer Cronk, Management and Budget Commissioner Jim Schowalter, and Office of Enterprise Technology Commissioner Carolyn Parnell, to lead the this comprehensive effort.

Smith detailed the Dayton Administration's approach to building a better government for a better Minnesota, saying that the effort is changing the way that state government does business. She unveiled a new website that will provide a place for Minnesotans to track the progress of reforms taking place in state government. Information on both current and future reform efforts can be found at http://mn.gov/governor/initiatives/.

Over the last ten months, every state agency has taken steps to improve their operations. Today, Commissioner Lucinda Jesson highlighted the results achieved through the Department of Human Services' effort to reform how the state buys health care in order to get quality care at a better price.

For the first time, the Department of Human Services injected competition into the bidding process for managed care plans that provide health care to Minnesotans with public health insurance, and tied contract awards to quality measures.

For far too long, uncompetitive contracts have favored managed care plans at the expense of taxpayers. Over the past ten years, health care costs have been rising at unsustainable rates, putting even greater strain on our state's budget. Managed health care spending was forecast at $4.4 billion over the 2012-2013 biennium to cover about 600,000 Minnesotans. Common-sense reforms like competitive bidding will allow our state to reduce those costs without reducing the level of service that Minnesotans deserve.

The competitive bidding process will result in $170-180 million dollars in taxpayer savings. Along with other managed care reforms put into law, total taxpayer savings will be $242 million over the next two years.

Following the competitive process that evaluated health plans both in terms of quality and cost, HealthPartners and UCare clearly emerged as the best value plans for all seven metro counties. They will be awarded contracts to serve these counties. Additionally, the bidding process resulted in a contract award to Medica to serve Hennepin County. DHS is in final negotiations with Blue Plus to serve Ramsey and Dakota counties.

"This is one example of the work we are doing throughout state government to deliver better services at a better price," said Governor Dayton, "but our work is just beginning."