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Too big to fail

November 1, 2008
by Douglas J. Edwards, Editor-in-Chief
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As Wall Street reorganized itself during the past couple months, talking heads frequently referred to AIG, Lehman Brothers, Merrill Lynch, and other corporate entities as “too big to fail.” That sounded reasonable, as these companies have a significant role in our economy. Yet as Uncle Sam opened his wallet for these firms, I couldn't help but notice how lawmakers seem much more concerned about for-profit companies than nonprofit health and human service providers.

Many nonprofit behavioral healthcare providers are facing dire financial situations too. For 50 years a Louisville, Kentucky, community mental health center cared for those who had no way to pay for services, but because of painful state budget cuts, it now has to turn those clients away.1 Provider organizations all across the country face similar circumstances. Despite their communities' tremendous and increasing needs, especially during this economic crisis, agencies have had to limit services and cut staff or ask them to make painful sacrifices. This past May, a New Hampshire CMHC reduced its employees' workweek by 2-1/2 hours, thereby decreasing their annual pay 7%, and also temporarily discontinued contributions to employee retirement funds. The agency's CEO says its financial situation was the result of absorbing unpaid costs from clients who couldn't pay increasing insurance and Medicaid deductibles—some as high as $1,000 per month!2

When a behavioral healthcare agency has deep financial problems, it usually doesn't make as much news as when a bank is in trouble. But these agencies are just as important to their local communities as the big Wall Street firms are to the national economy, and they also should be considered as too “big” to fail. In fact, these agencies' role is so vital that our government should be committed to ensuring they succeed.

As our nation took on hundreds of billions in obligations to save large financial corporations, I couldn't help but be bitter at the fact that so many behavioral healthcare organizations are just scraping by—and often told by state and federal lawmakers that there just aren't enough dollars to increase funding for services (or provide universal healthcare). While our nation's economic health is certainly important, its collective physical and behavioral health deserves equal attention. If cabinet secretaries can broker huge interorganizational deals over weekends, and if Congress can pass an unprecedented bailout in a couple weeks, then surely our government can quickly find a way to ensure health and human service organizations are reimbursed not just to survive, but to thrive.

Douglas J. Edwards, Editor-in-Chief


  1. Yetter D.Cuts affect mental health services. Courier-Journal (Louisville, K.Y.);September 8, 2008.
  2. Farrar C.Mental-health group faces cuts. Keene (N.H.) Sentinel;April 16, 2008.
Behavioral Healthcare 2008 November;28(11):4