BERLIN — In the immediate aftermath of the flooding that accompanied Tropical Storm Irene, Gov. Peter Shumlin said his team asked him whether they should begin work to rebuild the Vermont State Hospital in Waterbury.
“I said ‘no.’ I said, ‘As long as I’ve been in politics in Vermont that facility has not dignified the quality care that we should be giving to our most vulnerable patients,’” Shumlin said Tuesday at a ribbon-cutting ceremony for the new state psychiatric hospital in Berlin.
The 25-bed Vermont Psychiatric Care Hospital will begin housing patients with acute mental illness over the next several days, according to state officials.
The state-of-the-art facility is what patients in the state have deserved for over 30 years, Shumlin said.
Vermont has the best mental health services in the U.S, according to Doug Racine, secretary of the Agency of Human Services, a sentiment echoed by the governor and other officials who spoke.
The new hospital is the most visible example of Vermont’s post-Irene progress toward a decentralized mental health system that will allow patients to seek treatment in a variety of non-hospital settings, Racine said.
Many lawmakers, state officials and mental health workers have said the silver lining of the flood-damaged Waterbury hospital is that it spurred long-sought action to reform the delivery of mental health services.
“The biggest obstacle for replacing Waterbury has been money,” Shumlin said, adding that the state found a way to rebuild without asking Vermonters to pay the full freight.
The $28.5 million project will be paid for with an expected $3.5 million from insurance payments from the old hospital, $12.5 million from FEMA, with the state shouldering $12.4 million, Shumlin said.
Others peg the hospital’s cost at $38 million, because the state financed its share of the project with bonds. Debt payments will total $9.7 million.
Shumlin said Vermont will save money because it can now draw down federal dollars to pay for hospital inpatient psychiatric care. The old state hospital lost its CMS certification, leaving $10 million in Medicaid funding on the table annually, the governor said.
Jeff Rothenberg, CEO of the Vermont Psychiatric Care Hospital, has said the federal Centers for Medicare and Medicaid Services have given him verbal confirmation that the state can transfer certification from a temporary eight-bed facility in Morrisville.
The former state hospital had an operating cost of $22.6 million in its final year. The new state hospital is expected to cost $19.3 million to operate in its first year. The new facility will house and treat 25 patients; the Waterbury hospital had beds for 54 patients.
The increased per patient expenditure is due in part to fixed costs associated with running a hospital, Rothenberg has said.
The new hospital’s impact on the state’s general fund is offset by roughly $10.9 million in global commitment Medicaid money. Vermont’s global commitment waiver gives the state flexibility in how it can spend federal money for the program.
Sen. Jane Kitchel, D-Caledonia, said the hospital’s opening is a “watershed moment” for Vermont’s mental health system and Act 79, the 2012 law aimed at bolstering community-based services and reducing the reliance on hospitalization.
But Act 79 programs and projects, including the new hospital, are cumulatively $50 million over budget from what was originally proposed, Kitchel said.
The mental health system now vacuums up much of the global commitment money Vermont receives through its federal waiver. That’s because much of the state’s new Act 79 mental health services are not eligible for reimbursement for traditional Medicaid.
“This basically obligates all of our global commitment money,” Kitchel said, adding that money could go toward a range of services including substance abuse prevention.
Kitchel said the $50 million figure she cited is an estimate that does not include a secure residential facility in Middlesex. That seven-bed facility is now viewed as crucial to providing patients with alternatives to hospitalization, which are the most expensive, but not always the most appropriate, setting for treating mental illness.
The state continues to make additions to the Middlesex Therapeutic Community Residence, adding parking, a basketball court and plantings, but Frank Reed, deputy Commissioner of the Department of Mental Health, said the facility will close and be reopened elsewhere.
The state’s agreement with Middlesex would allow the facility to remain open through 2018, Reed said. His department will report to the Legislature on when and where a permanent facility should be opened in January.
Reed said he could not comment on the potential timeline for opening a permanent facility until the report is delivered to lawmakers next year.
State officials were exuberant about the opening of the new hospital which they believe will relieve pressure on a system that often lands patients in hospital emergency departments for long periods and isn’t always able to meet their needs.
Kitchel and others were cautiously optimistic, noting that without the new hospital, “it’s difficult to evaluate the new system as a whole.”
Among those preaching caution was Jack McCullough, director of Vermont Legal Aid’s Mental Health Law Project.
“It is painfully ironic that we’re opening up this facility the same day legislation that will increase the use of coercion in our mental health system takes effect,” McCullough said.
McCullough’s office represents patients in involuntary mental health proceedings, and was vehemently opposed to a new law that changes the rules governing those proceedings.
Jill Olson, vice president of policy and legislative affairs for the Vermont Association of Hospitals and Health Systems, said the new law needs to be monitored, but added that judges still have ultimate say over whether people are held or medicated against their will.
Olson was active in pushing for the new law, and works closely with hospitals that provide psychiatric services for the state.
Vermont is contracting with Fletcher Allen Health Care for psychiatric services at the new hospital, while Central Vermont Medical Center and Copley Hospital will provide medical and other support services.
The HowardCenter will stop taking the most acute psychiatric inpatients in state custody, but Rutland Regional Medical Center and the Brattleboro Retreat will continue to operate secure inpatient wards paid for through state contracts.
“We’re excited to see this facility open,” Olson said, “It’s been a long journey since the state hospital closed.”
