State budget cuts in Fiscal 2004 continue to accelerate, and that trend is likely to continue into the next fiscal year, according to a January report from the Kaiser Commission on Medicaid and the Uninsured (KCMU).
"State Responses to Budget Crisis in 2004: An Overview of 10 States" reported that states "found themselves with the need to make far more cuts in health care spending than in earlier years of the economic downturn."
Psychiatric News invited three members of the Board of Directors of the American Association of Community Psychiatrists (AACP) to describe the impact of budget cuts in their states and to discuss how additional damage to the health care system might be prevented.
AACP Secretary Jack Haggerty, M.D., is director of the Division of Social and Community Psychiatry at the University of North Carolina School of Medicine.
AACP’s immediate past president, Charles Huffine, M.D., is assistant medical director for child and adolescent programs at the King County Mental Health, Chemical Abuse, and Dependency Services Division in Seattle and maintains a community-oriented, private practice specializing in adolescents with behavior disorders.
AACP’s Area 1 representative, David Moltz, M.D., is a psychiatrist in Sweetser Community Integration Services in Brunswick, Maine, and for 11 years was the medical director of Shoreline Community Mental Health Services.
Each state has idiosyncratic factors that affected its response to the budget woes, which KCMU called the "most serious fiscal crises [for states] since World War II."
As in Oregon, which is about to face another round of budget cuts, the capability of Washington’s state legislature to respond to budget shortfalls is subject to various limitations concerning powers to tax (see page 8).
Huffine said that Washington state’s budget for mental health had been slashed three years in a row, in part because it’s so difficult to "fix things," because of the state’s "rigid and inadequate budgetary process."
North Carolina recently had suffered a "mammoth loss of revenue," because many of the state’s core industries left the state, according to Haggerty. In addition, in 2001, the state began a major reorganization that involved moving from a traditional community mental health center (CMHC) service model to one in which regional administrative entities contract with service providers.
As part of this effort, the legislature closed state hospitals and established a trust fund of $40 million to fund community services for former patients and others. But North Carolina Gov. Mike Easley (D) was forced to use the fund to reduce the state’s budget deficit during the crisis of Fiscal 2002, according to Haggerty, leaving only $12 million.
Bucking the trend toward decreasing coverage, Maine Gov. John Baldacci (D) embarked on an effort to establish the first statewide universal health insurance program in the country.
In June he signed a bill to establish Dirigo Health, a public-private health insurance program that aims to expand access to affordable insurance to the approximately 150,000 Maine residents who now lack it.
Moltz called the effort a "bright spot," but also described problems in the state.
"Mental health care [in the public sector] has become synonymous with Medicaid," he said. Medicaid budget cuts and patterns of reimbursement have resulted in demands for increased productivity, which, in turn, have decreased or eliminated time for such activities as interdisciplinary meetings and coordination with schools, which are necessary for good integrated care.
A dual system of care is developing in which those who have a financial need but are ineligible for Medicaid wait longer for treatment than those who are eligible.
Moltz spends "considerable time" helping patients become eligible for prescription-assistance programs offered by pharmaceutical companies to low-income people not eligible for Medicaid.
In North Carolina, the medically indigent and uninsured "are those being left out of the dance," according to Haggerty.
"We can’t take care of people without insurance unless they belong to priority populations, including those with severe mental illness, specific categories of especially harmful substance abuse disorders, or significant developmental disorders," he said.
Care is also deteriorating because psychiatrists are leaving the CMHCs in anticipation of the shift to regional administration of services. Increased rates of hospitalization and use of emergency rooms are being reported.
Huffine warned, "The real issue isn’t just about recent cuts. Mental health centers have been under severe financial constraints for the last five, and maybe 10, years."
He described a series of results. "Case loads rise. Training deteriorates. Young psychiatrists turn away from jobs in the public sector. Turnover is high."
The result is "erosion of services for the most-needy people."
Advocates have found strategies, however, to mitigate the damage of the budget cuts, some of which are inexpensive and easy to implement.
At a cost of just $10 a month, the Maine Psychiatric Association (MPA), for example, began a list serve in which 80 of the state’s 300 psychiatrists participate.
"It is a very, very powerful tool to network for support for Medicaid changes," said Moltz.
MPA members worked with the state’s chapter of the National Alliance for the Mentally Ill and the Maine Medical Association to "open up" the prior-authorization process for psychotropic medications funded by Medicaid and to encourage use of a monitoring system that identifies aberrant prescribing and provides education to psychiatrists.
MPA also established a program in which psychiatrists volunteer to provide telephone consultation to primary care physicians in areas of the state where there is limited access to mental health services.
The Washington State Psychiatric Association teamed up with other mental health advocacy associations and organizations representing county governments and the criminal justice system to create the Partners in Crisis program.
"When Medicaid cuts are threatened, we are able to mobilize sheriffs and other law-enforcement people who can speak persuasively about the likely impact on jails and budgets for the criminal justice system," said Huffine.
He also said that at the urging of mental health advocates, the legislature was "paying attention" to wraparound models that integrate funding sources to provide coordinated services.
Huffine thinks APA could be more helpful in addressing issues such as Medicaid waivers—in coordination with district branches—that are determined by the federal Centers for Medicare and Medicaid Services.
Haggerty invited APA to work with the AACP to find ways to empower psychiatrists and district branches to work more effectively to thwart budget cuts in public mental health. "We can help others figure out strategies, because we’re already doing it," he said.
Public-sector psychiatry in North Carolina benefits from the strong interest of the North Carolina Psychiatric Society and its executive director, Robin Huffman, who chairs the statewide coalition that lobbies on mental health issues.
Haggerty emphasized the importance of maintaining coalitions and urged caution about advocacy for issues that could divide them.
At the time of this interview, Moltz was scheduled to testify for MPA against a bill (LD 1713) that would permit psychologist-prescribing privileges in Maine. "I’ve never seen such a mobilization of resources on the part of APA," he said.
"If we put the same amount of money, energy, and resources into fighting budget cuts to mental health services as we do to defeating psychologist prescribing, we would be in a far better place. We need to put more real money where our mouth is in terms of advocacy for patients."
The report, "State Responses to Budget Crisis in 2004: An Overview of Ten States," is posted online at www.kff.org/medicaid/7002.cfm. ▪