Effort aims to cut mental health costs

Top officials within Spokane County’s public mental health system have quietly proposed a dramatic cost-cutting effort designed to tighten admission to state psychiatric wards.

The proposal would sever a long-standing agreement with Spokane Mental Health, which has handled civil commitments in Spokane County since 1974. Officials with the public mental health system have been in negotiation with United Behavioral Health, a managed-care firm based in San Francisco, to take over screening services to decide which mentally ill patients require hospitalization.

Community Services Director Kasey Kramer privately lobbied county CEO Marshall Farnell to approve the plan without the knowledge of Spokane Mental Health, saying the announcement would “create some animosity,” according to a county memorandum made public Tuesday.

Kramer expressed concern that Spokane Mental Health would use the media to “dissuade the board from following the department’s recommendation,” according to the Feb. 18 memo. Kramer wrote that the contract change could “call into question (Spokane Mental Health’s) continued viability as a service provider.”

David Panken, executive director of Spokane Mental Health, learned of the proposal after being contacted by The Spokesman-Review. The proposal became public at a Spokane County Commission briefing Tuesday morning, just hours before Spokane Mental Health was to be notified.

“Incredible,” Panken said in an interview. “There are serious implications from a community perspective. There is an entire infrastructure that is in place that the community has invested in heavily.”

County Commissioners on Tuesday told Kramer to seek competitive bids for the service from qualified providers, including private for-profit companies as well as Spokane Mental Health. The current contract with Spokane Mental Health expires July 1, Kramer said.

Kramer said it appears that Spokane Mental Health has leaned toward hospitalizations rather than cheaper, community-based treatment alternatives.

Commissioners appeared surprised at the urgency of the problem.

“If Spokane Mental Health is not doing a good job, why are we just now hearing about it?” asked Commissioner Phil Harris.

Commissioner Todd Mielke said he is concerned about how any change in the contract would affect community-based Spokane Mental Health.

The source of the debate stems from fees at Eastern State Hospital, where involuntary hospitalizations have risen steadily even as the number of psychiatric beds dwindled in the 1990s.

To encourage mental health systems to provide more support in the community, the state’s Mental Health Division placed limits on the number of people who could be sent to the state psychiatric hospitals.

When a county exceeds its limit, it must pay twice the daily rate. Currently, fees for Spokane County’s Regional Support Network average nearly $100,000 a month, according to county officials.

Under the existing county contract, which expires June 30, Spokane Mental Health is the only entity authorized to involuntarily place a person in the hospital.

“We must take steps now to change this pattern, to stop losing money that might otherwise be used for community-based treatment … ” Kramer wrote.

Kramer said the proposal to end the contract with Spokane Mental Health did not reflect on the quality of care the agency provided. Rather, he cited Spokane Mental Health’s failure to “decrease the front-door access” at Eastern State Hospital, according to the memo.

“There is no question that SMH provides quality services, but they are not the most cost-effective,” Kramer wrote.

Spokane Mental Health said the agreement to provide mental health professionals – part of a larger contract with the county – pays for a clinical staff of 27 people. Their salaries and benefits total more than $1.4 million a year, according to agency figures.

By ending the contract, the county may hire a subcontractor through United Behavioral Health, the controversial managed-care firm hired to oversee the county system in 1999. The firm’s Spokane office has repeatedly declined interview requests. Regional director Ken Eskow did not return a phone call Tuesday.

The public mental health system in Washington state has been in turmoil in recent years. The state faces an $82 million shortfall in the next two-year budget cycle for mental health services.

In Spokane County, about 1,300 low-income people have lost mental health care in the past two years. The mentally ill have surfaced with increasing frequency at jails, homeless shelters and hospital emergency rooms, according to local experts.

In the past two years, the county has opened several new facilities, including a nine-bed emergency triage center and a transitional housing complex for people with mental illness. Yet hospital fines topped $1.6 million in the period between January 2003 and the end of 2004, Kramer said.

Kramer conceded that more community resources are needed, but said that Spokane Mental Health was reluctant to manage psychiatric patients in the community because officials feared the potential liability. As a result, the company was too quick to hospitalize psychiatric patients, Kramer said.

“This is an occasion where I think the approach they’ve had … is fundamentally different from ours,” Kramer said. “Our belief is that the supports that are now in place, and the ones that we will build will lessen our hospital burden.”

Panken said that with inadequate resources in the community, mental health workers have little choice but to send the sickest patients to the psychiatric hospital.

He said United Behavioral Health reviewed hundreds of involuntary commitments by Spokane Mental Health in the past year.

“In not one case did they say we had detained someone inappropriately,” Panken said. “We have followed the law.”