by Joel Smith & r & As the tragedy of Hurricane Katrina revealed to the nation a social and political safety net that was badly frayed, so massive federal, state and local funding cuts seem to be outlining the vulnerability of Spokane County's mental health system and the people it's intended to serve. But the problem has been a long time in the making. The system is below sea level, and the waters have slowly been rising.

The dams will burst on Oct. 1, when Spokane County intends to cut $450,000 a month to mental health service providers like Sacred Heart Medical Center, Spokane Mental Health and Lutheran Community Services -- all part of the county's projected $7.5 million shortfall for mental health services over the next two years.

The county saw the storm coming in early July, when major changes in the way the federal government disburses Medicaid money to the state took effect. It warned of impending cuts, predicting, in August, a $3 million shortfall.

Service providers have already started laying off workers in preparation for the October cut-off. Spokane Mental Health, a nonprofit and the community's primary provider of 24-hour crisis services, has given the pink slip to some 65 employees. Lutheran Community Services has laid off 15 therapists and eight support staff personnel, almost 30 percent of its entire workforce. The New Bridge alternative school has been indefinitely shuttered; the Multi-Agency Adolescent Program (MAP) school closed, then reopened, but has been stripped of its in-house therapy staff. Spokane Public Schools will also lose mental health funding.

"Any cuts are painful," says Spokane Mental Health CEO David Panken. "These were really, really deep and extremely difficult to take."

And those in the mental health care community suspect that, like Hurricane Katrina, these cuts will likely hurt the poorest and least privileged the most. Service providers have filled the news media lately with dire predictions about how those people who can't find mental health care at pared-down facilities will just end up in emergency rooms, in jail, in trouble, filling Eastern State Hospital -- all costing more for the county to deal with than it would have cost to provide preventative care.

Many observers say they've seen this coming.

The immediate cause of the current crisis is the change in the way the federal government wants to deal with Medicaid, shifting the brunt of the costs onto individual states. In Washington, that's meant that $82 million that should have come down from the feds won't this year. Foreseeing this, state legislators earmarked $75.4 million in the last session to make up most of the difference over the next two years. They then handed that money to the state's Department of Social and Health Services (DSHS) to distribute among the state's 14 Regional Support Networks (RSNs) -- organizations that funnel state money into local mental health care programs.

DSHS decided to distribute the money in a new way this year. Doug Porter, with DSHS, says his organization had two funds to play with: federal Medicaid dollars (which, under new guidelines, can be used for nothing but Medicaid care for Medicaid-eligible patients) and state-only dollars, which can be used for any kind of care. First, he says, they calculated the state dollars. Then they laid out the Medicaid dollars, according to federal guidelines. When they did, he says, they noticed that many of Washington's smaller counties were taking a disproportionate hit from the lack of funds available under the new Medicaid guidelines. So, because they couldn't change the way the Medicaid dollars would be reimbursed, they reallocated the state dollars to try to make up for that hit, leveling the playing field somewhat by taking money away from larger counties, like Spokane, King and Pierce.

This is where things get fuzzy. Spokane County says it got short shrift in the allocation process and the reduced funding it says it will receive is directly responsible for the $7.5 million shortfall it's now projecting. County CEO Marshall Farnell says the discrepancy is between the county's and the state's estimates of how many people in the county are eligible for Medicaid help. The county says about 73,000; the state says about 77,000. But the state is the one signing the checks. This little difference of opinion, Farnell says, is worth $5.4 million, a big chunk of the mental health program's projected shortfall.

Officials at DSHS initially seemed baffled with Spokane County's calculations, insisting the county was actually coming out ahead in the allocation process. After sending three DSHS representatives to Spokane earlier this month, however, the department conceded that the county was indeed in the hole, and that deep, immediate cuts would be needed to keep it above water.

But it's not taking the blame for the county's debt. Nor is it eager to send a $5.4 million check. "We agree that they have a significant shortfall. We don't doubt they have to make these cuts," says Porter. "But we disagree that it's attributable to this distribution. If they have a 25 percent funding [shortage], we think we account for about 6 percent of it."

Instead, Porter points to a rash of problems in Spokane's mental health care management, going back for years. He says the local Regional Support Network has practiced "unsustainable spending," that it's bought more than its contract acquired, and that it has consequently drawn down its reserve, the safety net that cushioned the blow to counties like King and Pierce (though some suspect even these counties may be in a tight spot by January).

Farnell admits the reserve is almost gone but says that's how the county has dealt with steadily decreasing reimbursements from Medicaid: "We should have cut stuff a year ago, but we spent on reserves instead." It's a complaint heard across the country, as local governments scramble to compensate for the feds' shrinking responsibility.

However, Dr. Cornelius Bakker, recently retired as the psychiatric director at Sacred Heart Medical Center, says it's more than math that's troubling the county's mental health care system. He says the system's had problems practically since 1989, when the Regional Support Network first took over operations. "It's been downhill" ever since, he says.

Bakker calls the RSN "a complete waste," adding, "[It] has not been helpful. It has been a divisive force in the giving of mental health. It's been not to the benefit of the patients. The bureaucracy that has made the decisions -- and usually without discussion with the providers -- has had a very deleterious effect." He adds that the RSN's micromanagement of the details of care provision has been unquestionably harmful.

But he doesn't support the idea, floated recently by county commissioners, of dissolving the RSN altogether. He does, however, believe the county should drop its contract with United Behavioral Health, the for-profit firm that keeps the county's books at a cost of $1 million a year. "I have no equivocation about this," he says. "They should be fired, posthaste."

The county's Mental Health Advisory Board agrees. On Monday night, they voted unanimously to recommend just such an action to the board of commissioners, favoring instead an in-house financial operation, or a smaller, cheaper firm. King and Clark counties, feeling UBH was too costly, have also cut ties with the company in the last five years.

What happens next is anyone's guess. The county and DSHS still disagree about each other's math. The Community Services Department (which oversees mental health) has received a $2.8 million loan from the county, but that will do little to staunch the bleeding from the cuts. There is some hope that the county may receive more money from the state's newfound surplus. But that money wouldn't come, if at all, until next spring.

Despite the cuts, service providers sound strangely upbeat. Bakker says this is an opportunity to reexamine the way the county manages mental health care. He and many others welcome the return of Christine Barada as the director of Community Services (Bakker blames former director Kasey Kramer for much of the RSN's bureaucratic sluggishness) and sound encouraged by the county commissioners' seeming willingness to take an in-depth look at its problems.

Barada won't comment on her predecessor's work, but says she's "intent on opening lines of communication with providers and people in the community who have a real stake in this mental health system. There will be a change in that regard."

Lutheran Health Community Services CEO Dennis McGaughy is more blunt about the system's needs. "We just need more money," he says. "If you're a client, enough money means you got service. Not enough money means you got turned away."

Whatever reorganization the program can accomplish, it doesn't change the fact that hundreds, if not thousands, of people will soon be turned away from mental health care in Spokane County.

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