Four years ago, Minnesota health officials embarked on an ambitious plan to restructure state mental health services for people with the most dire psychiatric illnesses.

They created 10 mini-hospitals statewide designed to provide ideal psychiatric treatment, close to their communities and coupled with medical care. As a bonus, they hoped the facilities' small size would allow the state to draw on federal Medicaid money to pay for half of the cost of treatment.

But today nine of those hospitals, which together cost taxpayers $42 million a year, stand half-empty. The 10th, in Cold Spring, Minn., was closed last fall for lack of use.

Because of bad planning and flawed execution, critics say, the 16-bed hospitals routinely turn away the desperately ill patients they were intended to treat, leaving local health and law enforcement officials frustrated and fuming.

"We have struggled for years," said Peggy Heglund, director of human services for Yellow Medicine County.

Now the Minnesota Department of Human Services (DHS) wants to overhaul the system again. Officials want to change the mission of the mini-hospitals, cut $17 million from the program's budget and provide more effective care for some of the more than 100,000 Minnesotans who have serious mental illnesses such as schizophrenia, bipolar disorder and major depression.

But legislators, advocates and providers -- mindful of the last experiment -- are balking at DHS' plan and demanding a seat at the table.

"We don't want the state to make the same mistake again of jumping too quickly," said Sen. Linda Berglin, DFL-Minneapolis, an influential voice on health policy.

Dr. L. Read Sulik, a St. Cloud psychiatrist who was brought in 18 months ago in part to solve the problem, agreed that the Community Behavioral Health Hospitals are expensive, often ineffective and in need of overhaul. But, he said, the original idea was innovative.

"Minnesota forged the path trying to address a model that would be unique," said Sulik, an assistant commissioner at DHS. "We don't have other states that have done this."

Today, however, the facilities bear little resemblance to the original concept. The small hospitals, all built outside the Twin Cities area, replaced the state's six massive psychiatric institutions that used to house seriously ill people for months, years and sometimes even for life. "We were warehousing them," said Ed Eide, executive director of the Mental Health Association of Minnesota.

The community-based facilities were supposed to provide acute care close to home and operate in conjunction with local hospitals, so patients could get psychiatric care as well as the medical and addiction treatment that they often need.

Officials also hoped the new facilities would qualify for federal payments under Medicaid. Anything with 16 or fewer beds might meet federal requirements, relieving Minnesota of half the financial burden, state officials believed.

But almost none of that came about.

DHS was unable to partner with local hospitals, said Sulik. Instead, it arranged with private developers or counties to build 10 cookie-cutter facilities, which the state agreed to lease for 10 years. "What developed was 10 free-standing, completely separate 16-bed hospitals," he said. "None of them are part of their larger community health systems."

The result: The new mini-hospitals could not provide medical care. They also lacked enough security to accept difficult, aggressive patients, whom community hospitals also couldn't take.

The psychiatric hospitals were further isolated from their communities when DHS created a single statewide admission process. Social workers, doctors and police officers must call a Minneapolis number to get often-volatile patients admitted. Then DHS required that they first go to a hospital for medical screening.

"They were a barrier to admissions," said Heglund. "When you called, there were more questions, more testing and 'No, you can't get them in there.''' Often, she said, patients end up in jail instead of a hospital.

"We have not used them [the mini-hospitals] much," said Craig Myers, family services director in Cottonwood County. Instead, he sends patients to private hospitals in Sioux Falls, S.D., and Worthington, Minn.

Much of the burden falls on local sheriffs and police. Jim Franklin, executive director of the Minnesota Sheriffs Association, said deputies routinely provide security at local hospitals because staff nurses are ill-equipped to deal with the sometimes volatile patients.

Patients who are admitted to the state-run facilities are often sent out of town anyway because the closest psychiatric hospital doesn't have the proper staff on hand. Deputies end up driving patients in psychiatric crisis hundreds of miles to a facility that can take them. "Those are all costs borne by the sheriff's budget," Franklin said.

Federal resistance

Medicaid reimbursement hasn't quite worked out, either. Sulik said only four of the 10 facilities have been certified by federal authorities, and the process has been agonizingly slow. "There has been great resistance at the federal level to pay for services that they traditionally have not paid for," he said.

Federal regulators also questioned the occasional use of local police and sheriff's deputies to handle volatile patients. "There's a difference in their attitude about the use of firearms and Tasers," Sulik said.

Sulik and others say the new hospitals have produced some successes. For example, the length of stay averages only 22 days, instead of the 45 days they had anticipated. That's better for patients and taxpayers, but it aggravates the empty-bed problem, Sulik said.

Now everyone, from local officials, to the Pawlenty administration, to Berglin, agree that something has to change. The question is what and how fast.

Some say the DHS plan is simply a way to save money. "It's not a redesign," said Eide, of the Mental Health Association. "It's a slash and burn."

DHS plans to close a crisis center in Mankato and wants to change the mission of the remaining nine mini-hospitals to match community needs, Sulik said.

Berglin and mental health advocates say the state should slow down and develop the partnerships with local community health organizations that have been missing from the start.

Berglin plans to hold hearings in the next week to air the issues more publicly.

Josephine Marcotty • 612-673-7394 Warren Wolfe • 612-673-7253