THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, January 4, 1995 TAG: 9501040412
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY TOM HOLDEN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 88 lines
Faced with uncertain state and federal funding, a board in charge of care for the mentally ill won City Council backing Tuesday for changes that could allow it to contract with private companies.
The Community Services Board hopes to gain status as a mental health authority. Under the proposal, the board could contract with private insurance companies, hospital systems and physician groups to provide care for the chronically mentally ill, but it would remain publicly accountable.
Final approval must come from the Virginia General Assembly, which is expected to receive legislation this year that would make the change for Virginia Beach and a similar board in Richmond.
The 10-to-1 City Council vote is an example of how the city's municipal health care agencies are trying to position themselves in the event that state and federal agencies, their prime source for money, are turned over to managed care companies.
Under managed care, health care providers - hospital chains, physician groups, nursing homes - agree to provide care for a set fee. Advocates say this not only contains costs but creates an incentive for providers to create programs to keep people healthy and out of the system.
``We know health care financing will change in the coming years, but we don't know how,'' said Dennis Wool, the Community Services Board's executive director. ``But if we are to survive, we need to compete in the health care market.
``We can bill the state and federal insurance programs directly, but if the state turns its Medicare program to a private insurance company, which is what happens in managed care, then we won't be able to bill,'' Wool said.
``We would not be dealing with a city agency billing a state agency but a city agency billing a private agency, and we can't do that by law.''
Virginia's community services boards were set up in 1970 to administer the state, federal and local money spent for mental health, mental retardation and substance abuse services.
They serve about 6,700 people a year.
The City Council's dissenting vote came from at-large member John Moss, who said it might be best for private companies to eventually take over services traditionally provided by the state.
``I think it's time to let the private sector enter the vacuum and provide the services,'' Moss said. ``This may be a good opportunity to let them withdraw from the market place.''
But Mayor Meyera E. Oberndorf disagreed, pointing out that the reason public health care agencies arose in the first place was because private companies were unwilling to help.
``No matter how much we encourage the private sector to come forward, it has never happened,'' Oberndorf said. ``When push comes to shove, people always turn to their local governments asking: `What are you going to do for me?' ''
Over the years, Virginia has gradually increased its dependence on Medicaid to underwrite its public mental health system. This has reduced Virginia's expenses but has limited access to only those eligible for Medicaid benefits. Those without private insurance and who were not eligible for Medicaid have not been able to pay for behavioral health care.
``They fall through the cracks,'' Wool said. ``They can't get help in the private sector or the public. That's where we use city money. We use city money to subsidize those who are without insurance and who are not eligible for Medicaid.''
But even under this plan, Virginia's Medicaid costs have continued to rise, Wool said. So the state officials are looking toward managed care as a solution.
But these programs have had limited success with the chronically mentally ill, Wool said.
``This model is based on the treatment of an acute episode, one that assumes the person will get well. The people we deal with will be persistently disabled. They need our support or they will end up on the street, or in jail or in a state hospital and that system is already being diminished.'' by CNB