by Phyllis Vine

For years, families, consumers and advocates have been saying there is a shortage of psychiatric services and that hospital stays are abruptly terminated because of insurance. Now the for-profit industry has discovered this gap. And publicly traded companies are gearing up.

A recent article in Business Week dubbed "Psychiatric Solutions, Inc.," a NASDQ-traded company (symbol=PSYS), the fastest growing "pure play, public company in the inpatient psychiatric industry." In other words, it is profitable and "same facility quarterly revenue growth has averaged approximately 9%." For this, and other reasons, Business Week predicts "a healthy outlook."

According to its marketing materials, Psychiatric Solutions, Inc., expanded through a series of mergers and acquisitions since 2001 to build 10,000 beds in 90 facilities, roughly 18 percent of the inpatient psychiatric beds in 31 states. Some of the acquisitions, such as Ardent Health Services in 2005, added 20 hospitals. Ardent itself had been acquired by a private equity firm in 2001. Four years later, when that firm, Welsh, Carson, Anderson & Stowe, unloaded 20 in-patient psychiatric hospitals, Psychiatric Solutions, Inc., picked them up. This past June, the company acquired another 15 psychiatric hospitals from Horizon Health Corporation. Horizon had owned or operated many for only a few months before it began negotiating the merger.

In a pattern similar to the consolidation of fast foods, breakfast cereals, or women's apparel, big business has its eye on mental health services and an estimated $20 billion market. Whatever the financial rewards of practicing psychiatry, which is a labor intensive, people-oriented field of medicine, they pale compared to the lucrative package for Psychiatric Solutions, Inc.'s, top managers with salaries between $535,000 and $2.1 million, plus stock options. Board members come from banking, business, and hospital chains, notably Hospital Corporation of America (HCA), the nation's largest for-profit company. Only one psychiatrist, William M. Petrie, MD, sits on the board of directors.

What can this mean for how mentally ill people will be getting treatment? Can Wall Street firms, with eyes fixed on the bottom-line, commit to the best interests of a patient, perhaps one with a vexing, seemingly intractable medical condition requiring complex and careful monitoring that may require a stay longer than 10 days, the average for Psychiatric Solution, Inc.? What does business ownership of psychiatric hospitals predict for staff-to-patient ratio? How will clinical work be evaluated and by whom? What studies and evidence will influence the choice of medicine or treatment modalities? What professional qualifications will be required for employment? And who will drive the regulatory agency?

Part of the revenue anticipated by Psychiatric Solutions, Inc., comes from new funding as a result of insurance parity, which is likely to soon be law. It would be unfortunate if, in the rush to anticipate the benefits of ending insurance discrimination, mental health professionals lost this opportunity to shape the programs it deems essential to promote recovery.

For too long the mental health community has lamented a bias plaguing their work. This has translated into financial problems and staff shortages. They, in turn, led to shortchanging community programs and outreach, and to reduced services for patients and their families. Initiatives for intensive case managers, trained ACT teams, out-patient treatments -- the types of services on which successful rehabilitation is built -- were weakened. Parity insurance is likely to open a door for some of these, not only with an emphasis on inpatient beds, but to use resources to promote recovery.

Mental health treatment programs -- independent for-profit and not-for-profit hospitals, non-profit agencies, and general hospitals with psychiatric floors -- have the same challenge as the managers of publicly traded stock companies. It would be a shame if the mental health community did not seize it. The lesson of lost opportunities can be learned from the way chain nursing home companies stepped into a void left by the medical community. One wonders how that story might look today if geriatricians, not corporations or investors, had guided treatment and care.

It's all to the good if people with a mental illness benefit because the business community expands programs and services. But shareholders may not share the needs of stakeholders. How stakeholders respond will determine a critical question: who will shape treatment and care for people needing mental health services? And who, in the long run, will benefit?