TOTAL PRIVATIZATION: Mental health plan is big shift

Under pressure to fix its mental health system, Georgia is embarking on an uncharted course: the total privatization of state psychiatric hospitals.

In an escalation of earlier plans for limited privatization, officials now want to hire for-profit companies to build and operate three new psychiatric facilities to replace all seven existing state hospitals, according to documents obtained by The Atlanta Journal-Constitution. The last of the old facilities would close by 2012.

The move would end 150 years of state-provided psychiatric care in Georgia, marked by frequent revelations of horrid conditions, reforms, more revelations and more reforms. Now the state confronts a confluence of challenges: up to 10 percent budget cuts and an investigation of the hospitals by the U.S. Justice Department.

No other state has privatized its entire psychiatric hospital network. Only a few have turned over pieces of their mental health systems to the private sector, to mixed reviews. Florida, for instance, found that privately run facilities operate at a slightly less expensive rate than state institutions but can’t track any difference in patient outcomes. North Carolina auditors said that state wasted $400 million after allowing unqualified private companies to perform many psychiatric treatment functions.

As recently as September, Georgia mental health officials described privatization as merely an experiment, possibly beginning with just one hospital next year.

Now, however, they are proposing a complete reshaping of the system. Psychiatric units for children and adolescents would close. Adult patients would be housed in one of two new hospitals; one somewhere in metro Atlanta, the other in south central Georgia. And criminal defendants who may be mentally incompetent to stand trial would be brought from across the state to a single forensics facility, in Milledgeville, for evaluation and treatment.

In interviews in September, Commissioner B.J. Walker of the Department of Human Resources, which operates the state hospitals, said privatization could “begin another way of looking at things” and stimulate “real, positive change in mental health.”

On Friday, a spokeswoman for Walker, Dena Smith, said that while the commissioner is filling in more details, she has not dramatically altered her approach.

“The big picture has never changed,” Smith said. “The sentiment of that plan has not changed.”

In private meetings last week, Walker briefed mental health advocates and others on the proposal. The Journal-Constitution obtained a copy of an updated “game plan” that Walker distributed.

It cites a lack of money to build new state hospitals to replace the current facilities, some of which are 150 years old. Maintenance has cost $70 million in the past six years and could require an additional $100 million during the next decade. The plan also suggests some money that would go to hospitals could instead be used to pay for community-based mental health services.

Advocates withheld judgment, but several expressed what Ellyn Jeager of Mental Health America called “serious reservations.”

“Private companies are in the business to make money,” Jeager said. “I’m not sure it will improve the system.”

Proponents say the private sector can perform many government functions at less cost and with greater efficiency. That would be good news for Georgia sheriffs, who say they are overwhelmed providing medicines and services to mentally ill prisoners awaiting transfer to state hospitals.

“It looks good on paper,” Oliver Hunter, the deputy general counsel of the Georgia Sheriffs’ Association, said of Walker’s plan. “You don’t know if it’s going to work. If it doesn’t work, we’re looking at dire consequences.”

Privatization has received a lukewarm reaction from a mental health study commission appointed by Gov. Sonny Perdue. Members said their final report, expected this week, would stop short of endorsing the new plan.

One commission member, Dougherty Superior Court Judge Stephen Goss, has called for more analysis.

Another, attorney Stan Jones of Atlanta, questioned why officials would reconstitute the system before it is turned over to a new behavioral health department. Perdue recently proposed the new agency as part of a reorganization of the state’s health and human services functions. It would begin operations in July.

But Walker’s latest plan and a request for proposals for the new forensics unit make it clear that privatization is on a faster track.

The first contract could be awarded by early 2009. The winning bidder would take over forensics units at Central State Hospital in Milledgeville within another 60 days and would be required to open a new building in about a year.

The state hospital in Savannah would close by July 2009, followed in 2011 by the Columbus facility and in 2012 by hospitals in Rome, Thomasville and Augusta, as well as all units except forensics at Milledgeville.

The replacement for the Atlanta hospital for patients from North Georgia would open by early 2012. The other new facility, for the southern half of the state, would begin operating in mid-2012.

The Savannah hospital would be converted into a unit that would stabilize patients in crisis. Walker’s plan calls for additional community services and for reductions in units that house people with developmental disabilities.

“We don’t know if it’s a good plan or a bad plan,” said Nora Haynes, president of the Georgia chapter of the National Alliance on Mental Illness. But “they’re moving forward.”

The state began examining its psychiatric hospitals last year after the Journal-Constitution reported that abuse, neglect and poor medical care contributed to 136 deaths from 2002 through 2007.

The Justice Department investigation added urgency to state efforts. In May, the department cited an “unabated” failure to address dangerous conditions that have caused preventable deaths, injuries and illnesses. State officials are negotiating an agreement that would forestall a lawsuit charging Georgia with violating patients’ civil rights.

Similar investigations in other states have led to massive spending to upgrade or replace hospitals. Georgia ranks near the bottom in per-person spending on mental health care; reaching the average spending level would add at least $480 million to the current budget of more than $700 million.

The expanded privatization plan appears to be intended to make dramatic changes without proportionate increases in spending, according to organizations briefed by Walker.

“Everybody’s take is that there’s no [new] money,” said Terry Norris, executive vice president of the sheriffs’ association. “They’re trying to maximize what they’ve got.”