Nebraska’s only freestanding behavioral health care provider, Richard Young Center will close its doors after 72 years of service to the community and region. In addition, the mental health joint sponsorship created in 1999 by Nebraska Health System (NHS) and Methodist Hospital will be dissolved and the academic affiliation agreement with UNMC will be terminated.
Sandra Carson, president of Richard Young Center, this morning told physicians, patients and the approximately 300 employees of Richard Young Center of the decision to cease operations by April 1. The action is being taken with the consent of the boards of directors of the Center’s sponsoring partners.
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Statement by John Fraser Statement by Joe Graham |
“This is a sad day for the people of greater Omaha, a sad day for Nebraska,” Carson said Thursday.
The management and Board of Richard Young Center pursued several options to closing the hospital,” says Joe Graham, chief operating office of NHS. “These discussions included other local providers, national for-profit providers, management companies, government officials and other interested parties. None of these efforts bore fruit. The failure of any reasonable option to surface over the last few months indicates the magnitude of the problem in trying to operate a stand alone psychiatric hospital in today’s environment.”
Financial challenges
Ongoing and insurmountable financial challenges were the primary factors in the decision to close Richard Young Center. The Center has lost an average of $2.8 million annually since 1993, the last year of profitable operations. The largest annual loss was $3.8 million in 2002.
Methodist Hospital, which acquired Richard H. Young Memorial Hospital along with the former Lutheran General Hospital in 1987, covered all of the facility’s losses between 1993 and 1999. It has spent more than $30 million over the past nine years to cover Richard Young Center losses.
The growing negative financial margins were the result of several factors. Inpatient volumes have continued to drop with treatment trends favoring outpatient programs. The average length of stay has fallen significantly from 17.9 days per admission in 1993 to 7.7 days per admission in 2002. This has resulted in increased costs per patient day due to reduced economies of scale.
Adding to the financial downturn has been stagnant reimbursements from public and commercial payers, who have provided inadequate annual rate increases and imposed stricter managed care mandates, while expenses continued to rise.
Graham: “We should not overlook the success”
“While the Richard Young Center partnership can’t continue, we should not overlook the successes we have achieved and the patients we’ve helped,” Graham said. “The nationally recognized research done here will continue to help children and seniors. The patient care has been second to none and for that we as a hospital and as a community are grateful.
“The practice of psychiatry has evolved over the last few years. Effective treatments have allowed more patients to be treated in community and outpatient programs versus long hospital inpatient stays. This has reduced the demand for inpatient bed capacity each year for the past several years. This trend is also likely to continue.”
The future for patients, staff
Carson says arrangements will be made to accommodate all patients currently receiving treatment at Richard Young Center. Patients will be transferred to behavioral health units with available space in Omaha and Council Bluffs. Richard Young Center staff will work with the staffs of those facilities to ensure continuity of care of all of the relocated patients.
Richard Young Center staff will have the option to apply for open positions within Methodist Health System and NHS. In addition, several employment options will be available at other behavioral health facilities in town, including those facilities whose average daily patient census will increase with the closing of Richard Young Center.
Reaching the decision
In December it was announced that Richard Young Center would reduce its number of inpatient beds from 97 to 60, resulting in the elimination of approximately 37 staff positions. Upon additional analysis of that plan, it was determined that the impact of the changes would not be significant enough to continue operations.
“Some might argue that this decision was inevitable,” Graham says. “Certainly the two sponsors, Nebraska Health System and Methodist Hospital could not continue to support multi-million dollar losses. I am not an expert on mental health treatment, but I can only hope that this action can be an impetus for a community and state dialogue on the future of treatment for mental health illnesses.”
Community-based outpatient services
Key elements of Richard Young Center’s community-based outpatient services may continue, including outpatient behavioral services, addiction services, the Community Counseling Project and the foster care program. Details concerning the future of these programs will be made public as they become available.