Hundreds of people with chronic mental illness have lost public health care in Spokane County in the past two years, sending a wave of sick patients to hospital emergency rooms, state psychiatric institutions, jails and homeless shelters.

Now the state’s mental health system is facing an $82 million shortfall in the next two-year budget cycle, setting off a furious lobbying effort in Olympia, where state leaders are trying to handle a $2.2 billion shortfall in funding for all state government programs.

“I think it’s fair to say there’s almost a panic out there at the realization of the size of the budget crisis we’re facing,” said Sen. Lisa Brown, D-Spokane. “We feel we have to provide services to these people. I just don’t know how we’re going to pull the rabbit out of the hat yet.”

The Bush administration has tightened enforcement of an existing federal law that says states can only use Medicaid on patients enrolled in the program or for approved services.

Historically, the Centers for Medicare and Medicaid Services allowed discretionary spending on patients who hadn’t filled out paperwork or made too much money to qualify for the program. A 2004 state report on the non-Medicaid population said that 73 percent of those who reported income fell below the poverty level.

While states like Idaho kept strict restrictions on benefits, Washington serves more than 40,000 people who aren’t enrolled in Medicaid – about one-third of the people who use community mental health services.

The new enforcement could cost Washington’s mental health system at least $41 million annually in federal money, according to state estimates. Replacing the funds would require a 20 percent increase in the state’s share of the program; last year, the state’s mental health expenses through Medicaid topped $575 million.

“It’s probably the biggest problem in mental health that the state of Washington has faced in a long, long time,” said David Panken, CEO of Spokane Mental Health.

Even if the Legislature can find funding, many programs have already been dismantled. In Spokane County, about 1,300 low-income people have lost coverage. The federal change will take effect on July 1. The state’s 14 regional support networks, which oversee the public mental health system, have rapidly begun to shed mental health clients in an attempt to comply.

In the fall of 2003, Spokane County’s public mental health system stopped serving more than 400 people with chronic mental illness. County officials say they have no way to track where they went for care or what happened to them.

Many of them apparently sought care at the city’s low-income health clinics, where they were treated by family practice physicians with little experience caring for psychiatric patients. Last spring, patients began arriving with empty medication bags at clinics operated by Community Health Association of Spokane. In one month, expenses at the clinics’ pharmacy jumped $100,000.

“These are not people who can pay,” said Dr. David Bare, the clinics’ medical director. “There’s no place else for them to go. We’re working beyond our scope of care. Our scope of care does not include patients with serious, chronic mental illness.”

‘The will to pay’

The federal cuts have trickled down to county and city governments. In December, Spokane County commissioners agreed to pay more than $150,000 to temporarily keep afloat a program that serves elderly patients living independently. Spokane’s public mental health system said it could no longer fund the program because of the Medicaid changes.

At the heart of the Spokane program are volunteers like 77-year-old Woody Hawkinson, a retired Air Force tech sergeant.

On Thursday, Hawkinson awoke at 3 a.m. to drive an elderly Medical Lake woman to an early-morning doctor’s appointment. Each month, he puts 1,500 miles on his 1997 Ford Taurus. He receives no money except for a 37-cent-per-mile reimbursement from the state.

“This is a calling for me,” Hawkinson said.

By using volunteers, Elder Services’ officials say they can care for patients at a cost of $4 per day per client – compared with $42 a day in a nursing home or $58 a day to house a psychiatric patient in jail.

Spokane County jail officials say they are already overwhelmed by inmates with mental illness. In the past five years, the pharmacy bill at the jail has nearly tripled, driven by the staggering increase in drugs used to treat mentally ill inmates. Last year, the jail spent $465,000 on psychotropic medications.

That doesn’t include the cost to hire a psychiatric nurse and a mental health counselor. Nor does it take into account the cost of opening a separate wing in the jail three years ago to house the burgeoning number of inmates with mental illness. On a given day, the jail cares for nearly as many mentally ill people as Eastern State Hospital, which serves half of the state.

“These people are ending up in jail not because they belong there, but because they are going off their medication,” said Sheriff Mark Sterk, who testified twice last year about the impact of cuts to mental health funding.

“What is the most appropriate way to care for them? I don’t think we should go back to the 1950s and try to hide them in the jails.”

Now, frustrated county officials will try a new fix: Closed-circuit conferencing with Sacred Heart psychiatrists who will treat inmates through the lens of a camera. Hospital consultants said the program could save the jail $68,000 just by making sure the inmates are receiving proper dosages.

If the inmates spend more than 30 days in jail, they lose their Medicaid eligibility. After their release, they must reapply for the program – a process that can take several months. Nationally, two of three psychiatric inmates return to jail within 18 months, according to a 1991 study.

Desperate to stem the number of mentally ill people in hospitals and jail, the county’s public mental health system opened a nine-bed triage center in Spokane last summer. Since June, the monthly census at the center has increased five-fold, at times forcing staffers to find overflow beds for acutely ill, often suicidal patients.

Patients can stay at the center for only 24 hours before they are released. Two out of three patients aren’t enrolled in Medicaid, and almost none have private health insurance, staffers said.

“The need of the non-Medicaid population is not necessarily any different,” said Kasey Kramer, Spokane County’s director of community services. “But the will of the public system to pay for it is just not there.”

‘On the streets’

With increasing frequency, mental health experts say, mental patients who aren’t covered by Medicaid are surfacing in jails or at the state hospital, where Spokane County’s public mental health system spends between $85,000 to $100,000 a month in charges for exceeding the number of beds it is allotted.

The stories are echoed at clinics and mental health centers across the state.

In northwestern Washington, another 500 to 800 people will lose care, and the region will lose more than $2 million in funding for two evaluation and treatment centers.

“What I’m hearing from the hospitals and law enforcement is that they are finding them in emergency rooms and they are being picked up by police,” said Chuck Benjamin, administrator for the North Sound Regional Support Network. “I’m sure that some are going homeless.”

At Comprehensive Mental Health in Yakima, officials are making plans to end psychiatric care for 1,800 people and to close 150 residential beds for people with mental illness.

“Those people will end up on the door of the state hospital,” said Rick Weaver, the center’s director. “They may not get in, but they’ll be at the hospital, or they’ll be on the streets.”