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DC, Georgia Pursue Privatization of Mental Health Facilities

Washington D.C.'s Department of Mental Health announced today that it will be privatizing its mental health centers in 2009:

As WJLA reported last night, and DCist noted this morning, the D.C. Department of Mental Health wants to shutter its mental health centers and replace them with privately-run facilities.

City Desk reached DMH this afternoon for comment.

"We're doing it," says Director Stephen T. Baron. "But we're not doing it until '09." This should not shock anyone who either a) works at DMH or b) follows DMH closely. The department had been pushed to assess its mental health centers for a while. This past summer, it hired KPMG to study whether the centers should go private. The departmental back story is referenced in a report released earlier this month.

The conclusion of the study, Baron says is simple: If DMH privatizes its centers, it will save a lot of money and have a chance to increase the number of residents it helps. The department would save between $11 and $14 million.

The savings would come from an obvious source. "I think frankly it comes down to labor costs and the benefits," says Phyllis Jones, DMH's spokesperson. "The private providers tend to have cheaper labor costs."

The private providers already cover 60 percent of the city's outpatient care. Think Green Door. Think Community Connections. Baron says his department may begin transitioning residents from its centers to the private facilities in the coming months. A transition plan must be completed by the end of the year with full implementation to be completed by next fall.

Full article here.

Government-run mental health facilities are facing some tremendous challenges these days, and the successes with four privatized psychiatric hospitals in Florida are probably the most visible example of how policymakers are turning to the private sector to improve (sometimes even rescue) care and services provided to psychiatric patients.

Let's look at Georgia, for example, where the Department of Human Resources recently announced that it would be privatizing one state-run psychiatric hospital in a consolidation move, and opened the door to privatizing more facilities down the road. Cost savings are one driver, but the impetus to explore privatization comes from a far more important issue—service quality under state operation has literally deteriorated to the point that lives are at stake:

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.

Read more for yourself in the Atlanta Journal-Constitution's commendable ongoing, multi-part coverage of the appalling conditions in Georgia's mental hospitals, entitled, "A Hidden Shame."

This should dispel any notion whatsoever that providing care to psychiatric patients is somehow an "inherently governmental" function so delicate that it demands the creation and preservation of government monopolies to fulfill it. That system has broken down completely in Georgia, and they're not alone; similar investigations are ongoing in Illinois and other states right now. Experienced private companies and nonprofits can bring their resources to bear to turn things around quickly and improve patient living standards and quality of care—not to mention accountability, which can be woefully lacking in government operation. This is the central lesson we've learned from Florida:

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.

Reason Foundation has a new study underway that will explore state psychiatric hospital privatization in much further detail, with a specific focus on Florida and its successful implementation. Given the abysmal conditions in many of the state-run facilities and increasing federal watchdog intervention, there is likely to be rapidly increasing interest in how privatization can improve psychiatric facilities, control costs, and dramatically improve programming and patient care.

» Reason's Annual Privatization Report 2008
» Reason's Privatization Research and Commentary

Leonard Gilroy is Director of Government Reform


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