In the face of serious budget cuts, San Francisco General Hospital’s department of psychiatry is fighting to preserve its pioneering cultural competency programs. Hospital staff are particularly outraged by the city’s orders to cut 25 percent of the inpatient psychiatric beds, especially considering that the current number of beds remain consistently full.

The daily census has been parked at 100 percent for years. Month after month, 160 patients are admitted on average to the four locked units, and another 100 paying patients are turned away because there are simply not enough beds available. In what the San Francisco Examiner has called "civic insanity," the department has been ordered to close one of its four units by July 1.

The fight is not just about money; it cuts to the very core of culturally competent and adequate psychiatric services. The saga began on February 8, when Mitchell Katz, M.D., director of health for the city and county of San Francisco’s Department of Public Health (DPH), submitted his budget proposal for the fiscal year beginning July 1. Katz’s budget had to attempt to deal with a $40 million shortfall, due in large part to reduced state and federal funding that the city said it could not help him with.

One of the areas that Katz chose to cut was funding for inpatient psychiatric care at San Francisco General Hospital (SFGH). Katz proposed to eliminate 22 of the 87 psychiatric beds at SFGH, which would save $3.1 million. From the beginning, that proposal was unacceptable, not only to the psychiatry department, but also to a large portion of the community. The psychiatry staff immediately began a vigorous and pointed campaign to kill the DPH plan.

SFGH’s department of psychiatry has, over the past 20 years, organized its inpatient beds into four locked focus units: the Asian/Pacific Islander Focus Unit, started in 1980, followed by the African-American Focus Unit, the Latino/Latina and Women’s Issues Focus Unit, and the Lesbian/Gay/Bisexual/Transgender and HIV/AIDS Focus Unit (see box).

The focus units provide culturally competent inpatient care in the four threshold languages in the San Francisco area: Cantonese, Spanish, Vietnamese, and Russian. In addition, the units are able to serve particular catchment areas by focusing visibility as well as scarce resources on underserved populations.

According to Francis G. Lu, M.D., director of the Cultural Competence and Diversity Program at SFGH and a clinical professor of psychiatry at the University of California at San Francisco, the units also serve as an active training ground in cultural competence. Psychiatry residents, as well as trainees in psychology, social work, nursing, and occupational therapy regularly rotate through the units

Almost everyone agrees that DPH’s current budget woes stem from the federal Balanced Budget Act of 1997. DPH’s Katz told the city’s Health Commission, "The federal government continues to have a large surplus because they’ve pushed the cost of care onto localities."

The 1997 act cut $115 billion from projected Medicare spending and $13.6 billion from Medicaid (MediCal in California) funding between 1997 and 2002. The result was drastic cuts in payments to health care professionals. Institutions, like SFGH, that provide large amounts of indigent care saw large cuts, as did teaching hospitals.

Although San Francisco has increased its funding to the DPH in each of the last several years, the increases have not kept pace with the combined effect of the federal cuts and medical inflation. San Francisco Mayor Willie Brown declined to increase the DPH’s total allocation beyond the 8.5 percent already proposed.

DPH’s Katz believes that a large portion of the inpatient days spent in the unit are by patients who no longer need acute, inpatient care but cannot be discharged because they have nowhere to go. The city no longer receives any revenue from these patients once they are "decertified" for inpatient care.

Katz proposed in his budget the development of alternatives to inpatient psychiatric care, primarily at the city’s nursing home for the poor, Laguna Honda Hospital, and in residential hotels. Moving the decertified patients out of acute-care beds, said Katz, would allow for the elimination of the 22 beds he has proposed.

Unfortunately, according to Lu, Laguna Honda Hospital is not an appropriate facility for most of the patients cared for in the four inpatient locked units. "Ninety-seven percent of our patients are admitted on an involuntary basis," Lu told Psychiatric News. "They are either a danger to themselves or to others, or both. Two-thirds of our patients are dual diagnosis with Axis I diagnoses like schizophrenia, bipolar disorder, major depression, or schizoaffective disorder. Usually, it is Laguna Honda that is transferring its patients to us, but they never take ours back." In addition, the city’s current residential hotels are full.

Most of the psychiatry staff at SFGH believe that the biggest risk of eliminating 22 beds is that an increasing number of patients will not get needed care while others may be discharged while still a danger to society. Staff members point out that the units already turn away each month nearly 100 patients who have difficulty finding adequate appropriate psychiatric care elsewhere in the city. That number will only increase with the proposed reduction in beds.

Several officials in the San Francisco city and county governments share the staff’s concern. The Board of Supervisors has held hearings to discuss the potential of what one supervisor characterized as "mentally ill men and women—some homicidal, some suicidal, still others simply psychotic—being let loose on our streets."

"We all recognize the extreme financial pressures," San Francisco Supervisor Tom Ammiano said during one packed budget hearing, "but we cannot pursue budget cuts that hurt our most at-risk populations. We have already seen a serious erosion in the availability of beds for these people."

Supervisor Leland Yee, who holds a doctorate in psychology, has pledged that the city would do all it could to preserve current services, within the context of reigning in increasing costs within the DPH budget.

The ramifications of the loss of the 22 beds could be catastrophic. "I strongly support the creation of alternatives to inpatient care," said Robert Okin, M.D., chief of psychiatry at San Francisco General Hospital. "But the budget, even from a financial point of view, doesn’t make any sense."

The SFGH psychiatry department has proposed development of resources to free up inpatient beds by transferring patients who no longer need them. However, instead of closing the 22 beds, Okin and his staff have proposed filling those beds with MediCal patients to increase revenue.

If forced to eliminate the 22 beds, psychiatry staff wonder, which of the award-winning focus units is supposed to take the hit? Do you cut services to the Asians, Latinos, blacks, women, or gays and lesbians? The question has fueled a political nightmare. Katz suggested that two units be combined, but staff argue that those two populations would be adversely affected.

San Francisco Supervisor Gavin Newsom, who called the hearings, said he hopes to pursue a course down the middle, incorporating aspects of the plans submitted by both DPH and SFGH.

Katz’s budget, approved by the Health Commission, has been submitted to Mayor Brown for his approval. Brown must submit his final budget to the county supervisors by June 1. The supervisors have the final authority to approve, or request amendment of, the budget proposal.

At press time, SFGH’s senior administrator had issued a memo, ordered by Katz, telling the psychiatry department to begin involuntary staff reassignments to other positions within DPH. The transfers are meant to reduce the staffing of the department in preparation for the elimination of the 22 beds, while avoiding any direct layoffs.

The move by Katz has further escalated the fight, occurring even before the Board of Supervisors’ approval of the proposed budget. In a letter to the supervisors from Okin and his staff, Okin said the reassignments will be devastating. "In effect, this action will effectively destroy the integrity of all four Ethnic/Minority Inpatient Units due to forced reassignments and inevitable resignations." As of May 5, one senior staff member had already submitted his resignation and more were expected.

In addition, the California Department of Mental Health is investigating the proposed cuts and the impact they will have on the city’s ability to adhere to the state-mandated cultural and linguistic requirements.