• photo by Bob Geary
• View from the front of Dix Hospital

I went up to Dix Hill the other day to remind myself what this old and venerable place looks like, and feels like, now that the psychiatric hospital that was its reason for existence is in the process of closing and its sole use is as a campus for the state agency that's doing the closing. Dorothea Dix Hospital, named for the crusader who talked the North Carolina legislature into creating a hospital asylum for the "insane" in 1848, will be closed by the Department of Health and Human Services in the first months of 2011 unless, by some strange twist, the Republicans who will then be in charge of the General Assembly intervene to save it.

A few days later, I talked with DHHS Secretary Lanier Cansler by phone for the story I wrote in this week's Indy. I've copied the story below the fold. I wanted to know from Cansler whether DHHS intends to stay on Dix and expand there or move off to make way for some other future use of the property. DHHS has about 1,400 employees in 24 of the 40 buildings that remain on the 306-acre Dix Hospital tract. (At one time, Dix and its working farm comprised more than 2,300 acres — Dorothea Dix thought being outdoors in a tranquil setting, and working, were the best possible treatments for people with mental illnesses. Most of the land is now N.C. State's Centennial Campus.)

We also talked about the 2001 mental health "reform" legislation that spelled the beginning of the end for Dix Hospital, legislation that is now generally thought to have been not just a failure but, as Chris Fitzsimon of N.C. Policy Watch said recently, disastrous.

Some of what Cansler said is in the Indy. I thought I'd expand on and underscore some of it here.

First, Cansler said the Perdue Administration is studying what to do with Dix and with DHHS, which has employees in 39 leased spaces in Wake County in addition to the 24 buildings at Dix. The Dix buildings are old and most need a great deal of (expensive) renovation. The state's not interested in sinking a lot of money into repairs up there if it doesn't have to, he said. On the other hand, DHHS should be consolidated somewhere. Within 60 days, he predicted, administration officials will present their druthers to legislative leaders.

Cansler didn't express an opinion one way or the other about whether DHHS should consolidate or Dix or — the obvious alternative — put up a new building downtown where the other state offices are. Truth is, there are numerous places downtown (e.g., that big parking lot next to the Governor's Mansion) that would work for DHHS. Plus, it'll be worse than unseemly if DHHS drives mental health treatment off Dix Hill only to make it a campus for the bureaucrats who drove mental health off Dix Hill.

On the subject of the 2001 reforms, Cansler called it "a legislative package," which is literally true but fails to acknowledge the role played by Gov. Mike Easley, who clearly intended to save money by shifting mental health costs from the state budget to county budgets. Two years earlier, the U.S. Supreme Court in the Olmstead case ruled that persons with disabilities had a right to receive services in the least restrictive setting that was practical — a decision that cut against big state mental hospitals like Dix and in favor of community-based facilities for all but the most severely mentally ill. Great, said Easley, the old hospitals are expensive anyway and they're not eligible for federal funds from Medicaid. Lets' off-load the job to the counties and local hospitals. We'll set up a trust fund they can draw on, and we'll still save money.

Is how I remember it, anyway. The trust fund was $48 million, I recall, but no sooner was it established than Easley took the money back to help balance the state budget during the 2002 recession.

Cansler was deputy DHHS secretary at the time, but he wasn't in charge of mental health services and wasn't responsible for the outcome. Still, he had a front-row seat, so I asked him about the charge that reform was a failure. "I think the idea of having community capacity was good. I think the implementation was poor," he said.

The basic problem was underfunding. But another was privatization. The 2001 legislation called for the long-established "area programs" — local agencies that supplied mental health services to low-wealth patients using state money — to get out of the business of being service providers. Instead, they were to contract for services with private-sector companies (for-profit as well as non-profit) and provide administrative oversight only.

Well, said Cansler, the area programs divested too quickly, before community services were available to take over. So the psychiatrists who worked for the programs had nowhere to go and many left North Carolina. Meanwhile, local hospitals were closing their psychiatric units to save money, which left psychiatrists in private practice with nowhere to send their patients.

The upshot was that the state hospitals started receiving more patients despite the Olmstead mandate and despite the fact that the 2001 legislation also called for paring the number of state hospitals from four to three. Soon, the decision was made — again by the legislature — that Dix should be closed along with the old Umstead Hospital in Butner (Granville County, and the two replaced with a brand new Central Regional Hospital. Where would it be? The General Assembly said Butner.

Butner?

Has there ever been a worse decision than closing Dix, a signature place in the Capital City, and replacing it with a hospital in the middle of nowhere?

• photo by Bob Geary
• Dorothea Dix is history in the hospital lobby

As bad as that is, the symbolism is, if anything, worse: A Capital City that made itself a leader in mental health in 1848 by making an asylum on the high ground overlooking Raleigh now announces that it — the state — doesn't care to have such people nearby any more. In one of his last pieces before he died Thanksgiving Day, Peter Eichenberger rightly called it a blow to the very gestalt of Raleigh. "It has been some time since 'Dix Hill' set aside days to allow the more functioning patients out to wander around the city, but even with that absence," Peter wrote, "having all types of people contributing, even unconsciousy, to a society is one central icon of what a fully balanced society should strive for."

Eichenberger, after his near-fatal bicycle accident five years ago, suffered the kinds of "seizures, visions and, um, notions" that might've put him on Dix Hill not so long ago, he wrote. Advances in assessment and modern treatments meant that he no longer qualified as a "nut-job" — his word; still, "I feel a sense of solidarity and unity with those who do."

How many others of us might say the same?

Cansler left the Easley Administration after 2004, but he returned to take the top job in 2009 when Bev Perdue took office. Since then, he said, there's been far too little money for everything in Raleigh, and the General Assembly, after finding an extra $6 million to extend the life of Dix Hospital in 2009-10, put no money in the budget for it in 2010-11.

Thus, keeping it open has required him to dip into funds for community-based services that are solely needed and long overdue. In better times, Cansler said, if the General Assembly were funding community programs adequately and also making money available to keep Dix going, he'd have no problem with doing both. But forced to make a choice between ramping up community programs and doing less there in order to keep a shrunken Dix alive, he's chosen the former, he said.

Cansler said in the last two years, DHHS has signed contracts with local hospitals to provide 140 beds in psychiatric units at a cost of about $750 per bed per day. The per-day cost of beds at Dix is more than $1,100, he said.

For people with severe, long-term disease, state hospitalization is appropriate, Cansler said. But 40 percent of the patients admitted to state hospitals now stay there less than seven days, because their illness, though it may be severe, is not long-lasting ("severe and persistent"). For such folks, admission to a state hospital is not only not necessary and overly expensive, it's not a good clinical idea either. While hospitalized, they do better in a local setting where family and friends are nearby. After hospitalization, they need intensive, seamless follow-up that's a lot more likely to occur if they were treated locally in the first place.

With limited funds, Cansler says, the state's efforts now are focused on creating more local crisis-unit facilities and more psychiatric beds in local hospitals rather than on creating more state hospital beds. Advocates for the mentally ill argue that both are needed, and Cansler doesn't disagree. But the state's funding problems (and he didn't say it, but I will: the state's unwillingness to raise taxes on people who can afford it) leave him scrambling to build up the long-promised community services.

So he pleaded for patience. "There's a lot of positives that we're doing," Cansler said. "But we didn't get to where we are over night, and it's going to take awhile to get out."

• photo by Bob Geary
• One of Aloca's hydropower dams

It's a long way from over, but if you were making odds in the battle between Alcoa and the Perdue Administration, Alcoa's got a lot worse yesterday and Gov. Bev Perdue's odds would look pretty good except for the fact that if she gets what she wants from Washington and the state is allowed to recapture (the legal term) Alcoa's water rights on the Yadkin River, North Carolina will have to compensate Alcoa for what its dams are worth — and the state presently has no money, honey.

That said, Alcoa's road to relicensing is suddenly looking a lot longer ... and the longer this plays out, the better the chance that North Carolina's revenues will rebound and the needed cash will materialize in Perdue's accounts.

[Another Update 12/3: Talked with Stanly County Manager Andy Lucas, who makes the good point that whether FERC — a federal agency — or the state would ultimately be responsible for compensating Alcoa, the payment would doubtless be financed via revenue bonds backed by future earnings from the power plants. Thus, the state's bare coffers wouldn't be in the way of recapture at all — assuming, that is, that FERC would side with the state and against Alcoa in the first place. I have no insight into FERC or how its members will vote. But clearly, while FERC has never recaptured a license, it also has a history of insisting — and Alcoa acknowledges this insistence — that its licensees be on good terms with the water-quality standards of, in this case, the state of North Carolina. Alcoa, as of this week's stunning reversal by the Division of Water Quality, is anything but.]

[Update 12/3: Mike Taylor, a lawyer who represents Stanly County in this case, left me a message about recapture. He said it would be FERC paying to recapture Alcoa's license, not the state, and the cost would be limited to Alcoa's net investment, meaning what it's spent over the years on facilities minus depreciation. But if I recall correctly, FERC would look to the state for money or it would look to Congress for an appropriation that, presumably, would be initiated by North Carolina's congressional delegation. I missed Taylor on the return call; wil post more after I talk with him.

As to the net investment cost, Taylor's said in his message that it was just $26 million as of a few years ago. I reported, in my story last year (see below), that Alcoa put the figure at $91 million, which included $24 million in long-depreciated investments plus another $67 million spent recently on better turbines. (And the turbine investments may be continuing — the setback Alcoa suffered this week was related to the new turbines and whether they would or wouldn't resolve the problem of dissolved oxygen in the Yadkin created by Alcoa's dams.) Alcoa was also arguing, last fall anyway, that it would be entitled to hundreds of millions more from its lost future revenue stream. That seemed at odds with the whole notion of net investment cost — but since FERC has never before initiated a recapture process, how it would work exactly isn't certain and may ultimately be a matter of negotiations.]

You will recall that Alcoa's APGI subsidiary wants the federal government to renew — for another 50 years — the license under which the corporation operates four dams, four hydropower plants and a string of water-supply reservoirs on the Yadkin River.

You will also recall that Stanly County, the Yadkin Riverkeeper and Gov. Perdue since she took office have been fighting Aloca tooth and nail, arguing that:

(1) the only reason Alcoa was allowed to install the hydropower plants in the first place (which, in effect, gave it control of the river) was so it could supply cheap electricity to a big aluminum smelter in Stanly County, but the smelter and the hundreds of jobs that went with it are now kaput; and

(2) in the course of running the plant and the dams, Alcoa polluted the Yadkin but refuses to own up to the damage it's done.

For background, see our story "Give Back the Yadkin, Dammit" of a year ago. State officials tell us it will be another year or more before FERC, the Federal Energy Regulatory Commission, rules for or against Alcoa's relicensing application. But a key element of the application is supposed to be Alcoa's compliance with all relevant state water quality regulations.

As of yesterday, it isn't — The state Division of Water Quality, part of the Department of Environment and Natural Resources, revoked Alcoa's so-called 401 water quality permit, saying Alcoa withheld key evidence when it sought the permit.

The News & Record of Greensboro has a post up with more background, including DWQ's statement and Alcoa's response; you can view it here.

The actual DWQ revocation notice is worth reading for what it says about the evidence withheld by Alcao. You can read it here: 2010-01-10_APGI_Revocation_Notice.pdf

Finally, the Yadkin Riverkeeper, Dean Naujoks, was exultant:

This is a major step but we still have a long way to go, so watch for further developments on this topic. However, this decision opens the doors to pursue many of the other issues facing the Yadkin River such as full-scale environmental clean up/remediation of the site and River, as well as leveraging millions of dollars in water quality improvements for the Yadkin.

Taking on hard issues is always a gamble but the rewards can be far greater and the effort can accomplish more for our environment than less-controversial issues could ever hope to. Your continued support of our efforts is vital to our success; please consider a donation to Yadkin Riverkeeper so we can work to further protect and preserve this essential natural resource for future generations.

Some things—like clean water—are worth fighting for. And sometimes David actually beats Goliath!

The Riverkeeper's website is chock full of background as well. Naujoks' full statement is copied below the fold.