RICHMOND — Virginia’s top mental health official proposes a radical shift in hospital and community services so that the state will no longer spend half of its money serving 2 percent of its clients.

Dr. Jack Barber, interim director of the state Department of Behavioral Health and Developmental Services, on Tuesday presented a realignment plan to a group of lawmakers charged with reforming the system.

Barber wants Virginia to spend millions of dollars more over the next four years to build community services for the most seriously ill people, so that they have homes and the support they need rather than languish in the state’s psychiatric hospitals.

His proposal was one of several that the Joint Subcommittee to Study Mental Health Services heard on ways to keep mentally ill people out of hospitals and jails, and to ensure that they have the help they need to stay out of institutions.

All came with multi-million-dollar price tags.

Sen. Emmett Hanger, R-Augusta, who chairs the subcommittee’s finance work group and co-chairs the Senate Finance Committee, said Virginia could find the money it needs through Medicaid expansion.

“Everybody expected Congress to do something with the funds. As long as the Affordable Care Act is there, and we have the ability to participate, we should,” Hanger said.

He was one of the few Virginian Republicans who favored a narrow expansion when the ACA was first adopted, as long as Medicaid reforms took place. He is satisfied that they have.

Hanger said even before the November election, which gave Democrats more sway in Richmond, some of his Republican colleagues had begun to shift their views on accepting federal funding.

He sees it as a way to pay for mental health reform.

Virginia spends more than $575 million each year on behavioral health. About half of the money supports state-owned psychiatric hospitals that serve about 6,300 Virginians a year. The other half goes to 40 community services boards that serve about 306,000 Virginians.

Each year, hospital use and costs grow. The hospitals are at 95 percent capacity now and are expected in three years to have more patients than beds. Meanwhile, about 200 patients on any given day could be discharged if they had a place to live and services to help them keep their illness in check.

If nothing changes with the system, the state will pay $12 million more next year, while the problem worsens, Barber said.

If the state spent twice as much, it could begin to develop the types of housing and support services needed to keep people in the community, he said.

Once the services are in place, the state would give each community services board money to purchase hospital beds. The boards could earn rewards for having fewer inpatient days than expected, or be penalized for going over. Barber said the boards couldn’t ask localities to make up the difference because the goal is to have fewer hospital stays.

Barber made his presentation first on Monday to Hanger’s work group and then on Tuesday to the joint subcommittee.

The finance work group also signaled support to seek $13.4 million in funds to continue implementing other reforms underway by the department, $1.5 million for pilot projects to transport patients to hospitals without using law enforcement and unspecified amounts for jail diversion and supportive housing.

The full subcommittee is expected to meet again in December to formalize requests for the upcoming legislative and budget-making session.

It has one more year to develop its full slate of reform recommendation. The subcommittee, chaired by Sen. Creigh Deeds, D-Bath, was created following the tragedy in which a psychiatric bed was not found for Deeds’ son in November 2013. Hours later, Gus Deeds attacked his father and killed himself.

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Luanne Rife writes about the businesses, policies, discoveries and inventions that affect the health of people living in southwestern Virginia.

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