Growing number of Iowa hospitals close inpatient psychiatric units

From the Des Moines Register in Iowa:

IOWA FALLS, Ia. — If people here come down with pneumonia, a broken bone or an inflamed appendix, Ellsworth Municipal Hospital is ready to help. But from now on, anyone needing to be hospitalized for a mental illness will have to go somewhere else, possibly hours away.

Ellsworth Municipal recently joined a growing list of Iowa hospitals closing their inpatient psychiatric units. Five other Iowa hospitals have shuttered their units in the past decade, mainly because of a lack of money, psychiatrists or both.

Only 26 Iowa hospitals still have inpatient mental-health units, and leaders in the profession expect the number to continue dropping.

"Everyone agrees there's a problem, but no one knows what to do about it," said John O'Brien, the Iowa Falls hospital's chief executive officer. "We're reaching a tipping point on this. More and more of these units are going to close."

Demand for inpatient psychiatric care has dropped nationally, because modern medications help patients manage their illnesses outside the hospital. But experts say there is still a strong need for mental-health facilities to help patients in crisis.

Tim Rogers (pictured) of Eldora is the kind of patient who loses out when a psychiatric wing closes.

Rogers, 45, has a serious mental illness, diagnosed as schizo-affective disorder, which he usually keeps under control with medications. He owns a house, has a girlfriend and works part-time jobs at a car dealership and a motorcycle dealership. But every once in a while, his medication gets out of whack and he has what he calls "an episode."

Voices start coming out of his television and radio, telling him that he's going to have a heart attack or that he's going to hell. He sometimes has anxiety attacks that leave him catatonic. He also occasionally has delusions that he can talk to flies or that he will be elected president, then assassinated.

"It's like a storm," he said of the uncontrolled thoughts. "Medication changes bring me out of it, but it's a very scary thing."

Rogers, who was diagnosed with mental illness 24 years ago, only needs hospitalization for a few days once every few years. But it was a comfort to know that the nearby Iowa Falls hospital could meet his needs. Now that the hospital has closed its psychiatric wing, the nearest alternative is 50 miles away in Waterloo, and there is no guarantee a bed would be available for him there.

Rogers considers himself lucky. He can drive a car, so he can take himself to nonemergency treatment. But most of his friends with serious mental illnesses lack driver's licenses, so they need someone to drive them to treatment. Any patient who needs emergency care must be provided with an ambulance ride, sometimes several counties away. Their relatives and friends would have a harder time visiting faraway hospitals to offer support during their treatment.

Leaders in other types of health care have their own warnings about shortages in rural areas. But the problems in psychiatric care stand out.

General medical care is profitable enough that many small Iowa hospitals are building new, modern buildings. Ellsworth Municipal in Iowa Falls is considering joining them, with a new facility that could cost up to $40 million.

Hospital administrators say they can afford to improve medical facilities because payment for those services is more reliable than payment for psychiatric services.

At Ellsworth Municipal Hospital, for example, 81percent of medical inpatients are covered by Medicare, the federal health insurance program for the elderly and disabled. Medicare often is criticized for being stingy, but it is dependable, and it pays a bit extra for medical care provided at small, rural facilities classified as "critical-access hospitals."

By contrast, only 26percent of Ellsworth Municipal's psychiatric inpatients were covered by Medicare, and the program doesn't pay critical-access hospitals extra for psychiatric care. The largest portion of the hospital's psychiatric patients, 36percent, were uninsured people whose bills were supposed to be paid by their home counties.

"The payments we were getting from the counties didn't even come close to covering our costs," said O'Brien, the hospital's CEO.

In some cases, counties refused to pay anything because they said patients had not established residency in their areas. Even when the counties did pay, the rates were lower than those provided by Medicare, Medicaid or private insurers.

O'Brien said his hospital's psychiatric unit was losing $900,000 per year, which the organization could not sustain. The unit closed March31.

He said the crunch at his hospital's psychiatric unit was compounded by the closure or cuts of other psychiatric wings in Iowa.

By this spring, only 15percent of his hospital's psychiatric inpatients were from Hardin County, where Iowa Falls is located. The rest came from all over the state, often on judges' orders, which the hospital had to accept. Some came from as far away as Keokuk, 225 miles to the southeast. Transportation often was provided by sheriff's deputies or ambulances, at taxpayer expense.

The hospitals that have closed psychiatric wings tend to be in small or medium-sized towns or cities. Urban medical centers have more resources to make up for financial losses in mental-health care, but they are feeling pinched, too.

Des Moines' largest psychiatric unit is at Iowa Lutheran Hospital, which has 56 psychiatric beds.

Iowa Lutheran is owned by Iowa Health-Des Moines, one of two hospital companies that dominate the central Iowa market. Neil Fagan, who oversees the Iowa Lutheran unit, said Iowa Health's psychiatric patients are eight times more likely to be uninsured than the company's medical patients. That's mainly because psychiatric disorders make it hard for people to hold jobs that carry insurance, he said.

"Having serious mental illness is one of the fastest routes to poverty in our country," he said.

Georgeanne Cassidy-Wescott runs the psychiatric unit at St. Luke's Hospital in Cedar Rapids. She expects more small hospitals to close their units. She said it's hard to predict if bigger hospitals like hers will expand their programs to meet the need.

"Every CEO at every hospital has to decide if they want to be in this business, because it doesn't pay very well," she said.

St. Luke's psychiatric unit has 74 beds, making it the largest at any private Iowa hospital. It routinely accepts patients from all over the state, including from Des Moines when its units are full.

Cassidy-Wescott has served on state committees looking at the issue. The worst part of the problem, she said, is a shortage of psychiatrists willing to work in Iowa, especially in rural areas. That problem is closely tied to a lack of money, she said. The shortage also has caused waiting lists in some areas for outpatients wanting to see a psychiatrist.

Medicare and Medicaid, the two big government health care plans, pay Iowa providers some of the lowest rates in the country. And Iowa's county-by-county financing system for uninsured psychiatric patients leads to endless wrangling over payment, Cassidy-Wescott said.

"There's a tremendous amount of cost we go through to try to support this kind of fractured system," she said.

She is not sure whether the new federal health-reform law will help much.

One improvement could be new rules requiring private insurers to cover psychiatric care the same way they cover medical care, she said. But she said it's not clear whether hospitals will be better off when many currently uninsured patients become covered by Medicaid in 2014 under the reform law. The expansion could curtail Iowa's county-by-county payment system for psychiatric care, she said, but Medicaid payment rates are so low that mental-health care providers might not notice a financial improvement.

National analyst Tami Mark said the health-reform law might add to the pressure on psychiatric units, because many more people will have insurance coverage for mental-health care. "Whether there will be enough psychiatrists to handle that increased demand is questionable," said Mark, who works for Thomson Reuters, a health research company.

Mark said many hospitals added psychiatric inpatient units in the 1980s, when they were fairly profitable. But, she said, that trend was reversed by two changes: Private insurers began clamping down on who could be admitted and for how long. And Medicare changed its reimbursement rules for mental-health care, making it harder for hospitals to bill for their entire costs. The response has included numerous closures of hospital psychiatric units, Mark said. From 2002 to 2006, she said, the percentage of U.S. hospitals with such units dropped from 36 percent to 27 percent.

Another national researcher, David Hartley, said Medicare adjusted its payment rules about five years ago after finding that some small hospitals were making significant profits on geriatric psychiatric patients. But federal officials may have overreacted, he said.

Readjusting the financing rules would not be a major undertaking in the grand scheme of things, said Hartley, who is director of the Maine Rural Health Research Center. "It would take just a few percentage points to make these financially viable."

But it would be tough to win such increases at a time when health officials are looking to save billions of dollars in the overall health care system, he said.