Is it the economy?

The lead story in this week's Psychiatric Times was sent to me in e-mail this morning under the subject "Economy Threatens Psychiatry Programs". It provides the news that the Cedars-Sinai Department of Psychiatry and Behavioral Neurosciences is essentially being phased out except for "staffing of psychiatric support that is an adjunct to patient care throughout the medical center." It quotes an unnamed academic psychiatrist as saying that the real reason that psychiatric programs are getting the axe is that they are the least profitable services offered at any hospital. The article goes on to suggest that declining Medicare funding of Graduate Medical Education may threaten additional programs.

The only real explanation and dose of reality in that article was the quote from their anonymous source. Psychiatric programs and bed capacity have been closing down for the past 20 years. It is the direct product of managed care strategies either being applied directly by the managed care cartel or through their friends and allies in the government. I have previously posted on this blog how psychiatric services have been marginalized from an economic standpoint.  That should be obvious from surveying any acute care hospitals in your state. In the state of Minnesota for example, a minority of the total hospitals have psychiatric units and fewer are staffed for chemical dependency services.  That has resulted in the need to transfer patients in crisis in emergency departments across the state or in some cases in different states. As a result any involved family members have to travel hundreds of miles to maintain contact with that person.  The economy for psychiatry has been bad for the last 20 years.

The evolution of this process is apparently so insidious that nobody pays attention to it. The only way that the minority of hospitals with psychiatric units can continue to operate and staff those units with psychiatrists is if they do a high volume, low quality DRG based business or they are subsidized to some degree out of the profit margin of other departments. In that case, an economic argument can be made that more severely ill psychiatric patients or medically ill psychiatric patients would never leave medical or surgical units if there were not psychiatric units available to receive them in transfer.

This process is easily reversed by providing adequate compensation for psychiatric care. The reimbursement levels for inpatient care are so trivial that an inpatient psychiatric unit is currently the least expensive place to maintain the patient.  At some point, treatment on a DRG based inpatient unit is cheaper than a group home and much cheaper than a state hospital.  That creates additional incentives and barriers to discharge from the hospital.

The bottom line is that it is not the economy.  There has been a systematic bias against mental health services for at least 20 years.  It is well past the time for psychiatrists and other advocates to remove the term "cost effective" from their dialogue. Psychiatric and mental health services have been the most cost effective medical services for at least the past 20 years and there is no reason for expecting them to get less expensive. Reversing that trend and providing compensation that is at least on par with the rest of medicine will allow for quality psychiatric hospital services and outpatient clinics.

George Dawson, MD

Stephen Barlas. Elimination of Psych Services at Cedars-Sinai Could Foreshadow Similar Cutbacks Elsewhere.  Psychiatric Times Vol 29, No2, February 8, 2012 

Endnote:  According to the Minnesota Hospital Association 29 of 136 acute care hospitals have beds staffed for mental health care and 6 of 136 have beds staffed for chemical dependency care.

Managed Care 101 – The Utilization Review Hoax

I happened to start practicing psychiatry at a time when managed care was just starting to build momentum. From a political standpoint there was concern in the popular press that healthcare services were being over utilized. There is a famous study by the RAND Corporation looking into whether or not angiography and bypass surgery were being used to frequently to treat cardiovascular disease. There was a concern that medical and surgical procedures in general were being over utilized. This was part of the driving force for a large scale experiment called the Medicare PRO or Peer Review Organizations.

In the late 1980s and throughout much of the 1990s I was a physician reviewer for the Medicare PROs, first in Wisconsin and then in Minnesota. My job was to look at cases selected from all psychiatric hospitalizations in the state and determine whether the total length of time in the hospital was appropriate for the condition and whether or not there were any associated quality problems. There was an extensive list of quality problems that nurse reviewers would identify and forward to me for further assessment. Examples of quality problems ranged from death on a psychiatric unit to abnormal vital signs at the time of discharge to the appropriate monitoring of the therapy like lithium that require close monitoring. All physician reviewers working for this organization had to be carefully screened for conflicts of interest.  I could not review any case if I had any financial interest in the hospital or clinic where the incident occurred.

At about the same time managed care companies were establishing utilization reviewers for their insured members. They had no quality focus or quality markers. Their only focus was whether or not one of their members was entitled to inpatient coverage or a specific course of outpatient therapy. There were no conflict of interest considerations because the reviewers were all paid by the managed care company and therefore their financial interests were aligned with the corporation.

You could consider the two different forms of utilization review to be the great experiments in the provision of medical care in the 1990s. More appropriately the Medicare PROs were probably the experimental side and the managed care utilization reviewers represented a business model that really required no experimentation. It seemed quite obvious that if you could deny care that you would make more money.  What happened to these two models over the next 10 years?

Despite the rigorous screening and structurally defined quality problems used by the Medicare PRO, at one point it was determined that the amount of over utilization found in the state of Minnesota was not enough to justify the cost of the program. After all of the hype in the press about how physicians and hospitals were providing unnecessary care, that was a stunning finding on such a large scale that it should not have been ignored. It essentially meant that from an objective scientific standpoint utilization review is unnecessary. Minnesota stopped its utilization effort and decided to partner on the quality side with health care organizations to improve the treatment of specific conditions.

Utilization review on the managed-care side has not only continued but flourishes despite the fact that there is no objective basis for it and that managed care organizations have complete control over reimbursement to physicians and hospitals and the reimbursement for psychiatric services is the absolute lowest.  The most recent development has been internalizing utilization review directly into the hospital and using care managers to force discharges from hospitals. These care managers often depend on a quasi-scientific set of guidelines or standards that frequently ignore the specific needs of patients

.

Psychiatry has been hit particularly hard by this quasi-quality approach that disproportionately rations care to psychiatric patients. We are currently seeing people with complex disorders like unstable bipolar disorder discharged from psychiatric hospital within a few days because the "crisis" is over and yet they are not able to function by themselves at home. We have allowed managed care organizations to essentially dictate a standard that suggests the only reason that a person should be a psychiatric unit is if they are "suicidal" or a threat to others.  There is broad interpretation of what "suicidal" means and of course the physician reviewer for the insurance company has never personally assessed the patient or their circumstances.  The vast majority of patients who would benefit from quality care in a hospital would not meet either of those criteria and frequently have no other resources.

The fallout from this approach has been tremendous. Psychiatric care in hospital settings is generally viewed as being very poor in quality. Many outpatient psychiatrists I have consulted with have told me that there is essentially no place that their unstable outpatients can be stabilized because they are frequently discharged from hospitals in a few days and the treatment has not been changed. There is little collaboration between inpatient and outpatient psychiatrists because of the need for high turnaround and the time constraints.  The actual inpatient environments are frequently so toxic that people with fairly severe problems don't want to be there.  Managed care is focused primarily on providing high-volume, low quality care by the application of a method that has no basis in reality.

Financial Marginalization of Psychiatry

I wrote this original article in 2005 for the Minnesota Psychiatric Society newsletter in response to two developments.  First, it is one of the only articles that you will ever see quoting actual prices in terms of bills and what the actual reimbursement is.  Contrary to the myth of expensive health care, I have had people tell me how shocked they were at how little of a bill the insurance company actually paid.  The author here gives the actual dollar amounts.  Second, there is an obvious boom in Cardiology services at a time when psychiatric services were being strictly rationed according to managed care "carve out techniques." At the  time this article was originally written 100,000 patients per year received implantable cardioverter devices (ICDs) at a cost of $2 billion and a pulse generator replacement cost of an additional $1.4 billion.  Using the figures from this article that is the equivalent of 794,000 psychiatric hospitalizations per year.  The original article and the reference begins with the paragraph below.

A recent Twin Cities article on the escalation of technology and real costs for cardiac care in Minnesota highlighted just how severe the resources have been skewed away from psychiatric care. If you have been following the Minnesota Psychiatric Society's initiatives in this area over the past few years it will probably come as no surprise - but even in that context I found the following numbers somewhat shocking:

1. Minnesota (a state with maximal managed care penetration) - has 40% fewer mental health beds per capita than the nation.

2. In the past 5 years - 5 new cardiac care facilities have opened at a cost of $263 million.

3. An analysis of Medicare cost data for one hospital (United) shows why cardiac care is expanding and psychiatric care is shrinking. Here is a direct quote from the article:

"A look at Medicare cost data for one local hospital shows why. It cost United Hospital $8,091 to implant a pacemaker, but the hospital received $11, 538 for each procedure, according to 2003 data provided by the American Hospital Directory.

On the other hand, it cost United $10, 132 to treat a patient with psychosis, but the hospital received only $4, 282 per case. These are federal Medicare figures but the same disparities exist in payments by private health plans."

That's why you are seeing all of those shiny new Heart centers and no new psychiatric hospitals. Combined with the psychiatric outpatient penalty - it probably also goes a way toward explaining why the system is so fragmented and the seriously ill cannot find a psychiatrist.  Also notice that the insurers were described as worried about how to contain Cardiology costs, but the reality here is that all of these Cardiology services are owned by the major managed care companies.

George Dawson, MD

Hauser RG.  The growing mismatch between patient longevity and the service life of implantable cardioverter-defibrillators.  Journal of American College of Cardiology 2005; 45 2022-5.

Olson J. Cardiac care focus worries insurers. Pioneer Press, August 8, 2005: p 1A, 4A