Tweaking Will Cost Money

In the latest round of changes to North Carolina's mental-health-care system, officials are trying to cut $28 million from local area mental-health programs by forcing them to consolidate some of their administrative work.

Local mental-health programs spend almost $160 million a year on the oversight and regulation of services for people with mental illness, developmental disabilities and substance abuse. Some spend as much as 25 percent of their budget on administration.

The state's top health official said that's "unacceptable."

"I can't go on and on and say, 'We don't have enough for services when we're spending too much on administration,'" said Carmen Hooker Odom, the secretary of the N.C. Department of Health and Human Services. "We're not waiting any longer."

The battle is just the latest effort to reorganize the state's $2.3 billion mental-health system, which was meant to shift care and money from hospitals to community programs. Critics say that the state moved too quickly to dismantle a system of public programs relied on by 358,000 of the state's most vulnerable residents.

Four years into reform, there's no turning back.

The N.C. Division of Mental Health is getting ready to submit a report to the legislature with a wish list for new programs. Michael Moseley, the director of the N.C. Division of Mental Health, Developmental Disabilities and Substance Abuse Services since 2004, said he cannot say yet how much the proposals would cost.

"Personally I don't think the notion that we were going to build a robust community system solely from the downsizing of state psychiatric hospitals was doable. That was the assumption that landed in my lap when I came on board," he said.

"It's not going to be nickels and dimes. It's all I can say at this point. I think people are beginning to understand it's going to take substantial amounts of money."

He and Odom said that their top priority is getting approval from federal health officials to use Medicaid, the federal health-insurance program for the poor, to pay for new community services. State officials also want to focus on expanding 24-hour crisis services, drug treatment and housing.

The Journal asked legislators, advocates, state officials and academics what they would do to put reform back on track. House Speaker Jim Black and Senate leader Marc Basnight did not return calls for comment. Here are thoughts from others:

Verla Insko, a state representative from Durham and co-chairman of the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities and Substance Abuse Services, said that the General Assembly hasn't provided enough money.

"The key missing factor is money. All of the stuff we've talked about, if there was adequate money in the system we would have had adequate providers come forward. That money has not been put in the budget."

Allison Breedlove, the acting director of the Governor's Advocacy Council for Persons with Disabilities, worries that the state has moved ahead with reform without the data it needs to track how the changes are affecting patients.

"There needs to be greater accountability. I know the movement of privatization. I understand the concept. But who ultimately is responsible for those services? It's hard to make a private company as accountable as someone who is in the public domain."

Carol Duncan Clayton, the executive director of the N.C. Council of Community Programs, said that the N.C. Department of Health and Human Services needs to allocate more money for mental-health programs, work with agencies to provide round-the-clock crisis-management centers and adopt clear performance goals for local agencies.

"The department really does not have a strategic plan. We are unclear of what we are trying to accomplish. What are the three or five things that need to be done first?"

Andy Hagler, the executive director of the Mental Health Association of Forsyth County, an advocacy group, said that the state should consider returning to its previous reimbursement system, which provided mental-health agencies with a monthly stipend for services.

"It seemed to be easier before reform. We're hoping that there is going to be open dialogue between providers, agencies and consumers. They took a system that wasn't broken, they broke it, and now they're trying to fix it."

Judy Briggs, the chief executive of the Carolina Behavioral Health Alliance, a mental-health provider in Winston-Salem, said that the state needs to trim the number of local agencies that oversee mental-health services. Too many agencies focus on running the agency and not managing services, she said.

"We did this backward from the very beginning. We put more resources into administration than services. I think we need to start at square one and redo the plan. "

John Tote, the executive director of the Mental Health Association in North Carolina in Raleigh, said that the General Assembly needs to allocate more money for mental-health services from the Mental Health Trust Fund, a fund created in 2001 by the General Assembly to help pay for services. Most of that money was siphoned off to balance the state budget the following year.

"Really and truly, we're at a point where the biggest issue, I think, is the trust fund. That put us in a hole we haven't recovered from. I would not want to work for a mental-health center right now."

Robin Huffman, the executive director of the N.C. Psychiatric Association, said that federal and state governments need to increase the reimbursement rates for psychiatric services, which could encourage more psychiatrists to care for indigent patients.

"If you're going to make this a free-market project, you need to put in the business incentive so that what you want to develop, develops."

Bert Wood, the chief executive of Step One, a substance-abuse treatment agency in Winston-Salem, said that the state needs to rework its fee-for-service billing system, to make it easier for agencies to get paid for their work. Many mental-health clients often don't show up for their appointments, which complicates billing for agencies.

"When you combine that with a billing system that's awkward and complex, that's slow in payment, then you have a formula for catastrophe."