Tri-City Medical Center / Photo by Adriana Heldiz

County supervisors this week approved a framework to restore inpatient psychiatric beds at Tri-City Medical Center in Oceanside, a deal that could signal a broader shift in how the county approaches mental-health care.

A year ago, Tri-City faced an avalanche of criticism when it closed its inpatient behavioral health and crisis stabilization units, raising the possibility that the North County region might be without any hospital beds for mental health patients come 2020.

Elected leaders and county bureaucrats rushed to find solutions, including calling for public reviews and improvements to the region’s entire mental health system.

Those efforts began to shed light on the clogged, fragmented mental health system that patients in crisis confront as they seek care, and the financial losses hospitals face in treating mental health patients.

The new framework with Tri-City approved by supervisors on Tuesday aims to directly address those challenges with a commitment that the county will cover half of the cost to build Tri-City’s new 16-bed facility, settle on Medi-Cal insurance reimbursement rates that match Tri-City’s costs and incorporate financial incentives to encourage better care for patients.

The goal is to quickly return inpatient psychiatric services to coastal North County and encourage Tri-City to hold onto and improve its mental health services over the long haul.

As word of the deal emerged last month, some advocates questioned whether Tri-City should receive such assistance and incentives from the county after its decision to shutter mental-health beds left the region scrambling for solutions.

But county behavioral health director Luke Bergmann said the framework – and potentially, future ones with other hospital groups – could lead to better long-term outcomes for both patients and the regional mental-health system. He said the Tri-City deal fits into the county’s more holistic goal to transform a system now defined by hospital and emergency room visits to one that offers patients an array of preventative and chronic care options throughout the county.

Bergmann and other county officials described the deal as a template for future hospital contracts, particularly in its envisioned use of financial incentives.

“What’s especially exciting in this arrangement is that it uses these fiscal mechanisms in the context of establishing additional crisis services – acute care beds – to actually drive forward a chronic care management approach,” Bergmann said. “And the real legacy of this deal, in my opinion, will be that.”

Once the Tri-City deal is finalized, county officials say they plan to negotiate incentive-based agreements with other hospitals that encourage bolstered outpatient care and more coordinated care throughout the region.

Getting to the tentative deal with Tri-City wasn’t easy.

Advocates and county officials were startled last year when Tri-City announced that it planned to shutter its behavioral health units. The district has said it was already losing significant money on its psychiatric services – including a reported $5.4 million in 2018 – before concluding that last year that needed upgrades to its former facility would cost millions more.

As Tri-City prepared to close those units, patients, families and North County leaders unsuccessfully implored the district to retain those services.

Within months of the closure, the county’s Midway psychiatric hospital and Palomar Health’s North County hospitals saw dramatic surges in behavioral health patients, and North County police officers were forced to transport so-called 5150 patients considered gravely disabled or a danger to themselves or others farther away, which meant they spent far more time away from their patrols waiting in ERs.

In June, Supervisor Nathan Fletcher and Assemblywoman Tasha Boerner Horvath demanded that Tri-City come up with a quick plan to reinstate services or face a state audit.

Later that month, Supervisor Jim Desmond proposed pulling $14 million from the county’s reserves to help Tri-City open at least 16 inpatient psychiatric beds and 12 short-term crisis beds. The proposal didn’t pass muster with fellow supervisors, including some who described it as an undeserved bailout for the health care district.

The negotiations quietly continued.

Then, on the eve of a planned August legislative committee vote on the requested state audit, Boerner Horvath and Fletcher announced a tentative deal.

More details trickled out late last month when the Tri-City board voted to unanimously back a draft agreement that called for the county to ultimately cover about $5 million of the expected $10 million cost for the new facility and provide the district with an upfront, no-interest loan for the full cost of the project. The arrangement also stated that both the value of the Tri-City land and yet-to-be finalized incentives will be counted toward Tri-City’s loan repayments.

Not everyone was supportive.

When the deal was presented at the county’s Behavioral Health Advisory Board meeting last week, some board members questioned whether the county had tried to partner with other providers.

“Was there any chance of doing this somewhere else and giving the same financial incentives and support to another North County entity?” said board member John Sturm, who argued the arrangement with Tri-City could be described as a sweetheart deal.

County officials said they decided Tri-City, which runs a general hospital in the coastal area where inpatient beds are needed, was best poised to deliver.

“Given the local geography in the behavioral health ecosystem, the (limited number) of mainstream health systems in North County, frankly, it’s very important that we work with who’s there,” Bergmann said last week.

Others were relieved a deal had been reached.

National Alliance on Mental Illness San Diego CEO Cathryn Nacario told supervisors that she appreciated the months of effort to reach an agreement.

“The [Tri-City] closures impacted public health, the law enforcement community and many patients and families in need of care,” Nacario said. “I applaud Dr. Bergmann and the entire Board of Supervisors for their openness and willingness to continue to learn, review, collaborate and create a plan to address these needs.”

Tri-City CEO Steve Dietlin struck a similar tone on Tuesday.

“The (agreement) outlines a framework to advance long-term and sustainable community mental health solutions and partnership and collaboration with the county of San Diego,” Dietlin told supervisors. “This framework also provides exciting opportunities for monitoring and improving patient outcomes through collaborative care coordination that’s critical to the entire mental health continuum.”

The specifics of that coordination and the incentives Tri-City may receive are not yet finalized. Tri-City and the county also have yet to set a timeline for building the new facility.

County and Tri-City officials pledge to return to county supervisors with a finalized deal in January.

Lisa Halverstadt

Lisa is a senior investigative reporter who digs into some of San Diego's biggest challenges including homelessness, city real estate debacles, the region's...

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