Two years ago, Republican lawmakers inserted a provision into the state budget that would have, in part, privatized Michigan’s public mental health system.
Immediately, mental health providers and advocates called on Gov. Gretchen Whitmer to veto the provision, saying it would cause sweeping damage to the care being provided to approximately 300,000 low-income Michiganders with mental illnesses.
Ultimately, the governor vetoed it when she signed the Fiscal Year 2020 budget but said at the time that the public mental health system was in need of reform.
Now, Senate Majority Leader Mike Shirkey (R-Clarklake) and Sen. John Bizon (R-Battle Creek) have introduced a package of legislation — Senate Bills 597 and 598 — that proposes to privatize the state’s $3.6 billion public mental health system in what the GOP lawmakers said is an effort to simplify a confusing bureaucracy and better integrate physical and mental health care for low-income residents.
If signed into law, private health insurers would manage care for patients in the state’s public mental health system instead of the state-created health plans that currently oversee them.
Once again, mental health providers and advocates are lambasting the private takeover of a public health system they say needs more investment instead of a complete overhaul — but they said they’re nowhere near certain the governor would veto the legislation this time around. The bills so far have gone through committee hearings, but state lawmakers have yet to vote on them.
“It’s very scary for us, quite frankly,” HealthWest Executive Director Julia Rupp said of the prospect that Whitmer may not veto the bills. HealthWest is one of Michigan’s 46 community mental health centers that contracts with the state-created health plans to offer mental health services, as well as physical health care, to low-income individuals.
Whitmer’s office did not respond to requests for comment. The Michigan Department of Health and Human Services (DHHS), the entity that first receives the federal dollars for the state’s public mental health system and then contracts with the public health plans that currently oversee that system has not taken a stance on Shirkey’s legislation.
“We appreciate the interest that the Legislature has in behavioral health and look forward to working with our legislative partners in making improvements for the sake of children and families,” DHHS spokesman Bob Wheaton wrote in an email. “MDHHS is neutral on the legislative proposals at this time and will be monitoring the legislation closely as it moves through the legislative process.”
Rupp said she’s especially concerned that, even if Whitmer backs the idea of vetoing the legislation, the governor may not go through with it because she doesn’t want to further battle Republican lawmakers who have fought her tooth and nail over her public health policies during the COVID-19 pandemic.
“We have a governor known across the country for the way she handled the COVID pandemic, masking and stay-at-home orders, and now she’s refusing to give any leadership in that regard,” Rupp said. “Why is that? What does that mean for us? I don’t know. Maybe she doesn’t want to be kidnapped anymore. Maybe it’s because politically she can’t afford it with all those rescue funds tied up in the Legislature.”
Whitmer last year issued a series of public health orders to mitigate the spread of COVID-19, including mandates that students wear masks in schools and certain employers close shop. Irate over the executive orders, Republican lawmakers voted in July on a petition rescinding the governor’s power to issue pandemic-related health orders, but the DHHS remains able to do so. Whitmer has not pushed for the health department to issue a school mask mandate and has said instead that she wants local health departments and school districts to make those decisions because residents would be more likely to listen to them.
The kidnapping Rupp cited is a reference to the 13 men — including some members of right-wing, self-described militia groups — who were arrested and charged in October 2020 with an alleged kidnapping and murder plot against Whitmer. According to the FBI, the plot was a response to Whitmer’s COVID-19 stay-at-home health orders.
The rescue funds Rupp noted are the billions of dollars in emergency COVID-19 funds the federal government has sent to Michigan, which Whitmer has for months been pushing state lawmakers to allocate.
“I don’t know if we’re becoming a pawn in a greater political game,” Rupp said. “Many of us are very concerned she may feel this is not the battle she wants to fight.”
Privatizing the public mental health system
Shirkey said he has been working on privatizing the public mental health system for years because “our state’s system is broken.”
“Not providers, not staff, but the system is broken,” Shirkey said at a Sept. 21 Senate Government Operations committee hearing on the two bills. “Too many Michiganders who receive Medicaid and need mental health services are slipping through the cracks. …Too many of these patients with both mental and physical ailments are seeing both worsen because of a lack of coordinated care.”
The legislation has garnered the backing of private health insurers, including Blue Cross Blue Shield of Michigan – the largest health insurer in the state — and Meridian Health. Company officials have echoed the majority leader’s sentiments that a private takeover of public mental health would allow for a simpler system that would make information about accessing mental health services more understandable for residents.
For example, Shirkey said there would be a single 1-800 phone number that people could call for information about accessing mental health services. Once patients began receiving services, they would be assigned a single care coordinator who would work with them on accessing both mental and physical health care.
Dominick Pallone, executive director of the Michigan Association of Health Plans, a nonprofit that advocates for the state’s largest insurers, said at the Sept. 21 hearing that his organization is in “full support of these bills.”
“We don’t think these bills solve all of the problems that our behavioral health and physical health programs face today,” but they “will go a long way in improving choice access, quality and accountability for the Medicaid beneficiaries and the taxpayers of the state of Michigan,” Pallone said. He noted that nine out of 10 of the current state-created health plans that oversee the public mental health system have run structural deficits in recent years, including $93 million in deficits in 2018.
Current mental health providers and advocates said improvements need to be made in the public mental health system, but are deeply critical of the legislation. They argue a private takeover would further marginalize an already vulnerable population, in part because insurance companies would prioritize profits over people and haven’t built the network of necessary relationships with communities that current mental health providers have — such as with the social workers or police officers responding to mental health crises. Providers also explained they already are offering integrated care — or services that address both mental and physical health.
Leaders from the National Alliance on Mental Illness (NAMI), for example, argue the legislation needlessly decimates the state’s current public mental health system by allowing commercial insurance to take control and essentially eliminating the state’s 10 regional mental health and substance abuse plans — known as Pre-Paid Inpatient Health Plans, or PIHPs.
Currently, DHHS contracts with these 10 state-created health plans to manage care for some 300,000 low-income residents who need mental health services. Those PIHPs then contract with one of the state’s 46 community mental health programs. The community mental health programs provide a range of services themselves and also contract with various other health providers to offer mental and physical health care.
“While we agree improvements need to be made, we’ve seen no evidence that demonstrates the only way to achieve those changes is to abandon the publicly funded, publicly accountable system in favor of an unproven for-profit system,” NAMI Michigan Executive Director Kevin Fischer said at the last committee hearing. “We believe many, but not all, of these improvements can simply be achieved by better contract management and enforcement by the [state] Department of Health and Human Services.”
Rupp noted in an interview with the Advance that many of the issues GOP legislators have cited as reasons to overhaul the public mental health system — such as non-Medicaid patients being able to access care at community mental health sites — are now being addressed with a significant influx of federal funding for certified community behavioral health clinics.
Through funding from federal legislation sponsored by U.S. Sen. Debbie Stabenow (D-Lansing), there are 29 organizations in Michigan designated as certified community behavioral health clinics, including HealthWest. These sites receive additional federal dollars to expand access to mental health services, including programs being able to offer services for individuals and families who may be financially struggling but don’t qualify for Medicaid.
“This means I can provide the same services regardless of who their insurer is,” Rupp said. “That really meets the goal that Shirkey and others are complaining about.”
Fischer, of NAMI of Michigan, also emphasized that while billions of taxpayer dollars would still be funding the state’s mental health system under a private takeover, the public would lose the insight it currently has of the system.
“There’s a loss of transparency and accountability since private entities are not subject to [the Freedom of Information Act] and the Open Meetings Act,” Fischer said. “There’s a loss of service recipient, family and community involvement in program and policy decisions.”
Meghann Keit-Corrion, government affairs associate at the Michigan Association of Counties, which represents all county commissioners in the state, said her organization’s members oppose the legislation and “strongly believe in maintaining our current public health structure.”
Keit-Corrion said at the committee hearing that commissioners are concerned that a private takeover of the system would result in community organizations no longer playing a role in the mental health system.
“I had one Mid-Michigan county that created monthly meetings with schools, special education staff, probation, DHHS, and they were able to look at all of these residents they touch and address behavioral concerns and anticipate the needs in advance rather than being reactive so we didn’t exhaust law enforcement, school or medical resources,” she said.
If there’s a private takeover of the system, Keit-Corrion said members are worried the insurers would not focus on building these kinds of relationships.
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