Part 1: Bottleneck in Psych Care Leaves Hospitals, Patients in the Lurch

In a locked behavioral health unit at Alvarado Parkway Institute, “You didn’t come this far just to come this far” is scrawled in multicolored letters on a poster board outside a patient room. For some patients, there’s a wait to go further.

Alvarado and other San Diego hospitals, like Sharp HealthCare, Palomar Health and Scripps Health, are grappling with a back-end bottleneck in psychiatric care. More patients in mental health units face long waits for continuing care, like skilled nursing facilities, according to San Diego County data.

The extended inpatient stays are costly for hospitals, delay patients in a critical leg of their journey and back up the rest of the behavioral health continuum. Rising costs shrunk the number of homes serving these patients, fueling the trend.

“It’s about getting them through the hospital stay and into the appropriate setting. And when there just aren’t enough beds to do that or locations for the patients to go, it’s absolutely a challenge and definitely a cost to the health system,” Palomar Health CEO Diane Hansen said.

For most San Diego hospital systems, operating margins declined in recent years — and behavioral health hasn’t helped. Hospitals reported losing millions annually in the area, owing to low reimbursement in mental health, and partly to caring for mental health patients with nowhere to go. The hospitals have sought greater county funding for downstream services.

A San Diego Business Journal examination, which included multiple public records requests, revealed the extent of the patient backlog. Stakeholder interviews illuminated fiscal and patient impacts — and potential solutions, which include new facilities and new business models.

Care Stages

Here’s how patients move through psychiatric care: Those in crisis go to a therapist, community clinic or emergency department, and if need be a locked hospital unit, designed for a weeklong stay. Then, some go home. But others require another facility outside the hospital, either for long-term care or as a stepping stone before resuming everyday life.

Various post-hospital facilities cater to the different needs. Frequently they’re full. That’s evident by “admin days,” a stat recorded when a hospital patient is ready for discharge but a bed in a step-down facility isn’t available.

In San Diego last year, nearly 1,400 Medi-Cal behavioral health patients — roughly a sixth of all Medi-Cal behavioral health patients — experienced at least one admin day. That’s more than five times the number of patients who waited a decade prior, according to county discharge data.

Their wait for the next step averaged almost two weeks, which doubled in comparison with four years ago. The ramifications run from patient frustration to hospital finances.

The Impacts

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These in-limbo patients continue to get the same level of care, but most hospitals receive about $665 a day in reimbursement, or 54 percent less than patients still deemed acute. This creates “a financial burden,” states a September report from the Hospital Association of San Diego & Imperial Counties to San Diego County.

To navigate a fractured placement landscape, hospitals have added social workers and planners to the payroll, a factor in the high cost of admin days, according to the report.

The lack of post-acute treatment — and ensuing backup — forces hospitals to deliver long-term psychiatric care, when they’re built for a weeklong stopover. So said Dr. Michael Plopper, chief medical officer of Sharp HealthCare, the region’s largest private provider of psychiatric services.

“If we’re just sitting here waiting for patients to go somewhere, we just keep redoing the same treatments we’ve been doing because that’s what we’re built to do.” Plopper said. “They’re passively waiting and not involved, so it’s discouraging for them.”

Patients tired of waiting sometimes settle for a post-acute facility incompatible with their needs, according to Alvarado hospital officials. They said that increases the likelihood patients — particularly those who are homeless — will cycle through emergency rooms or return to the streets, which has bearing on a regional homelessness crisis.

As for the financial impact of admin days on patients, Medi-Cal, a health coverage program for low-income Californians, sometimes requires a cost share from patients. Patients with private insurance generally are on the financial hook, according to an Alvarado official.

San Diego — and other counties — only keep admin day data on patients with Medi-Cal. These patients represent most admin day placements, according to hospital officials, who said the issue contributed to financial struggles in behavioral health.

Last year, among major health systems, losses in psychiatric services totaled $11.4 million for Sharp HealthCare, $5.4 million for Tri-City Medical Center, $4.9 million for UC San Diego Health and $14 million for Palomar Health, according to data provided by the hospitals. Scripps Health lost $4.7 million in 2017, the latest data available. UC San Diego Health did not comment on the article.

Like machinery, a blockage at the end of the psychiatric system can bring the rest to a standstill. Patients needlessly hung up in a psychiatric unit tie up beds, lengthening psychiatric waits in emergency departments.

Continuing Care Beds

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To break up the obstruction, start by replenishing the number of board and cares, hospitals say. These licensed homes, frequently run by families, take patients who can function outside of a locked unit, but who require medication assistance, meals and supervision.

San Diego last year had 882 board-and-care beds, down 14.7 percent from 2012, while behavioral health cases rose. In the last decade board-and-care homes, often run by families, fell from 109 to 60, according to the nonprofit 211 San Diego.

It’s simple math. Reimbursement hasn’t kept up with expenses. That’s according to Carla Sidlo, manager of the Broadway Home in San Diego, a board and care with 49 beds. Factor in fewer outside programs that take clients during the day, and increased licensing costs, and these homes struggle financially.

“It just keeps getting harder and harder,” said Sidlo.

A former case manager specializing in housing coordination for vulnerable populations, Tracey Wilson’s searches more than a few times took her to cockroach-infested homes. She decided to open her own supportive housing, initially eyeing a board and care. Then the regulatory costs became apparent.

Regulations aim to prevent shoddy homes, but Wilson said they could be loosened in some instances, calling out burdensome reporting requirements. She ultimately opted to launch four independent living facilities, under the banner Rooted Life Supportive Housing, which takes some mental health patients.

Unlike Wilson’s facilities, independent living facilities often can’t accommodate these patients. The unlicensed homes are geared toward addiction issues.

Faced with difficulties in placing patients, Alvarado Parkway Institute has explored an unusual move for a hospital: opening its own board-and-care facility. It would complement Alvarado’s 66 inpatient beds and outpatient services.

Alvarado would pull the trigger if the facility breaks even, unreachable at this point with an estimated monthly cost of $1,500 per patient, about $500 more than typical government reimbursement. The hospital plans to gauge whether the county would make up the shortfall, in return for the hospital buying the site.

“We want to meet patients where they are in the course of their care,” said Alvarado CEO Megan Montgomery-West.

Solutions may be harder to come by in another avenue of sub-acute care: skilled nursing homes. They increasingly turn away mental health patients, following a federal ratings system penalizing nursing facilities with large numbers taking psychiatric drugs. So said Dr. Michael Krelstein, clinical director of behavioral health services for the county Health and Human Services Agency.

The aim is to curb over-prescribing — and drugs being doled out to those without a psychiatric disorder. But county and hospital officials argue the well-intentioned rules ignore that some patients need medication.

“Some of that’s well intended because back in the day there were way too many people in skilled nursing facilities who were inappropriately given psychiatric medications to control their behavior, even though they didn’t have a psychiatric disorder,” Krelstein said. “But these days, those regulations are being interpreted and kind of operationalized in a way which goes against genuine psychiatric patients.”

Who Should Pay?

For hospitals, the hope is that the county will add incentives for sub-acute facility operators. That way operators stay or get in the game.

“I think the county, our partner hospitals, all try to do the best they can, within the resources they’re given. That said, we would like to see the county increase financial support,” said Dr. Jerry Gold, administrator of Scripps Behavioral Health Clinical Care Line.

The County Board of Supervisors, which controls the purse strings, hasn’t considered the idea, but “all options are on the table,” said Chair Dianne Jacob.

Last year, the county spent $21.17 million on continuing care beds, a 263 percent increase from a decade prior. The county also operates inpatient beds.

Jacob stressed that it’s not only the number of continuing care beds that matter. She said better case management throughout the stages of psychiatric care could help halt a revolving door of patients, a topic the Board of Supervisors took up recently.

“Right now we have pieces of a system that are fragmented, and not working efficiently for the individual. Too much focus on programs and not enough on the individual,” Jacob said.

The board is moving on other fronts. Supervisors recently moved forward with a plan for a “regional hub for behavioral health continuum of care,” on 7.24 acres of county land, nixing a plan to build condos on the site, near Scripps Mercy Hospital and UC San Diego Medical Center, Hillcrest. High-level plans call for inpatient crisis stabilization, outpatient services and more.

Supervisors began examining the continuum last summer, after community outcry over Tri-City Medical Center suspending operations of its inpatient behavioral health and crisis stabilization units. (Tri-City is now in talks to provide stabilization services through a partnership.)

Tri-City’s decision touched off soul-searching over how San Diego could do better in mental health. The hospital association report focuses on continuing care, also touched on by Tri-City in a statement.

“It’s important to recognize that hospitals are just one piece of the behavioral health continuum of care. Hospitals have been advocating to elected officials at the local, state, and federal level for many years to invest in health services at points all along the behavioral health continuum.”

Recently, to bolster step-down bed coverage, hospital officials have advocated higher spending of money from the Mental Health Services Act, a 2004 ballot measure that taxed California millionaires. Unspent revenue from the measure swelled before dropping last year to $99 million, and is set to run out in a few years, according to county data.

Seeking Solutions

Greg Knoll, CEO of the Legal Aid Society of San Diego, said financial pressure sparked hospital versus county arguments over who should pay more for post-acute care. But Knoll, who has taken part in stakeholder meetings, believes friction gave way to collaboration.

“I think that’s where the San Diego system at this stage is failing,” Knoll said. “And I think all parties, if for necessity if not for anything else, are finally deciding to come together and come up with various things that might work.”

He was optimistic about another development. A November Trump administration decision could eventually pave the way for California hospitals to use Medicaid funding for mental health treatment in facilities with more than 16 beds, which has long been barred. This would make behavioral health more financially viable.

San Diego’s growing admin day problem appears to be unique compared with two nearby counties. Los Angeles’ numbers have dropped over the past decade. Orange County has had relatively high admin day totals per Medi-Cal admissions, though Orange County’s rate hasn’t increased as much as San Diego, according to data obtained by the Business Journal.

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'Created the Mess We're In' 

Plopper of Sharp HealthCare said San Diego took backwards steps a decade ago. It included, he said, the county slashing Institution for Mental Disease, or IMD, beds as part of a shift toward other community services and other facilities.

“That was a decade ago that those changes happened and created the mess we’re in now,” Plopper said. “Now they’ve wised up.”

By wised up, he means the county in the fall added 64 IMD beds at county-contracted Crestwood Behavioral Health, which Plopper said eased the behavioral health placement backup. IMD beds are reserved for long-term care of those too ill to live alone.

In 2010, IMD beds fell from 198 to 113 — and only recovered four years later. The region now has 265 IMD beds, the highest total since records going back to 1995, according to state data. But Plopper believes the number still falls short.

Asked about the matter, County Behavioral Health Services said via email the agency “does not have detail to share related to strategy 10 years ago,” and declined an interview request.

Plopper said fleshing out the behavioral health continuum — including other needs like more psychiatrists and additional supportive housing — would mean the region could get by with the number of existing inpatient beds.

Expanding Outpatient Services

Doors close behind hospital staff, clicking and then buzzing. The sounds underscore that this is a locked unit. Down the hallway, a clipboard-toting nurse in purple scrubs scribbles notes while listening to a patient.

Nearby, four nurses huddle in a medication room’s tight quarters, separated by glass panes emblazoned with the name Alvarado Parkway Institute.

But more and more, the focus is outside the hospital, partly on account of patient waits.

Alvarado in recent years expanded mental health outpatient services, also designed to reduce costs, and to achieve scale that makes the space more financially viable.

The model may be challenging for others to follow. Alvarado is a freestanding hospital saddled with fewer regulations than large health systems.

At the very least Alvarado wants to facilitate a dialogue. The hospital recently convened a committee made up of board-and-care facilities, other step-down providers and additional stakeholders.

Hospitals have more on their minds than beds.

Inadequate county case management pushes discharge planning onto hospitals, according to the September hospital association report. The National Alliance on Mental Illness in San Diego supports certain cases, among other critical gaps filled by the nonprofit.

In the absence of a website listing real-time bed availability, discharge planners call homes around the county, and if at capacity, repeat the routine the next day. And the next day. And the next.

[This story was originally published by the San Diego Business Journal.]