sam's notes

notes on government, sports and popular culture

Monday, December 12, 2005

.........Rough version of my perspective on mental health reform in North Carolina:

So far, mental health reform in North Carolina has not gone smoothly.

A report card recently issued by the North Carolina Psychiatric Association (NCPY) said that mental health reform “ran into a perfect storm’ of adverse events: unanticipated budget problems, shortfalls in Medicaid, increase in population, more medically indigent (non-Medicaid) consumers needing care, less bridge funding than anticipated, community hospital capacity not increasing (and in fact hundreds of bed being closed over the past decade), and the loss of public sector clinicians (especially psychiatrists).”

In a recent two-part series, the Winston-Salem Journal painted an equally unflattering picture.

“The massive overhaul of the state’s $2.3 billion mental-health system began with the best intentions,” the Journal wrote. “But four years into the overhaul, there is little proof that treatment has improved, and there is growing evidence that the state’s complex system of care is worse than ever.”

In January 2001, state legislation was introduced to reform mental healthcare by returning its governance and operations to the counties. But the effort to streamline mental healthcare has only added another layer of bureaucracy.

Many feel the entire legal, financial and service structure of North Carolina’s mental health system is being profoundly altered. Nonprofit agencies that offered mental health services to county residents have now become local managing entities (LMEs). Each agency must submit a local business plan to North Carolina Department of Health and Human Services Division of Mental Health, Developmental Disabilities and Substance Abuse Services, after which the state recommends different divestiture options.

Many of the state’s 30 LMEs are in a state of confusion right as they struggle to make sure it’s both economically and clinically feasible to divest themselves. Divestiture of clinical services at LMEs is a complicated affair. LMEs not only have to ensure private contractors are offering services to patients, but also must deal with matters such as asset transfer and annual leave for employees.

LMEs were supposed to receive financial assistance to aid in the process as the state began closing beds in psychiatric hospitals, a move that would save about $50 million, according to the Journal. Hospitals are gradually trying to move away from primary care as more and advances in treatments and drugs are made. People with manic depression who would be hospitalized 20 years ago are now able to function in society.

But according to NCPY, admission of adult patients increased 23 percent since 1999 with a dramatic rise since March 2004. Admissions of child and adolescent patients have increased dramatically in August 2003, nearly doubling between in three-month phases in both 2003 and 2004.

In a memo to LME directors around the state, J. Michael Hennike, the division of mental health’s interim chief of state operated services, let directors know that the spike in hospital admissions would have a profound effect on their budgets.

Based on the increase in admissions, the division said it not be able to close beds until 2006, a modification that not allow funding for an expansion of community mental health systems.

“We are hopeful that as those programs that have already been funded become operational, admissions to the State hospitals will decrease. As this occurs, we will reevaluate our ability to fund additional mental health community expansion proposals,” Hennike wrote.

There’s considerable doubt among many that the new 488,000 square-foot Central Region Psychiatric Hospital, scheduled to be completed in 2007, will have enough beds to satisfy demand.

In the meantime, LMEs and their private spinoff companies are definitely feeling the financial crunch.

In its series, the Winston-Salem Journal reported “ on the fate of HopeRidge Centers for Behavioral Health, the spinoff company of CenterPoint Human Services, the mental-health agency serving Forsyth County and surrounding areas.

In a letter outlining the contractual obligation with Hope Ridge, CenterPoint stated it disagreed with legislation to reform the mental health system because it would “alter the legal, financial and service structure of all area authorities as a reaction, in part, to the failure of some area authorities to meet established performance expectations.”

Still, CenterPoint pressed ahead with its local business plan to contract with Hope Ridge and finalized it in April 2005. In September, HopeRidge was bankrupt.

Another private contractor, Telecare, informed its client, Crossroads Behavioral Healthcare, that it would no longer be able to treat its patients, who live in Surry, Iredell and Yadkin counties.

Officials at Telecare told the Journal it had lost $700,000 treating Crossroads’ clients.

“I guess we’re also hoping that the state and county will be patient with us, because we’re one of the largest providers that’s tried, and if we’re having difficulties perhaps the issue is the system needs to be adjusted,” Anne Bakar, Telecare’s chief executive, told the Journal.

On top of all this the recent budgeting process was kind to LMEs The Health and Human Services department wants to reduce the number of LMEs to 20, meaning treatment will be further regionalized. Until that goal is achieved, LME budgets will have to tighten to the tune of $28 million.

When advocacy groups such as theMental Health Association in North Carolina (MHA/NC) voiced their opposition, the department backpedaled, saying it find the $28 million somewhere else.

MHA/NC says that for true mental healthcare reform to be a reality, both hospitals and community programs still need adequate funding.

“Reform proponents have known from the start that both systems would need funding during the transition; the freeze on shifting funds is yet another barrier to having a mental health system that meets people’s needs in their community,” the association wrote in a recent public policy update.


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