America's Mental Health Care System in Shambles

By Art Levine, The American Prospect. Posted July 26, 2008.

It may seem arcane, but the reimbursement and spending priorities of government health agencies can literally have life and death consequences for people with mental illness. Just ask the family of Carolyn Howard, who was bludgeoned to death in 2005 on her front lawn by her adult son Keith, who suffers from paranoid schizophrenia.

The tragedy unfolded after the Florida Medicaid program abruptly dropped Zyprexa, the expensive antipsychotic medication upon which Keith Howard had depended, from its formulary of approved drugs. As a result, Howard was hospitalized twice in the two months before the killing, having heard voices telling him his mother conspired with murderers like Lee Harvey Oswald. An investigation by The Orlando Sentinel last year found that Howard was prescribed substitute medications but that they didn't help. Today, compelling federally funded studies question, in general, the effectiveness of such "second generation" antipsychotic medications as Zyprexa; these drugs, although they may work for certain individuals like Howard, also pose health risks like diabetes while boosting Medicaid's antipsychotic drug costs 10-fold in barely a decade. But Florida's inflexible, ham-handed approach to cost cutting, as opposed to more humane cost-effectiveness strategies in a few other states, shows the devastating impact of shortsighted budgetary policies.

On virtually every front, Medicaid and other government agencies, the drug industry, and health-care providers all play a part in a fragmented system that uses taxpayers' dollars to pay for treatments and drugs that too often don't work. At the same time, wholesale budget cuts, convoluted reimbursement rules, and conflicting funding agencies have helped create a perfect storm of waste, needless deaths, and ineffectiveness. Tragically, this has diverted scarce resources from proven, recovery-oriented programs such as "supported employment" that promotes a guided return to work, or integrated "dual diagnosis" treatment for the 50 percent or more of seriously mentally ill people who are also substance abusers. "Medicaid hasn't given much attention to mental-health reform, just to cutting costs," observes Dr. Robert Drake, the director of the multiyear National Evidence-Based Practices Project who also leads the Dartmouth Psychiatric Research Center. "We're funding vested interests to suck profits out of the system rather than helping the patient."

All told, financing policy plays a central role in a system that President Bush's own New Freedom Commission on Mental Health declared nearly six years ago to be in "shambles." Indeed, Medicaid and the broader public system of health care for people with mental illness is such an uncoordinated mess that a study last year by the National Association of State Mental Health Program Directors reached a shocking conclusion: Mentally ill adults who receive treatment in the public-health system die 25 years sooner, on average, than Americans overall.

One victim of the flawed system was Robin Eckman, a 53-year-old Fort Lauderdale resident with clinical depression who fell into a diabetic coma last year after her Medicaid-sponsored managed health-care plan refused to pay for her insulin. "If a friend didn't come out and take me to the hospital, I would have died," she says now. Eckman is allergic to the cheaper form of insulin approved by the HMO, run by StayWell, which also refused to pay for her antidepressants. Eckman is just one of 210,000 other Medicaid recipients, many with mental illness, who have been forced into for-profit managed-care plans as part of a free-market Medicaid experiment in Florida's Broward and Duval counties, along with three other rural counties. Yet this federally supported showcase for corporate-run Medicaid flexibility and efficiency promoted by former Gov. Jeb Bush has turned into a nightmare for some patients, according to critics, including a state inspector general. To top it off, the primary HMO provider, StayWell, was raided last October by FBI agents investigating it for fraud.

Given such abuses and chaotic care, it is especially ominous that the life expectancy of seriously mentally ill Medicaid patients has sharply dropped since the early 1990s. "What other group in America has lost 10 years of life expectancy in the last decade and a half?" asks Joseph Parks, the chief clinical officer for the Missouri Department of Mental Health and lead author of the 2007 report by the state mental-health program directors that partly blames the lack of coordinated care serving the mentally ill for the drop in life expectancy. Parks also says that the side effects of the new generation of "atypical" drugs -- primarily dangerous weight gain and diabetes -- are also "a contributing factor" to the sharp rise in early deaths for people with mental illness.

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