Corporate Psychiatry, and Greed Back Again?

This will be a full post but a ‘sidebar’ type as mentioned a few posts ago. This concerns one of the other states suddenly having a different type of problem in mental health reform service delivery. This involves what can happen when there is an attempt to privatize andsplit off the tasks of mental health care delivery by the mantra popular in certain political and business circles.

The enthralling idea behind privatization for traditionally “government services,” such as municipal water supply, trash collection, mass transit, public health care and mass pandemic protection, to cite an extreme example, is that governments cannot do the work as well, efficiently or cheaply as can the “private sector.” The political machines of the past century such as Tammany Hall and its decades of corruption and cronyism, the Daley political machine of Chicago where everything that got done, “got done,” often as a result of greasing the palm of your local alderman.

The ideological faith and belief that capitalistic, corporate business could always do a better job took strong hold of the political imagination of many in this country by the middle of this past century, emerging fully in the Reagan years largely in the form of “de-regulation,” and unfettering the business world from choking restraints of governmental rules, over-regulation that stifled innovation, efficiency and the free market and its potential productivity. Much of this was indeed true in certain sectors and up to a point. But the non-psychologically minded politicians who could not live in the world of ambiguity and human nature, would behave as if humannature and all its foibles and inherent sense of self interest would sacrifice for the betterment of the greater good of the Almighty Economy. A huge ideiological boo-boo in this paradigm shiftwas committed under this belief system, that began perhaps with President Reagan’s breaking the air controllers’ strike in the earliest years of his first term. But human nature asserted itself and those years came to be known as the “Age of Greed” years before our Wall Street crooks in nice looking suits broke the economy with hedge funds that were worthless, the housing mortgage bubble, insider trading and greed on a scale never seen or achieved in history.

So now we are witnessing states who have either given up

on wrangling and managing the most imprecise “enterprise” of medical care, and especially mental health care in particular, or have made the conscious, understandable and from some viewpoints, perfectly rational decision to ‘get the state out of mental health care.” Privatization is again making the rounds of statehouses as if it were a brand name, an amazing idea full of promise that it its adherents are 100% sure it willl bring solutions to problems that have not changed much in 200 years. Health care still does not follow rational laws of supply and demand, inventory, or many of the other modern ideas of business management that have achieved wondrous results in the hands of persons like Jack Welch of GE, or the author Peter Drucker.

But greed has also asserted itself in oneof the other biggest oligarchical sectors of American health care, that of Big Pharma in atrocious and astounding ways since Prozac came out in the late 1980’s. Its entry and price set at literally and suddenly approximately five times its predecessors, set the stage for staggeringly higher drug prices compared to when such were informally ‘regulated’ or held in check by the Feds for all categories of new medications especially the biologicals in the inflammatory diseases and cancer. Suddenly everyone looked around and realized there were no more guards of checks and balances or accountability at the doors of the coffers of prices of commodities that were “life saving,” or needed at a level beyond those of clothing or cars, i.e., medicines. And the Princes of Pills took full advantage of the new vaccuum. Mostly recently we have seen the unbelievable phenomena of medicinal patent trolls acquiring rights of even generic medications and raising prices by many hundred fold. So de-regulation and privatization has worked no better and possibly worse, faster than governmental supposed bungling and inefficiency of yore.

We had the two hospital chains of the 1980’s in psychiatry, who raped the insurance industry when those very bright but perhaps antisocial in their values as the concept of “the common weal,” seemed to have disappeared from their liexicon and consciousness. Charter hospitals and the other company, NME, National Medical Enterprises I believe was its name, changed the health insurance industry forever driving them into their now typical adversarial roles of denial of coverage understandably because of the lack of controls (read ‘regulation’) on fees in the world of inaptient private psychiatric treatment. I can remember in my training days witnessing inpatients who routinely stayed hospitalized for up to a year. To be sure I had my own flabbergasted and outraged reactions to this clear abuse of the system and was not surprised when “managed health care” and cost controls, length of stay reviews and cut-offs hit psychiatry first and with a vengeance. Psychiatry deserved the sanction the cost control clamps placed on the profession. Those who participated in the insurance ripoff  were also dishonest, and pushing the limits of dishonesty until they were stopped.

Briefly the two hospital corporations I mentioned above set the tone for the rest of many psychiatric private treatment centers or units in even the “highest institutions of learning,” (read ‘medical school departments’) to make obsceneamounts of money off inpatient psychiatric practince. I would refer the reader to the esteemed veteran New York Times reporter, Mr. Joe Sharkey, and his book of the end of that era, “Bedlam,” that uncovered and documented this incredible business scam. In Texas the companies, especially NME, figured out they could have their own ambulance services in every country that had inpatient psychiatric treatment close by enough, listen on their scanners, have their drivers deputized as “officers of the law,” deputies in the then lax laws of Texas, and race to a place of “disturbance,” whether it was spousal abuse, a genuinely mentally ill person out of control, or intoxication, and commit them psychiatrically on the spot since they were empowered to do so under Texas law being deputies “and all.” Then after ascertaining the person had insurance, off they went to the local Charter or NME facility where they were involuntarily committed without any formal psychiatric process or examination or confirmation clinically of the severity of the person’s clinical status to justify suspending their civil rights. And the patient was kept in the hospital for “treatment” until their insurance ran out and then they were discharged. Mr. Sharkey’s book stunningly documents this era, practice and modus operandi. Later NME was prosecuted in Texas and in that state alone had to pay back over $500 million to Blue Cross/Blue Shield.

Now we have the case of the hospital corporation with a chain of private psychiatric hsopitals/treatment centers in the Greater Boston area who is under active and determined investigation for overbilling to heights not yet tabulated. And patient citizens are beginning to come forward to the Boston media telling accounts that remove the curtains of respectabiity and appearance of august centers of modern thorough psychiatric treatment. This story will most likely once again expose the limits of privatization and the costly error of lack of oversight and involement by the state as it washed its hands figuratively of the tiresome, endless chore of caring the chronically mentally ill.

Now to specifics: In two articles appearing in the Boston Globe on July 3, 2015, the system of Arbour-HRI Hospitals were cited by the Department of Justice for being under active investigation for suspected system wide billing fraud. The hospitals are part of a larger business entity, th Arbor Health System which is in tirn owned by Pennsylvania-based Universal Health Services, the largest owner of psychiatric hospital and clinics in the country. [Sound familiar?] The DOJ’s inestigations in the last three years have expanded to their facilities all across the country implying a coordinated business policy of practice. The five hospitals in Massachusets under investigation have 550 beds and account for an impressive 20% of psychiatric admissions in the state. The Arbour organizationzation also owns outpatient counseling clinics in the state.

But it gets worse: 3 deaths in these facilites have occurred in the last 18 months and families have jump started demands for internal reviews to the courts where one case has been entered for litigation. But Arbour-HRI has been cited repeatedly by state regulators over pooor care and inadequae staffing at its hospial and outpaient clinics. AT Arbour HRI two years ago, public health officials found the hospital failed to provide active treatment some patients and found that the patients with major psychotic psychiatric diagnoses such as bipolar illnsss and schiophrenia having little or no face to face treatment, wandering the halls or sleeping for hours during the daytime for lack of active programmming.

My next post will focus on one or two states who are also considering privatization of state psychiatric hospitals and who would do well to pay attention to the history of these sometime misadventures and the appalingly similar histories since the days of Charter and NME in the 1980’s

And it is always telling that hospitals being considered for managerial ejection from the state systems of management and potential oversight are always the problem hospitals.

More soon on the misadventure of a “solution.”





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.

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