American Psychosis by M. D. Torrey Executive Director E Fuller Read Free Book Online Page B

be remembered that countries like Sweden and the Netherlands are much smaller and more homogeneous than the large and diverse United States. Sweden has approximately the same population as the state of Georgia, and the Netherlands has a population less than that of Florida. We can learn from the successes of these countries, but we cannot simply import their models. We have to start with what we have and ask how it can be made into a functioning mental illness services system.
Although it was never planned as such, Medicaid is the fiscal giant that dominates the funding of mental health and mental illness services. As a federal program with state-matching funds, it mandates core services that must be provided by the states and allows states to use Medicaid funds to provide additional services if they choose to do so. The share of total mental health and mental illness spending covered by Medicaid has increased from 17% in 1986 to 28% in 2005 to more than 30% today. This includes inpatient care in general hospitals, nursing homes, outpatient psychiatric and medical care, and prescription drug costs. For individuals with a diagnosis of schizophrenia, Medicaid and Medicare paid for the care of 19% of these individuals in 1977, 63% in 1996, and perhaps 90% today. The state-matching costs for Medicaid are the second largest item in most states’ budgets, behind only education. 45
The Medicaid program as currently constructed is the single largest fiscal impediment to improving services for mentally ill persons in the United States. Services atthe state and local level are organized exclusively to maximize Medicaid reimbursement by the federal government, with little regard for organizational efficiency or what patients actually need. Medicaid officials in Washington have tried various strategies to control federal costs, but in every instance states have found ways to defeat these efforts. A classic example is the institution for mental disease (IMD) exclusion, by which Medicaid refuses to pay for inpatient costs in state mental hospitals. The states responded by simply emptying the state hospitals and shifting inpatient admissions to the psychiatric units of general hospitals, which are covered by Medicaid. The fact that the state hospitals already had the patients’ records and were much better set up to provide care for seriously mentally ill individuals was not considered. Medicaid reimbursement, not patient needs, has been the driving force behind the organization of public psychiatric services for four decades.
States have also utilized various organizational schemes in attempts to control state Medicaid costs. At least 34 states deliver “some or all mental health services through managed care arrangements, including both carve outs and comprehensive MCOs [managed care organizations].” States such as California, Utah, Colorado, Pennsylvania, New York, and Massachusetts have used capitation funding, under which providers are paid a fixed amount to deliver all necessary services. 46
Such funding programs have three things in common. First, the bottom line for these programs is cost savings, not patient care. Almost none of these programs make any attempt to assess quality of care or patient outcomes. Second, the sickest mentally ill patients are the ones who suffer most under such funding programs. The reason is that individuals with mental illnesses constitute only 11% of all Medicaid beneficiaries, but this 11% accounts for one-third of all high-cost beneficiaries. As described in previous chapters, seriously mentally ill individuals incur high expenses as they migrate from program to program in the present disjointed care system. When funding programs want to save Medicaid money, therefore, denying services to seriously mentally ill individuals is the easiest way to do so. Such individuals are unlikely to complain, they do not have an effective lobby of family members to advocate on their behalf, and they often end up