Landrieu needs to lead, not pose, on spending issues

As noted in yesterday’s post, one challenge Louisiana must meet as it evolves towards a more effective and efficient indigent care system is dealing with mental health issues. This requires analysis and leadership rather than the posturing exemplified by New Orleans Mayor Mitch Landrieu.

Part of mid-year budget corrections involves the state reducing funding for indigent mental health care. As Medicaid funds from federal sources few recipients for this service, states pick up the bulk of this, and Louisiana, with its aberrant charity hospital system, until recent years funneled the vast bulk of its spending on this to those institutions or to nursing homes. With cuts now necessary until the end of this budget cycle, these hospitals must absorb the bulk of them, including disproportionately those in the care of the indigent mentally ill.

This upset Landrieu, who asserted an issue looming large for his administration was crime, and he noted correctly that less servicing of the indigent mentally ill increases crime and its costs. He called these cuts therefore counterproductive and implored Gov. Bobby Jindal generally and the Louisiana State University System specifically to reconsider them.

We can perhaps put aside the fact that Landrieu did not address the actual reason why these cuts came, because of a state fiscal structure that leaves the state with surplus money for spending on low-priority items while higher-priority needs, almost all in the areas of health care and higher education, get squeezed. With almost $5.5 billion idling in funds produced by some 300 constitutional and statutory dedications, a significant portion of which never would get spent for their designated purposes, the state is awash in cash but unable to direct it to where needs are except by separate appropriations bills, until reform of this inflexible system occurs.

But Landrieu also demonstrated misdiagnosis of resources allocation in behavioral health policy, if not actually having contributed to the problem through inattentiveness. As it reforms its wasteful institution-based, money-follows-the- provider indigent health care system to one that is diversified where money follows the patient, maybe its most inefficient part has been in this policy area.

As with other states, when the deinstitutionalization paradigm took hold about 40 years ago, which argued many of mentally ill did not have to live in large, state-run mental hospitals, Louisiana cut them loose with few transitional elements in place, and likely went overboard in doing so. As a result, some who should not have been put into the community and cannot live reasonably ordered lives outside of hospitals were cast adrift, while others who could lead lives close to normally behaving began to rely voluntarily on charity hospitals and/or involuntarily on law enforcement for their care.

Both choices spend resources in this kind of care very inefficiently and cannot entirely address safety concerns of both the individual and of the public. Like other states, in recent years Louisiana has increased its attention to managing a continuum of care for these individuals, which in most instances proves much less expensive (older data estimate direct savings of at least 15 percent compared to institutional care) than providing acute care repeatedly or longer term care in less appropriate settings, such as having the mentally ill reside in nursing homes rather than less restrictive settings. This has been accomplished through increased emphasis on outreach programs and through the use of programs that encourage living in group settings in the community and with clients’ families in home environments.

Landrieu complained about cuts that affect acute care of mental illness. But these are areas that should be reduced anyway, in favor of home- and community-based solutions, along with the realization that it would be best for some people presently not in institutions to be placed newly or back into institutions. Rather than call only for restoration of funds for a leaky acute care system for dealing with mental illness, Landrieu at the very least needs to supplement his remarks, if not replace them, with a call to system reform that encourages transferring resources for this that presently go to charity hospitals or other intermediate care facilities towards home- and community-based care networking.

Instructively, Landrieu did not comment on a report that showed New Orleans had the second-highest rate of homeless, nor the significant discovery that its proportion of mentally ill homeless was about double the national average. In part, this is a result of the rush to deinstitutionalize and a fragmented care system concentrated too much on the extreme of acute care. With increased crime, this is another example of the indirect costs of a poorly-functioning behavioral health care system.

Obviously, we should want a state fiscal system that does well in priorities in spending, necessitating both constitutional and numerous statutory changes. However, within an area of policy also we need the most efficient and effective use of taxpayer dollars that can achieve the best outcomes. As a part of the entire overhaul of the state’s indigent health care system that will require removing most of the present charity hospitals and state developmental disability centers from state ownership, perhaps some of these can be converted to serve as facilities to handle a larger number of the mentally ill who, in their own best interests, need to be back in institutions.

Yet remaining resources do not need devoting to state institutions or to Louisiana’s notoriously over-bedded nursing home sector, in dealing with behavioral health issues. They would go further in serving more and in better ways those with mental health problems by steering them to home- and community-based services. As far as politicians go, Landrieu must learn not just to gripe about money, but to advocate the use of it more wisely and implement such solutions at the macro level of state fiscal policy and the micro level of specific policy. Had these kinds of programs been in place, he might have found the reduced amount of money the state has to offer to pay for these services would have been more than enough to provide more of them than it could prior to such reductions, and he’d have no letters to write.