No treatment?

It's been a tough few years for mental-health providers across North Carolina, as attempts at reform have led to sharp budget cuts and left many clients struggling to find services.

State officials have been trying to transform what they regard as a bulky, overly institutionalized system into one that is more flexible and can offer better services. But critics have asserted that in practice cuts have simply left many providers scrambling to provide care. And current economic woes, they note, have only made matters worse.

Weathering the storm? Dan Zorn at Families Together believes that by expanding and diversifying services, mental-health providers can endure the latest round of state cuts. Not all providers are as optimistic. Photo by Jonathan Welch

A month ago, the situation for Western Highlands, which oversees mental-health services for eight counties, including Buncombe, looked dire: The state took $1.9 million in funds, calling them "underutilized," and ordered Western Highlands to reduce its fund balance by another $1.5 million. In total, the state cut $5.4 million.

It was just another blow to a system that's been battered repeatedly in recent years. In 2006, New Vistas, the area's largest mental-health provider, closed, in part due to state cuts. That sent about 10,000 people looking for treatment elsewhere. Yet while new providers have arisen to take up the burden, the area has had to scramble after losing a total of $9 million in state money since 2007. Worse still, area providers and county officials were counting on Western Highlands' reserves to tide them over — until the state ended up cutting those too.

"They said that any service that isn't covered by Medicaid can't be covered by state dollars, so that's resulted in a reduction of services for some families," says Department of Social Services Director Mandy Stone, who chairs the board of Western Highlands. "They also reduced services for children and cut developmental therapy. On top of those cuts, we had to reduce our fund balance by $1.5 million. We'd been using the fund balance we built up to maintain services when the state made cuts."

The Buncombe County Board of Commissioners balked at cutting services to children and substance-abuse programs and has found funds to shore up services throughout the remainder of the fiscal year.

Still, says Stone, "We had a $2.3 million loss last year. We covered that with our fund balance. But our fund balance isn't being regenerated: Eventually we're just not going to have capacity to fill those holes."

What will these latest cuts mean? Opinions from mental-health providers range from bleak prognostications to guarded optimism, though all predict a trying period of upheaval.

Dan Zorn, head of Families Together, which provides in-home services for children as well as mental-health services for families, says that after this latest round of turmoil shakes out, services should improve overall.

"Over the next six months, we will see an acute lack of services," he tells Xpress. "A lot of things are still being finalized. But services will grow, and by next summer or fall we will recover and even see higher quality and more available services than before. So short term, it's going to be severe; long term, the situation's more optimistic."

Zorn notes that Families Together has added more in-home services and day treatment for children, among several other programs. Larger providers with an array of programs, he believes, will be less vulnerable if the state cuts funding in one area. And serving a larger number of clients will increase a provider's financial stability.

But Margaret George, program director for the October Road treatment agency, says she's already seen the consequences up close and is pessimistic about future prospects.

"I've seen people that badly need treatment going without," she told Xpress. "Things are going to get worse. You're going to see a rise in hospital activity, a rise in incarcerations because the people affected by this can't get the treatment they need. They don't just disappear. It's going to get much worse before it gets better."

"Unable to continue to function"

The economic downturn has led to a severe budget crunch, and Stone worries that the state will gut vital services as it struggles to plug budget holes. A letter she sent on behalf of Western Highlands to Lanier Cansler, the state's secretary of health and human services, spelled out the consequences of continuing cuts.

"Local communities will feel the impact in our schools, courts, hospitals and jails, placing additional strains on health and social service systems," reads the Sept. 30 letter, which Stone wrote just after the cuts. It goes on to describe a dire scenario that would unfold if the state cut Western Highlands' fund balance.

"We are rapidly approaching the point where there will be insufficient fund balance to fill the gaps. As a Board we have given serious consideration to the reality that the proposed cuts for next fiscal year are unsustainable through fund balance and may place us in the position of being unable to continue to function and require that the state take over. We are steadfast in our commitment to consumers."

The letter invited Cansler to Asheville for a meeting, and he accepted, coming the following Friday. After that sit-down, the state agreed to give Western Highlands back the "underutilized" $1.9 million, which Stone asserts hadn't been used sooner only because of the time it took for new providers to get former clients of New Vistas into their systems. It was a great relief to get that money back, Stone says, but it still leaves Western Highlands facing an uncertain future.

Part of the problem is that the state's mercurial approach to reform forces mental-health providers and the government agencies they work closely with to constantly adapt, Stone says.

"The landscape never stabilizes. They continue to change rules, reimbursement rates," she says. "That means you have service providers that are constantly having to adjust."

"We thought things had stabilized," says George in agreement. "We thought we had some breathing room. We don't. It hasn't gotten better. We've got a lot of people that need help and we've got shrinking resources to help them with."

The state isn't uncaring, Stone notes, attributing much of the chaos and loss of funds to a genuine push to improve the mental-health system. While she acknowledges the severity of the budget crisis, she argues that in many cases the state is trying to move those struggling with mental health into systems that haven't been built. She gives an example:

"They're closing the Level III and IV residential homes for kids. What they're saying is that those can be handled by wrapping therapeutic supports around children and moving [the children] into therapeutic foster homes. Yes, the research does indicate that's a far better approach."

There's just one problem: Those homes don't exist.

Out in the country

Of course, Western Highlands deals with more of Western North Carolina than just Buncombe. It also administers mental-health services in Transylvania, Henderson, Madison, Mitchell, Polk, Rutherford and Yancey counties. As Stone notes, rural areas are facing the same problems but with far fewer resources and far less infrastructure to fall back on.

"The challenges in those rural counties are massive," Stone says. "We really do have counties in this region that have no mental health services."

For instance, state cuts have left holes in the Madison County budget that can't always be filled, even with careful administration, County Manager Steve Garrison says.

"In our customer base, when we can't make resources meet, we do see some adults going without services," Garrison tells Xpress. "We have to put a cap on the number of customers. We route some of them to Buncombe, but that's not a route that leads to having self-sustaining services in our county."

Despite the challenges, he says, Madison is making progress. More psychiatrists are on hand at local schools and working with law enforcement. But while these efforts do help, Garrison notes, "The [state] cuts don't exactly seem equitable. We're left with some unpredictability, trying to string together a hodgepodge of services. We're going to need state support on some fronts. More beds [for patients], for example. There are some things that just cost a lot for a rural county to provide."

The shape of things to come

Zorn sees a viable system taking shape, and says he believes that Families Together will manage to weather the cuts, because it has recently diversified its services.

"Providers are going to have to be more diverse, more flexible," he said. "Maintaining relationships in Raleigh is critical to adapting to these changes." Those relationships can give providers better information about seemingly sudden changes, and allow them to adapt their organization (or plead their case to state officials) accordingly.

After a period fraught with challenges, he sees a workable system emerging.

Overall, before mental-health reform began, there were many small providers. But now, Zorn says, "That's over. You're going to see a few large providers for the mental-health system, but with better infrastructure and improved services."

Stone agrees with the ultimate direction the state is moving toward, but says that the endpoint isn't close.

"I agree with the push to move services to the community and not deal with them in a clinic or hospital unless absolutely necessary," she says. "But if community services aren't there, you don't have a way to support those individuals."

Stone particularly worries about "those who need a lot of structure, those who we're going to see in our detention center and emergency services if they don't get their medication." But she is concerned about a wide range of groups.

"What happens when children are moved out of residential homes but don't have adequate support is that the school has to deal with them," Stone says. "You'll see more individuals vying for hospital beds. I think Secretary Cansler has a solid vision — we support that — but we're going to have to build this new system before it works."

David Forbes can be reached at dforbes@mountainx.com or 251-1333, ext. 137.