Center Evaluates the State’s Program To Serve Mental Health Patients at Local Hospitals

The Center has released the first independent evaluation of a statewide initiative to purchase bed space and build capacity for mental health patients in crisis at local hospitals across North Carolina. The goal of the program is to increase the number of beds available for mental health patients, keeping them out of hospital emergency rooms and out of the state psychiatric hospitals.

In 2008, the legislature first funded “three-way contracts” between the state, local mental health management entities (also called LMEs), and hospitals across the state. LMEs are the local agencies responsible for managing the provision of mental health services in the area served. The three-way contracts were developed as a way of moving North Carolina closer to the comprehensive local service system envisioned under the state’s 2001 mental health reform legislation.

The Center’s research findings include:

(1) The number of patients served under three-way contracts is almost as many as the total served each year by the three state psychiatric hospitals combined.

(2) Readmission rates for people served under the three-way contracts are lower than for those served in state hospitals.

(3) Short-term admissions (seven days of less) to state hospitals have dropped from 51 percent of total admissions in 2008-09 to 21 percent in 2011-12.

(4) The average length of stay in emergency departments for patients that were transferred to a community hospital was more than 12 hours shorter than the average length of stay for those that were transferred to a state psychiatric hospital.

(5) The average length of stay for patients served through the three-way contracts at all hospitals is less than seven days – as intended.

Based on its research, the Center made four recommendations to improve the program: (1) improve the timeliness of the payments to hospitals, (2) designate a state liaison and include hospitals in the state’s working group on the contracts, (3) open state training programs to local hospital staff, and (4) evaluate patient outcomes.

The Center’s 60-page evaluation of the state’s three-way contracts program is available to download electronically for $5. It also is published in the latest 135-page issue of the Center’s journal, North Carolina Insight. The entire issue can be downloaded electronically for $10, or a printed copy can be purchased for $25. By becoming a Center e-Member for $50, anyone can receive online all other articles in the Center’s study of mental health as they are completed, future issues of Insight, and the Center’s quarterly newsletter for a year. To order a printed copy, call Tammy Bromley at (919) 832-2839, fax (919) 832-2847, or send an email to  

For more information on this mental health study, call Mebane Rash, editor of North Carolina Insight, at the N.C. Center for Public Policy Research, at (919) 832-2839, or email her at

Click here to read the press release