Mental health layoffs forecast

Local mental health providers will be forced to lay off as many as 200 employees by October because of a $3 million shortfall.

The unexpected lack of funds stems from a dispute with the Washington Department of Social and Health Services.

County officials say that federal Medicaid cuts coupled with a new DSHS funding formula that rewarded some counties at the expense of three of the state’s most populous ones leaves Spokane County more than $3 million shy of what it needs to operate its mental health system through June 2006.

Spokane County Commissioner Mark Richard said that shortfall will likely mean a 10 percent cut to crisis services such as emergency mental health hospitalizations and responses to those who are suicidal, and a 25 percent cut to outpatient care services like counseling and medication.

Layoffs would likely be system-wide and include everyone from doctors, administrators and nurses to therapists and office workers.

Richard has been trying since mid-July to convince the state to allocate more money to Spokane County, but said he’s losing hope that the state will fix the problem.

On Friday, two dozen owners and operators of group homes for the mentally ill questioned county officials about the decrease in funding, which the owners contend will stretch already meager profit margins even thinner.

Richard, who has worked closely with mental health advocates and other county officials to resolve the shortfall, told the group the decision had been made in Olympia and appeared to be political.

“I don’t think they adequately predicted the impact this would have on Spokane,” Richard said. “We’re going to see some pretty devastating cuts implemented.”

In an earlier interview Richard said the legislators from Grays Harbor and the Timberlands area engaged in last-minute maneuvering to take money allocated for Spokane, King and Pierce counties and direct it to others.

The shortfall has exasperated local officials, who said that an $80 million allocation from the state Legislature would not cover the loss of federal funding under the Bush administration.

Edie Rice-Sauer, the Spokane Regional Support Network’s administrator, received an additional $500,000 for the next two years from the state, but she estimated the county would lose between $200,000 to $400,000 each month from cuts to Medicaid.

“When you look at the percent, we were hit the hardest,” Rice-Sauer said.

Rice-Sauer said other regions in the state had received more money this year, and some were uncertain how to spend the money.

But DSHS officials say that’s not the case. Other areas needed the money more, said Dave Daniels, operations chief of DSHS’s mental health division.

Richard said he expects that the RSN public mental health system will request a $2 million loan from the county’s general fund.

And that loan may be granted. If the county’s mental health services take a hit, experience has shown that other agencies and departments also pay a price. Untreated people often need help from emergency services like fire departments and hospitals or end up crosswise with police and in jail.

“We can’t let the mental health services take the brunt of this. It’s a core service of the county,” Richard said.

That may mean other county services will be cut to make up a portion of the shortfall.

Daniels called Spokane’s complaints “overly alarmist.”

The county is in better shape than it says and shouldn’t be planning as many cuts as it is, he said. “I’m crossing my fingers and hoping they’ll come out with something less than they’ve been threatening,” he said. “If you make too big of a cut too early, you might be cutting services you can’t bring back.”

But waiting only means the cuts have to be deeper to make up for extra spending on the front end, said Spokane Mental Health CEO David Panken.

Even waiting until October will exacerbate the cuts, conceded Richard.

“We’re trying to balance delay with compassion for employees and people who won’t be able to receive services,” he said, adding that he’s still holding out hope for some kind of state funding increase.

Even if DSHS officials agreed with Spokane County’s assessment of the numbers, there’s little that can be done now, said Daniels. The money has already been allocated to other regional support networks.

One last possibility for relief would be a state agreement to forgive the fines that the county pays when it has too many patients at Eastern State Hospital, said Richard. That could make up about $1.4 million of this year’s shortfall.

Only Washington Gov. Christine Gregoire can make a difference on that front at this point, he said.

But Daniels said that’s probably not in the cards. It’s unlikely the state will budge on those fines, called liquidated damages.

So now it’s left for Spokane County to determine which services will be cut.

What’s clear to all involved is that what’s eliminated isn’t easily replaced.

Even if the state Legislature gives Spokane County more money for the 2007 fiscal year, starting next July, it will be difficult to restore many services, said Panken.

“The metaphor of trees being cut down is true,” he said. “You can’t just glue them back together.”