Topeka State officials in Kansas began laying out their case Wednesday for why they think the state should replace the aging and troubled Osawatomie State Hospital with a new facility and hand over management of the facility to a for-profit, out-of-state corporation.
Tim Keck, secretary of the Kansas Department for Aging and Disability Services, which manages the psychiatric hospital, said the hospital has become too challenging for the state to manage, and it is time for the state to make a decision.
"We are at a point that we need to address Osawatomie once and for all," Keck said during a Statehouse news conference. "It’s been problematic for the state for a long time — a long time before I took the job; a long time before the governor came into office. For a long time, we’ve needed to address this as a state."
The hospital that sits just south of the Kansas City metropolitan area has been in operation since 1866. Although the original buildings on the campus are now gone, many of those that stand today date back to the first half of the 20th century. The newest was built in the 1980s.
Today, the hospital suffers from a number of problems, the biggest of which are staff shortages and inadequate facilities. Although it is licensed for a little more than 206 beds, the hospital was forced to cut back in 2015 because of overcrowding, and it now limits its patient population to around 150 beds.
In 2015, the Centers for Medicare and Medicaid Services decertified Osawatomie State, citing a number of factors affecting patient care and staff safety. That action came shortly after a female worker at the hospital was raped by one of the patients.
Keck, who took over as KDADS secretary in August 2016, said his agency has taken several steps to address the deficiencies, and he said one unit within the hospital, a 60-bed unit called the Adair Acute Care facility, is on track to regaining Medicare certification within the next few months.
Over the long term, however, Keck said large parts of the Osawatomie State campus need to be replaced, and he said a private company with experience in managing such facilities would be better suited to run the hospital than the state of Kansas.
Keck said KDADS has been working with a Nashville-based company, Correct Care Solutions, which also manages state psychiatric facilities in several other states.
The current plan being discussed, he said, would be to demolish several aging and obsolete buildings on the campus and replace them with a new facility that could house up to 210 patients. That would be in addition to the 60 beds in the Adair Acute Care unit that officials hope to recertify.
That would bring the total capacity up to 270 beds, something that would come as a relief to local facilities like Lawrence Memorial Hospital and the Bert Nash Community Mental Health Center, where officials have been complaining for months about the length of time it takes for space to open up at Osawatomie so that psychiatric patients can be transferred there.
One of the big issues for lawmakers, however, will be the cost. Keck estimated the cost of demolition and new construction could run as high as $175 million, which would need to be financed either by issuing new state bonds or by entering a lease-purchase agreement.
Meanwhile, the state would still need to make regular appropriations to pay Correct Care for operation of the hospital.
State Sen. Laura Kelly, of Topeka, the ranking Democrat on the Senate Public Health and Welfare Committee, noted that the state's efforts to privatize its Medicaid program, now known as KanCare, has led to a host of problems, and she questioned how a for-profit hospital could operate a state psychiatric institute properly while still producing a return for its shareholders.
A spokesman for Correct Care, however, said that over the years, the company has found numerous ways to provide care in a state hospital setting more efficiently, reducing both direct costs and exposure to legal liability.
Keck noted that the administration will need legislative approval before it can enter into any contract with a private company, the result of a proviso inserted into the budget bill lawmakers passed this year.
He said the agency plans to seek legislative approval during the 2018 session. He also said that Lt. Gov. Jeff Colyer, who in all likelihood will be governor by that time, has endorsed the concept of privatizing the hospital.