To reach the point that it could open a sparkling new hospital building in a ceremony today, Sheppard Pratt Health System had to spend the past two decades shifting its focus away from hospitalization and its Towson campus.
Mental health care has moved relentlessly from inpatient to outpatient, from long-term to short-term, from talk therapies to medications, from private payments to government programs.
Along the way, Sheppard Pratt has had to reinvent itself.
"What they did was forward-thinking and proactive," said Mark Covall, executive director of the National Association of Psychiatric Health Systems, an association for psychiatric hospitals and units.
The profound changes Sheppard Pratt has undergone have coincided with the tenure of Dr. Steven S. Sharfstein, president and chief executive, who arrived as medical director in 1986. At that time, all care was delivered on Sheppard Pratt's main campus, mostly to inpatients who filled its 320 beds and stayed an average of 80 days.
But as care models and reimbursement systems changed, Sheppard Pratt was forced to reassess its core business.
"We decided we weren't in the psychiatric hospital business, we were in the mental health care business," said Sharfstein.
Now, Sheppard Pratt runs eight "day hospital" programs on campus, and a variety of other programs, most in off-campus locations around the state. The hospital accounts for less than half of Sheppard Pratt's revenue - $153.9 million last year.
Its reach extends from a school in Allegany County to a family services agency in Montgomery County to a hospital unit on the Eastern Shore. In all, the system includes 12 outpatient programs, nine special education schools, three adolescent residential treatment programs, and five community housing and rehabilitation programs. Sheppard Pratt also manages, under contract, psychiatric services at nine general hospitals in Maryland.
At the same time, with the new building, Sheppard Pratt now operates 192 beds and the average patient stay is just 10 days.
The graceful Victorian buildings that have been Sheppard Pratt's hospital for more than a century indicate a past bordering on the aristocratic. What was then called the Sheppard Asylum opened in 1891, one of a small group of elite private psychiatric hospitals with 19th-century roots - a group that shares enough history and prestige that it sometimes refers to itself as "the Ivy League." The old building included suites of rooms so that patients could have their servants stay with them.
"They were long-term care facilities for the wealthy," said Dr. John A. Talbott, professor of psychiatry at University of Maryland School of Medicine, who has written a number of academic articles on the history of psychiatry.
By the middle of the 20th century, the range of people receiving psychiatric care was broadening, as insurers began covering inpatient stays, although not, generally, community treatment programs.
But things were already starting to change, Talbott said. Medications for schizophrenia became available in 1955, and anti-depressants followed. With the change in treatment methods, there was a corresponding shift in philosophy, a growing belief that for most patients, treatment in the community was preferable to institutionalization.
The changes were gradual at first - what Talbott called "a soft revolution."
It didn't remain soft for long. Insurers became willing to pay for outpatient treatment in hopes of forestalling more costly hospital stays. State governments began shutting down mental hospitals and switching resources to community mental health clinics.
Nationally, the number of psychiatric beds plummeted. In 1970, there were just under 525,000 inpatient and residential treatment psych beds; by 1986, there half as many, according to data from the federal Substance Abuse and Mental Health Services Administration.
The pressure accelerated in the '90s with the rise of HMOs and other managed care insurers, which squeezed costs. This time, private hospitals felt the pinch acutely. While the shift to shorter stays and more outpatient care had been under way for some time, "managed care accelerated the process and created some casualties along the way," Sharfstein said. The number of beds at private psychiatric hospitals dropped from 42,399 in 1994 to 26,789 in 2000.
Other "Ivy League" peers merged with general hospital systems, and Sheppard Pratt had exploratory merger discussions as well.
Instead of being absorbed into another hospital system, however, Sheppard Pratt embarked on a strategy of building its own system by acquiring community treatment programs. It wasn't clear, however, that acquisitions were the road to solvency. Many of the programs it took over were themselves financially stressed.
