by John M. Curtis
(310) 204-8700

Copyright November 1, 1998
All Rights Reserved.

nother cryptic casualty of the HMO/managed care wars bit the dust as Santa Monica’s St. John’s Hospital and Health Center announced closing its inpatient mental health and chemical dependency units on February 15, 1999. "The hospital hopes to reopen the psychiatric ward in the future," said hospital CEO Bruce Lamoureux, adding, "that the decision depends on whether they [St. John’s] can find ‘affordable’ space." While profit margins per bed are no doubt greater for medical-surgical beds, that doesn’t mean that inpatient psychiatric care isn’t desperately needed. Closing the door on reopening the chemical dependency unit, Lamoureux unambiguously stated "that there are no plans to provide chemical dependency services in the future." Reacting to the unexpected move, psychiatrist Joe Takamine noted that "this is no longer a community hospital because it no longer serves the needs of the community."

       With substance abuse a recognized national health menace, abandoning inpatient chemical dependency programs pulls the rug out from underneath millions of hopelessly addicted Americans. Outpatient programs — although less expensive — simply can’t provide the comprehensive care needed to treat a wide variety of life-threatening addictive disorders. Without highly structured and protective inpatient settings, addicted patients are at greater risk for relapse and self-destructive behavior. No medical facility can really claim comprehensive care without inpatient mental health and chemical dependency treatment.

       For 41 years, St. John’s ministered to the drug, alcohol and psychiatric problems of the Westside’s upscale community. Pulling the plug on the mental health and chemical dependency services appear cavalier and irresponsible to many observers. "It’s remarkable that no plans were made to save this," commented David Cole, president of the Mid-City Neighbor’s Association. Bailing out of the mental health game, St. John’s becomes one among countless inpatient mental health programs bankrupted by current HMO system which places physicians and hospitals at financial risk by paying paltry fixed dollar amounts per month to manage psychiatric benefits.

       Known as capitation, this system guarantees that referring patients for inpatient mental health services is a prohibitive budget buster. There’s simply no room left in the HMO’s profit margins to permit inpatient mental health and chemical dependency programs. While free-standing psychiatric hospitals are nearly extinct, inpatient psychiatric units of hospitals — like St. John’s — are now on the endangered species list. Only county, state or federal hospitals have the necessary funding to provide inpatient psychiatric and chemical dependency treatment.

       Under the current HMO reimbursement system, medical groups and managed mental health companies are bankrupted for allowing health plan subscribers to utilize their inpatient psychiatric benefits. Because physicians and hospitals — not health plans — assume the financial risk for allowing enrollees to utilize their benefits, they must clamp down on utilization. Hospitals, like St. John’s, are forced to live on a lean budget, as conscientious gatekeepers or case managers disallow the use of inpatient mental health benefits. Considered a luxury by many plans, mental health and chemical dependency benefits are frequently the first jettisoned. Only 50% of today’s health plans even include mental health or chemical dependency coverage. And, in the current managed care atmosphere, plans that do offer mental health benefits, are viewed as a dangerous risk to an otherwise profitable health care business.

       Medical groups paid fixed monthly dollar amounts to manage subscribers’ benefits, simply can’t afford, on today’s managed care budget, to allow subscribers to utilize costly inpatient mental health benefits. As a result, hospitals are dolled out mental health benefits on a very lean basis. Patients are told that in order to utilize inpatient benefits they must be a danger to themselves or others. Psychiatric hospital coverage under the current system is seldomly permitted. Cost conscious gatekeepers do their utmost to keep plan subscribers from utilizing their inpatient mental health benefits. Is it any wonder that inpatient psychiatric programs have difficulty surviving? On most managed care plans, hospital utilization review departments fight for every nickel, but ultimately lose the fiscal battle with HMOs or managed care plans.

       Free-standing psychiatric hospitals or inpatient units in med-surg facilities can no longer survive under the present reimbursement system from HMOs and managed care. Only single payer government programs like MediCal or Medicare can support necessary inpatient psychiatric or chemical dependency programs. Ironically, the indigent, elderly or gravely disabled are the only groups likely to receive inpatient psychiatric or chemical dependency treatment. Middle class wage-earners subscribing to HMOs are locked out of available inpatient mental health and chemical dependency treatments. Citing dubious outcome research which suggests that outpatient psychiatric or chemical dependency treatment is just as effective as inpatient services, completely ignores the medical necessity of inpatient programs like St. John’s. How many more drunk driving deaths or ballistic episodes in the work-place will it take to convince people?

       How many more psychiatric hospitals or inpatient units will have to close their doors under the current HMO system? With more mentally ill and drug addicts having no place to turn, is it any wonder that the homeless population continues to grow? Without inpatient psychiatric and chemical dependency programs, otherwise treatable conditions deteriorate into more serious problems. When will the health plan industry finally recognize that mental health and chemical dependency are just as life-threatening and pose a serious a public health risk as any other communicable disease or medical condition? With St. John’s now slamming their doors, is anyone finally going to get it?

About the Author

John M. Curtis is director of a West Los Angeles think tank specializing in human behavior, health care and political research and media consultation. He’s a seminar trainer, columnist and author of Dodging The Bullet and Operation Charisma.

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