In August, Tennessee-based Strategic Behavioral Health unveiled plans to build a 72-bed psychiatric hospital in Scott County. The for-profit company's proposal - which will be considered by the Iowa Health Facilities Council in February - was greeted with enthusiasm by many public officials and community mental-health providers, dozens of whom wrote letters of support.


There were two notable dissenters: the area's existing hospitals. Genesis Health System and UnityPoint Health Trinity wrote in opposition, with an overarching argument that they are addressing current shortcomings in the system. The two hospitals plan to add 65 new inpatient psychiatric beds in the Quad Cities by the middle of 2017.

The mental-health system is complex, and inpatient psychiatric beds represent a small but crucial part of the mix - providing care for those who are a danger to themselves or others. In truth, though, the present void in the local market is less an issue of physical infrastructure than the dearth of psychiatrists and other mental-health professionals in the area. That shortage has been a major factor in the Quad Cities having too few beds available for people with serious mental illnesses.

Strategic Behavioral Health's proposal must also be considered in the context of a changing mental-health-care system. Iowa in 2014 shifted to 15 multi-county delivery areas throughout the state, with Scott County in a five-county region. Crucially, this system is intended to deliver care in "the least restrictive setting possible," according to Iowa Department of Human Services Director Charles M. Palmer. That represents a shift away from institutional and inpatient psychiatric care.

Still, nobody disputes that the Quad Cities region desperately needs more inpatient psychiatric care, especially for minor and geriatric populations. As the 2013 report "A Safety Net in Peril: The State of Public Health in the Quad Cities" noted: "While the community mental-health centers have proven to be cost-effective in providing high-quality outpatient care and community services, the need for inpatient care has gone largely unmet." The effect is that people with the most severe cases of mental illness are either not getting the proper level of treatment or are being transferred far away from the Quad Cities.

That hasn't abated in the past two years, but now the area basically has two competing plans to address the shortage: Strategic Behavioral Health's proposed hospital and the two local hospitals' expansions of inpatient psychiatric care.

They are not likely compatible. The Iowa Health Facilities Council's certificate-of-need (CON) process is intended to prevent an over-supply of medical services - which could lead to higher health-care costs overall.

Kenneth Croken, Genesis Health System's vice president of corporate communications, marketing, and advocacy, explained that the CON application comes down to a question of efficient delivery of services. "Creating more venues does not generate more practitioners; it only diffuses impact," he said. "It is dramatically less expensive to care for 10 people in one location than it is to care for five people in each of two locations. ... [With more providers,] you've got to duplicate infrastructure, and all of that expense puts upward pressure on health-care pricing."

Genesis President and CEO Douglas P. Cropper said in a letter that "Genesis' existing psychiatric beds and the Genesis expansion plan will provide services sooner and result in a more-comprehensive and less-costly alternative to the development of a 72-bed free-standing psychiatric hospital."

The Quad Cities' two hospital systems have also suggested that Strategic Behavioral Health could hurt their abilities to expand inpatient psychiatric care.

"It is our intention at this time to go forward with our expansion plan," Croken said. "Of course, that's always subject to re-evaluation if some of our worst suspicions [about Strategic Behavioral Health] are realized."

And UnityPoint Trinity, in a letter opposing the proposal by Strategic Behavioral Health (SBH), echoed that: "Existing providers in the Quad Cities community are in the process of modifying their mental-health-service delivery systems to respond to changing needs, and adding 72 inpatient psychiatric beds would greatly disrupt this effort." Furthermore, "SBH's proposal will undermine the ability of existing facilities to recruit and maintain qualified staff."

In comments to the Clinton County Board of Supervisors in September, Rodney Tokheim, vice president of business development for Mercy Medical Center in Clinton, Iowa, said that his facility could lose patients to the SBH hospital, adding that Mercy could close its inpatient psychiatric program. (Clinton County is in the same five-county mental-health district as Scott County.)

So when the Iowa Health Facilities Council considers Strategic Behavioral Health's CON application early next year, it has a lot of factors to mull. Will Strategic Behavioral Health's proposed hospital better fill the need for inpatient psychiatric care than the efforts of existing hospitals? Which carries more weight: broad community support for Strategic Behavioral Health's proposal or the promises of Quad Cities hospitals?

Expansion Plans

Genesis presently has 18 inpatient beds for adult psychiatric care at its west campus in Davenport. UnityPoint Trinity's Robert Young Center currently has 25 adult beds in Rock Island, with an additional six beds for children and adolescents. That's 49 current inpatient psychiatric beds.

Genesis, as part of a strategy initiated in 2012, plans to add 42 beds, including eight reserved for adolescent patients and 24 for geriatric care. The first five of those new beds - for children and adolescents - are scheduled to be available on December 1. Croken said the full expansion should be complete by July 1, 2017.

According to Robert Young Center President Dennis Duke, UnityPoint Trinity plans to move its 23 residential-rehab and detox beds and convert them into psychiatric-care beds within the next 18 months.

In total then, the two hospitals plan to add 65 new inpatient psychiatric-care beds - more than doubling the capacity in the Quad Cities by mid-2017. If both plans come to fruition, the Quad Cities would have inpatient psychiatric beds for 53 adults, 39 senior citizens, and 16 children - plus six "swing" beds at the Robert Young Center that could be used for any population.

"That would provide an ample number of beds for this area," said Michael Freda, president of the National Alliance on Mental Illness (NAMI) of the Greater Mississippi Valley and former chief operating officer of the Robert Young Center. Freda's organization was neutral on Strategic Behavioral Health's proposal.

Croken said his hospital will consider adding up to 35 additional beds for inpatient psychiatric care if there remains unmet need after the expansion.

Skepticism and Mistrust

Despite those plans, Strategic Behavioral Health's proposal has generated widespread support.

The company operates eight facilities nationwide and has three more in various stages of development, according to its filings with the Iowa Health Facilities Council. It plans to start construction of a $14.3-million, 55,000-square-foot hospital in Bettendorf in March and complete it in early 2017. (Those time frames assumed consideration by the Iowa Health Facilities Council in October. The board is now expected to hear the CON application at its next quarterly meeting, in February.)

SBH has not revealed where exactly it plans to build the hospital, although it said it will have an option to purchase property in place before its CON request is heard. Bettendorf City Administrator Decker Ploehn wrote in an e-mail that the company has not sought Tax Increment Financing or other city incentives for the project but has expressed interest in them.

The CON application said SBH's Quad Cities hospital would initially serve one population - likely adolescents - with other age groups added over six months.

While four letters in favor of the proposal came from people with relationships with Strategic Behavioral Health, more than two dozen others were written by Quad Cities community members - representatives of three school districts and four counties, city officials from Bettendorf and Davenport, parents, law enforcement, and mental-health professionals.

Those letters sketched a grim picture, in particular of nonexistent inpatient services for children and older adults. As John J. Willey, chair of the five-county Eastern Iowa Mental Health & Disability Services Region that includes Scott County, wrote: "At the present time, there are no beds in our region for individuals under 18 years of age. This automatically means a child or adolescent needs to be removed from his/her community to access this service. As the population ages, there is also an increased need for specialized geriatric inpatient psychiatric services, which is currently not available in the region."

And Lori A. Elam, director of Scott County Community Services, wrote that "because there is no children's behavioral unit in Scott County, a total of 157 children (voluntary and involuntary [commitments]) were transported out of Scott County to another city to a behavioral-health unit with a bed available in Fiscal Year 2013. ... These children were separated from their families for mental-health treatment." She added that in Fiscal Year 2013, "another 16 individuals went home because their parents did not want them taken across the state ... ."

It's possible that some Strategic Behavioral Health supporters were unaware of Genesis' and UnityPoint Trinity's expansion plans, although Croken said Genesis has been "as public as I know how to be."

But there's a clear thread among some Strategic Behavioral Health supporters of mistrust of the local hospitals.

In her letter of support for SBH, Janet Huber, president and owner of Compassion Counseling in Bettendorf and Muscatine, wrote: "Our local mental-health system is extremely broken and is not getting any better with the two current major hospital systems in our area."

In an e-mail, Dawn Vincent, vice president of operations for Southpark Psychology in Moline, wrote that her company "feels the need for an additional inpatient facility is vital. All too often those in need of inpatient services are turned away from the two facilities currently providing these services." She added that Southpark Psychology hopes "this new company will attract more psychiatrists and mental-health professionals" to the Quad Cities area.

Even some people who didn't support Strategic Behavioral Health's application expressed skepticism about local hospitals' ability to meet the need for additional inpatient care.

In an explicitly neutral letter, Vera French Community Mental Health Center CEO Anne Armknecht wrote: "Over the last six years, our local hospital, Genesis Health System, has decreased the beds being used for inpatient psychiatric needs, and had even closed [in 2009] its child inpatient psychiatric unit. No increase in services of a substantial nature had materialized in years. Therefore when Strategic Behavioral Health proposed building a new 72-bed inpatient psychiatric hospital, we were encouraged. Since that time Genesis Health System has proposed an accelerated plan to expand their behavioral-health services. And they have been more open to working with community providers than they have [been] in many years. Our hope is that either, or both, plans come to fruition, that inpatient psychiatric beds are increased in our community, and that the needs of the mentally ill are not ignored."

"There's a frustration [among] ... some of the providers in the [mental-health] community" about the longstanding shortage of beds, said NAMI's Freda, "and that also bubbles up to some of the governmental organizations in the community." Many professionals are aware of the nuances of the mental-health system, he added, but when people get turned away for inpatient care locally or have to be transported to another community, that speaks loudly.

And Diane Holst, a member of the Scott County Board of Supervisors who didn't support her body's letter of support, wrote that "I was uneasy about Strategic [Behavioral Health]'s statistics. It was not that Genesis and Trinity were filling the needs in the county and - unfortunately, because of the state's redesign of mental health - the needs of the five-county region. It's clear that the present need is greater than the capacity."

A Shortage of Doctors, Not Beds

Holst is alluding to questions about Strategic Behavioral Health's business plan, and in particular its pay mix (people with private insurance, people on Medicaid, etc.) and its staffing and recruitment of psychiatrists. Those are also key points raised by Genesis and UnityPoint Trinity.

In Strategic Behavioral Health's application, the company projects that 30 percent of its patients will be on Medicaid. "For both Genesis and UnityPoint Robert Young, our Medicaid payer mix is over 50 percent," Duke said.

UnityPoint Trinity, in its opposition letter, wrote that "SBH's proposed facility would cherry-pick the least-complicated and most-profitable patients, leaving the existing facilities with fewer resources to care for the patients with the greatest need."

"Effectively, they would be looking to create a two-tiered system of behavioral-health services," Croken said. Lower reimbursement rates for indigent and public-aid patients would impact Genesis' and UnityPoint's ability to continue offering inpatient psychiatric services.

By e-mail, I asked Strategic Behavioral Health founder and CEO Jim Shaheen and Director of Development Mike Garone to respond to the specific arguments made by Genesis and UnityPoint against the company's proposal. Garone responded that "we are not accepting media requests at this time" and didn't respond to a follow-up request.

But in its CON application, Strategic Behavior Health wrote that "as a hospital, SBH will be required to provide services under EMTALA [the federal Emergency Medical Treatment & Active Labor Act, passed in 1986] guidelines, which do not allow refusing services to someone with an emergency psychiatric condition. There should be no payer disparities between organizations. ... There is no evidence that SBH will be 'cherry picking' payers as has been publicly asserted by another provider."

Yet Strategic Behavioral Health's own projections of its payer mix undermine that claim.

The question of staffing and psychiatrists speaks to the real shortage in the community, which is in mental-health professionals rather than physical infrastructure.

"The lack of beds really is a symptom of a bigger issue, ... a function of not having enough psychiatrists in the area," said NAMI's Freda. "There is really a serious lack of psychiatric providers - meaning psychiatrists and/or advanced nurse practitioners with a certificate in psychiatry. ... The beds are almost like a rallying point. But the system is so integrated and so complex that it's not just an issue of beds."

As Croken noted: "People keep saying: 'We need beds.' Well, we don't need beds. Beds I've got. What we need are staff. ... So offering beds without staff is ... disingenuous. We want people to get effective care, not simply [to be] warehoused. ... There is no value to having beds if there is nobody to treat the patients in those beds. Our patients are not tired; they're ill. They have serious psychiatric issues that need the attention of our staff."

Genesis in recent years began a psychiatric hospitalist program, presently employing two psychiatrists for its 18 active inpatient beds. "We'll continue to expand our staff in support of the expanded bed capacity," Croken said.

He added that Genesis inquired how SBH would bring new psychiatrists to the area, and "we have been told that is proprietary, and they will not share their strategy."

So a key question is whether SBH or local hospitals can better recruit and retain mental-health professionals, in particular psychiatrists. Strategic Behavioral Health says it uses a national recruiting company.

The company's CON application doesn't specify its proposed hospital's level of staffing, but it states that "SBH intends to recruit highly trained and specialized clinicians (i.e., psychiatrists, psychologists, social workers, and counselors) to the local community to not only work within our hospital but work within the community in a 'shared resources' fashion." This suggests that Strategic Behavioral Health's model involves contracting with psychiatrists in private practice to provide services at the hospital.

Giving Reform Time

Those concerns about Strategic Behavioral Health's business practices and their impact on existing hospitals are, of course, less important than the issue of results. Assuming there's not a need for inpatient psychiatric care sufficient to support the expansion efforts of Genesis and UnityPoint and SBH's hospital, which of those would provide the best care at the lowest cost?

Croken said that Strategic Behavioral Health's facilities nationwide have an average length of stay almost twice as long as Genesis' and UnityPoint's - and higher readmission rates: "Care is important. But not as important as the quality of care. ... If your goal is to find a place to put somebody immediately, then maybe having a lot of beds makes sense to you. But if your goal is getting people out of care and returned to productive normalcy, the number of the beds is much less important than the quality of care delivered at those beds."

Strategic Behavioral Health's CON application states that its average adult length of stay is 9.5 days; Croken said Genesis' is 4.5 days. SBH's percentage of adult re-hospitalization for mental-health reasons is 13 percent, compared to Genesis' 6 percent. Duke said that in August, the Robert Young Center's average length of stay was 4.5 days, and its readmission rate (for any reason - not just mental health) was 10 percent.

Those outcomes obviously bear on the cost of care - which in turn affects the cost of both private and publicly funded health insurance.

Additionally, Robert Young Center President Duke said it's too early to know how Iowa's mental-health reform effort will affect how care is delivered - and consequently the need for additional inpatient beds: "Historically in Iowa, the system has been dependent on inpatient and institutional care. ... Iowa's plan for mental-health reform is moving away from inpatient or institutional care and creating a delivery system that is coordinated and integrated within the general health-care system, allowing for the patients to be treated in the least-restrictive environment rather than just simply having an inpatient bed for patients."

So while nobody disputes the need for more inpatient psychiatric beds in the Quad Cities and the five-county mental-health region in Iowa, there is a question of how many beds. "I think right now it's too soon, and we're not allowing the opportunity for reform to take full hold," Duke said.

To see what reform might look like in Iowa if done well, you could look at a three-year demonstration project undertaken by the Robert Young Center. The initiative worked with 366 patients who had a severe mental illness along with other simultaneous health problems. The goal, Duke said, was "to coordinate their care and integrate their care" within the general health-care system.

Integrated health care is particularly important considering that many people with serious mental illness have other chronic health conditions - a fact that Strategic Behavior Health can't address because its facility wouldn't offer any medical services.

The Robert Young Project project reduced emergency-room visits by 50 percent, inpatient psychiatric admissions by 54 percent, and inpatient medical admissions by 48 percent, Duke said, cutting health-care claims by $8.1 million. Furthermore, patient-submitted "quality of life" scores - measuring emotional, mental, and physical health - more than doubled.

"We were treating patients in the least-restrictive level of care, and the appropriate level of care," Duke said.

I asked whether Iowa's new mental-health system could produce similar results. "Absolutely," he said. "The reform efforts are underway, and they have some of the components that we've already implemented on the Illinois side of the river. ... The delivery system and the reform need the opportunity to continue to mature."

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