Community Mental Health Centers Leading Healthcare Reform

By Brad Smith, Denver Business Journal

Early results from a pilot project to cut the cost of mental health services for Medicaid recipients indicate the program has been successful. according to the Colorado Behavioral Healthcare Council (CBHC). The Colorado legislature authorized the pilot program starting in 1995 as a way to cut the cost of services by switching from a traditional fee-for-service system to a capitated form of contract with the state of Colorado.

Colorado community mental health campaign

For years, the state contracted with local mental health agencies to provide Medicaid services and pays the contractor a lump sum on a per-patient basis, rather than paying for itemized services. It did not encourage compassion, creativity or positive outcomes.

Youlon Savage, executive director of the Adams County Community Mental Health Center in Adams County, said the Medicaid capitation Pilot Plan saved $6.5 million in tax money in 1996, while operating in 51 of Colorado’s 63 counties.

The remaining 12 counties, including the population centers of Denver and Larimer, will be up to bid and added to the project next January 1. Other counties not yet in the program are Cheyenne, Elbert, Kit Carson, Lincoln, Morgan, Phillips, Sedgwick, Washington and Yuma.

Colorado community mental health

Savage said the project so far has resulted in a shift in services from expensive inpatient hospital services to less costly and less restrictive community-based services, reduced waiting lists, development of new services, improved coordination, increased assistance for beneficiaries and additional money for non-Medicaid indigent persons.

“If we continue to make strides that we have made in the last year and a half, Colorado will have a superior community mental health system,” Savage said.

  • People with serious mental illness lose 25 years of life expectancy as compared to the general population and the loss is due primarily to cardiovascular disease;
  • More than half of U.S. adults have a mental or physical condition that influences their ability to work; and
  • About 25% of all Social Security Disability payments are for individuals who have a mental illness.


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