Press Release

Seven years of reform leave plenty of mental health problems

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RALEIGH — North Carolina’s mental health reformers will miss the boat if they focus solely on the structure of the mental health system, according to a new John Locke Foundation Policy Report.

Click here to view and here to listen to Joseph Coletti discussing this Policy Report.

“Reforms first adopted in 2001 have yet to deliver on the promise of improved outcomes for those with serious mental illness,” said report author Joseph Coletti, JLF Fiscal and Health Care Policy Analyst. “The problem has less to do with the system’s structure and more to do with the separation of decisions about money from decisions about care.”

That separation has led to problems for “local management entities,” the groups established earlier in this decade to replace old area mental health agencies, Coletti said.

“These state-funded LMEs are unaccountable to any one government, and they’re unaccountable to market forces,” he said. “This has led to issues such as one LME paying its director $319,000 a year to manage care for 4,700 people. The lack of accountability led to another LME neglecting to spend one-third of its state budget one year, then spending the same amount within six months the following year — with no documentation showing a need for the great fluctuation in spending.”

The solution to mental health care problems involves neither a return to the pre-2001 mental health system, nor the increased consolidation supported by Gov. Mike Easley and his top Health and Human Services administrators, Coletti said.

“Giving more power to overseers in Raleigh would just add another layer of bureaucracy to the system and put another obstacle between good managers and their clients,” he said. “Instead, the state should allow LMEs more flexibility to use programs that work.”

One example of a success story involves Piedmont Behavioral Health, the LME for Cabarrus, Davidson, Rowan, Stanly, and Union counties, Coletti said. “A state-level Medicaid waiver allows this LME to control its state, local, and Medicaid funds,” he said. “This gives Piedmont Behavioral Health flexibility to adjust payments to providers to match services with consumer needs better.”

“This LME’s management also has the ability to pay claims sooner than Medicaid can, and it has incentives to find good care at an appropriate rate,” Coletti added. “Extending this waiver to other LMEs would help consolidate care management and payment in a single source close to the person in need of care.”

Other changes would also produce benefits, Coletti said. “The state could encourage competition by allowing care managers to cross artificial geographic service boundaries,” he said. “That could improve efficiencies and help spread best practices more rapidly. In addition, more crisis intervention teams could help improve both the community-care system and public safety. Third, the state could expand access and lower costs by easing restrictions on the ability of non-psychiatrists to offer psychiatric services.”

Until changes are made at the local level, it would be counterproductive for the state to rush cost savings linked to consolidation of state mental hospitals, Coletti said. “State officials have already said they’ll need to keep Raleigh’s Dorothea Dix Hospital open until at least 2011,” he said. “Dix would handle patients for whom the new Central Regional Hospital in Butner will have no room. Dix could remain open indefinitely, and the state should adjust staffing and training at its mental hospitals to the evolving role of hospitals as crisis centers with some long-term patients.”

Coletti recommends flexibility that would lead to “evolutionary changes,” not “radical departures from the current path.” “Recommendations in this report change incentives for participants in the system, not their behavior,” he said. “These incentives should redirect the state mental health system’s focus to customers and outcomes rather than process and rules.”

Joseph Coletti’s Policy Report, “Mental Health Reform: Steps Toward Improvement,” is available at the JLF Web site. For more information, please contact Coletti at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].

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About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.