Administrative leaders of psychiatric hospitals always have faced tough challenges. In the 1800s and in more recent years, administrators traditionally have had the responsibility of ensuring the viability of complex organizations. From raising the funds to build hospitals to winning ongoing support from diverse groups to keep hospital doors open, psychiatric hospital administrators have a long history of being advocates for what it takes to make a difference in the lives of people with some of the most serious mental illnesses.
But in recent years the pace of change in the psychiatric hospital field has accelerated dramatically. From my vantage point as the chief operating officer of Sheppard Pratt, one of the country's most venerable private psychiatric health systems, and as the recent president of the National Association of Psychiatric Health Systems (NAPHS), I see a number of specific changes on the administrative front. Comparing these changes to the past can help us better understand where we are today and what actions administrators can take to prepare for ever-accelerating change.
What Has Changed
More regulation. Today a wide array of regulations (such as EMTALA and HIPAA) affects hospitals. Hospitals are subject to the rules and, in many cases, inspections of scores of agencies, including:
federal agencies (such as HHS, CMS, OSHA, DOE, FDA, DOD, and FBI);
accrediting bodies (such as The Joint Commission, CARF, and COA); and
state agencies (such as departments of health, mental health, substance abuse, family services, child welfare, justice, and education).
Subsequently, a large portion of each day, not just for administrators but also for clinicians, is devoted to paperwork. Yet the most complex and detailed regulatory requirements—those associated with Medicare and Medicaid—did not exist until 1965. In fact, between 1991 and 2001 Medicaid grew to become the largest payer of mental healthcare with prescription drugs the fastest-growing spending component.1 Before federal reimbursement programs, regulation was primarily at the state level and was more idiosyncratic to state sensibilities.
Conflicting regulations can leave hospitals caught in the middle. For example, EMTALA requires all hospitals to treat emergency patients, but federal institutions for mental disease (IMD) restrictions actually prohibit Medicaid funding for these patients in freestanding psychiatric hospitals. The growing burden of duplicative and conflicting regulations has led NAPHS to make regulatory reform a priority this year. (See sidebar by 2008 NAPHS President Jeff Borenstein, MD.)
More rigorous managed care demands. As practice changes and faster-acting psychiatric medications have resulted in shorter episodes of crisis-stabilization hospitalization, managed care organizations have been under pressure to find alternative ways to deliver ongoing cost savings to the insurers and employers with which they contract. In some markets this has resulted in deep discounting and exclusive networks that ultimately reduce consumers' access to mental health services. The impact of reduced fee allowances and higher administrative burdens also has resulted in the erosion of the number of psychiatrists who will accept insurance and, thus, reduced the availability of affordable outpatient services for patients discharged from hospitals.
Higher severity of illness. In today's inpatient settings, individuals present with serious, complex, and challenging needs. Unlike in the past, hospitals are now seeing more patients with co-occurring disorders, increased levels of family dysfunction, and higher prevalence rates of autism. New demands are created from societal and demographic changes, such as cultural expectations and language barriers. Psychiatric disorders may be complicated by a wide range of other issues, including drug or alcohol abuse, child/spousal abuse, learning disabilities, and more. Many individuals—including children—may have multiple service systems involved with their treatment, such as child welfare agencies, judicial systems, or special education providers. This complexity means administrators need to work ever more closely with clinical staffers to understand the challenges they face and to work with them for solutions that best meet individual patients' needs.
Fewer state services and a changing private-sector payer mix. Within the past several decades, the number of public psychiatric hospital beds has decreased. States have been decreasing the number of available beds, and many state hospitals no longer provide acute care (i.e., crisis stabilization). According to CMS, in 1970 there were 413,066 state and county hospital beds dedicated to patients with psychiatric problems; by 2002, there were only 57,263 nationwide.
This downsizing has led to more patients being seen in the private sector, as well as a changing payer mix within the private sector. In their early years, private hospitals such as Sheppard Pratt were private-pay facilities, but government payers (Medicare and Medicaid or state-funding initiatives) are now the source of payment for growing numbers of patients in private-sector hospitals.
More technology. Technology is revolutionizing all aspects of treatment. There are new resources to help with clinical care (e.g., electronic medical records), safety (e.g., security systems), and community outreach (e.g., e-mail and Web sites). While new technology can save time and money through increased efficiency, it can be difficult to determine which technologies will survive and whether it makes sense to be an “early adopter” or wait until market forces take hold.