33rd Annual Legislative Breakfast: "Sustaining Hope for Mental Health in North Carolina

Mebane Rash and Aisander Duda, N.C. Center for Public Policy Research

Friday Center, Chapel Hill

8:15-11:30am, January 22, 2010

[Mebane Rash] Ten years after mental health care reform legislation was

enacted in North Carolina, one of the unintended consequences plays out in

emergency rooms across our state each and every day. At one community hospital

with 24 beds in the emergency room, there were about 2,000 visits last year by

patients with mental illness or substance abuse – on average, about five visits each

day. It costs the hospital $500 dollars a day to hold a person in the ER for

treatment, and this hospital estimates that it spends $1 million dollars on treatment

of mental health patients in the ER each year, most of it uncompensated.

Last May, a 16-year-old girl stayed in the emergency room for nine days

until a psychiatric bed opened up for her. She was not evaluated by a psychiatrist,

and she did not receive mental health treatment during her ER stay. ER physicians

could sedate her and try to keep her comfortable, but they did not have the

expertise to initiate psychiatric treatment.

In June, things got so bad that for two weeks, there were nine or more

patients in the ER at all times with mental health or substance abuse issues. Not

only has there been an increase in the numbers of patients, but they are staying

longer and longer as they wait for beds to open up – the average statewide is 2.8

days. There have been as many as 15 people being held in this ER for mental

health issues – more than half the capacity of the emergency room. The longest

stay has been 10 days. Imagine waiting in an ER for 10 days.

This hospital has had to create a transition unit for holding mental health

patients – 7 beds that used to be reserved for patients with chest pain. This hospital

has had to hire sitters – certified nursing assistants that provide one-to-one

monitoring of patients that are suicidal or psychotic. This hospital has had to ramp

up security to help with violent patients.

Emergency rooms like this one are on the front lines of mental health care in

North Carolina, even though they are not funded and staffed to do so, even though

the environment in the ER is the opposite of what many mental health patients

need, and even though many ERs are unable to provide treatment. In the ERs

across our state, hope is hard to find if you are a mental health patient.

My name is Mebane Rash, and I am an attorney with the North Carolina

Center for Public Policy Research. But this is not just a job for me. I have a parent

that is bipolar. I have an uncle with autism and mental retardation that lives in a

group home in Person County. And, just after graduating from law school, I

worked on the implementation of the Thomas S. class action with Carolina Legal

Assistance, a mental disability law project. My guess is that you are here today

because personally or professionally this issue touches your life too. I spoke last

year at this breakfast, and I want to thank you for inviting me back today to give

you an update of our evaluation of mental health reform.

The Center is a nonpartisan nonprofit that studies the most important public

policy issues facing North Carolina. Part think tank, part watchdog, our Board of

Directors looks just like our state in terms of gender, race, political party

affiliation, from the East, West, and Piedmont.

There are several things in my mind that distinguish the work of the Center:

we are independent, our policy analysis is research-based, and we never lose sight

of the public in public policy. We take our research to policymakers, the media,

and interested citizens across the state, just like this group, because we want our

work to make a difference.

Today, I am going to talk first about the Center’s study. And then I want to

share with you some numbers – numbers that I hope will make it easier for you to

talk about the scope of mental health issues in your communities. I also will talk

about the recent elections and the state budget – and what both may mean for you

as advocates. Then, I am going to turn it over to my colleague, Aisander Duda, to

tell you about our research on how mental health reform has worked in other states.

[Slide 2: Part I] The Report. The goal of the Center’s evaluation of mental

health reform is to produce high-quality public policy research, to educate the

public about these issues, to raise the level of public debate, and to improve public


We released the first part of our study in March 2009. This was an in-depth

look at the history of mental health reform in North Carolina since Dorothea Dix

came here in the 1840s. This part of our report won a national award for most

distinguished policy research.

[Slide 3: Part II] The next phase of our research will be released this

winter, spring, and summer as individual articles on our website before being

published together in our journal, North Carolina Insight. There are articles on the

mental health system and who it serves; an essay on depression; an evaluation of

the three-way contracts between the state, local management entities, and hospitals

to purchase bed space for short-term inpatient crisis care; and a look at how the old

Mental Health Study Commission worked and whether we needs parts of it again

now– like independent staffing and the inclusion of consumers. All of these

articles assess the consequences – good and bad – of mental health reform over the

last decade.

[Slide 4: Part III] The final phase of our research looks at mental health

reform in other states, and Aisander will talk with you about that. But we also are

going to conduct a comprehensive survey of both the public and private mental

health work force in this state – positions, titles, number of vacancies, wage range,

turnover rate, education, training, experience, and demographics – believe it or not,

the state does not have this basic information. Based on our research on the needs

of the patients, funding streams, the work force survey, experiences in other states,

and interviews with those in the field, we will make findings and recommendations

designed to continue to improve the provision of mental health services in North


[Slide 5: Prevalence] Let’s talk first about prevalence – how many people

in your counties are estimated to have a mental illness, a developmental disability,

or substance abuse. To generate these numbers, we took the Division’s estimates

of prevalence and applied them to the most recent certified population estimates

for Chatham, Orange, Person, and Durham counties. So these are estimates as of

July 2009, using data last updated in September 2010.

Statewide, the Center estimates that just over 15 percent of North Carolina’s

population needs mental health care: roughly 9,000 of those people reside in

Chatham County; over 21,000 live in Orange County; 5,600 are in Person County;

and more than 40,000 call Durham County home.

[Slide 6: Number in Need/Served] To evaluate access to mental health

treatment, it is important to look at the number of people who actually receive

services through the state’s public system of care. The state’s 2010 reports are just

out, and here you can see how many people in your counties were treated in the

state’s psychiatric hospitals, developmental centers, alcohol and drug abuse

treatment centers, the Wright and Whitaker Programs, the neuro-medical facilities,

and in the community through the local management entities last year. In both the

O-P-C local management entity and the Durham LME, more than 20 percent of

those in need received treatment through the state’s public system of care.

Given the revenue shortfall we face this year, mental health consumers need

your help now more than ever. Whether you like the new political landscape or

not, this issue is not partisan, and those in need need you to remain involved.

[Slide 7: The Legislature] The New Republican Majority. Let’s talk

about the elections. On November 1st, the day before the elections, Democrats in

the state Senate held a 30-20 majority. The next day, voters gave Republicans a

31-19 majority. That is more than 3/5 – enough to override a Governor’s veto.

Republican Phil Berger will replace Marc Basnight as leader of the state Senate.

Senator Berger will appoint all Senate committee chairs and make all committee


Again last November 1st, Democrats held a 68-52 majority in the state

House. The next day, voters gave Republicans 67 seats. One unaffiliated

candidate (Bert Jones) was also elected, and he has said he will join the Republican

caucus, so Republicans will end up with a 68-52 majority in the House. But House

Republicans are short of the 72 votes needed to overturn a Governor’s veto.

Representative Thom Tillis of Charlotte will be the new Speaker of the House.

Between redistricting, the budget, and their first 100 days agenda,

Republicans in both houses will be busy. They already are at work, and in the

House they have consolidated many of the standing committees. Health, Aging,

and Mental Health will be combined into a Health and Human Services

Committee, with a Subcommittee on mental health. Health and Human Services in

the House is currently scheduled to meet on Wednesdays at 10 am. The legislative

session starts on Wednesday, January 26th at noon.

All of the legislators representing your districts were re-elected (Senators

Bob Atwater, Ellie Kinnaird, and Floyd McKissick; and Representatives Bill

Faison, Joe Hackney, Larry Hall, Verla Insko, Paul Luebke, Mickey Michaux, and

Winkie Wilkins), and all of them are Democrats. In the House, Joe Hackney will

be the Minority Leader. I think you need to engage your legislators in a

conversation about how to be productive on mental health issues over the next

decade. In our office, we call this a 10-year election because this General

Assembly will draw new legislative and congressional districts based on the 2010

census data. My guess is that you are going to need friends in both political parties

if you want your voice to be heard. The Center produces a citizen’s guide to the

legislature, and it will be online this year for the first time. I hope you will find it

helpful in your work as advocates.

[Slide 8: The Budget] The Budget. Right now, here’s what we know

about the budget. The most recent estimates from the legislature’s Fiscal Research

Division put the deficit at $3.7 billion dollars. That’s close to a fifth (19.5%) of the

total ($18.9 billion) state budget.

Governor Perdue held back 1 percent of every state agency’s funds in

August. Then she cut another 2½ percent in December. She froze hiring and

clamped down on pay raises, purchases, and travel. She’s also asked every agency

to prepare plans where they’d cut 5, 10, or 15% from their budgets. I attended a

budget briefing held by Secretary Lanier Cansler of Health and Human Services

recently. You should expect cuts. The question is what is going to be cut, and

that’s where you can make a difference.

[Slide 9: The MH Budget] In 2009, in North Carolina, $3.3 billion dollars

was spent on mental health services. About 70 percent of those dollars come from

Medicaid, and 21 percent are appropriations from the state. About 77 percent of

those dollars are spent on community services, and 21 percent is spent on state

facilities, like mental hospitals. [Slide 10: Medicaid MH Services] Secretary

Cansler says that Medicaid in North Carolina puts more money into the economy

than agriculture. Optional Medicaid services for adults comprise over 17 percent

of the state appropriation to the Department of Health and Human Services. The

Mental Health, Developmental Disability, and Substance Abuse Division’s budget

comprises more than 10 percent of the state appropriation to DHHS. We need to

think about where we think the system can realistically absorb additional cuts.

In our research on mental health reform, one of the places we are looking to

for hope is the innovative money-saving approaches other states are taking in these

tough economic times. My colleague is going to tell you now about our visits to

other states.

[Slide 11: Other States] [Aisander Duda] Good morning, my name is

Aisander Duda and I am a project consultant on the Center’s study of North

Carolina’s mental health reform. I would like to thank all of you for inviting me

here this morning.

[Slide 12: Cansler Quote] Two weeks ago, Department of Health and

Human Services Secretary Lanier Cansler declared “Mental health reform is over.”

He said, “Now we are about building a mental health system and doing the things

that we need to do to build a strong system across the state.” Cansler’s changes to

the system are intended to provide more consistent and stable service provision in

North Carolina.

Still, there is much about our current system that is in flux. There is a brandnew

provider model, CABHAs or Critical Access Behavioral Health Agencies, that

has been up and running for just under a month. Our ability to serve people in

crisis in the community is still being ramped up. And, there are pockets of the

state that even now do not have access to the services they need. We are fortunate

to have a Secretary that is open to new ideas and fresh perspectives in both

evaluating and running our mental health system. I think he has the hardest job in

state government right now.

[Slide 13: 50 States] During the course of this study, I’ve been a part of

closely evaluating North Carolina’s mental health system and also researching how

other states have reformed their systems. Remember that to implement the U.S.

Supreme Court’s Olmstead decision all states had to reform their mental health

systems. So we’ve visited other states to see what we can learn from their


The Center looked at all 50 states and selected six to visit and study in depth.

Three of those states [CLICK] – Kansas, Massachusetts, Minnesota – have

innovative or higher-performing mental health systems, while the other three

[CLICK] – Georgia, Michigan, and Nevada – are lower-performing and serve as a

cautionary tale for us. [Slide 14: Four Factors] We used four factors to evaluate

these states: governance, coverage, work force, and funding.

While I wish I had time to tell you about each state, this breakfast would

probably turn into a dinner by the time I finished. So instead I’d like to tell you

about three national trends that became apparent as I looked at what states around

the country were doing to comply with the U.S. Supreme Court decision and serve

those with mental illness.

[Slide 15: Funding] The first national trend that I found in conducting this

study was the search for new and more efficient funding models. Particularly in

the current economic environment, this is a crucial element in running an effective

and cost-conscious system. North Carolina is currently trying a new funding

model, called a federal 1915(b)(c) Combined Waiver for the Medicaid program.

Without going into too much detail and putting everyone down for a Saturday

morning nap, Medicaid waivers allow states to fund and operate systems outside

federal guidelines. This gives states more flexibility, more bargaining chips in

dealing with private providers, and long-term cost savings. [CLICK] In North

Carolina, the Piedmont Behavioral Health Local Management Entity has been

operating under this type of waiver for several years, with other LMEs are

scheduled to begin using this funding model within the next year.

[CLICK] Michigan has implemented its federal 1915(b)(c) Waiver

statewide and has had mixed results. On one hand, the state has been able to save

money and increase provider quality, but on the other hand Michigan has struggled

to match federal dollars with state dollars because of its economy and the

economic downturn. The state has seen consumers forced into dire situations in

order to get on the Medicaid rolls to obtain coverage. As one Michigan area

mental health director told me, “We’ve had to tell people who ask for help to come

back to us when they’ve lost their job, their house, and their support; because at

that point they will qualify for Medicaid and get the services they need.”

[SLIDE 16: Consumers] The second trend is in many ways the most

important trend I saw in my research – the inclusion of consumers in both their

treatment and in the governance of the system. In states that are really doing

things well, mental health consumers do everything from sitting on oversight

boards [pause] to working in recovery as Peer Support Specialists helping other

consumers [pause] to helping plan their own treatment and medication

management with doctors.

[CLICK] Even in Georgia, which is the birthplace of Peer Support,

consumers trained as Peer Support Specialists run several “Peer Support and

Wellness Centers.” These are stand-alone houses that offer temporary bed space

for adults for up to a week at a time, a 24/7 Peer Support phone line, and wellness

activities like learning about how to shop and eat healthy foods. They also offer

seminars on disability resources in the community. It’s like a Clubhouse on

steroids, completely consumer-run. The house that I visited was a beautiful twostory

house tucked into a wooded area just outside of Atlanta. If there was a place

to seek peace, rest, and community, this was it.

 [CLICK] I was also lucky enough to visit the Genesis Clubhouse in

Worchester, Massachusetts. This Clubhouse is an international training facility

and has one of the most robust programs to provide employment I have ever seen.

On top of the in-house jobs that the Genesis Club offered, they also have five

different levels of work opportunities in the community for their members. In the

last year alone, 162 of their members working full or part-time earned nearly one

million dollars in total salary.

[Slide 17: Prisons vs. MH] Last, but not least, among the emerging trends is

each state’s approach towards dealing with mental illness and substance abuse in

jails and prisons or in the mental health system. A psychiatrist who works in

western North Carolina told me that state governments have two options when it

comes to serving their mentally ill populations: (1) the Department of Corrections

can be the unseen arm of mental health system – housing people in prisons with

little or no treatment – or (2) the mental health system can be the unseen arm of the

Department of Corrections – with citizens being served at a much lower cost in the

community with treatment that prevents them from ending up back in jail.

There is no better example of this than the state of Georgia. [CLICK] One

in 13 people who are residents of Georgia are either currently incarcerated or

paroled. It is estimated that 60 to 70 percent of those inmates require either mental

health or substance abuse services, or both. When it comes to funding principles,

the state of Georgia has chosen to fund the prison system first and foremost,

leaving those with mental illness with few options and little hope of staying in the

community and out of jail.

[CLICK] By contrast, the state of Minnesota has done a very good job

funding its community mental health system, requiring less work of local Sheriff’s

offices. There only 35 percent of inmates require mental health services in the

state’s prisons. For comparison’s sake, Minnesota ranks 12th in the nation in per

capita state spending on community mental health services, while Georgia is

ranked 46th in the nation.

Now I want to return to what Mebane mentioned about North Carolina’s

hospital emergency rooms. In New York, the mental health system was designed

for emergency rooms to be on the front lines of mental health care. There is a

psychiatric ER in each of their LMEs. It provides a single portal of entry into the

mental health system. Psychistric ERs are the home base for Assertive Community

Treatment teams. These teams are designed to provide comprehensive,

community-based psychiatric treatment, rehabilitation, and support. These ERs are

funded and staffed to identify who needs help the most, what help they need, and

where they should get it. The only psychistric ER in the Southeastern United

States is in Charlotte, and it is funded by the LME mostly with local dollars.

Another unintended consequence of North Carolina’s reform is our use of

adult care homes to house those with mental health issues. In 2009, 64 percent of

all residents in adult care homes in North Carolina had mental illness,

developmental disabilities, or dementia. Currently, there is a federal investigation

of North Carolina’s use of adult care homes. In New York, a federal district court

judge has held that adult care homes are institutions that segregate residents from

the community and impede residents’ interactions with people who do not have


[Slide 18: Contact] It is our hope that state leaders in the executive and

legislative branches will continue to evaluate the mental health system. It is our

hope that the state will continue to think about the governance, coverage, work

force, and funding of the mental health system of care. It is our hope that this state

will continue to improve mental health services statewide or at least not allow the

services to deteriorate during the state’s current budget woes. It is our hope that

leaders will look inside and outside our borders for good ideas and worthwhile

innovations that can make a difference to consumers in North Carolina. Thank



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