Privatizing mental health and drug treatment

Good Morning America did a strong piece on the privatization of traditionally public sectors of healthcare, including some efforts underway in Georgia. The piece also breaks down the profits one company made while turning away the sickest patients.

This is the central question from the story:

Critics, like Flanagan, question whether for-profit companies can provide quality care at the same time they try to meet or exceed shareholder expectations.

Gov. Sonny Perdue's administration has made a real push toward the privatized model in an effort to find efficiencies in mental health and drug treatment and ease over crowding in mental facilities. A lot of folks in the industry say it simply won't work, but then a lot of them also stand to lose money as private competition for state dollars shows up.

Illinois is ahead of us in this effort. And, according to the ABC story, the government there ended up suing a provider for doing exactly what many mental health advocates fear will happen here: Looking to serve only customers who can make them money, and shutting out the sickest of the sick. From the story:

In the lawsuit, the government argued that between 2000 and 2004 Amerigroup received $232 million in taxes to pay for Medicaid health care benefits but spent little more than half of the money it received on patient care.

The lawsuit was filed by a former Amerigroup employee named Cleveland Tyson. Tyson's attorneys, Frederick H. Cohen and David Chizewer, told the court that Amerigroup Illinois selectively enrolled healthy patients in its HMO in order to receive payments from the state for each new enrollee. At the same time, Amerigroup allegedly avoided signing up patients who would need care.

Attorneys said one of the most damning moments in the trial came when the government played a portion of a videotaped deposition of Amerigroup's former Chief Marketing Officer Herman Wright.

On the tape, Wright told attorneys his "growth strategy was to bring in all the, all the folks out there who were 'healthies,' which were basically the majority of your population."

When asked if he focused on patients who were sick or already in the medical system, Wright replied, "Well, I'm from the health insurance industry. From day one I think one of the, if I had told anyone I was going to go out and enroll as many sick people as I could in health insurance I would be fired."

Many thanks to Kristina Simms, a local mental health advocate, for calling my attention to this story.