As mental health cuts loom at the state level, AltaPointe — the primary mental health care provider in coastal Alabama — is looking to lock in support from Mobile and Baldwin counties to help fund the company’s first long-term bond option.
Altogether, AltaPointe is seeking to borrow more than $17 million to help fund at least $10 million in renovations to its facilities in Mobile and Daphne. As it seeks its first long-term bond, AltaPointe is hopeful that “locking in” long-standing revenue streams from both counties will help it get the best interest rate possible.
Among other projects, the bond would pay for a new roof at BayPointe Hospital in Mobile and EastPointe Hospital in Daphne; enhance the parking lot at AltaPointe’s administration facility; and facilities expansions required to admit the influx of patients from outpatient offices managed by Alabama Psychiatric Services, which closed all of its facilities earlier this year.
Tuerk Schlesinger, CEO of AltaPointe Health Systems, Inc., has approached both county commissions, with mixed results. Both counties have already helped subsidize AltaPointe for years through a percentage of taxes on tobacco products, but at least some members of both commissions have expressed issues with “tying the hands of future commissioners” by agreeing to continue that funding throughout the life of AltaPointe’s 25-year bond.
“The wording of their request justified the commitment of those funds for 25 years, and if the cigarette tax were to double, the money going to AltaPointe would be double as well,” Baldwin County Commissioner Chris Elliott said. “There’s still some contract negotiations going on, but … I didn’t get the impression there was enough support for us to commit that money for the next 25 years.”
Elliott said he personally is a strong supporter of AltaPointe, which already receives about $450,000 each year from Baldwin County — or 40 percent of the funds generated from Baldwin County’s cigarette tax. While Baldwin County has yet to reach a decision on extending that commitment, Elliot said as long as he’s in office he will “fight tooth and nail to make sure they get that level of funding or more.”
“(AltaPointe) is a for-profit institution, but what they do and how they do it is laudable to say the least,” Elliot said. “They have stepped into a spot that everybody else is getting out of to serve a population that desperately needs it.”
In Mobile County, Commission President Connie Hudson said she feels similarly, and told Schlesinger at last Thursday’s meeting AltaPointe is a “last resort” for mental health and “it’s important to support it anyway we can.”
However, revenue sources for AltaPointe in Mobile County are slightly different from Baldwin’s. Instead of an annual allocation, Mobile County pledges about 8 cents for every pack of cigarettes sold to mental health, the vast majority of which goes to AltaPointe.
That system was established by state legislation in 1987 and is funded by county statutes enacted in the early 2000s. As smoking rates have decreased, so has the value of the agreement. In fact, Schlesinger himself said their contribution from Mobile County has steadily decreased by at least 3 percent for several years.
District 3 Commissioner Jerry Carl finds himself at odds with Hudson, and didn’t mince words when questioning Schlesinger. Carl took the opportunity to discuss the “huge salaries” at AltaPointe and its lack of competition in the Bay area.
“I understand you’ve got your votes, and it’s going to be hard for me to stop this, but you’re going to lock us up for 25 years and regardless of the quality of service we think we’re getting, we’ll have no leverage on you going forward,” Carl said. “That’s my whole rub here, you’re the only game in town. We had a private company that wanted to come in three years ago and through the state board, that got shut down. And now you’re telling us, either we approve this, or we’ve got problems in the mental health system.”
In early 2014, the Alabama Statewide Health Coordinating Council (SHCC) voted unanimously against an effort by Memphis-based Strategic Behavioral Health to set up a free-standing psychiatric hospital in Mobile County with financial backing from a Las Vegas-based investment group.
Strategic Behavioral Health’s attempts were sidelined when the SHCC ,which includes Schlesinger, voted 20-0 against a Certificate a Need for the proposed psychiatric hospital.
Schlesinger said the competing mental health facility was strongly opposed by the SHCC, suggesting it was sponsored by a venture capitalist group working “to build hospitals around this country quickly and then flip them like condos.”
According to Schlesinger, Strategic Behavioral Health also had no intention of accepting adult Medicaid or indigent care patients — a category he said comprises the majority of mental health patients in Mobile.
“With the type of needs and patients that we have, we have to put providers in our area that will add to the quality and capacity of this area,” Schlesinger said. “These private-pay patients only make up 30 percent of our patients, and they are subsidizing the other 70 percent. These private-pay patients are the only patients [Strategic Behavioral Health] was going to accept.”
Meanwhile, Schlesinger told commissioners AltaPointe welcomes competition and would pledge any support to help the numerous local hospitals expand their mental health operations to fill the void in services.
Mental health recently has been on the cutting block at the federal, state and local levels. The city of Mobile’s recent budget cuts withdrew $400,000 from AltaPointe.
On the state level, mental health allocations could drop $35 million if the budget is approved as anticipated. With the loss of related, federal matching funds, the total loss can approach $100 million.
According to Schlesinger, more than $2 million in federal Medicaid funding allocated to freestanding psychiatric hospitals has already been withdrawn — though he said U.S. Sen. Jeff Sessions is working on legislation to have it restored.
As for the proposed bond issue, Schlesinger said it was required for essential improvements. He also said any additional money received through county support would be spent on patient care.
“This is about making sure the people in Mobile and Baldwin counties get the health care they deserve in quality facilities,” he said.
CORRECTION: The original version of this article suggested that Alabama Psychiatric Services, which closed earlier this year, managed hospitals. APS did not manage hospitals, it managed outpatient offices. Also, Schlesinger said Strategic Behavioral Health also had no intention of accepting “adult Medicaid or indigent care patients,” not Medicare patients, as originally reported. Finally, it should be noted that despite Baldwin County Commissioner Chris Elliot’s statement, AltaPoint is a nonprofit organization.