Mental health system may cut back, privatize

Georgia may turn some of its troubled state psychiatric hospitals over to private operators as it prepares to make deep cuts in mental health spending.

The proposed reductions —- as much as 10 percent, or $77.5 million, for the fiscal year that ends June 30 —- come as state officials try to avoid a costly settlement with the federal government over deadly and abusive conditions in the seven state hospitals.

Federal authorities say overcrowding, understaffing and poor care have caused Georgia Regional Hospital/Atlanta to violate its patients’ civil rights, and they have threatened legal action to force sweeping corrections.

Most states that have experienced similar U.S. Justice Department inquiries have ended up having to spend more —- in some cases, much more —- on mental health care. Even before the newly proposed cuts, outlined Wednesday, Georgia’s mental health spending was among the lowest per resident in the nation. Just to reach the national average could cost Georgia as much as $480 million a year.

Officials also raised the prospect of “consolidation” of state hospitals, but they said they have not decided on eliminating specific facilities or services.

The cuts, which still must be approved by Gov. Sonny Perdue and lawmakers, angered advocates for the mentally ill. The advocates still are smarting over their unsuccessful battle in late June to keep the state from diverting $6.6 million in funding for children’s mental health services to other programs.

“People living with mental illness have shouldered the burden of decades of cuts,” said Nora Haynes of the Georgia chapter of the National Alliance on Mental Illness. If more reductions lead to hospital closings, said Ellyn Jeager of Mental Health America’s Georgia chapter, “there will be more people in the streets, in the jails, in the emergency rooms.”

The board of the Department of Human Resources approved the cost-cutting plan for mental health and other DHR programs, such as public health and child welfare, after a five-hour meeting Wednesday. The board took no public comment. But board members said they worried the cuts might harm vulnerable Georgians and eventually lead to higher treatment costs. In response to drastic drops in state revenue, Perdue has directed all state agencies to identify potential reductions of 6 percent to 10 percent.

In setting priorities for the cuts, “we did not want to lose any ground in our hospitals,” said Gwen Skinner, director of the DHR’s mental health division. “We wanted to continue to build the community [services].”

Yet the plan calls for cuts across the mental health division, from children’s services to drug treatment and adult care. For instance, officials would slice $1.7 million from facilities for children discharged from state hospitals, $268,000 from a toll-free hotline that assists people in crisis and $150,000 from United Way programs that help mentally ill people who are homeless.

DHR Commissioner B.J. Walker described the cuts as “painful.” But she also said “consolidation and privatization” of hospitals could save the state $20 million during the fiscal year that begins July 1. Of that, she said, $13 million would be redirected to community services.

The hospital changes “would net us savings and improve quality,” Walker told the DHR board. “Many other states have done some of this.”

Georgia officials have reviewed privatized mental health programs in Florida, Indiana, Oklahoma and Pennsylvania, Walker said in an interview later Wednesday.

She declined to say how many hospitals might be run by private firms. But she said the state would not convert all seven state-run facilities.

Another option, she said, would be to award contracts to private firms to manage some community-based mental health services.

No state has moved more aggressively to privatize mental health services than Florida. In the past decade, it has hired private operators for five facilities, both massive state psychiatric hospitals and specialized treatment programs for sex offenders and other criminal defendants diagnosed with mental illness.

Four years in, a Florida consumer advocacy group concluded that the facilities had improved under private management. Waiting lists for patient admissions were eliminated, the group found, and the average patient stay decreased from eight years to less than one year. In addition, fewer patients were placed in seclusion and restraints to control their behavior.

At the privately run facilities, a state report said, the average cost per patient was about 7 percent lower than at the remaining state-run hospitals.

Walker said consolidation of hospitals may involve grouping certain kinds of patients, such as children or those under the supervision of criminal courts. She declined to say whether she plans to close entire hospitals. Those facilities are major employers in their communities, and earlier suggestions to close hospitals have drawn fierce protest.

Georgia’s mental health system has been the focus of increasing scrutiny since January 2007, when The Atlanta Journal-Constitution reported that 115 psychiatric hospital patients had died from neglect, abuse or poor medical care since 2002. During 2007, the newspaper reported, as many as 21 more patients died under suspicious circumstances. The newspaper also reported that authorities had confirmed almost 200 cases of patient abuse from 2002 to 2007.

The Justice Department opened a civil rights investigation of all seven state hospitals in response to the Journal-Constitution’s articles. In a letter to Perdue in May after inspecting Georgia Regional in Atlanta, the department said an “unabated” failure to correct dangerous conditions had caused preventable deaths to multiply and left patients vulnerable to sexual assaults and other attacks. Medical and nursing care, federal investigators said, “substantially depart from generally accepted professional standards.”

The state wrote the Justice Department in July, soliciting offers to settle the case and detailing actions it already had taken to improve the hospitals, Russ Willard, a spokesman for Georgia Attorney General Thurbert Baker, said Wednesday.

Walker, the DHR commissioner, said, “I think there is still conversation going back and forth.”

A Justice Department spokesman declined to comment, saying the investigation is continuing.

$26.67: In 2005, Georgia ranked 42nd in per-person spending on community-based mental health services.

$22.31: Georgia ranked 35th in per-person spending on state psychiatric hospitals.

LOW IN SERVICES

In 2005, Georgia ranked 42nd among the states and the District of Columbia in per-person spending on community-based mental health services:

1. Alaska, $232.10

2. District of Columbia, $228.82

3. Pennsylvania, $163.90

4. Vermont, $145.59

5. New York, $141.72

Average: $70

42. Georgia, $26.67

43. South Dakota, $26.19

44. Louisiana, $23.68

45. Kentucky, $22.97

46. Arkansas, $22.92

47. Nebraska, $22.84

48. Texas, $22.07

49. Idaho, $21.70

50. Florida, $19.66

51. New Mexico, $12.90

LOW IN HOSPITALS

Georgia ranked 35th among the states and the District of Columbia in per-person spending on state psychiatric hospitals:

1. District of Columbia, $138.82

2. Mississippi, $57.82

3. New York, $55.62

4. New Jersey, $49.63

5. Connecticut, $47.98

Average: $30.32

35. Georgia, $22.31

46. Texas, $13.81

47. Oklahoma, $12.86

48. New Mexico, $11.33

49. Arizona, $10.55

50. Arkansas, $10.19

51. Iowa, $9.22

Source: National Association of State Mental Health Program Directors Research Institute Inc.