Private Psychiatric Sector is Re-Awakening

One of the unspoken “white elephant in the room’ disturbing trends in the long slow 20 year disintegration of intensive, vitally needed, inpatient, hospital based psychiatric care delivery system has been the inexorable closure of beds everywhere. I do not honestly know that statistics of the percentage of private psychiatric beds that have closed since the early 1990’s when the trend accelerated, but it has been very substantial.

As they say in trite stories designed to bore the listener, “it all began in…”  the early 1990’s when the bandit organization called Charter Hospitals [read the book BEDLAM by New York Times long time investigative reporter who is still writing, Mr. Joe Sharkey, for an expose of how a few national private for profit psychiatric mills like Charter operated in those days. Instead of “pump and dump,” those outfits operated on the financial principal of “vacuum and dump,” meaning keep the patient inpatient till their insurance benefits ran out, and then arrange a discharge–quickly. Charter went bankrupt as most of us ethical practitioners knew it eventually would in the early 1990’s. In the few other locales that I have practiced, other than Durham NC and western North Carolina, I always knew the refrain “never have Charter on your CV.” Among ethical practitioners it was a blight. I recall a  personal incident where in one pra1930e Southwestern resident sister, did much more than I could to help them, I was approach my first week in my relocated and family driven need to work there, by a Charter “professional relations representative.” He came at the end of my long working days in the evening hours and was obviously irritated at having to wait so long as he was not accustomed to shrinks who worked past 6 p.m. I was puzzled as he carried a brand new bag of a complete set of golf clubs.{Disclaimer: I do NOT play golf]. He started his preamble and then launched into his pitch that I would be deserving of a shady sounding financial arrangement if I referred inpatients to the two then local Charter facilities. I would also be given an all expenses cruise for my wife and myself and have my staff credentials all done in a week or so. As it dawned on me nature of the arrangements being offered me and their inherent dishonesty, my Texas temper began to boil. Knowing me from years of analysis I knew I had to keep it under control or I would repeat my father’s mining engineering WWII approach to leadership in the mines he oversaw when I was growing up: throw the guy THROUGH the wall [my father was a true giant of of a man and one of the true “Four Horseman of Texas” high school football named after the Four Horseman of Notre Dame. I remember exercizing every bit of self control I ad and coldly as possibly with the most moral opprobrium, I could muster, telling him in civil but no uncertain terms to “get out” and take his bribes with him. I remember he was flabbergasted, never expecting than any greedy practitioner would turn down such a wonderful offer. As a final addendum, there was a salary offer couched in all this that would supplemented by an undisclosed sum with every referral. Such were the operations of Charter and at least some other national psychiatric chains, such as “NME” written about by Joe Sharkey.

But the bad news about Charter cratering all in a week or two in the 1991 or so [that year may wrong] was than a few thousand private psychiatric beds were lost the country over. And that started the trend of private psychiatric beds closing and private units downsizing all over the country as the reimbursements from private insurance companies cratered also. And that is the largely forgotten co-contributing cause to our present day mental health care crisis.

My next blog post in a week or two, I hope will address that legislation moving through Congress that will seek t redress the coverage inequities that still plague private hospitals who still, God Bless Their Souls, who operate inpatient psychiatric units. They ALL do so at a loss. Like a loss leader at a grocery store except in health care you cannot refer every psych inpatient for expensive surgery and make up the loss like you can at the steak counter in a grocery store. These hospitals do so out a sense of mission to the communities and because nobody else will.

But finally the psychiatric, bean counter, local legislative world is waking up partly due to the overcrowding of jails everywhere with the severely mentally ill who cost gobs of money to house, care for and treat well enough to retain accreditation of correctional review bodies, the rise of the mentally ill homeless even in small towns, as they said in the old movie “The Music Man,” ‘right here in River City! And the never ending now weekly spate of mass shootings at least enough of which are perpetrated by a particular brand of mentally ill for the most part that is fast becoming the shameful distinguishing news feature of American around the world. But debate is for another post…

A recent article, “Centra applies to add beds to psychiatric unit at Virgina Baptist,” in Lynchburg VA, published at, is a good example of a relatively novel and much needed trend in the slow turn-around in the re-construction of mental health care in this country. Centra Health, a private hospital holding corporation is doing what I hope and assume is a brave thing, entering into the world of inpatient psychiatric care, likely in the hopes of better things, i.e., financial support, to come. Wake up Congress, this effort starting to happen elsewhere is bourne of desperation as states and local regional health care entities try to start filling a gap that is now upon us that imperils us and patients in many ways. I am not a dyed in the wool free market Republican but this is an example the market doing the right thing, seeing a need, and entering to fill it. But it needs support at a large level. And attention legislators: IT IS GOING TO COST REAL MONEY.

Centra hopes to add 8 to its existing psychiatric 37 beds which is impressive. It is clear from the article they saw the need locally and responded.

And why did this happen? Ask State Senator Craige Deeds now well known to the nation as one of our most well placed mental health advocates, whose son Gus suffered the ultimate price of unavailability of local mental health care too late, suicide, after having stabbing his father nearly two years and highlighting in a personally tragic way our current mental health care delivery crisis plight.

The answer is simply that states across the country since the 1990’s have sought to save monies in the multiple economic bubble  busts, and recession, by slashing mental health budgets, closing state hospital psychiatric beds and neglecting the decades long disparities in mental health insurance reimbursement that have drive the private psychiatric care sector into a shadow of its former self nationally. My own training university, a powerhouse and truly deserving prestigious care and research organization, now has far fewer private inpatient psychiatric beds than when I trained there in the 1970’s and depends upon a local private hospital with a far larger private psychiatric inpatient service to meet those needs. Most of the university’s now few inpatient psychiatric beds are funded by research grants and funds that is the reality facing many such prestigious university medical centers that one would assume are rich and powerful beyond belief. Not so anymore.

More to come on this topic soon.



Author: Frank

I am a older child, adult, geriatric teaching psychiatrist with over 30 years' practice experience in North Carolina, first at Duke as clnical teaching faculty, then in Western NC as a primary child psychiatry specialist. I have taught and supervised child psychiatrists and psychiatrists in training and many other mental health professionals and taught at two medical schools. I have served in many public and private practice settings. My primary interest is in observing and documenting the ongoing mental health reform efforts in the State of North Carolina and documenting its sucessess and failures at all levels. My favorite pastime among many others is spoofing my friends and kids with my deadpan sense of humor.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: