The reform plan that legislators approved in 2001 called for diverting money from the state hospital system -- predicted to net $95 million in savings between 2002 and 2007 -- to help pay for outpatient care provided by private companies.
The state's mental hospitals are often the only inpatient care available for those without private health insurance. The plan assumed that the need for hospitals would decrease as new outpatient services became available.
It hasn't worked out that way.
The outpatient services didn't develop, and demand for admission to the smaller hospitals soared as more people with mental illness slipped into crisis. Though patient beds have been cut by nearly a third since 2000, the promised savings from a leaner hospital system have evaporated.
In February 2007, community hospitals were told that the public psychiatric hospitals could no longer accept all the patients needing treatment.
"At times, the census on our admissions units has been so high that it has caused us serious concerns regarding patient safety and treatment capability," wrote Michael Moseley, director of the state Division of Mental Health, Developmental Disabilities and Substance Abuse Services. (He announced his retirement last week.)
"In order to address these concerns ... we will be delaying admissions from community hospitals until we can decrease capacity to a level that does not jeopardize patient safety and well-being."
Between Moseley's pronouncement and the end of the year, Dorothea Dix Hospital in Raleigh turned patients away on 46 percent of days.
Broughton Hospital in Morganton, which serves an area that includes Charlotte and most of the western half of the state, turned away patients 206 days out of 334 -- 62 percent of the time. During peak summer months, the hospital was closed to new patients on all but a handful of days.
The state's hospitals have not maintained consistent tallies of how many people were turned away during "admissions delays," but Broughton officials estimate that 1,183 patients referred to that hospital were not admitted.
Many of those patients ended up stuck in medical facilities ill-equipped to handle their psychological problems, languishing in emergency rooms while on a state hospital waiting list.
A state law passed in 1995 requires state psychiatric hospitals to admit mentally ill patients who are indigent or otherwise unable to pay for care at a private facility.
State hospitals director James Osberg said that if all the patients who needed help were admitted, it would violate a federal law that forbids medical facilities from accepting patients they cannot adequately treat. He said the federal law supersedes the state law.
"We would have more patients than we are staffed to provide care for," Osberg said. "If you put 20 patients in a 10-patient area, you would likely not be able to provide safe care."
Despite overcrowding and admissions delays, state officials are sticking with a plan to close Dix and John Umstead Hospital in Butner on May 1.
Patients and some staff members from the two hospitals will be moved to the new Central Regional Hospital, a smaller facility in Butner. The $120 million hospital was set to open in February, but that has been delayed at least two months because of design flaws and safety concerns at the new building -- features that could allow suicidal patients to kill themselves
