OPEN MINDS Behavioral Health Institute recently convened a meeting of seven influential executives of America’s mental healthcare system to discuss our nation’s mental health policies and practices.

The agenda for our meeting was straightforward: we wanted these veterans -- some of them architects of America’s public mental healthcare system -- to tell us how the system should, and could, be improved. We were particularly interested in addressing the needs of the severely and persistently mentally ill. So we asked our panelists for their assessments of the present system and for their assumptions on which any effort to redesign healthcare should be built.

Over the course of three days, our panelists shared their insights on mental health policy, budget issues, health economics, Medicaid managed care, prescription medicines and how to integrate mental health into the larger context of America's healthcare system. By Sunday, after nearly 20 hours of presentations and discussion, we had heard several recommendations and, surprisingly, a fairly unified vision of what should and could be achieved.

Our panelists included: Ralph Aquila, MD, assistant clinical professor of psychiatry at Columbia College of Physicians and Surgeons and director of residential community service, St. Lukes/Roosevelt Hospital, NY; Don Gilbert, MBA, Commissioner of the Texas Health and Human Services Commission; James Haveman, Jr., MSW, Director of the Michigan Department of Community Health; Ivan Walks, MD, medical director of ValueOptions, one of the country’s largest behavioral healthcare organizations; William Burnside, private practice attorney (formerly Assistant Commonwealth Attorney, Virginia), whose seven cases before the Supreme Court of Virginia have all been decided in favor of his clients; Robert Egnew, MSW, MPH, behavioral health director of Monterey County, California (formerly president of the National Association of County Behavioral Health Directors); Brian Roherty, director of Metropolitan West, Washington, D.C. (formerly executive director of the National Association of State Budget Officers); and Monica Oss, President of OPEN MINDS.

From day one, our panelists wanted us to know that America’s mental healthcare system is in the midst of fundamental change and that new roles are emerging for purchasers, mental health authorities, patient advocates and consumers. Within this environment, panelists identified three underlying assumptions that must be addressed to improve the system and concluded with a call to action. We begin with the assumptions.

Assumption 1: New technology, i.e., newer medications, has radically transformed the mental healthcare landscape, creating a new set of patient needs.

Just as the development of integrated circuitry carried the world beyond the cumbersome mainframe, changing how we communicate and conduct our business, new technology--in the form of second-generation antipsychotic medicines, or atypicals--has markedly changed the management of schizophrenia and other severe and persistent mental illnesses. This positive transformation affects both the individuals suffering from severe and persistent mental illness and the mental healthcare system itself. In our panelists’ view, newer medicines are outpacing the field’s ability to respond and making new directions in mental healthcare necessary.

The newer medications, panelists agreed, have proven their clinical utility. Their ability to treat both the positive and negative symptoms of schizophrenia, improve cognition, reduce depressive symptoms and the likelihood of suicide is well documented in medical literature and clinical practice. Studies of newer agents also document their superior safety profiles and indicate they may be less likely than older drugs to be associated with development of serious side effects including tardive dyskinesia (TD), a debilitating neurological side effect of antipsychotic medication characterized by involuntary, and stigmatizing, muscle movements.

Despite these advantages, payers have been slow to embrace newer medicines because they are considerably more expensive per pill than older drugs. Further complicating the picture, according to our panelists, is a mental healthcare system dispersed among many different sectors--with, at times, poor communication among the various sectors--and a variety of funding streams fed by federal, state and local governments. In such a fragmented system, "cost savings" becomes less relevant as the "credit" for savings resulting from the wise allocation of resources in one area (e.g., pharmacy) may be realized in a totally different sector of the system (e.g., mental health hospitalization). States without shared communication or joint accountability among the different sectors of mental health services delivery can only evaluate the individual components of mental healthcare, thus, offering their individual sectors little incentive to manage total treatment costs.

Recognizing the resistance to ever more costly medications, within the last few years psychiatric studies have begun probing beyond drug safety and efficacy issues to examine a drug’s economic impact on the mental healthcare system. The parameters of these studies include relapse rates, hospital admissions, resource utilization and employment as a measure of the medication’s overall value. The findings reported from these studies show that newer medicines can reduce the frequency of relapse and the number of hospital admissions, and despite their higher per-pill price, may save healthcare dollars.

Responding to these studies and to a persuasive letter from Dr. Steven Hyman, director of the National Institute of Mental Health, Sally Richardson, the director of the Health Care Financing Administration’s Center for Medicaid and State Operations, recently wrote to state Medicaid directors saying:

"…the costs of ‘revolving-door’ re-admissions…due to lack of compliance with the older drugs because of side effects…are obviously substantial. Short-term savings achieved in formulary budgets by not including the new medications may be more than offset by spending on inpatient care."

Medication cost, within the larger context of total treatment cost, has become the new focus for dialogue among interested parties. The present system, which pays for and tracks care by its components--inpatient treatments, office visits, medication and so forth -- worries manufacturers and some advocates who fear that the system structure and states’ desire to reduce expenditures could limit access to an important new technology. Even so, both parties continue to pursue new avenues for cooperation, understanding that as our panelists pointed out, any system of finite resources must question new costs. While caution on the part of payers is understandable, everyone agrees it is in manufacturers’ and payers’ (and consumers') best interests to find new ways of talking about this issue.

Assumption 2: New technology requires a redesign of social programs serving the severely mentally ill to maximize opportunities for recovery and reintegration in community life.

Panelists were unanimous in their view that while newer medicines bring dramatic improvements over older drugs to those with severe and persistent mental illness, new drugs alone are not enough. To truly improve outcomes, the cornerstone of every recovery plan must be based on the concept of reintegration -- a chance to work, a place to live, and opportunities to develop friendships and contribute to a community.

And very good reintegration programs do exist — at both the state and county levels. These programs are having a profoundly positive effect. As consumers receiving newer medications have sought services such as education and employment training, a number of new programs have been developed to accommodate their needs, improving access to services, broadening the types of services available, and doing a better job of matching consumers to the appropriate level of care. It is precisely these types of community-based programs, coupled with the newer medicines, that has given rise to the reintegration movement, which holds that those with severe and persistent mental illness can lead meaningful and more self-sufficient lives. Reintegration, or a return to the community, is essentially a process that builds social networks of family and friends, and educational and employment opportunities that ultimately lead individuals toward more productive and less dependent lives. Part of the reintegration process, panelists concurred, also emphasizes support services for members of the consumer’s family, and these services should include education, psychosocial and crisis intervention. Reintegration, panelists agreed, is a critical component of stigma reduction efforts.

But, in some areas, not enough program resources (job opportunities, appropriate housing and opportunities for socialization) exist to accommodate the sheer number of people who want to make use of them. This, panelists conceded, is a significant challenge. And the lack of continuity between state hospitals and community care for people with schizophrenia remains striking and costly. The pattern that emerges is one of an inconsistent or unsustainable linkage between state hospitals and community services after discharge and subsequent repeated hospitalizations. While panelists agree that there may be sufficient money within the mental healthcare system to improve outcomes for the severely and persistently mentally ill, the money frequently does not follow the consumer back to the community. Such systems are too fragmented to use the money effectively, focusing as they do on the discrete components of care — hospitalization, outpatient therapy, medication, residential services and so on. In such fragmented systems, consumers and their families are often forced to negotiate their transitions from one level of service to another. As one panelist said: "there is not enough money in the system to do the right thing, nor enough to continue doing the wrong thing." Ultimately, an integrated healthcare delivery system that encompasses, rather than carves out, mental health services could go a long way toward addressing the problems and maximizing human and monetary investments in recovery.

Panelists identified another factor undermining the system, the "business- as - usual" attitude among many mental healthcare providers whose expectations for the people with mental illness with whom they work have yet to catch up with the realities made possible by newer medications. Panelists agreed that a redesigned system requires not only a new model with different policies and practices, but also a new culture to effect the necessary change: In a new system, consumer choice will be a major component of any recovery plan.

While redesigning the system will be challenging, developing a new culture will add a new layer of complexity to the situation. Our panelists expressed real concern about the ability to reduce stigma surrounding mental illness in society at large. Stigma reduction can be an even greater challenge within some cultural and ethnic groups. Developing a new culture, they believe, will require a new generation of social champions espousing higher expectations than currently exist within the mental health community. And while newer medicines have dramatically altered the landscape, some would contend that a social revolution--born of decentralized, local control--is equally important and is proceeding at pace. At the core of the social revolution is the concept of choice for the severely and persistently mentally ill. In this progressive environment, consumers have a much greater voice, deciding with the help of their recovery team --which services they will use (including housing, education, transportation and employment) and which doctors they will see. As one panelist pointed out: "the new abilities of consumers demands that the mental healthcare system be redesigned."

Just as efforts to redesign the system must acknowledge the diversity of communities and cultures, a culturally competent system will recognize and relate to the health beliefs, practices and status of the community it serves.

Some panelists believe that corporations and their CEOs can become an important catalyst for change. As more consumers--the able mentally ill--seek employment opportunities, business leaders can advocate on their behalf. Leading by example will encourage greater numbers of employers to provide opportunities for fulfilling work. But while business leadership can have a significant impact, panelists cautioned not to expect one charismatic businessperson to change the cultural framework. That change must be forged from within the mental healthcare community itself.

Assumption 3: System redesign requires the political will to establish reintegration as a priority at the state and local levels.

If sound public policy is to triumph over politics, understanding the role of states as service providers/coordinators is key. And the message from the states seems clear: improve access and quality and reduce program costs. But these goals--with so many players and funding streams--are elusive targets and may prove difficult to reach.

To get there, states and--more recently--counties have turned to managed care, which, in turn, has focused on the most expensive component of psychiatric care—hospital admissions. With its emphasis on accountability, early release and discharge planning, managed care is encouraging community-based systems of care. However, as more states and counties insist on managed care for their Medicaid populations, it will continue to be important to focus on quality of care and services that foster the reintegration process.

Since the growth of behavioral managed care could fundamentally change the roles and responsibilities of state mental health authorities--and not all states believe that their carve-out behavioral health programs are successful--panelists agreed that it will be important to define the role of government and standards we use to determine what is appropriate care. After all, managed care is both a social and business contract involving purchasers, providers, advocates, government and persons with mental illness. In such a system it becomes essential to define the contract and the responsibilities of each of these parties. Nowhere is the intent of the covenant more revealing than in the performance contract. The essential question must be asked of all parties at the table: what is your desired outcome? Financial risk is likely to be at the heart of the discussion. But so, too, is the equally powerful concept of value. Value, for example, might be judged in terms of a managed care organization’s administrative competence, cultural training expertise, meaningful information analysis and accountability. A provider’s clinical and cultural competence is another measure. Cultural competence might be defined as a system or provider’s ability to deliver cost-effective, quality services equitably across culturally diverse populations. Government’s role might be valued in terms of shaping the political will to fund the system appropriately, shaping rules and remaining a vigilant watchdog. A drug’s value in this environment would be judged by its ability to reduce relapse and hospitalizations, thus making a return to the community and employment more likely.

Within the context of decentralized, local control, legislators must confront some difficult choices as well. One such choice is whether to keep open underutilized state psychiatric hospitals. These institutions consume disproportionately large amounts of funding in return for the amount of care they provide. Deciding how best to control costs in the post-institutional era in which community-based and managed- care systems are dominant is likely to lead legislators to rethink their continued commitments. Panelists agreed that for funding to be truly effective in the community-based era of care, dollars must follow consumers back to their own communities.

In addition to their three basic assumptions about the mental health system, panelists identified what they believe needs to be done to redesign the system. Their call to action appears achievable, but without addressing these challenges, and doing so in a way that moves beyond narrow interests, the system does a disservice not only to the people whose lives have been touched by mental illness, but to their communities as well. Our panelists concluded by calling on all parties (state and county mental health and Medicaid directors, state budget officers, professional organizations, consumers and advocates, purchasers and managed care administrators, business leaders, legislators and their health staff members, and governors) to join in the discussion that will lead to a system we can all be proud of.

• First, all interested parties must identify and agree upon appropriate models of mental healthcare that optimize recovery, productivity and quality of life while minimizing societal costs related to severe and persistent mental illness.

• Second, these parties, especially those working in community mental health centers, must begin to build a new culture that cherishes the promise of reintegration, values diversity, and helps to replicate appropriate mental health system models.

• Third, these parties must shape a process by which the new models and culture can emerge and flourish. Inevitably, communication will lie at the heart of this process. We must identify the appropriate forums to discuss the issues and rely on culturally diverse groups of dedicated individuals to construct and carry the vision to others for validation and endorsement. Inevitably, we must engage the expertise of governors, legislators and state finance officers to build the new systems on a solid legislative and financial framework so that our new systems can endure.

Clearly, the call to action points to the need for increased coordination and cooperation throughout the system. Understanding that care for the severely and persistently mentally ill spans a continuum of services, it is important finally to recognize that these services are inextricably linked. To reduce costs or streamline utilization at one point simply by pushing patients through to the next point in this continuum is ultimately counterproductive. This is cost shifting, not cost cutting.

The question, then, is: how do we build and encourage participation in a systems where the players regard themselves as partners—the only sort of systems, it seems, that can realistically meet the challenges ahead.

Because OPEN MINDS views this conference as a starting point on a journey of examination and discovery we ask our readers to consider our call to action and talk with us. We’d like your thoughts on the subject before we meet with our panelists again. Write us, e-mail us or call us with your reactions to Mental Health, Medicine and the Public Interest.

Mental Health, Medicine and the Public Interest was supported by an unrestricted educational grant from Eli Lilly and Company.

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