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Before the bad news arrived earlier this month, Cascadia Behavioral HealthCare in Portland offered community housing and emergency services to about 8,000 Oregonians who suffer from addictions and mental illnesses, such as schizophrenia and post-traumatic stress. Then effective Mar. 1, the state of Oregon, in a desperate attempt to balance its budget, declared some patients ineligible for Cascadia's government-financed care.
As a result, the nonprofit agency cut its budget by 20%, or $8 million a year. Cascadia has since reduced its staff by 350 employees, or 29% -- and now serves 2,500 fewer patients. Those now being turned away are left to fend for themselves, and in some cases they're going without the medication and services that help keep them stable and able to care for themselves.
This story is being repeated with increasing frequency across the nation. Massachusetts, West Virginia, Alabama, Oklahoma, Florida, Mississippi, Iowa, and New Jersey are among the other states that in the past six months have cut or eliminated benefits for mental-health patients and are considering more cuts.
WEAK LOBBY. In one respect, that's understandable. The 50 states are running $17 billion to $45 billion overbudget this year, according to Moody's Investors Service. On average, 20% of state budgets go to fund health-care programs, primarily Medicaid for low-income citizens, says Bruce Gordon, senior vice-president of the nonprofit health-care ratings group at Moody's. About 10% of state health-care spending -- a nationwide total of $20 billion -- goes to treating mental disorders, according to the National Institutes of Health. And since the mentally ill aren't a particularly powerful constituency, cutting funds that are earmarked for them is a politically expedient decision.
Oregon, for example, is in the process of trimming its overall budget by about 10% over the next two years. Over that same period, its budget for mental-health services could drop twice as fast -- by about $200 million, or 20%, says Barry Kast, assistant director for health services at the Oregon Human Services Dept. Benefits such as assisted housing and outpatient therapy are getting hit the most. Oregon eliminated coverage for illnesses such as depression when it first cut prescription benefits for 110,000 working poor on Feb. 1, then reinstated partial subscription benefits for those people on Mar. 14.
As well as hurting patients, the cuts could have an unintended negative effect on the states themselves. Many of the mentally ill could end up in jail, on the streets, or in hospital emergency rooms, says Richard Scheffler, professor of public policy at the University of California at Berkeley. And 24 hours in a hospital can cost as much as six months of outpatient care, according to Cascadia CEO Leslie Ford. She adds that incarcerating someone on a simple charge, say panhandling or stealing a cup of coffee, can cost several thousand dollars -- about as much as what's needed to provide outpatient mental-health care for a year, including counseling and medication.
BIGGER STRAINS. In fact, as the budgets that now support the mentally ill shrink, many of these people will simply end up using other buckets of state funds, says Scheffler. Instead of going to a specialist, they may go to a regular physician, who won't be as well equipped to help. The money needed for their treatment will come out of the budgets of departments of correction and the states' general health-care budgets, says Scheffler. "It's not all savings," he says of the budget cuts. Adding the mentally ill to their load will put a bigger strain on those other budgets, which are being trimmed as well.
U.S. productivity will also suffer if mental illness goes untreated. The World Health Organization estimates that in 2001, the U.S. economy suffered $63 billion in productivity losses, including the time family members took off from work to care for their mentally ill loved ones. The WHO also factors in the inability of disabled people to get an education or to find a job when their illnesses go untreated.
The long-term costs of too little care are more tangible, in part because shortcuts taken now can lead to longer and more intensive treatment later -- and increase the lifetime cost of care for a disabled person. South Carolina, which cut $40 million, or 20%, from its mental-health budget this year, has reduced its capacity for treating such patients by 500 hospital and nursing-home beds over the past two years, says Stephen McCleod-Bryant, medical director at the state's Mental Health Dept.
Copyright 2003, by The McGraw-Hill Companies Inc. All rights reserved.
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