January 1999

Neglected Adolescent Mental Illness:
Managed Care at Its Worst

by Edward R. Sodaro, M.D. and Jennifer Ball, C.S.W.

Without a single public vote, hearing or referendum the American people have had their health insurance stolen from them during the last 10 years. Previous freedom-of-choice indemnity plans have been replaced with dubious coverage from amazingly lucrative managed care companies. The former cab driver and owner of US Healthcare, for example, earned one billion dollars in the recent sale of his business to Aetna.

Mentally ill patients have suffered horribly from managed care. Spending on psychiatric illnesses has declined 67% over the last decade. "Managed mental health has thrown us back to the Dark Ages in terms of psychotherapy," says Dr. Karen Shore, president of the Long Island-based National Coalition, a reform organization. "Let's say your mental health benefits look great. You're promised outpatient care, substance abuse treatment, day programs, and hospitalization. Now try to collect." Psychiatric managed care companies use the denial of needed care to make enormous profits. Universal single payer systems such as Canada or multi-payer systems such as the 1,200 private insurance plans of Germany (by law non-profit) all have an overhead in the range of 5%. In other words 95 cents on the dollar goes to patient care. For American psychiatric managed care the overhead is not uncommonly in the range of 50%.

Adolescents suffering mental illness and substance dependence seem to have suffered the most from managed care. Rapidly escalating suicide rates, drug addiction, and self-destructive behaviors are testimonies to a collapsing mental health system. The nation's largest managed behavioral health firms received straight "Fs" on treatment of psychiatric disorders in a report card from the National Alliance for the Mentally Ill. Managed care companies use obsolete guidelines for treating teenagers with serious mental illnesses and strictly limit hospital care. Less than half of the largest and supposedly best companies do not even define a suicide attempt as a medical emergency.

Bryant L. Welch, a prominent Washington, D.C. psychologist and attorney, has learned shocking facts as he engages in the discovery process of his lawsuits against managed care denials of treatment. He reviewed the criteria for homicidality of a large West Coast mental health managed care company and noted to his horror, "The definition of homicidality, believe it or not, is that one must not only intend to kill somebody, and have both a plan and means to do it, but they must also have an intent to do it 'within the next four hours!' " Similar types of outrageous criteria have been discovered by Dr. Welch for use in denying emergency treatment for severe depression: "Five years ago physicians complained that a patient had to be suicidal to gain admission to a hospital under managed care. Even that is no longer enough. For suicidal patients, prior attempts at self harm can be used to establish suicidality for purposes of hospitalization only if they occurred within the previous 24 hours. This criterion appears to be an industry standard at the present time."

So what happens to these teen-agers denied treatment by managed care? Where do these kids go? They go to the morgue, to jail, or they are sent into public schools unequipped to be treatment centers. The educational system is currently being flooded with untreated mentally ill and substance addicted youngsters. Some of these children, if fortunate enough, may be classified emotionally disturbed and referred to special education therapeutic environments at taxpayer expense. As a society, the economic burden of providing psychiatric care is being shifted to non-clinical, publicly funded settings, as the wealthy health insurance industry increases its profits by denying proper care.

Managed care criminalization of mental illness in young people produces particularly bad outcomes. We are now incarcerating vast numbers of mentally ill "offenders." Laurie Flynn, executive director of the National Alliance for the Mentally Ill reports that, "Part of mental illness in America now is that you are going to get arrested." Studies indicate that up to 15 percent of U.S. inmates have serious mental illnesses. This is in the range of 300,000 mentally ill persons currently in jail. Although some of those psychiatrically ill inmates are violent and dangerous, the majority of them have committed only minor offenses. Desperate parents and public authorities are forced to use jail as the only resource now available for out of control, self-destructive or dangerous psychiatrically impaired adolescents.

Texas Juvenile Court Judge Hal Gaither complains, "If you are a young person and mentally ill, you have to get arrested to receive treatment." Judges are reluctant to grant bail for out of control individuals, who then tend to stay in jail much longer. In New York City's prison system, for example, the average incarceration for all inmates is 42 days, but is an astonishing 215 days for the psychiatrically ill. Psychiatric managed care violates constitutionally protected civil rights in its refusal to allow proper treatment.

Prisons have replaced hospitals for the nation's mentally ill. Due to managed care, the largest mental institution in the United States is now the Los Angeles County Jail, with an average daily census of 1,600 severely mentally ill inmates. These untreated patients suffer from schizophrenia, manic depression or major depression, not anti-social personality disorder. The LA County Jail is a dangerously inappropriate setting for these patients. And the rates of mental illness are far higher for teenagers in prison. The California Youth Authority reports that 35 percent of boys in its custody and 73 percent of girls need psychiatric care. One prison facility in Corsicana, California has 80% of its juveniles requiring anti-psychotic medications.

Prison is an unsafe place for mentally ill adolescents. Incarceration of disturbed teenagers is the worst imaginable option, always greatly worsening depression, psychosis, and creates a high risk for suicide. Jail guards are not therapists. They are not trained to deal with psychotic youths that are incapable of following even simple rules and regulations. Solitary confinement is a common result, and this of course worsens the mental illness. Psychologist and activist Linda Reyes comments, " The system we have created is totally ineffective. It doesn't rehabilitate the kids. And it doesn't even take care of the public safety."

Concentration camp conditions for depressed and psychotic youths are common. At one notorious for profit private correctional center for youth in Louisiana, U.S. Justice Department investigators alleged that juveniles were brutally beaten on a regular basis by other inmates and ill-paid untrained guards. Adolescents routinely lost weight due to insufficient food. Fights occurred over inadequate clothing and shoes. The children were crammed tightly in double bunks in barracks with room only for a few metal tables and a TV, with open toilets and showers. Sexual attacks were common. Solitary confinement of mentally ill boys was also common, with an average stay of five to six weeks. It was found that some disturbed children were being kept indefinitely in the tiny solitary confinement cells. These same youngsters had all belongings removed and were laying on thin, threadbare mattresses on top of cinderblocks in intolerable heat. A psychiatrist visited only one day a week and provided no therapy. The corporate owner of this facility protested that the Justice Department's demands for hiring more psychiatrists were "unrealistic." This is modern managed care at its finest.

The inhumanity and cruelty is widespread in our supposedly advanced nation. The Justice Department has leveled some of the severest criticism at Georgia, threatening to seize the state's juvenile prison system, because of a "pattern of egregious conditions violating the federal rights of youth." Pepper spray was used as a restraint technique to control psychosis. In Colorado, a private juvenile prison was shut down after an investigation of the suicide of a 13-year-old revealed a widespread pattern of physical and sexual abuse.

A Wall Street Journal report called for-profit managed care companies "extremely profitable" with " plenty of potential for additional growth." In Rhode Island, a large insurer was fined $100,000 for paying incentive bonuses to the company's chief psychiatrist, who was responsible for denial of treatment coverage for mental illness, contingent on the company's level of profitability. In Iowa, it was alleged that a "commission" of $880 was paid for each admission denial to in-patient psychiatric hospital care. The managed care system in the United States does not satisfy the needs of society or individuals, but is massively profitable.

Reform of this obviously corrupt, immoral system must come from litigation and legislation. Activist organizations, private citizens, and responsible public prosecutors must seek corrective actions in every possible legal arena against managed care mistreatment of teenagers. Class action litigation must be pursued. Management of adolescent mental illness and addiction by incarceration in the prison system is a profound violation of constitutional and human rights. State and federal heath care regulatory agencies should begin to fulfill their responsibilities and correct this outrageous mistreatment. Public agencies must enforce the transfer of psychotic children out of prison settings into psychotherapeutic placements. The disreputable managed care industry must be very closely monitored to honor its contracts with these youngsters.

Improvement in the current grossly inadequate governmental oversight of psychiatric health insurance must come through changes in federal and state laws. In 1998, a sizable minority of Republicans in Congress supported a managed care reform bill essentially identical to the Democratic Party proposal. However, the Republican leadership under Newt Gingrich and Trent Lott completely froze out even modest reform legislation. The Democratic reform bill, which included full rights to sue your health insurer, lost by only 5 votes in the House of Representatives. The Democrats picked up 5 additional new Representatives in the 1998 elections.

Post 1998 election analysis revealed that the public's distress over managed care was a major influence in the unexpected Republican losses on Election Day. The significance of this issue is not lost on the Democrats who openly have announced their plans to hit Republicans hard on the managed care reform issue the instant Congress reopens. The Democrats plan to hammer away endlessly for managed care reform until the year 2000 elections. Ultimately, the needs of adolescents are the same as for all citizens in any humane, civilized state: universal coverage with the freedom to chose your providers through a heavily consumer regulated not-for-profit insurance mechanism.

Edward Sodaro, M.D. is Clinical Assistant Professor of Psychiatry at the State University of New York at Stony Brook and practices in Long Island, N.Y. Jennifer Ball, C.S.W. is a clinical psychiatric social worker in a special education program and is Editor of the Managed Care Liability Project (www.NoHMO.com). All relevant references are on this Managed Care Liability Project website.

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