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Pierce County, WA Mental Health Services Privatization Moves Forward

Leonard Gilroy
August 21, 2009, 6:18pm

There are some interesting new developments on the mental health services privatization front coming by way of Pierce County, Washington. As of a few years ago, Pierce County was responsible for administering mental health services for the state, but budget pressures prompted the county to step out of its administration role, and the state negotiated a contract with OptumHealth—a subsidiary of UnitedHealth—to begin administering those services earlier this year.

Fast forward to today, when the state is trying to augment mental health funds my maximizing opportunities to tap more Medicaid funding. As David Wickert at The News Tribune describes in this article today, the federal program will only contribute funds for low-income patients housed facilities of 16 beds or less (which I assume is designed to be a disincentive to institutionalization, as the mental health community has long been advocating a macro-level shift towards more community-based care solutions). Because Pierce County's mental health division operates two facilities totalling 48 beds, Optum asked the county if it would continue serving as a mental health services provider, but also build a 16-bed facility, and the county declined citing budget pressures.

At that point, the state and its partner OptumHealth decided to turn to the private and nonprofit sectors to achieve their goals, and the county will now step out of its role as primary services provider.

Wickert just reported via the Tribune's blog that OptumHealth has just announced the three firms and nonprofits that will replace Pierce County in providing crisis triage, 24-hour hotline services and a complete range of inpatient and outpatient support services. According to the OptumHealth press release:

The new system allows the state to qualify for higher levels of federal mental health funding than it has achieved in the past, which is significant in the face of current state budget limitations. [...]

OptumHealth was retained in July 2009 by the State of Washington to improve and coordinate mental health services for Pierce County residents. With feedback from the community, OptumHealth developed a mental health crisis system that maintains and enhances existing essential services, while adding new, proven treatment options to support recovery. The effort identified and recruited providers with strong track records in community-based mental health crisis programs, and experience in operating facilities in ways that meet federal funding requirements.

Currently, three service providers are expected to participate:
  • Recovery Innovations Inc., for a Crisis Triage Center using the “Living Room” model — a new system approach for Pierce County that combines traditional medical and psychiatric care with a home-like environment, and help from peer support specialists who have lived through similar experiences.
  • MultiCare Good Samaritan Outreach Corporation and a coalition of local mental health agencies, for 24-hour mobile crisis outreach services, a planned 16-bed Evaluation and Treatment Center and community crisis respite beds. Pierce County residents will be able to call a single, centralized toll-free crisis line.
  • Telecare Mental Health Services of Washington, for a 16-bed Evaluation and Treatment center. Telecare specializes in serving those with serious, complex mental illness, and provides a full spectrum of services, including inpatient care, crisis support, residential programs and outpatient services. [...]
New services will begin on October 1, 2009. A transition program has been established to ensure there will be no interruption of services for people needing care or for community and law enforcement agencies who count on the crisis system for support. OptumHealth will conduct extensive outreach throughout the community in coming weeks to ensure all parties are well- informed and new protocols and processes are in place for a smooth transition on October 1.

The privatization of various aspects of public mental health systems has been well underway for awhile now, and this is yet another example of officials using strategic privatization to achieve their mental health care delivery transformation goals. Reason Foundation's new Annual Privatization Report 2009 highlights the latest news in mental health privatization, with a special focus on current state and local efforts to privatize psychiatric hospitals and services, as well as case studies on privatization initiatives at the South Florida State Hospital and Eastern State Hospital (Virginia).

Regarding Pierce County, it's worth noting that independent experts and mental health advocates were brought into the loop and played a role in vetting the contractors with regard to what they could bring to the table on best practices in mental health care delivery:

The agencies selected were evaluated by a panel that included independent third party mental health experts and consumer and family representatives. "As a long-time citizen activist and advocate for persons with major mental illness, I was pleased to evaluate proposals submitted to OptumHealth for the delivery of mental health crisis services to individuals in Pierce County," said Eleanor Owen, interim executive director of the National Alliance on Mental Illness Greater Seattle affiliate. "Because a crisis is only one aspect of mental illness, I was most impressed with proposals that also focused on long-term support to help people reach recovery."

It's critical to bring the mental health advocacy community into the decision process, because they tend to be less concerned with who provides the services than with how well they are performed and whether or not they conform to practitioner best practices. Roughly a decade ago in Florida, for example, the Florida Statewide Advocacy Council was initially resistant to the state's first steps on psychiatric hospital privatization, but after witnessing the dramatic turnaround in quality at South Florida State Hospital after privatization, the Council unanimously passed a resolution in 2003 supporting further privatization of Florida's psychiatric facilities.

Unfortunately, the intersection between privatization and mental health services can sometimes get politicized like anything else, but by and large it appears that the shift towards increased use of privatization is well underway. With the challenges that state health and corrections budgets are facing these days, I would expect to see much more of this in the future.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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