Behavioral Health Resources in midst of dire financial test

Problems include higher worker health premiums, clients who don’t show up

ahobbs@theolympian.comFebruary 15, 2014 

A therapist leads a pro-labor work song along with fellow staff members outside Behavioral Health Resources during a picketing demanding improved wage structure and client support from BHR. (The Olympian file, 1999)


The financial turmoil at Behavioral Health Resources has left employees wondering how much longer the mental health-services provider will survive.

Last month, BHR delayed payroll by a day until the cash was available. A potential employee strike also looms.

“We’re in financial distress, and I’m doing everything in my power to keep BHR from failing,” said CEO John Masterson, adding that this is the most severe financial challenge in his 13 years at the helm. “If BHR were to close, that would be a significant impact to the community.”

BHR, based in Thurston County, is a multi-county provider of mental health and addiction recovery services.

Masterson said BHR spends more than it earns. According to the organization, monthly operating cash decreased from $2.7 million in Dec. 2012 to $702,214 in Dec. 2013. Personnel costs represent 83.5 percent of this year’s budget.

In addition, costs for employee health benefits went up 18.9 percent. Masterson said BHR can’t cover the increase of $35,000 a month in benefits while still paying 100 percent of health premiums.

BHR serves nearly 10,000 low-income patients a year in Thurston, Mason and Grays Harbor counties. Founded in 1956, the private nonprofit organization has 293 employees, most of whom belong to labor union SEIU Healthcare 1199NW.

The union and BHR have clashed over employee contract negotiations. The original labor contract expired in March 2013, and no agreement has been reached. The union has proposed several concessions, such as no wage increases.

However, Masterson said the union’s proposal would make the health plan more expensive. BHR presented a final offer in November, and recently declared an impasse in negotiations.

BHR plans to implement the new health plan — with a higher copay and deductible for employees — on March 1. This could set the stage for a one-day strike, approved by the union, which still considers the contract open for bargaining. Masterson said a strike would be counterproductive to saving the organization.

Some say a broken business model is a factor in BHR’s trouble. Although the organization relies on state and federal dollars, BHR has gradually shifted to a fee-for-service model to generate money.

BHR’s state and federal funding is managed through a contract with the Thurston Mason Regional Support Network. BHR recently had to repay $447,000 to the regional support network for two years worth of group services that did not qualify as billable, according to an audit.

Several employees say they are frustrated with the lack of billable hours and the effect of no-shows for appointments. Therapists are paid only for hours in which a client shows up. If a client cancels an appointment or fails to show up, employees must fill out paperwork without compensation.

In roughly one out of three appointments at BHR the client doesn’t show up, said Paul Gray, an adult therapist and the sole full-time employee at the Elma branch. Some mentally ill clients have difficulties with organization and “holding it all together,” Gray said, which can cause missed appointments.

Therapists have a financial incentive to remind clients about appointments, but there is no disincentive to the clients for canceling. Gray said the system, which imposes quotas on billable hours, is more to blame than the management.

“We have so little control over what happens with our clients and whether they show up or not,” said Gray, part of the union’s bargaining team. “The standards they’re putting us on are impossible to meet.”

Recent changes in the agency, such as a switch to electronic health records, have also contributed to the stressful climate at BHR.

“BHR has been in rough times before, but they’ve always pulled out,” said Tammi Keesee, an office specialist at the administrative headquarters in Olympia. As a 22-year employee, Keesee said the last major layoffs were in the late 1990s, and she feels the organization can ride out this wave.

“I don’t feel the community is going to let us go by the wayside,” she said.

The no-show problem is prevalent in the mental health industry. A 30 percent no-show rate is common, according to a 2013 report by the Kansas Health Institute News Service.

Organizations can raise their bottom lines significantly by reducing the number of canceled appointments – and thus raising the number of billable hours. The report suggests a few solutions that can help recapture hundreds of thousands of dollars in lost revenue. One idea was to increase the number of same-day appointments and walk-ins. Another suggestion was to hire a “trained interviewer” to contact clients 48 hours before appointments and find alternatives if a client seems unlikely to show up.

Andy Hobbs: 360-704-6869

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