Hospitals Shrink Services Treating Mental Illnesses

Staff Reporter

At least seven Los Angeles area hospitals have either closed or downgraded their psychiatric units, sparking concern that the county's mental health bed capacity could be seriously impacted.

The hospitals, including Cedars-Sinai Medical Center, are mostly citing the state's new nurse staffing law and an expected drop in Medicare payments as reasons for the cuts.

So far, the closures and reductions have not prevented psychiatric patients from receiving care. But officials say that services have been pushed to the brink, especially for uninsured patients needing involuntarily commitment who sometimes wait more than a day in emergency rooms for a bed.

"You still get those patients through the emergency room. The cops bring them in. Their families bring them in. Then you are really stuck," said Margo Kaatz, the mental health administrator for Presbyterian Intercommunity Hospital in Whittier.

At least 176 psychiatric beds have been either lost or downgraded since last fall, a hit on the county's vast mental health system in which general acute care hospitals with psychiatric units play a significant role.

The hospitals provide most of the acute involuntary care for patients suffering from episodes of schizophrenia, manic depression and other mental illnesses. They have 1,134 beds for acute involuntary psychiatric care out of a total of 1,743 countywide. The remaining beds are located in free-standing, independent psychiatric hospitals.

"Psych units run on a very tight margin. It's not a profit center at all," said Sheree Kruckenberg, vice president of behavioral health for the California Healthcare Association, an industry trade group. "Any time you tweak any rule it has the potential for a negative fiscal impact on the entire hospital."

Nurse-to-patient ratios

All psychiatric care operators have suffered from financial pressures over the past decade, but general acute care hospitals may be under the greatest stress much of it tied to newly instituted nurse-to-patient ratios.

Those ratios, which went into effect in January, require hospitals to staff their psychiatric units at night at the same levels they are staffed during the day, even though hospital officials say this is unnecessary.

"If you are in a medical-surgical ward with patients hooked up to machines there might be some reason for that, but what you have is patients medicated to sleep at night," said Jim Lott, executive vice president of the Hospital Association of Southern California, a regional hospital trade group.

Officials with the California Nurses Association, which sponsored the new law, maintain that the ratios may cost more money but that nurses are needed and they provide better care.

"Any good psych nurse will tell you that there is absolutely no rule about what time patients are sleeping," said Donna Gerber, the association's director of government relations.

Even so, the cost of meeting the new regulations was cited as a major factor by the San Gabriel Valley Medical Center in its decision to close its 42-bed voluntary ward last month.

"The nursing ratios had a major impact on us financially," said hospital president Steven Fellows, who estimated the ratios would cost the unit an additional $700,000 in salary expenses per year.

Officials at Cedars-Sinai also cited the nurse-staffing rule in their decision to trim their involuntary psychiatric unit from 68 to 51 beds, though they contend that the issue was more the difficulty in finding enough nurses than in paying their salaries.

"The market in terms of experienced psychiatric nurses is just not there," said Linda Burnes Bolton, the hospital's chief nursing officer. "We just found ourselves unable to assure we could meet the ratios at all times."

Medicare changes

The recent spate of closures and reductions began last September when Presbyterian Intercommunity Hospital downgraded its 10-bed unit from one that would accept involuntary patients to a unit that only treats patients voluntarily. Involuntary units have the highest level of care, since they must accept patients who are admitted against their will.

That was followed in January by Cedars-Sinai's decision to reduce capacity at its unit by 17 beds, and then the closures of voluntary and involuntary units at California Hospital Medical Center, St. Mary Medical Center and, most recently, San Gabriel Valley Medical Center.

Glendale Memorial Hospital & Health Center downgraded its unit to voluntary status, and 41 psychiatric beds were lost at Century City Hospital when the entire facility closed.

Industry officials say that the system may be strained further when the federal Medicare system changes the way it reimburses hospitals treating elderly psychiatric patients. The system, which now pays hospitals on a reasonable-cost basis, will essentially move to a flat rate that the state hospital association estimates will reduce payments by 5 percent, though in some cases more.

While the federal Centers for Medicare & Medicaid Services has not published a final rule for the new Medicare formula, San Gabriel Valley Medical Center estimates that it would have lost more than $1 million annually under the new payment system. St. Mary Medical Center specifically cited the changes in Medicare reimbursement when it announced the closure of its 23-bed geriatric psychiatric unit in May.

On top of this are rules imposed last year that have nearly halted the transfer of indigent medical and psychiatric patients to the county's four public hospitals.

Dr. Thomas Garthwaite, director of the county's Department of Health Services, acknowledged that the rules might be forcing private psychiatric units to hold indigent patients. But he maintained that the county hospitals never had that much room for transfers, with only 148 psychiatric beds. "So often our psych beds are full anyway," he said.

No more subsidies

There is also concern that buyers of the 14 hospitals Tenet Healthcare Corp. has put up for sale in Los Angeles County will not want to operate those units. The 14 hospitals have about 100 psychiatric beds.

Already, that has proven to be the case at Century City Hospital, which Tenet no longer operates. The new operator has plans for a high-tech hospital largely focused on surgery. "There just wasn't enough square footage available to address the psychiatric needs," said Joel Bergenfeld, the newly appointed chief executive at the hospital.

Mental health advocates, meanwhile, are pushing a ballot measure in November that calls for the psychiatric care system to be funded in part through taxing upper income Californians. Proposition 63 would raise an expected $700 million annually, largely for community-based mental health programs, but some of that money could make its way to hospitals treating indigent patients.

"There is not going to be a pot of money for inpatient care willy-nilly, but it will have to be part of the treatment," said Richard Van Horn, chief executive of the Los Angeles County Mental Health Association.

At least one hospital has added psychiatric beds in the past year: Pacific Hospital of Long Beach, which spent $5 million to just about double the size of its 37-bed involuntary unit.

Chief Administrator Clark Todd said the unit has been profitable, but only because the hospital, which serves large numbers of low-income patients, gets an extra $300 per bed per day through a state program.

That program could potentially be cut as the state and federal government continue to struggle to balance their budgets amid rising health costs. "Without the (program) we would probably be out of the business. We could not make ends meet," Todd said.

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