Private mental health services can cost less

HAVING read the 11th report of the court master cited in the article "Crowding plagues state hospital" (Star-Bulletin, Feb. 11), as the chief executive officer of Kahi Mohala Behavioral Health, I feel compelled to respond.

I have been working in Hawaii for 4-1/2 years. Before coming here, I spent more than 30 years working as a state official in public sector mental health. When I first arrived in Hawaii, I felt that I had fallen into a 20-year time warp with respect to the mental health system. I wholly concur with the problems the court has identified within the state Adult Mental Health system in Hawaii, and the present and impending crises. The fact is that many of the issues cited in the court report are not new, some extending back through the state hospital portion of the decree.

That aside, as KMBH's CEO, I feel that I must respond to specific references regarding the cost of care at my organization, which I believe have been made due to lack of real and comparative information. It is alluded to in the court report and quoted in the Star-Bulletin that the state pays "extraordinary costs" to maintain beds at Kahi Mohala. In fact, costs for care at Kahi are less than costs for care at Hawaii State Hospital. On the surface, it might appear differently, since it is very easy to identify and see all the costs for care at Kahi; they are specifically outlined in the contract between the state and KMBH.

ON THE other hand, the ways that state budgets are configured, no single service entity (like HSH) has all of its costs within its operating budget. In fact, one of the most significant costs that is not contained in the agencies' budgets is the "fringe benefit costs for staff" (these costs are allocated to the Department of Human Resources Development budget). This item alone accounts for up to one-third of the costs that do not appear in the agencies' operating budgets.

The second significant cost that is not fully represented in a state agency budget is the indirect cost of administration. These costs include such things as some of the labor negotiating costs, DHRD staff who process fringe benefit-related costs, contracts processing staff within the Adult Mental Health Division and the Department of Accounting and General Services, legal costs for representing the agency are within the attorney general's budget, as are legal costs for processing patient orders to treat, conditional releases and a plethora of other unallocated costs. The fact is that when such costs are appropriately added to the "per-bed cost" at HSH, they exceed the costs at Kahi by more than 20 percent.

WITH KAHI, what you see is what you get (all the fringe benefits, all the indirect costs, etc.). With the State Hospital, you only get a piece of the information. I believe that if a cost and allocated cost audit were initiated for the costs of the State Hospital, one might be surprised at the actual costs of state-provided services versus those provided by a private not-for-profit.

A final piece of information that I would like to share is the concept of "episodes of care." Most advanced mental health systems have embraced this concept as one measure of efficiency. Essentially, this measure assesses how the beds in a system "perform." In lay terms, it examines how many individuals can be served in the total number of beds available, and how rapidly a system turns those beds over for use by other individuals. A high ratio expands accessibility and expands the number of people you can serve in a given period of time. It is a measure of how efficiently resources are used, and whether or not we are good stewards of the resources we receive.

IN TANDEM with the efficacy of care, efficiency should be monitored to provide good clinical outcomes at reasonable costs. I believe that if one were to comparatively evaluate these measures between Kahi and the state system, you would also discover there is a more efficient use of the resources and lower overall "episode of care" costs.

The bottom line in terms of inpatient care is that Kahi serves more people at lower costs than the state.

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