Home » Bankruptcy filing by mental health agency a loser for Kentucky

Bankruptcy filing by mental health agency a loser for Kentucky

By Molly Burchett
Kentucky Health News

The decision of Seven Counties Services Inc. to file bankruptcy to avoid paying into the Kentucky Employee Retirement System has created a “no win” situation for the state, and the issue may add yet another obstacle for Kentuckians to get the mental health care they need.

SevenCountiesSignLouisville-based Seven Counties is one of the state’s largest mental health agencies, serving more than 30,000 adults and children with mental-health services, alcohol and drug-abuse treatment, developmental-disabilities services and preventive programs, according to its website.

And while Kentucky’s mental health system has received an F grade for its funding, the state pension system needs agencies like Seven Counties to pay in more because the system is just 27 percent funded.

“Employers will have to ante up around 38 percent of annual payroll, compared with the 23 percent now required,” Mike Wynn notes in The Courier-Journal.

Kentucky’s need for mental health services is much greater than the supply, and an estimated 1.7 million Kentuckians live in areas designated as a “mental health professional shortage area,” which means almost 40 percent of Kentucky residents lack proper access to such professionals, says a report by the Kaiser Family Foundation. About 24 percent of residents’ mental-health care needs are under-served, and this situation could be worsened by federal health reform, which will expand mental health and substance-abuse treatment benefits to more Kentuckians without adding to the number of providers.

Bankruptcy for Seven Counties is a lose-lose proposition: It could close its doors in 2014 and stop providing services to 30,000 Kentuckians or, if the bankruptcy goes through, the state’s retirement system wouldn’t get anticipated agency payments into the system, reports Ryan Alessi of cn|2, a news service of the Time Warner and Insight cable-TV companies.

“The only two paths this can go is we could stay in KERS until we have given them our last nickel, which is a year (or) year-and-a-half from now … (and) we close the doors and go out of business and KERS gets no more money because we’re out of business,” Dr. Tony Zipple, president of Seven Counties, told Alessi.

In addition to funding problems for mental health services, many people with mental health issues don’t seek treatment because of its stigma, said Sheila Schuster, executive director of the Kentucky Mental Health Coalition, in a recent opinion piece sent to Kentucky newspapers. Shuster calls on elected leaders to increase funding of mental health services and highlights the prevalence of mental health illness.

“At least one-fourth of us will experience a behavioral health issues (mental illness or substance use disorder) in a given year,” Schuster writes. That number, and the number of people needing treatment, will continue to grow, she says.

Schuster also writes about the societal impact of not treating mental illness: “Depression is rated as the No. 1 cause of disability in this country, and is a leading cause of absenteeism and decreased productivity in the work force.” Because some people avoid treatment due to stigma, they may self-medicate with drugs or alcohol, and “the effects of stigma and failure to treat the whole person can have catastrophic results,” she writes.

In addition to calling for more mental health funding, Schuster asks all Kentuckians to get educated about mental illness so that its stigma can be erased. Click here to read more from Schuster about mental health and resources for help. For a PDF of her op-ed, click here; for a text version, here.

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.