Roadmap Points Way to Reform In Public MH Care Financing

Selby Jacobs, M.D., chair of APA's Committee on Public Funding for Psychiatric Services, and his colleagues took a pragmatic approach to the thorny issue of health care finance reform.

As director of the Connecticut Mental Health Center in New Haven, he brought the perspective of a frontline practitioner to the task. The center is owned by the state of Connecticut and operates under a “Memorandum of Understanding” with the Yale University School of Medicine.

Jacobs worked with co-authors Jeanne Steiner, D.O., Mark Schaefer, Ph.D., and Michael Hoge, Ph.D., to produce the study “Financing the Care of Individuals With Serious Mental Illness.” An abbreviated version of the report and the full recommendations were published in the October 2004 Psychiatric Services.

The authors opened by pointing out that states spend less of their budgets, when adjusted for inflation, on mental health care than they did in 1955. The funding problems are exacerbated by enormous budget deficits resulting from an economic downtown that began in 2000.

Jacobs told Psychiatric News that he could even imagine “the public sector disappearing over time.” He mentioned the likelihood that President Bush will again try to turn Medicaid into a block-grant program. If Bush prevails, the result will be a virtual cap on federal expenditures for the program.

“I would see this as a first step toward the withering away of the public sector because the states don't have the resources to make up the difference and are trying to cut their losses too,” he said. “Both levels of government want to get out of health care.”

Jacobs also pointed out that health care did not rank high as an issue among voters in the presidential election.

The authors decided to focus on the possibilities for incremental change because of the difficulties for broad-scale reform given the priorities of the current administration and funding trends at the state level.

They turned to co-author Schaefer, a top mental health administrator in Connecticut's Medicaid agency, for a state-level perspective about the practicality of various changes.

Recommendations were based on the assumption that “the system of financing services will not dramatically change in the near future.”

They wrote, “The funding for mental health care received by seriously mentally ill individuals comes from a complex and seemingly impenetrable array of sources with confusing eligibility rules and particular benefit packages.”

To understand the sources of that funding, the authors first provided a straightforward description of each funding source, individuals eligible for coverage, and the types of services that could be reimbursed.

Their second approach was to list the kinds of services an individual with serious mental illness might need and to identify funding sources available for those services.

Finally, the authors presented eight vignettes drawn from the real-life experiences of individuals who needed services in a New England state.

The vignettes, taken with the first two approaches, illustrated “how the existing patchwork of funding can impede the delivery of services to seriously ill persons as a function of age, socioeconomic drift, income or asset levels, living arrangements, maternal status, interstate travel, employment status, and the entry to or departure from the criminal justice system” Original article: (see below).

Their analysis of problems in financing found that the multiple payers and the changing eligibility status of individuals led to discontinuity of care and, in some cases, fragmentation of care, as patients transitioned from one payer to another or fell through the cracks.

Jacobs told Psychiatric News that he is undertaking another effort to examine the impact of financing systems on access to care.

“Medicaid reimbursement rates have stagnated or declined during the last few years,” he said. “It's difficult to believe that those shrinking rates do not ultimately affect access.”

Jacobs is looking for datasets that would enable him to determine whether rates do, in fact, limit access by reducing the availability of providers who accept Medicaid patients.

The report, “Financing the Care of Individuals With Serious Mental Illness,” is posted online at<http://ps.psychiatryonline.org/cgi/content/full/55/10/1096?>.▪

Psychiatr Serv 2004 55 1096