DSHS Analyzes Behavioral Health System; Rejects State Hospital Bid

Health Care

As directed by the Legislature, the Department of State Health Services recently analyzed the Texas public mental health system and requested proposals to privatize one of the state’s psychiatric hospitals.

DSHS released two reports on the system:

  • overview of the current system
  • recommendations to improve access, services use, patient outcomes and system efficiencies

The only proposal to privatize a state hospital was rejected because of proposed reductions in staff and medical care.

Analysis of Behavioral Health System

The analysis of the current system was completed by the Public Consulting Group this year under a contract from DSHS. The reports looked at the state’s behavioral health system, including

  • 37 Local Mental Health Authorities;
  • NorthSTAR Medicaid managed care waiver;
  • substance abuse prevention and treatment providers;
  • state psychiatric hospitals;
  • Medicaid fee for service and managed care programs; and
  • Children’s Health Insurance Program (CHIP) benefits.

Recommendations to improve the behavioral health system are divided into three main categories: service and delivery system, governance and oversight, and funding and financing.

  • System overview – Analysis of the Texas Public Behavioral Health System (PDF, 348 pages)
  • Recommendations – Recommendations for System Redesign (PDF, 82 pages)

Proposal to Privatize a State Hospital

DSHS announced on Oct. 3, 2012, that it would not accept a proposal from GEO Care to operate the Kerrville State Hospital. This proposal, the only one submitted to privatize one of the state’s mental health hospitals, cut staff overall by 21% (from 542 to 428) and psychiatric nursing assistants by 29% (from 167 to 118).

“It is my belief that these staffing levels are not sufficient to serve the individual needs of patients at this facility or to ensure a safe environment for patients and staff,” said DSHS Commissioner David Lakey. While GEO Care said it could save the State about $3.3 million and meet the Legislature’s goal of reducing costs by 10% over four years, the proposal received an overall score of 64 out of 100, six points less than the minimum passing score required by DSHS.

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