Budget Cuts Mean Shrinking Access to Mental Health Services for DC’s Children

June 6th, 2011 | by A Guest blog from the DC Behavioral Health Association

Tragedies often bring us together.  That happened last week, as the DC Council held a hearing on the terrible shooting spree on South Capitol Street that is still fresh in the city’s memory.  Everyone at the hearing  — Council-members, the Gray Administration, and numerous public stakeholders  — all agreed that this tragedy was a sign that the District of Columbia must do a better job of meeting the mental health needs of D.C. children.

Yet at the same time the hearing was proceeding, several hundred children were in the process of having to find a new psychiatrist or psychologist following the closure of a mental health agency that had operated under contract with the District’s Medicaid program.  This is the third child-serving provider to close within the last six months.  As a result, families may face increasing challenges in getting mental health services for their children.

The District recently expanded eligibility for  mental health services for adults, and there are proposals to serve more children who need these services.  Yet cuts in payments to  mental health providers make it unlikely that the city can meet these important goals.

The City Needs More Mental Health Practitioners

Eight recent studies have found that the number of Medicaid-funded mental health practitioners is inadequate.   Yet the District has exacerbated this problem by cutting the amount it pays mental health providers to serve DC residents.  Lower reimbursements mean that fewer providers will choose to participate in Medicaid.  This suggests that DC’s mental health provider shortfall will grow worse.

What does worse mean?  At yesterday’s Council hearing, Dr. Adair Parr from Children’s National Medical Center testified that there is a 10-week wait for a child served by Medicaid to see a psychiatrist at Children’s outpatient clinic.  Thus, families who need help for their children already have to wait 70 days – or almost one-third of a school-year – to get their first appointment.

Can Existing Mental Health Providers Expand?

The fact that mental health providers are closing their doors is the tip of the iceberg.  Due to budget cuts, virtually all providers are under financial stress, which means that the agencies still in operation may not be able to pick up the slack from the agencies that have closed.

The D.C. Behavioral Health Association recently reviewed financial statements for six large mental health clinics.  Our findings are alarming; providers’ fiscal health declined precipitously since 2007.

Operating Margins Have Disappeared. By 2010, none of the providers in our survey of the District’s mental health clinics had a positive operating margin.   Instead, providers drew down their assets at the rate of $40,000 per month on average.  Operating margins are necessary to ensure that providers have enough resources to replace capital resources like computer software or absorb new clients.

Cash on Hand Has Shrunk: The amount of liquid assets mental health providers have relative to their liabilities has fallen by 97 percent in four years. This means many providers are wondering each month whether they can meet payroll and other bills on time. Our analysis suggests that mental health providers may face financial limitations on their ability to expand to meet growing need for mental health services.

Access to Treatment Must Be Addressed

The shrinking number of mental health providers has profound implications for the District of Columbia.  First, because of budget cuts, it is not clear whether providers have sufficient capacity to absorb a high volume of new clients.  Second, recent reforms may exacerbate the city’s existing shortage of mental health providers.  In 2010, D.C. expanded mental health benefits for adults, increasing by 30 percent the number of adults eligible for Medicaid-covered mental health treatment.  Yesterday, D.C. Council held a hearing on proposed legislation to expand the number of children referred for mental health services.  If enacted, the bill could increase the demand for mental health services – without ensuring that there are a sufficient number of providers.

The city’s efforts to expand coverage and identification of mental health needs are laudable and desperately needed.  If these efforts are going to be effective, the city must also address access to treatment by ensuring that there are an adequate number of mental health providers.

One Response to “Budget Cuts Mean Shrinking Access to Mental Health Services for DC’s Children”

  1. [...] jettisoned altogether or slashed to the bone, including children's mental health in a city where three clinics serving the poor already closed in the last six months. "They made a bad budget worse," says Ladduwahetty, the activist with DC for [...]