300,000 People Rely on Michigan’s Public Mental Health System. Republicans Want to Privatize It.

“All the things that I never dreamed that I would be able to do, I’m doing,” Malkia Newman said. “And that’s because of the support that I received through the community [mental health] system—the wraparound services—which would go away if it was privatized.”

Need to Know

• Michigan Republicans introduced a pair of bills to privatize Michigan’s public mental health system.
• Opponents say these bills would take away local control, worsen the level of care, and line the pockets of insurance companies at the expense of the 300,000 Michiganders who rely on the public system.
• The Republican-led effort has drawn opposition from more than 100 national, state, and local organizations, including the Michigan Developmental Disabilities Council, the Michigan Sheriffs’ Association, and the Michigan Catholic Conference.

MICHIGAN—When Malkia Newman walked through the doors of a community mental health center in 2004, she felt she’d hit rock bottom. 

The Oakland County resident was in her mid-50s, had been married and divorced three times, and couldn’t hold down a job.

“I was homeless, I was suicidal, in crisis,” Newman, now 68, told The ‘Gander. 

Newman was diagnosed with bipolar I disorder in 2001. She was initially medicated, but later went off those prescriptions, which led to manic episodes and bouts of depression. 

That was the state Newman was in when she arrived at Oakland County’s public community mental health center—one of 46 public Community Mental Health (CMH) programs in Michigan. These CMHs and their provider agencies are responsible for delivering mental health services to 300,000 low-income Michiganders through the state’s public system. 

The Oakland County team evaluated her and directed her to CNS Healthcare, one of its provider agencies. The team at CNS changed her life.

“They were able to get me stabilized on medication. Within a year, they helped me find an apartment, which I hadn’t had in a couple of years, and they also provided me with a part-time peer position,” Newman said. “I tell people all the time that I’m a poster child for community mental health.”

With the help of her case managers, Newman got her life back on track. She received support services, learned more about her illness and how to live with it, how to deal with signs and symptoms, and the importance of her medication.

“My daughter noticed immediately when I started taking meds. She said, ‘Mom, whatever you do, don’t stop taking your medication. I could have had a mama,’” Newman said ruefully. She admits there was a lot she couldn’t do for her daughter because she was incapacitated, sometimes for months at a time.

By 2007, Newman had made such strides that she began working full-time at CNS. She also met a man at her mother’s church, and they eventually eloped. Together, the couple bought a home in 2012. 

Newman knows firsthand how important it is for care to be available, accessible, and comprehensive—which is why she’s speaking out against a controversial new effort by Michigan Republicans to overhaul the state’s public mental health system.

Senate Majority Leader Mike Shirkey (R-Clarklake) and Sen. John Bizon (R-Battle Creek) have introduced a pair of bills, SB 597 and SB 598, that aim to privatize Michigan’s public mental health system. It’s a shift that critics like Newman say would take away local control, worsen the level of care, and line the pockets of insurance companies at the expense of Michiganders.

While the bills were introduced last year, they were updated earlier this month and remain on the Senate floor.

If Shirkey’s plan is passed by the legislature, it would require Gov. Gretchen Whitmer’s approval. Whitmer’s office did not respond to a request for comment, but the governor vetoed a similar effort to partially privatize the public system in 2019. 

Newman remains concerned about the plan. She worries about what it would mean for people who are, like she once was, at the lowest point in their lives and desperately need help.

“I became a supervisor in 2016. I’m a homeowner now … I’m a taxpayer. All the things that I never dreamed that I would be able to do, I’m doing,” Newman said. “And that’s because of the support that I received through the community [mental health] system—the wraparound services—which would go away if it was privatized.”

The Current System Has Issues, but Shirkey’s Plan Is Not the Answer, Critics Say

While Newman and others have had a positive experience, that’s not the case for everyone who seeks out care. Even supporters of the system admit it’s a confusing bureaucracy that includes both public and private providers. The ease of accessing care also varies based on an individual’s location, insurer, and diagnosis. 

“This isn’t a gallbladder operation. Mental illness is such a diverse and non-specific type of event that very few individuals have the same kind of issue,” said Dan Russell, CEO of the Genesee Health System, a community mental health center located in Flint. “That’s why it looks scattered sometimes because not one treatment plan fits everybody.”

Here’s how it works currently: Michigan’s Department of Health and Human Services contracts with 10 state-created mental health and substance abuse plans for patients who have Medicaid for insurance. Those state-created plans have contracts with CMHs, such as the Oakland Community Health Network. 

When a patient seeks care through a community mental health center, they’re offered either a virtual or in-person screening. Based on the results of that assessment, they’ll then either receive care through that center or be referred to partner providers—like CNS, where Newman got care. Wherever they receive treatment, the goal is to address patients’ physical and mental health in an integrated, comprehensive manner. 

This holistic approach is critical, according to Russell.

“We serve the seriously mentally ill, which are adults; the seriously, emotionally disabled, which are children; individuals with an intellectual and developmental disability; and individuals with a substance use disorder,” Russell said. “We take the toughest cases, a lot of times cases that would not go anywhere else because they’re very, very difficult.”

CMHs represent a sort of “safety net” in the community, he added. “When there is something that happens and nobody is quite sure who to call or who’s going to do something, a lot of times we get called for community tragedies and those kinds of things.”

If Shirkey and Bizon’s bills become law, they would transition control of the public mental health system away from the state-created plans and instead give that control to private, profit-driven health insurance companies such as Blue Cross Shield of Michigan and Meridian Health, both of which support Shirkey’s plan. Under private control, CMHs would just become like any other provider and lose a lot of the functions and services that allow them to serve as a sort of community safety net, Russell said. 

Shirkey—who has received steady donations from insurance companies, including Blue Cross Blue Shield and the family behind Meridian—did not respond to a request for comment. He has claimed his plan is simply an attempt to better integrate physical and mental health care and simplify the system. Critics aren’t buying it. 

“It’s very misleading. It sounds good when Sen. Shirkey talks about it. The reality is not very pretty,” Russell said. “The new legislation is more expensive, decreases the quality of care, and local communities should be very, very concerned. They would see a very, very definite decrease in the quality and access to the services that they now have.”

The Republican-led effort has drawn opposition from more than 100 national, state, and local organizations, including the Community Mental Health Association of Michigan, the Michigan Developmental Disabilities Council, the Michigan Sheriffs’ Association, the Michigan Catholic Conference, dozens of mental health service providers, and the Michigan Association of Counties (MAC).

“We’ve seen … over half of [Michigan] counties pass resolutions in opposition to any shift towards privatization and really it ranges from all of our UP counties to Oakland. It’s not a partisan issue by any means. It’s not a size of a county issue,” said Meghann Keit-Corrion, a governmental affairs associate at MAC. “It’s really a concern to them to take this away from that local governance structure that they feel very connected to and they feel responsible for.”

Ordinary Michiganders also oppose the idea when asked about it. A recent poll commissioned by the Community Mental Health Association of Michigan and conducted by EPIC-MRA found that 67% of Michigan voters want public entities to continue managing the public mental health system rather than turning over control to private, for-profit companies. Conversely, only 24% of voters supported privatization. 

‘The Community Will Never, Ever See the People Making the Decisions’

The existing system is public and locally administered, which means that a host of information—including budgets, how much money is spent, and the services CMHs provide—is available to the community. Russell noted that CMHs like the Genesee Health System also hold public meetings and are readily accessible to community members. 

“Right now, if somebody has a question about our system, or they have a complaint or they have an issue, they call us. And a lot of times I get that. I had an issue not too long ago [flagged by] Sen. Jim Ananich,” Russell said. “One of his constituents had an issue with one of the providers in our system and he called me and I looked into it and I got him an answer within an hour or two. 

If Shirkey’s plan succeeds, the decision-makers replacing folks like Russell are not guaranteed to be in Michigan. Shirkey said that under his proposal, there would be one 1-800 phone number for people to call to learn about how to access mental health services. Once they began getting treatment, they’d be assigned a single-care coordinator who would be in charge of their care.

Handing control of locally managed mental health care to distant decision-makers could make it harder for patients to get quality services and hold the people managing their care accountable. 

“It’s like when you call your healthcare provider insurance plan. You talk to a specialist and maybe they’re in Michigan, probably not. Maybe they’re in the country, maybe not,” Russell said. “You never talk to somebody who’s going to be in a position who’s actually going to give you a real good, solid answer.”

Shirkey’s Bill Could Worsen Mental Health Care, Too

The possible loss of local control isn’t the only factor that has experts on edge.

Russell also argues that health insurance companies don’t have a lot of experience managing mental health, citing a 2019 report funded by the Michigan Health Endowment. The report found that those with mild-to-moderate mental illnesses, such as anxiety disorders and depressive episodes—the kinds private insurers are tasked with managing—were the least likely to have their needs met. 

“The health plans did not do a good job managing that benefit, and I would say that is a much easier population to deal with than the ones we deal with, and we do a much better job at it,” Russell said.

The private companies’ failures to adequately serve these populations is why MAC is concerned about handing over control of an even larger share of the population.

Putting for-profit companies in charge could lead to “more denials-of-services” and “higher costs,” Keit-Corrion said.

Research has shown that private insurers do not provide the same level of mental health coverage as medical coverage. They reimburse mental health providers at substantially lower rates than medical or surgical providers, which is why so many behavioral providers opt not to be a part of insurance networks, making it harder for patients to get the care they need.  

A coalition of 15 Michigan Democrats and one Republican are trying to address this “parity” issue with a new bill that would require insurance companies to offer the same level of coverage for mental health and substance use as they do for physical health. It remains to be seen if the Republican-led legislature gets on board.

To be fair, the public system has its shortcomings as well. The Michigan Health Endowment’s 2019 report found that Medicaid enrollees are the most likely to remain untreated for a mental illness. There are reasons for that though, according to Newman. State funding has been woefully inadequate and certain areas, such as the UP, face shortages of providers—a reality that’s only gotten more dire during the pandemic.

“Access is a problem. Not everybody that needs services can get services,” Newman said. “We don’t have enough doctors. We don’t have enough case managers. We don’t have enough social workers. We don’t have enough nurses, and it’s hard to just pull staff out of the sky.”

The answer, Newman and Russell believe, is not to privatize the system, but to provide more funding to fill the staff shortages and increase the number of patients they can care for.

“We need to invest the money where it produces the best results and not just line the pockets of insurance companies and shareholders,” Newman said. “We’re still underfunded in the public system. If we funded it correctly, oh my god, what a difference it would make.”

Michigan, a state of 10 million people, has fewer than 800 beds across the state’s five psychiatric hospitals. 

“We have people across the state … sitting in emergency departments waiting for a bed, waiting for that care,” Russell said.

Higher Costs for Michigan and More Money for Insurance Companies

With Michigan’s existing public mental health system, the money is spent locally: Local providers and CMHs only spend about 6% of their funding on administrative costs, compared to nearly 9% at private, for-profit Medicaid health plans. In general, private insurance plans’ overhead costs are more than double that of public plans. 

The Community Mental Health Association of Michigan has warned that if Shirkey’s plans become law, it could raise overhead administrative costs to 12 to 15%—money that would come out of the pockets of ordinary Michiganders and be stuffed into the pockets of for-profit corporations. 

If these private insurance companies take over the system, Russell believes it would “funnel the money to places other than local communities in the state of Michigan.” 

“It won’t save money. It will cost more money. It will add a lot more layers to the system,” he said. 

Despite a groundswell of opposition, Shirkey and his allies are barrelling forward with their agenda.

“They turn a deaf ear,” Newman said. “They’re not listening to what people are saying.”