CITY OF PHILADELPHIA
BEHAVIORAL HEALTH SYSTEM

A Brief History

UNIFYING PHILADELPHIA'S BEHAVIORAL HEALTH SYSTEM

For more than 30 years, the Philadelphia Department of Public Health had provided behavioral health care to impoverished city residents through the Office of Mental Health (OMH) and the Office of Addiction Services (OAS). These two offices offered diverse programs, operated by different funding streams. Each was overseen by separate state governmental organizations, under different restrictions, guidelines and requirements.

Once private, for-profit companies entered the picture and began to manage the behavioral health care of Philadelphia's Medicaid recipients, consumers and families found themselves lost in a maze of providers and payers, often pushed from one to another, especially if they were difficult to treat.

By assuming responsibility for its own Medicaid recipients, the city recognized it could streamline a cumbersome and complex system and make it more cost-effective and responsive to those it served. Establishing one unified system would offer a single point of accountability, better quality care and the potential for cost efficiencies in service design and delivery.

For all of its merits, the question of whether Philadelphia should establish a managed care company for its own citizens on Medicaid generated considerable debate in 1996. City leaders worried that doing so would place the city at undue financial risk. Many remained convinced that for-profit companies were better suited to the task.

But advocates countered that a behavioral health company managed by the city would preserve a greater share of Medicaid funding for those who needed it most.

Instead of watching Medicaid dollars evaporate into large-scale corporate advertising campaigns, multi-million dollar executive compensation packages and stockholder earnings, Philadelphia could direct its share of state funds into services with the greatest benefit for the city's most vulnerable and disadvantaged population.

More significantly, the plan offered the opportunity for the city to better integrate behavioral health care with the delivery of other city social services. Urban residents with serious behavioral health problems typically face other serious issues: chronic health problems, inadequate or no housing, joblessness. By bringing together city, state and federal grants and program funds into a comprehensive behavioral health system, Philadelphia could create a broad safety net that could better serve the full spectrum of its needy residents.

In 1997, as part of a new state program called HealthChoices, Philadelphia took on the job of managing the behavioral health care of its own city residents on Medicaid, (or "Medical Assistance," as the program is known in Pennsylvania). In February of that year, the city launched Community Behavioral Health (CBH), a non-profit corporation serving the city's Medicaid recipients, and began the complex task of linking it with other core components of the Department of Behavioral Health.

In just ten years, Philadelphia's system has become a national model for the delivery of high-quality, cost-effective, managed behavioral health services to the public sector. More importantly, despite the predictions of skeptics, Philadelphia's Behavioral Health System has produced:

Significant savings that are being reinvested in a wide range of programs for homeless persons, children in schools and other support services
Increased access to treatment
Better coordination of services across all jurisdictions and funding streams
Greater accountability to consumers of services and their families and more involvement in planning and monitoring services