Elimination of Psych Services at Cedars-Sinai Could Foreshadow Similar Cutbacks Elsewhere

A major hospital’s decision to phase out most of its psychiatric services and its psychiatry residency program has rattled the profession a little bit. Cedars-Sinai Medical Center in Los Angeles said it made the decision in order to accomplish a “reorganization designed to focus on the institution’s core strengths while continuing to serve the community’s healthcare needs.”

Cedars, the preeminent private hospital in Los Angeles and considered the “hospital to the Hollywood stars,” said it would continue staffing of psychiatric support that is an adjunct to patient care throughout the medical center.

In a written statement provided to Psychiatric Times through the Cedars public relations office, Anand Pandya, MD, Interim Chair of the Department of Psychiatry, said, “I am very proud of the long list of accomplishments and advances that are the legacy of the Cedars-Sinai Department of Psychiatry and Behavioral Neurosciences. The professionalism and dedication of our staff has been unflagging through this transition and everyone within the department is committed to making this as smooth as possible for patients and psychiatry residents.”

Sally Stewart, a spokeswoman for Cedars-Sinai, declined to make either Dr Pandya or Waguih William IsHak, MD, Director of the Psychiatry Residency Training, available for interviews. Neither responded to an e-mail requesting comment on the closure of their programs.

One leading academic psychiatrist called Dr Pandya’s statement the kind that is “issued for public consumption.” He suggested that Cedars-Sinai was axing psychiatric programs because psychiatric in-­patient beds and out-patient services are among the least profitable, if not the least profitable, offered by any hospital. That is because psychiatrists have a limited number of expensive treatments a hospital can bill for, such as MRIs and cardiac monitoring, or even x-ray studies. That, in turn, contributes to placing psychiatric residency programs first in line to walk the plank when Medicare funding for graduate medical education is threatened, as it is today, as Congress attempts to dramatically cut federal spending on Medicare and Medicaid.

The academic psychiatrist explained, “Cedars is anticipating that federal funding for graduate medical education will decline in 2013 and that the hospital is simply positioning itself, as any number of other hospitals will position themselves.”

Cedars had a small psychiatric residency program consisting of 4 individuals in 2010. Those 4 were chosen from 400 applicants from medical schools at Harvard, Yale, Cornell, U of Penn, U of Michigan, Stanford, UCLA, USC, and many other highly rated places. Those 4 resident slots are part of a larger residency program at Cedars, none of the others of which are being phased out. Each hospital has a “cap” on the number of residents it can train with graduate medical education (GME) funds. The hospital decides how to allocate those cap spaces among specialties.

According to the American Psychiatric Association, the number of psychiatric residents in the US declined through the 1990s and into the early 2000s and then increased. There were 6201 residents in 2010, an increase of 2 residents over the previous year.

Officials at some other well-known hospitals declined to say whether they, too, were cutting back on psychiatric services or were considering closing down their psychiatric residency programs.

Jerry Berger, a spokesman for Beth Israel Deaconess Medical Center, where the Harvard program is centered, was unable to provide any information. John Lipsey, MD, a psychiatrist and Director of Residency Education at Johns Hopkins University School of Medicine, did not respond to e-mails.

But Sidney Weissman, MD, Professor of Clinical Psychiatry, Feinberg School of Medicine, Northwestern University, said his program was not reducing its residency class. He added that Northwestern Memorial Hospital, which houses the psychiatric residency program he participates in, just built a new 29-bed psych in-patient unit, having closed the previous 55-bed unit. However, the University of Chicago Hospital closed its in-patient psych unit a few years ago and continued its psych residency program in conjunction with community hospitals.

Aside from what is expected to be declining Medicare funding of GME, changes are also expected in how the cap is allocated. Total hospital spots are declining, and new spots are opening up at community training programs where primary care phy­sicians do most of their work. Those settings do not now qualify for GME payments, which go only to hospitals.

A 2010 report from the Medicare Payment Advisory Commission stated that Medicare is the single largest payer of GME, expending $9.5 billion in 2009. Approximately $3 billion of this is intended to support Medicare’s share of the direct costs of running GME programs. The other $6.5 billion is meant to support Medicare’s share of the indirect clinical costs associated with the presence of GME. “Commission analysis has shown that this amount is $3.5 billion higher than the empirically calculated indirect clinical costs associated with teaching,” the report said.

In a December 22, 2011, letter to the Institute of Medicine, a bipartisan group of US senators asked for an independent review of the governance and financing of the GME system. The letter stated, “We believe our GME system is under increasing stress and the projections for our health care workforce are of significant concern.”