Rejected Once, Pennsylvania Corporation Files New Bid For Oregon Psychiatric Hospital

Willamette Valley Behavioral Health Facility.PNG

Three years after failing to win state approval to build a 100-bed psychiatric hospital in Wilsonville, a multinational health care giant is trying anew, arguing that the mental health care crisis in Oregon has only worsened since its first application was rejected.

The latest bid by Universal Health Services proposes a $47 million facility that would offer a range of treatment, from inpatient stays to outpatient care for patients with substance abuse problems. 

The application for a “certificate of need” says the facility is necessary to treat the expanding population of mental health patients in the Portland area. It also broadly slams Oregon’s mental health care system.

In particular, the document points a finger at the Unity Center for Behavioral Health, located in Northeast Portland. The 107-bed facility, the state’s only emergency psychiatric hospital, has “failed” to reduce demand for inpatient psychiatric care and provide a “safe and stable place” for patients, the application asserts.

“Instead of representing a solution, the Unity Center has instead exacerbated the mental health crisis facing Oregon residents,” Universal Health says. The for-profit company, headquartered in Pennsylvania, owns Cedar Hills Hospital, a mental health facility in Southwest Portland.

Universal Health is a global heavyweight in behavioral health care. It has more than 350 hospitals and other facilities in the United States and the United Kingdom, staffed by more than 87,000 employees. In 2018, the publicly traded company reported a profit of $779 million on revenues of $10.8 billion.

Universal filed its previous Wilsonville application in November 2016. Opponents blasted the company, saying it was only interested in profits and that the state should give Unity a chance to work. Unity opened in January 2017.

But Unity faced problems from the get-go, dogged by complaints of violence, abuse, and neglect, and, most recently, big financial losses. 

Unity also doesn’t have the capacity to meet local demand, Universal says in its latest application, filed last year. It says that the Northeast Portland center is often at capacity and refers patients to Cedar Hills.

Universal Health says Unity Center added few if any inpatient beds to the metro area’s psychiatric care network. Instead, the four hospital systems that created the center – Legacy Health, Kaiser Permanente, Oregon Health & Science University and Adventist Health – simply shifted their psychiatric beds over to the Unity Center, the application argues.

Application Raises Many Questions

It’s widely acknowledged that Oregon lags in providing mental health care. But it’s unclear whether Universal Health’s project would offer solutions:

  • Does the  Portland area need more psychiatric beds? 
  • Would Universal Health’s project help relieve jails and hospital emergency departments of patients who need care?
  • Could it address Portland’s homeless problem by providing treatment to people with mental health problems who end up on the streets?
  • Or would it largely cater to people on commercial insurance plans and Medicare? 
  • And how much progress have health care organizations and the state made in opening more outpatient facilities and other low-cost alternatives to expensive inpatient beds?

Universal’s application is not yet complete, and the state has not formally evaluated it. Once the health authority considers it's ready, officials will schedule hearings and solicit public input.

Unity Center hasn’t submitted comments yet or responded to Universal Health’s claims. But the facility, which is run by Legacy, acknowledges it is swamped with seriously mentally ill patients who need long-term care and that the state’s main mental hospital, Oregon State Hospital, doesn’t have enough beds.

“The high percentage of (Unity) patients waiting for a bed in the Oregon State Hospital, and the lack of available resources in the community for patients needing longer-term care both contribute to a longer length of stay at Unity Center,” the hospital told the Oregon Health Authority in a recent report outlining Unity’s financial losses, which are projected at $21 million for the current fiscal year.

First Proposal Faced Heavy Opposition

Universal Health’s original application was divisive. 

Some medical groups and psychiatrists backed the plan, saying more mental health inpatient beds were needed. But the Oregon Health Authority ultimately rejected the proposal, saying the state favors prioritizing outpatient treatment, in part because it is much less costly than running inpatient facilities.

But any initiatives for increasing outpatient care since 2017 have not had much impact, Universal Health says in its new application.

“Unfortunately, even after implementation of several (outpatient initiatives), Oregon has continued in a state of crisis with respect to mental health and substance abuse, due in large part to continued lack of access to a sufficient supply of inpatient psychiatric beds,” the application says.

Critics of the 2016 proposal noted that the Wilsonville facility would take few if any low-income Medicaid. That’s still true with Universal Health’s new project. Medicare, commercial health insurance plans and other similar plans would provide 86 percent of facility revenues, with Medicaid providing just 13 percent, according to the filing.

At a hearing in 2017, critics said the most desperate need is for more psychiatric facilities to handle Medicaid patients, not beds for people on commercial insurance plans.

However, Universal Health asserts there is a need for more psychiatric beds across the demographic spectrum, given the steady population growth of the Portland metro area and the anticipated growth in the coming decade. The company said Oregon lags far behind national standards for the number of psychiatric beds in relation to population size.

Application Cites Lack Of Psychiatric Beds 

State policy urges hospitals to use beds for psychiatric patients when they’re not needed for other purposes, if possible. But hospitals in Clackamas, Multnomah and Washington counties have not done that, the application says.

The company estimated there is a surplus of 357 acute-care non-psychiatric medical beds in the tri-county area. “This surplus results from acute care providers maintaining excess inpatient bed capacity, which they have been unwilling or unable to convert to psychiatric beds. This has resulted in a severe shortage of inpatient psychiatric care in Clackamas, Multnomah, and Washington counties and contributed to the declaration that Oregon faces a mental health crisis with high rates of (emergency department) boarding and incarceration of mentally ill individuals in jails rather than hospitals,” the application asserts.

It’s difficult to convert medical hospital beds to psychiatric beds, in part because psychiatric patients need specialized staff, like psychiatrists and psychiatric nurses, who typically don’t work at regular hospitals.

Universal Health says that reality underscores the logic of creating a facility such as the proposed one in Wilsonville.

Psychiatric Patients Housed in Jails, ERs

In its application, Universal Health argues that large numbers of people with mental health problems are kept at metro-area hospital emergency rooms – a practice known as “ER boarding” – as well as at local jails. But it’s unclear whether the Wilsonville facility would help ease those problems. People with mental health issues also often have multiple medical problems, and the proposed Wilsonville facility would not be equipped or staffed to handle many such cases.

Still, Universal Health said it would have no trouble filling the Wilsonville facility and turning a profit. A flood of patients is turned away from Universal Health’s 98-bed Cedar Hills facility because it – like Unity Center – is now filled to capacity, Universal Health says.

But to win approval, an applicant for a “certificate of need” must prove that the proposed facility is the most cost-effective way to deliver services.

The last time around, Oregon Health Authority said Universal Health’s proposed psychiatric hospital would not improve access to care and was not the most cost-effective means of delivering care.  

You can reach Christian Wihtol at [email protected].

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