Highlights of the 1998 Institute on Psychiatric Services: Issues in Public-Sector Managed Care

In the summer of 1995, to counter a potential shortage of funds in the coming year, the Los Angeles County Board of Supervisors proposed drastic cuts that would have effectively suspended all inpatient and outpatient psychiatric services at four hospitals operated by the Los Angeles County Department of Health Services. The cuts would also have shut down the hospitals' psychiatric residency programs, which served the county's most seriously mentally ill and indigent patients.

At Los Angeles County-University of Southern California Hospital, one of the four hospitals, the faculty and residents of the psychiatric training program reacted to the proposal with outrage and confusion, but local psychiatric association leadership, directors of the local residency programs, and residents quickly organized to help bring the consequences of the proposed cuts to public attention. The most serious consequences were averted after a multimillion-dollar bailout from the federal government in September 1995. Although some reductions in inpatient and outpatient services occurred, these services continued to be provided at County-USC Hospital, and the residency program was saved.

Marc D. Graff, M.D., a psychiatrist with Southern California Permanente Medical Group in Reseda, California, who was president-elect of the Southern California Psychiatric Society in the summer of 1995, was one of several speakers from the society who reflected on their reactions to the budget crisis and discussed the strategies they used to cope with it. Describing the local problems contributing to the budget crisis, Dr. Graff noted that of the 9 million people living in Los Angeles County at that time, more than a third had no health insurance or were underinsured. The unemployment rate was 10 percent, and the county was still suffering from the effects of costly natural disasters and civil emergencies, including floods in 1990, riots in 1992, wildfires in 1990 and 1993, and an earthquake in 1994.

In response to the proposal to curtail psychiatric services at County-USC Hospital, residents in the hospital's psychiatric training program planned a press conference to highlight the hardships that would be faced by the poor, largely Hispanic community served by the hospital. As president-elect of the local psychiatric society, Dr. Graff made contact with mental health advocacy organizations and the press. His conversations with a Los Angeles Times reporter led to a front-page story on the mental health care crisis, with follow-up stories on succeeding days.

The residents' press conference held on August 14 just outside the hospital was attended by representatives of the Southern California Psychiatric Society and the California Alliance for the Mentally Ill, Dr. Graff said. A statement of concern was read in both English and Spanish. The event received extensive press coverage, including coverage by the local Spanish language media. Besides working with residents to organize the press conference, the local psychiatric society sent letters of concern to each of the county supervisors and letters to society members alerting them about the crisis, Dr. Graff said.

For Dr. Graff, one of the major lessons of the budget crisis was that psychiatrists need to increase their awareness of issues facing their mental health systems and to seek help from a broad range of sources when those systems are threatened. He recommended drawing on the expertise of experienced psychiatrists, talking with staff and psychiatrists involved at every level of APA and the local psychiatric society, talking with natural constituencies such as the local Alliance for the Mentally Ill, and reaching out to politicians and the press.

Calvin J. Flowers, M.D., was chief resident in the USC psychiatry training program at the time of the budget crisis and is now assistant clinical professor of psychiatry at USC. Dr. Flowers said that many faculty members and residents believed that the long history of the residency program, begun in 1943, and the volume of work the residents did precluded the program's ever being shut down. At the time of the crisis, the hospital's outpatient clinics served just under 1,000 adult patients and 400 child and adolescent patients, he said. Between 500 and 600 patients were seen each month in the hospital's psychiatric emergency services, and 1,500 to 1,600 patients were accepted from police agencies each year.

Organizing the residents to respond to the crisis was a challenge, Dr. Flowers said, but the preparations for the press conference provided a common focus. The crisis also encouraged the USC residents to build alliances with residents in the other training programs threatened by the budget cuts, he said. To help maintain public mental health services and prepare for future crises, training programs should develop rotations in administrative and organizational psychiatry or at least provide training to help residents develop administrative and organizational skills, Dr. Flowers said. Training programs should also encourage residents to work to decrease the stigma of mental illness as a strategy for countering the tendency to cut resources for mental health care, he said.

William Arroyo, M.D., medical director of child and family mental health services at the Los Angeles County Department of Mental Health, was on the faculty of the residency training program at the time of the budget crisis. He said that program faculty were not asked to help develop proposals for reconfiguring mental health services to meet the budget shortfall. Many faculty members began searching for other jobs in the face of possible cuts in civil service employment, and because they were employees of the Board of Supervisors, many faculty and staff did not talk to media about the crisis. Dr. Arroyo credited the program's survival to the convergence of media attention, the focused interest of local, state, and federal officials, and heightened community interest.

Milton H. Miller, M.D., chairman of the department of psychiatry at Harbor-UCLA Medical Center in Torrance, California, viewed the crisis from the perspective of directors of public-academic training programs. He emphasized that the needs of patients should be the basis of cooperation among psychiatric leaders. A history of fighting for patients' rights and a foundation of carefully crafted relationships with leaders in the mental health advocacy movement will stand psychiatric professionals in good stead when mental health services are threatened, he said.

Roderick L. Shaner, M.D., current medical director of the Los Angeles County Department of Mental Health who was director of psychiatric emergency services at County-USC Hospital at the time of the budget crisis, said that to prepare for future crises, academic psychiatric programs must work closely with the public mental health system and with each other to preserve good training and high-quality care for patients. He reported that since 1995, closer links between these entities have been established in Los Angeles County. Despite thorny contractual issues and logistic problems, the academic departments and the Department of Mental Health are beginning to establish joint public projects in inpatient, outpatient, and consultation services for children and adults. He urged organized psychiatry to pay close attention to the state of public mental health.

Implementation of managed care in the public sector has strengthened efforts to integrate the mental health and substance abuse treatment systems, which have historically been separate. Persons with severe mental illness and co-occurring substance use disorders, who are generally the highest users of expensive inpatient care, often fall through the gaps between the two systems into homelessness and criminal activity, increasing their costs to society.

At a symposium entitled "Treatment of Dual Diagnosis in Public Managed Care," all five presenters made the point that whether care is managed by a public agency or by a private-sector organization under contract, attention must eventually focus on the dually diagnosed population because of the large share of resources these patients will need if a system of care is poorly integrated.

"Comorbidity is an expectation, not an exception," observed Kenneth Minkoff, M.D., referring to the large proportion of severely mentally ill persons with substance abuse problems. Dr. Minkoff chaired a panel of experts that during the past two years has developed national standards of care for dual diagnosis treatment in public managed care systems, including practice guidelines, workforce competencies, and training curricula. The panel's report, Co-Occurring Psychiatric and Substance Disorders in Managed Care Systems, was issued in late 1998 and can be downloaded from the Internet (www.med.upenn.edu|~cmhpsr/cmhs_reports.htm). The panel's work is part of an initiative begun in 1996 by the federal Center for Mental Health Services to ensure that the needs of specific populations are not overlooked in the shift to public managed care.

Dr. Minkoff, who is medical director of Choate Health Management and Arbour-Fuller Hospital in Stoneham, Massachusetts, called the panel's report "a Bible" that can be used by any system of care that wants to do a better job managing the treatment of persons with serious mental illness and substance use disorders, who continue to be turned away from many programs. He stressed the need to make service systems "welcoming"—not simply accessible. Care systems, he said, should promote a longitudinal perspective that recognizes both disorders as primary, appreciates the chronic relapsing nature of each, and emphasizes the value of continuous relationships with treatment providers.

National criteria for dual diagnosis treatment are also being developed by the American Society of Addiction Medicine (ASAM), a group of more than 3,000 physicians from different specialties who are interested in understanding their patients' substance use problems. David Mee Lee, M.D., chairs a committee established in November 1996 to adapt ASAM's Patient Placement Criteria for the Treatment of Substance-Related Disorders to the treatment of persons with co-occurring disorders. Dr. Mee Lee described the committee's efforts to solicit wide input into the draft criteria, which will be sent out for field review in early 1999.

Dr. Mee Lee emphasized that the individualized treatment required by dual diagnosis patients must be based on careful assessment of severity of illness and level of functioning. ASAM's criteria guide the clinician through a multidimensional biopsychosocial assessment so that the clinician can identify services likely to be effective, he explained. In adapting ASAM's existing criteria to persons with dual diagnoses, the committee has had to expand the assessment to include risk areas related to ongoing mental illness, such as deficits in cognition and self-care, that would interfere with recovery and require special services.

Richard K. Ries, M.D., also emphasized the importance of assessing severity of illness in treating persons with dual diagnoses. He pointed out that, in essence, managed care is an effort to ensure that the sickest people get the most care. Programs involved in managed systems usually must demonstrate that their patients need the level of care they receive. However, he noted, many managed care entities develop instruments that require busy case managers to rate patients on too many variables, resulting in unreliable and poor-quality data.

At Harborview Medical Center in Seattle, where Dr. Ries is director of outpatient services, clinicians have developed a brief scale that case managers use to rate the severity of illness of dual diagnosis patients in the center's rehabilitation and recovery program. Dr. Ries and his colleagues have shown that single ratings on only four dimensions—psychiatric symptoms, substance use, treatment compliance, and overall level of dysfunction—are sufficient to distinguish sicker from less sick patients and to measure treatment progress.

Dr. Ries noted that use of representative payees is his program's most successful intervention for dual diagnosis patients, a point that was taken up by Andrew Shaner, M.D., who in 1989 started a dual diagnosis program at the West Los Angeles VA Medical Center. Research conducted by Dr. Shaner convinced VA administrators that disability income of veterans with serious mental illness was facilitating their drug use. For $45,000 annually, he was allowed to hire someone to administer a representative payee program, and within a year 65 of the dual diagnosis patients in his program had a representative payee. The hospitalization rate fell from 24 bed days per patient per year before the payee program to less than one bed day per patient per year after the payee was assigned.

Initially, the payee distributes small sums of money to a patient contingent on abstinence from drugs and on other goals set by the patient and clinician, Dr. Shaner explained. He emphasized that clinicians must be creative in developing a continuum of individualized incentives for each patient not only to improve treatment but also to ensure that those who are able to do so will learn to manage their money themselves. He warned that too often payee programs use contingencies as sticks rather than carrots.

In the San Diego area for the past three years, a for-profit managed care organization—Telecare Corporation—has been contracted to deliver services to the 100 highest users of acute mental health care, most of whom have co-occurring severe mental illness and substance use disorders. Telecare established the ACCESS program, which reduced the cost of care by 70 percent the first year and by another 15 percent the second year. Dr. Minkoff praised the program and called it an instance of managed care providing high-quality, effective treatment. Robert T. Quinlivan, L.C.S.W., Telecare's director of managed care, shared some of the lessons learned by the ACCESS program, which is based on the Program for Assertive Community Treatment (PACT) model.

In conducting representative payee programs for dual diagnosis patients, which Mr. Quinlivan strongly endorsed, he advised clinicians to "lose as many power struggles as possible." He noted that dual diagnosis patients are often street-savvy survivors who do not want to be "managed," and that the approach must be one of "partnering." The PACT model, with its emphasis on outreach, in vivo treatment, and 24-hour-a-day access, represents the level of effort that is often necessary to engage patients in this population, he said.

Mr. Quinlivan observed that it is very difficult to convince managed care and public-sector administrators that 25 to 30 percent of patients with severe mental illness and substance use disorders will remain chronically impaired and will need substantial daily supports for the rest of their lives. For the other high utilizers in this population, prevocational and vocational services are critical, he said. Placing people in jobs with the supports they need to remain employed improves their quality of life and lightens the caseload of the intensive case management team. In effect, he said, patients' vocational activities become their treatment, and the team is no longer supervising patients—their jobs are.

"There are 30,000 active cases in the San Diego County mental health system," Mr. Quinlivan noted, "and only two dual diagnosis programs serving a total of 200 patients. That leaves 29,800 people in programs with no emphasis on dual diagnosis." Mr. Quinlivan ended with a "tongue-in-cheek, but serious" observation: "We need to reinvent mental health systems so that mainstream programs are for the dually diagnosed, with specialty services for the singly diagnosed. The mental health field knows a lot about treating singly diagnosed people, but we have a long way to go with dual diagnosis."

With the shift of vulnerable public-sector populations to managed care, advocacy groups have increased their efforts to ensure high-quality care for persons with serious mental illness. At a half-day symposium, representatives of the National Mental Health Association (NMHA) described advocacy campaigns in three states—Louisiana, California, and Maryland.

The California MHA led a successful two-year campaign to add three atypical antipsychotics to the California Medicaid (Medi-Cal) formulary in the fall of 1997, effectively opening the formulary to all new antipsychotics as they are approved. (A fourth was added in 1998.) No group in California has ever succeeded in opening the Medi-Cal formulary to all drugs in a class, noted Rusty Selix, executive director of the MHA in California, who coordinated the campaign. Addition of the new medications meant that patients no longer have to fail at two courses of the older, less expensive drugs before being prescribed an atypical antipsychotic. Using the campaign as an example, Mr. Selix described key ingredients in successful advocacy, with an emphasis on the important roles that psychiatrists can play in improving mental health care in the public sector.

First, the specific campaign goal must be realistic given the resources of the state—learn where the state falls in per capita spending on Medicaid patients, advised Mr. Selix. Because no campaign can be successful without a coalition of all stakeholders, he noted, carefully assess the extent and effectiveness of existing coalitions in the state and build on them.

Psychiatrists can play a critical role in capturing the attention of a state legislator or official and making him or her a believer in the goal, Mr. Selix said. In meetings with legislators or officials, the campaign's message must be delivered by a triad—a psychiatrist, a consumer, and an advocate. No single person, no matter how eloquent, can be as effective as this triad, Mr. Selix observed. The psychiatrist is the expert and the scientist, who explains the problem and affirms that it is real. The consumer puts the science in a human context and tells a powerful emotional story that illustrates the need for policy change. The advocate translates the science and the story into a plan for what the legislator can do.

Because legislators hear constantly from advocates, it is important to stay on message and keep it short, Mr. Selix said. Legislators will give physicians more time than they give advocates, because they don't hear from physicians as often, and they know that physicians are giving up valuable time to meet with them.

No change happens overnight, and laying the groundwork is an important task for the coalition, Mr. Selix said. The change in the Medi-Cal formulary in the fall of 1997 began with a hearing in June 1995. Assess the political landscape, and learn where the pressure points are in the legislature, he advised. A key lesson learned from the Medi-Cal campaign, he noted, was that proposing legislation was not sufficient—state budget action was required.

"As psychiatrists and advocates, we can talk all we want about the therapeutic value of care, but in the political arena it always comes down to money," said Mr. Selix. "You have to show that what you are proposing works from a financial standpoint." For the formulary campaign, the coalition assembled a large body of data to demonstrate that failure of the older medications among a substantial proportion of patients resulted in high costs for inpatient care, which were then added to the costs of treating side effects of the older drugs.

Press coverage on proposed legislation is extremely hard to get but enormously valuable, Mr. Selix observed. State legislatures act on about 5,000 pieces of legislation a year, and not more than 50 get news coverage. Success can often be achieved by putting the state authorities on the defensive, he said—a position in which they are likely to offer compromises. In the Medi-Cal formulary campaign, the coalition coined the phrase "a two-strikes policy" to describe the state's requirement that a severely ill patient fail twice on typical antipsychotics. The state denied the existence of such a policy, which spurred press coverage, Mr. Selix noted. In addition, he said, the state mental health office was accustomed to being viewed as "a good guy," a view that was hard to maintain when it was being assailed by physicians and consumers.

When a campaign succeeds, it is usually a win-win solution, Mr. Selix observed. Advocates and consumers achieve their goal, and the legislators and other state officials who supported the project get the credit. One way for psychiatrists to get involved, he said, is to contact one of the MHA affiliates, which are listed on the NMHA Web site (www.nmha.org/).

In a lecture entitled "The Evolution of Community Psychiatry: From Relationships to Contracts," Joel Feiner, M.D., described the importance of relationships in psychiatric rehabilitation—relationships between therapists and clients, as well as those between clients and the other people in their lives, which are often disrupted by mental illness. Dr. Feiner expressed concerns that therapist-client relationships are endangered in a system dominated by managed care. He illustrated many points with anecdotes from his work as clinical and training director of Mental Health Connections in Dallas.

Clinical experience and research have greatly increased knowledge about psychiatric rehabilitation—to the point where the term "rehabilitation technology" is sometimes used to describe the field, Dr. Feiner pointed out. However, when rehabilitation technology fails, it is generally because not enough attention has been paid to the relationship between the practitioner and the client, he said.

Community psychiatrists view clients from a perspective that embraces their environment, the systems they live in, and their social and professional networks and roles. The importance of clients' connections with the people and institutions in their lives is a core value of community psychiatrists, said Dr. Feiner. Psychiatric rehabilitation can be seen as a way of creating and restoring these connections and enhancing a client's relationships, beginning with the client's relationships with members of the rehabilitation team.

Although the literature on the value of long-term relationships in the treatment of persons with severe mental illness is skimpy, Dr. Feiner acknowledged, a consensus has grown that no therapist-client relationship can develop when the therapist imposes his or her own goals on the client. Rather than asking clients what they need and helping them to get it, some therapists focus on what they themselves need, he said. If asked, clients might say they need money, love, friends, and relief from bad feelings, and therapists might say they need clients to be compliant with treatment and medications and to learn to function better in activities of daily living.

When the therapists' needs, not the clients', are the focus, Dr. Feiner explained, accusations of noncompliance and treatment resistance arise. They are simply ways of saying to the client, "You are not doing what I need you to do." And burnout—now sometimes called "compassion fatigue"—is the result for the therapist.

Therapist-client relationships are endangered under managed care, Dr. Feiner said. To illustrate, he quoted from an article written by a managed care clinician on how to conduct initial sessions with clients in a managed care plan. As early as possible, the author said, it is crucial to discuss the constraints imposed on the treatment by managed care, which are primarily related to costs and benefits and confidentiality. Clinicians should define such constraints as operational realities, suggested the author, and tell clients they have a responsibility to take an active interest in these matters because they directly affect their care. "The collaborative nature of the therapeutic alliance can be addressed during these moments of truth," the managed care clinician concluded.

"This is an interesting exercise in reframing," noted Dr. Feiner, "as we move from 'What do you need?' to 'What do I need?'" Of course clinicians know what managed care requires, he said, but they should not accept it at face value. "Any of these points of 'reality' are open for discussion," he said, "and the idea is to continue to keep them open. If this is the approach that managed care demands in the face of what we are asking for—relationships that really matter—then we have to raise some questions and keep the discussion going."

As more states adopt a managed care approach to public mental health care, delivering services that are culturally competent—that acknowledge and incorporate variance in acceptable behaviors, beliefs, and values within diverse populations—is increasingly being seen as a way to provide more cost-effective care, said Andres J. Pumariega, M.D., professor and chairman of the department of psychiatry and behavioral sciences at East Tennessee State University in Johnson City, Tennessee, in a session highlighting approaches to cultural competence in clinical care.

Incorporating cultural competence into the design of service systems and into direct clinical services can improve services for traditionally underserved populations while also resulting in cost-effective outcomes that correspond well with the goals of managed care, Dr. Pumariega said. Cultural competence contributes to cost-effective care by allowing more accurate diagnosis, by promoting culturally syntonic interventions, which also tend to be less restrictive, and by encouraging earlier use of services.

Cultural competence is a set of skills, knowledge, and attitudes that can be taught to clinicians and staff leaders, Dr. Pumariega said. However, he cautioned that a single workshop or class is not enough; a continuous process of sharpening awareness and skills in cultural competence is needed.

Dr. Pumariega gave an overview of a set of guidelines for implementing principles of cultural competence in mental health systems that was recently released by the Center for Mental Health Services. The document, entitled Cultural Competence Standards in Managed Mental Health Care for Four Underserved/Underrepresented Racial/Ethnic Groups, is described in a news story on pages 129-130 of this issue. The guidelines were developed by practitioners representing four ethnic-racial groups—African Americans, Asian Americans and Pacific Islanders, Latinos, and Native Americans—that have historically been underserved and underrepresented in staff positions in mental health systems.

The cultural-competence standards reflect a public health model, in which the needs of the population are assessed using an epidemiological and cross-cultural perspective, the clinical delivery system is organized based on the assessment, outcomes are measured with valid instruments and indicators, and the results are fed back to the system to improve clinical service approaches, Dr. Pumariega said. He suggested that this approach can serve people of color well. Integrating cultural-competence principles with concern for accountability and quality will lead to responsive systems, he said.

In a discussion of cultural competence in diagnosis and alliance building, Annelle B. Primm, M.D., M.P.H., assistant professor and director of the community psychiatry program at Johns Hopkins University School of Medicine in Baltimore, gave examples from the DSM-IV cultural formulation.

The first step in the cultural formulation—developing a narrative summary of the cultural identity of the individual—covers such factors as the person's ethnic or cultural reference groups and degree of involvement with culture of origin and host culture, language abilities and ability to switch between standard English and the language used with family and friends, and aspects of nonverbal communication such as the interpretation of interpersonal distance, Dr. Primm said.

The next step is to determine the individual's cultural explanation of the illness, she said. The explanation may involve fate or God's will, or the person may describe the cause of the illness in terms of one of the culture-bound syndromes listed in DSM-IV. The clinician should ask about the person's current preferences for and past experiences with professional and popular sources of care and about expectations for treatment. Some patients may not have a frame of reference for particular interventions such as psychotherapy, and the clinician may need to explain why they are useful.

The clinician should also assess cultural factors related to the person's psychosocial environment, which may include culturally relevant interpretations of social stress, supports, and levels of functioning and disability, as well as the person's likelihood of experiencing violence, poverty, and excess morbidity and mortality. Among the cultural elements of the relationship between the individual and the clinician that need to be considered are differences in social status as well as ethnic and racial differences. Dr. Primm cautioned clinicians to be aware of the possibility of misinterpreting popular beliefs and religious activities that are widely accepted in the community but may seem paranoid or pathological to practitioners.

Francis G. Lu, M.D., clinical professor of psychiatry at University of California at San Francisco, said that California has been a leader in the area of cultural-competence standards. In 1995 the state shifted responsibility for mental health care for Medi-Cal recipients to the directors of mental health for each county, and the counties developed a variety of arrangements for providing services, he reported. In 1996 the state department of mental health established a task force including consumers and county representatives to develop standards and requirements for cultural competence that the counties would have to address by June 1998. In 1999 cultural competence will be reviewed as the state does its annual site reviews of each county's services, Dr. Lu said.

The state's cultural-competence standards cover the areas of access, quality of care, and quality management, and each county is required to identify the cultural and linguistic needs of its beneficiary population and assess its readiness to provide services that meet those needs. One area in which the California standards differ from the cultural-competence standards recently released by the Center for Mental Health Services is in the requirement that counties provide mental health services in "threshold languages"—primary languages other than English that are spoken by 5 percent of Medi-Cal beneficiaries in a county or 3,000 beneficiaries, whichever is lower, Dr. Lu said.

In areas with threshold-language population concentrations, key points of entry into the public mental health system—a 24-hour toll-free line, the beneficiary problem resolution system, inpatient services, and other locations where face-to-face encounters with consumers occur—must at least have interpreters for the threshold languages available, Dr. Lu noted. In Los Angeles County, for example, eight threshold languages were identified, he said.