California releases plan for overhaul of mental health programs

California mental health officials on Wednesday detailed plans for a new Department of State Hospitals, a streamlined agency that they said would improve treatment and reduce patient violence at the troubled psychiatric facilities — as well as save money.

The department, which will oversee the state’s five mental hospitals and psychiatric programs at two of its prisons, is expected to replace the Department of Mental Health next year. The spinoff is the result of broader legislative changes intended to pass the department’s other responsibilities — for community mental health care —- down to county governments.

Cliff Allenby, acting director of the current Department of Mental Health, said that long-overdue improvements at the hospitals would come along with the structural change.

A 271-page report by an independent panel commissioned by Allenby last summer — and posted online Wednesday — found organizational and financial problems at the department, as well as issues with patient treatment and aggression. The agency is facing a $120-million budget deficit.

Acting Deputy Director Kathy Gaither called the report “probably more candid than any … that’s come out on any state agency.”

The proposed overhaul, which is subject to negotiations with employee unions, includes the elimination of 600 jobs, diluted staff-to-patient ratios, a rethinking of treatment programs and stronger fiscal oversight. It comes as the hospital system is struggling to emerge from federal oversight imposed five and a half years ago to settle a lawsuit over poor treatment.

Atascadero State Hospital and Patton State Hospital in San Bernardino were released from the consent judgment last month, but federal lawyers on Friday sought to extend key portions of the agreement for Napa State Hospital and Norwalk’s Metropolitan State Hospital. They argued in a court filing that those hospitals had failed to keep patients safe from harm and death. A hearing on the matter is scheduled for January.

Coalinga State Hospital was not subject to the federal agreement, but the state imposed similar reforms there.

A number of the proposals outlined Wednesday seem to reverse changes called for by the consent judgment, raising questions about whether Justice Department officials would contest the overhaul.

For example, instead of leaving their units daily to participate in a campus-style treatment “mall” as required under the federal agreement, patients would attend groups in their own units — a change state officials said would improve safety and save on staff time.

Napa psychiatric technician Donna Gross was strangled on the grounds last year by a patient who, although known to be dangerous, was given a pass that allowed him to wander freely to attend mall groups. Napa employees pushed after Gross’ death to have the most dangerous patients placed in a high-security treatment unit with enhanced staffing.

Instead, Gaither said Wednesday, the state would launch a pilot program at Atascadero next week for 12 such patients and assess whether to expand it to other hospitals.

Earlier this year, safety concerns led California Health and Human Services Secretary Diana Dooley to lift a hiring freeze at the five state hospitals. But next year’s plan calls for the elimination of 600 direct care positions — psychiatrists, psychologists, social workers, nurses and psychiatric technicians among them. Fewer than half of those are currently filled, Gaither said.

Outside contract positions also would be eliminated.

In the revamped department, Gaither said, clinicians also would generally have larger caseloads. But caregivers who previously were focused exclusively on paperwork — meeting extensive federal requirements — will be reassigned to patient units.

Gaither characterized the changes not as a reversal of the federal reforms, but as “a refinement.”

Employee unions reacted angrily to the plan, saying reduced staff-to-patient ratios were dangerous and that soaring overtime costs can only be reduced by hiring.

Dr. Stuart A. Bussey, president of the Union of American Physicians and Dentists, called it a “pie-in-the-sky” proposal driven by “short-term monetary goals.”

lee.romney@latimes.com