At a time when Unity Center for Behavioral Health says that a backlog of psychiatric patients seeking treatment is causing a “public health crisis,” a health care company is offering to an additional 100-bed facility in the Portland area.

Yet Unity officials have signaled they plan to oppose Universal Health Services’ bid for state approval.

Three years ago, the Oregon Health Authority denied Universal Health’s application as Unity prepared to open its doors for the first time. State health officials said the four hospital systems that created Unity had successfully argued that their joint venture would meet the Portland metro region’s need for more inpatient beds.

That has not happened. In fact, many say the problem has gotten worse.

If the state approves Universal Health’s application, it would be the first open acknowledgment that opening Unity hasn’t done enough.

Unity leaders maintain that its current troubles don’t mean the Portland area needs more places to help people in distress. Unity instead says the problem is the Oregon State Hospital, which has mostly cut off admissions from anyone who isn’t charged with a crime. The patients the state turns away are now staying at Unity longer than expected.

“We believe there is already enough inpatient capacity at the acute care level in the state of Oregon, if the flow of civilly committed patients is remedied,” said Brian Terrett, spokesman for Legacy Health, which owns and operates Unity.

Legacy Health is not alone in its opposition to Universal Health’s request. Other hospital systems and some mental health advocates are critical of the proposal. However, Legacy’s opposition comes as it seeks more money from the state to prop up its finances. Unity says it is hemorrhaging money while caring for some of the state’s sickest patients and needs additional state general fund dollars to stay afloat.

Universal Health argues it can ease Unity’s strain.

“Nothing would help the Unity Center more than opening our facility, getting it approved and taking some of the full pressure and burden of responsibility that they are currently struggling with,” said Ron Escarda, Universal Health Services group director for the northwest region.

A history in Oregon

Universal Health can claim experience in this area.

One of the largest behavioral health providers in the country, it also operates facilities in the United Kingdom. It recently expanded in Washington and currently provides care at one Oregon location: Cedar Hills Hospital in Southwest Portland.

Cedar Hills opened in 2008 with 36 beds. Two years later, officials expanded to 78 beds, then to 89, and then 94. Each time, the facility hit 80% to 90% capacity immediately, according to the company, and remains in that range.

In 2019, Cedar Hills fielded 11,000 calls from patients or hospitals looking for a spot. But only about 3,500 were able to get into Cedar Hills, which tries to only admit patients who fit the services they provide.

“We know that there are people being boarded in emergency rooms,” said Michael Sorensen, Cedar Hills’ director of business development. “We know that on a daily basis we have people call and we don’t have a bed for them.”

When the state in 2017 denied Universal Health’s application to open a second Oregon facility, in Wilsonville, officials cited Unity 13 times. The health authority said the proposed new Universal Health facility might create too much competition for Unity, which was about to open, to thrive.

Universal Health promised to raise private capital to build the $50 million facility.

Officials wrote that Universal’s business plan is solid, but said it could hurt existing providers. They said a new player in the market could potentially divert patients who have private insurance, and thus a better reimbursement rate for care, as well as take state funds and Medicaid dollars from other hospitals.

The state’s denial also said that Unity’s new-to-Oregon psychiatric emergency room was likely the future of behavioral health care facilities, whereas Universal Health was proposing a model similar to what already existed in the market – a redundancy of services.

“The opening of the Unity Center in Portland, with a psychiatric emergency department will alleviate the need for transfers to a new inpatient psychiatric facility,” health officials wrote in the denial.

Since then, Unity has gone through a state and federal patient safety investigation that for months forced Unity to turn away almost all new patients. Now, the hospital is in a financial crisis and asking for additional state funds to remain open, saying the Portland facility has nearly quadrupled projected annual losses.

Part of the blame, Unity officials say, falls on a patient backlog. People who need an inpatient bed are waiting for hours and days in recliners in Unity’s psychiatric ER. The 107 inpatient beds are full because the Oregon State Hospital cannot accept new patients and there are too few community-based treatment options to accept them.

Similar problems, differing finances

Universal Health faces some of the same problems.

Like Unity, Cedar Hills officials say they have a larger than usual percentage of patients waiting for placement at the Oregon State Hospital.

Cedar Hills had 22 patients waiting -- 23% of their beds. A top Unity executive said that 25 people were being held there at one of the highest points.

And the average length of stay at Cedar Hills has increased. During a recent tour of the facility, 16 of the most acute patients were waiting more than 30 days to move to the state hospital or a similar treatment program, with some up to 60 days. That’s been the new average for a few years as demand has increased, Sorensen said on a recent tour of the facility.

For the whole hospital, which includes people who are receiving lower levels of care as they detox from drugs and alcohol, the average stay is eight days.

“We don’t have enough services across the spectrum, but we especially don’t have enough of at the acute levels,” he said, standing in the hallway of Cedar Hills as staff moved through sets of locking doors.

But unlike Unity, Universal Health says it’s in the financial position to ease those problems.

Universal Health’s Cedar Hills location is the state’s only for-profit behavioral health hospital and the vast majority of patients have private insurance.

That is partly because Cedar Hills cannot be paid for Medicaid patients, which make up about half of the people in the Portland area who need mental health services. Yet, health laws require Cedar Hills to admit any patient that fits their treatment portfolio, regardless of ability to pay.

The company has been forced to build a business model that assumes it will lose money serving patients who cannot pay for care, which happens whenever Unity is full and transfers Medicaid patients to Cedar Hills. The hospital provided 2,500 days of uncompensated care to patients last year, Sorensen said.

Cedar Hills would like to recoup some of that money. It doesn’t have a contract with coordinated care organization Health Share, which provides mental health benefits to most people on the Oregon Health Plan and mainly contracts with Unity.

Sorensen said Cedar Hills would gladly take in more Medicaid patients and is aggressively pursuing a contract with Health Share. Those efforts so far have been rebuffed.

“And the state says, you have to eat it,” Sorensen said.

But in the meantime, Universal Health officials say that their business model is working fine, even when the company is providing free care.

Next steps

Whether Universal Health will be allowed to open a facility in Wilsonville won’t be known for months, at least.

The Oregon Health Authority has asked the company additional questions and is awaiting response. Once the application is completed, the state has 90 days to rule.

Health authority officials declined to comment while the application is open.

A key opponent to Universal Health’s previous application, the Service Employees International Union, hasn’t weighed in, though they opposed the application last time.

The Oregon chapter of National Alliance on Mental Illness, a powerful advocacy group, has sought state approval to weigh in on the application. Providence and Willamette Valley Medical Center have also asked to submit input on the application.

Last time, they opposed the facility. Some of their concerns echoed Legacy’s spokesman, who said the state should focus on expanding services and facilities for people who are no longer in crisis but still need consistent mental health care.

Legacy refused to answer questions about whether their opposition was rooted in financial concerns.

Jason Renaud and other advocates for people with mental illness also want the state to provide more services outside of just inpatient hospitals. They also remain critical of Universal Health’s current lack of Medicaid ties.

But when it comes to Unity, Renaud acknowledged many people leave the facility only to go back to the same unstable circumstances they were in before, which exacerbates their mental illness until it is severe enough to `land back in Unity.

“Maybe one of the things Unity has taught us is that we don’t just need Unity,” Renaud said. “We maybe need two or three of them.”

-- Molly Harbarger

mharbarger@oregonian.com | 503-294-5923 | @MollyHarbarger

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