Controversial Psychiatric Hospital Project Up For Public Comment

Cedar Hills Hospital.jpg

Let the public comments commence.

Oregon health officials have declared that a for-profit company’s long-pending application to build a 100-bed psychiatric hospital in Wilsonville is complete, and it’s now time to hear from the public.

The project, by health care giant Universal Health Services, has been controversial since Universal’s first application in 2016, and there’s little reason to expect that sentiments for and against have abated. The project cuts to the heart of key issues in state mental health policy: Does the state need more inpatient hospital beds? Or is there a greater need for community-based and outpatient services? Would the proposed hospital improve services for Medicaid and other low-income patients, or would it mainly serve commercially insured patients?

Big hospital systems in the Portland metro area’s medical establishment opposed the project in 2016, and they were relieved when the state rejected it in 2017. But supporters, including Wilsonville elected officials and some mental-health advocates, are glad Universal is taking a second shot.

Universal hasn’t changed the $47 million project’s details much. Rather, the Pennsylvania-based corporation hopes that sentiment at the Oregon Health Authority and in the Portland metro area has shifted in its favor.

The health authority’s staff is reviewing the application’s hundreds of pages, accumulated during more than 18 months of back-and-forth between Universal and the state.

There’s no deadline for the staff to issue a recommendation. Nor is there a closing date set yet for public comment. But the agency has set a public hearing – by video – for April 15.

Comments can be submitted to Oregon Health Authority, 800 NE Oregon St., Suite 465, Portland, OR 97232, or emailed to [email protected].

“We look forward to a decision from the OHA,” said Universal spokesman Michael Sorensen. “The need for additional behavioral beds in the region continues to exist, and a new behavioral health facility could serve as part of the solution.”

Last year, a group of advocates, including politicians and some health care groups, urged Gov. Kate Brown to use her executive authority to approve the project as part of the state’s COVID-19 response strategy. The governor declined.

Legacy Among Opponents In 2016

Previous critics of the project have remained silent on the second attempt.

The Portland-based Legacy Health hospital system, the lead partner in the Unity Center for Behavioral Health in Portland, opposed the 2016 proposal. The 107-bed Unity Center, opened in 2017, is an effort by Legacy, Adventist Health, Kaiser Permanente and Oregon Health & Science University, to centralize their emergency, outpatient services for their psychiatric patients.

In its opposition to the 2016 proposal, Legacy said the hospital wouldn’t address the need to serve Medicaid patients and ran counter to the state’s growing emphasis on community-based mental health care.

Legacy did not respond to a request for comment from The Lund Report.

Because of its size and nature, the Universal project is subject to the state’s certificate of need process, which evaluates whether a facility is needed and provides reasonable access to quality health care at a reasonable cost.

Over the past 18 months, OHA officials have tried to nail down how many Oregon Health Plan members Universal expects to serve at the Wilsonville facility, and how much outpatient care it would offer them.

Universal already operates one other psychiatric inpatient hospital in Portland: Cedar Hills Hospital. But Cedar Hills takes relatively few Oregon Health Plan patients – a fact Universal blames on the coordinated care organizations, Oregon’s Medicaid insurers. Of the 15 CCOs in the state, only two relatively small ones, Trillium and Yamhill Valley, have contracts that put Cedar Hills on their in-network lists.

The rest – including the state’s biggest, Health Share of Oregon, which insures more than 380,000 low-income Medicaid members in the Portland metro area -- won’t put Cedar Hills in its network. “Thus, (Cedar Hills) receives few referrals, leading to relatively few Medicaid inpatients,” Universal wrote to the health authority.

Cedar Hills, and the proposed Wilsonville facility, would like to sign on with more CCOs, Universal wrote, and if they did, they would take more Medicaid patients, including at the proposed Wilsonville facility.

Health Share declined to comment to The Lund Report about why it declined to make Cedar Hills in network.

The state also quizzed Universal about whether its hospitals offer outpatient psychiatric services, especially for Medicaid members, once they are discharged from in-patient treatment. Universal said that it typically provided little, if any, outpatient care to discharged Medicaid patients, because in many states Medicaid won’t pay for outpatient care that is based in a hospital.

Surge Predicted In Demand For Mental Health Services

Universal, in a letter to the health authority last year, stressed that it expects a surge in demand for mental health services of all kinds – including inpatient hospital care -- to the COVID-19 pandemic.

“Mental health strains related to physical distancing and anxiety inflicted by COVID-19 are expected to have long-term mental health consequences,” Universal wrote. “Overburdened acute care hospitals were not particularly likely to allocate their extra capacity to inpatient psychiatric care prior to the COVID-19 crisis, and completely unable to do so during the pandemic,” wrote Ron Escarda, CEO of Universal’s services in the Northwest.

The societal stresses of the pandemic “suggest a coming surge in demand for mental health services, for which all Oregon providers and the OHA should begin preparing for immediately. Additional inpatient psychiatric capacity would help meet this coming demand,” he wrote.

Universal has said that the proposed hospital is financially viable, serving patients covered by commercial insurance, Medicare and Medicaid. At Cedar Hills, about half the patients are on commercial insurance, 40% are on Medicare, and 10% are on the Oregon Health Plan, Universal has said.

Publicly traded Universal is a giant in the niche market of psychiatric services. In the United States it has 185 inpatient hospitals and 12 outpatient facilities; in the United Kingdom it has 146 inpatient hospitals and three outpatient facilities. It also has 26 acute-care hospitals.

Its 2020 revenues topped $11.6 billion, up from $11.4 billion the previous year. Profits in 2020 were $943 million, up from $814 million the previous year.

The 2020 figures were substantially buoyed by taxpayers: Universal in 2020 received $413 million in grants from the federal government under the CARES Act, and another $187 million in grants in January of this year, according to Universal’s latest filings with the federal Securities & Exchange Commission.

 You can reach Christian Wihtol at [email protected].



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