Utah's psychiatric health-care industry has experienced its second casualty in four months.
Citing financial difficulties, Parkside Recovery Center of Salt Lake City, a drug and alcohol rehabilitation treatment center, has followed the route of Riverwood Hospital in Provo. It has closed its doors.The forced closures, officials say, should serve as a warning to other such specialty hospitals facing dwindling insurance reimbursements.
"Many of the major insurance companies, through managed health-care organizations, are not paying for the hospitalization of many illnesses, including chemical dependency treatment and psychiatric problems," said Phillip Quigley, Parkside program manager.
Quigley explained that over the past few years, treatment costs have escalated - much to the dismay of insurance companies.
"To curb the costs there is a trend in the (insurance) industry to decline any hospitalization for chemical dependency - even when it is sorely needed," he stressed. "Just when there is more and more need for chemical dependency treatment, insurance companies are cutting back benefits.
"Thus there is great pressure on all the chemical dependency units."
Utah has many such units. In fact, the number of drug and alcohol treatment facilities and psychiatric hospitals has soared during the past few years.
In 1984, Utah had 0.203 psychiatric beds per 1,000 people. By the end of 1986, that had more than doubled - to 0.487 per 1,000. These figures don't include drug and alcohol dependency beds.
State officials say the dramatic increase can be tracked back to the rescission of the state's "certificate of need law" in December 1984.
Under the certificate regulations, those seeking to construct health-care facilities had to prove a need for the new operations. When it was rescinded by the Legislature, it opened the field up to free enterprise.
When hospital beds and competition to fill them increased, so did insurance claims. That's when the third-party carriers took matters into their own hands.
Today some insurers don't pay for drug and alcohol treatment at all; others severely limit payments.
The result: Treatment facilities are closing.
"My guess is that there will be some more that will either go out of business or change functions," Quigley said.
He said Highland Ridge Hospital has assumed care for its seven active patients and 90-100 patients who had been through a treatment program but need continuing supportive treatment. Their programs will continue.
Some of the facility's 25 employees will be transferred to other Parkside Recovery centers around the country. "But others won't be as mobile," he said.
Their challenge is to find employment with other such facilities that also face the dollar crunch.
Parkside, located at 1255 E. 39th South, has been in business less than two years, after Parkside Medical Services, Parkridge, Ill., purchased the St. Benedict's ACT program at that location in September 1987.