America at the start of the 21st century is confronting a crisis in mental health care. The problem can be put simply enough: over the past decade, our mental health systems have been progressively starved of the resources they need to do their job. This systematic defunding of psychiatric services has occurred in both the private and the public sector. For a number of years the effects of this process were hidden from the public, with voluntary agencies soaking up the burden of providing care. However, the cumulative impact, combined with cuts elsewhere in the health care system, is now becoming apparent—and will be even more apparent in the near future.
The evidence of this crisis is all around us in the media today, although its intensity varies by region. Hospitals are closing inpatient psychiatric units to the point that patients are spending days in emergency rooms waiting for beds. Outpatient services are being downsized and agencies merged or closed, such that in many areas it is difficult to find care anywhere but in an emergency room. Long-term residential beds are in short supply, forcing patients, once hospitalized, to remain on inpatient units longer than they need to. For children and adolescents, these problems are worse by an order of magnitude.
What accounts for the crisis situation? In brief, with the growth of behavioral managed care over the past 15 years, reimbursements for psychiatric services have declined as costs have increased. To obtain payments that are often a fraction of what they were ten years ago, hospitals, clinics, and practitioners must seek prospective and concurrent approvals and then carefully monitor reimbursements. Payments are frequently denied for trivial reasons. The cost burden of participating in utilization management is immense: many clinicians spend hours each day on the telephone with reviewers and must repeatedly refile bills until they are paid. When huge arrears in payments accumulate, providers are frequently offered some fraction of the amount due on a take-it-or-leave-it basis.
In the midst of all this financial pressure on facilities and clinicians, the federal government decided that the goal of a balanced budget could be reached only by cutting back Medicare payments, especially to teaching hospitals. A five-year series of progressive reductions was ordered, continuing through this fiscal year. The federal government—the last payer to offer reimbursement approximating the cost of care—had decided that it too wanted to kick the system while it was down. Mental health units were specifically targeted for aggressive postpayment Medicare audits in an attempt to recover moneys when technical lapses occurred in the documentation of care—for example, when a note in a patient's chart did not document to the government's satisfaction the reason for a particular treatment.
Finally, the other major payer—the states through their Medicaid programs—got involved. Because no one else was paying the real cost of delivering care, the states concluded that they could play the same game. In my state of Massachusetts today, Medicaid reimburses an average of 71 cents for every dollar that a hospital spends rendering care.
As a result of these forces, private practitioners, in a desperate attempt to survive, have begun to refuse any insurance payments for the treatment they deliver, insisting they will treat only persons who have the resources to pay out-of-pocket for care. Thus it is extraordinarily difficult, and in some areas nearly impossible, for patients with insurance to find practitioners who will accept their insurance as payment for care. The middle classes, who thought they were insured against the costs of psychiatric care, are waking up to the fact that their coverage is not what it appears. Outpatient services are not available to them, and they may have to travel many miles to find inpatient beds. In short, we are teetering on the brink of a wholesale collapse of our mental health care system.
What can we do to avert this catastrophe? First, those of us who are aware of the problem have a responsibility to sound the alarm. Next, we need to press Congress to pass legislation to establish parity in insurance coverage between mental illness and all other disorders. Almost all health insurance policies place limits on the number of hospital days or outpatient visits for psychiatric care, while almost no policy has comparable limits on any other kind of medical care. But parity on paper is not enough. State and federal legislation must require that third-party payers use comparable procedures for reviewing claims for psychiatric care and other medical care. The petty harassment that bleeds providers and hassles patients—such as requiring advance approvals for every few visits and delaying payment indefinitely—has to end.
The business community also has a role to play. As the purchasers of most insurance coverage for their workers, they have the responsibility of ascertaining that the insurers with which they deal are providing effective coverage. Effective coverage means adequate payments to cover the costs of providers, a large enough network to meet the needs of the insured population, minimal hassles for patients and providers in obtaining authorization for treatment, independent appeals mechanisms when requests for care are denied by the insurer or managed care company, and defined performance measures to demonstrate that patients receive the care they need.
Finally, government has a part to play. Medicare and Medicaid payments must be realistically gauged to cover the actual costs of care. States cannot be allowed to shirk their historic responsibilities to provide a safety net for indigent patients, regardless of diagnosis. Their support is particularly needed for residential and rehabilitation services. Turning public care over to the managed care industry is not a solution; indeed, it simply exacerbates the problem.
In the end, of course, we get what we pay for. At every level of decision making—individual, corporate, state, and federal—the failure to recognize our responsibility to fund mental health services has created a crisis of access for people with mental disorders. Unless we acknowledge the situation and begin to reverse it, what is left of our mental health system will surely collapse.
Editor's Note: The October issue of Psychiatric Services is distributed to all attendees at the Institute on Psychiatric Services, the annual fall meeting of the American Psychiatric Association (APA). Earlier this year, we asked Paul S. Appelbaum, M.D., who was then APA's president-elect, to write a brief statement describing an issue of critical importance that he believed should be a focus of discussions at this year's meeting. We then asked three leaders from different areas of the mental health care field to write commentaries on Dr. Appelbaum's statement. Gary Tollefson, M.D., is vice-president of neuroscience-medical at Eli Lilly and Company and a Lilly Distinguished Research Scholar. Jonathan Book, M.D., is chair of the American Managed Behavioral Healthcare Association and chief medical officer of Magellan Behavioral Health. Michael F. Hogan, Ph.D., is director of the Ohio Department of Mental Health and chair of the President's New Freedom Commission on Mental Health.
Dr. Appelbaum is A. F. Zeleznik professor and chair in the department of psychiatry at the University of Massachusetts Medical School, 55 Lake Avenue North, Worcester, Massachusetts 01655 (e-mail, email@example.com). He is also president of the American Psychiatric Association.