Sullivan considers privatizing mental health, opioid treatment

Posted 5/26/21

MONTICELLO, NY — First it was the adult care center. Now it’s the department of community services (DCS).

Sullivan County is looking into privatizing the department, which handles …

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Sullivan considers privatizing mental health, opioid treatment


MONTICELLO, NY — First it was the adult care center. Now it’s the department of community services (DCS).

Sullivan County is looking into privatizing the department, which handles mental health care for county residents and is a central agency in the opioid fight. The county has sent out a request for proposals (RFP) from firms able “to provide the programming currently offered.”

“This is not a takeover,” said health and family services committee chair Nadia Rajsz. “The excellent services that we have will stay.”

County staff emphasized that this is exploratory. The county is not obligated to do anything. There is more to learn. “We simply want to better understand whether the services DCS provides—which are necessarily costly—can be more efficiently delivered without reducing those services,” county manager Josh Potosek said in a statement. “If we don’t find that to be the case, then we’ll continue as present.”

What does DCS do?

If you’re struggling with drugs, alcohol or mental health problems, DCS can help you. Ready to get help with an opioid addiction, the most significant factor in Sullivan County’s health problems? You can call them. Fees are charged on a sliding scale. They take Medicaid, Medicare and insurance.

What is privatization?

There are different kinds. A government can transfer a whole property or department from public to private ownership, it can outsource some parts of a department to a business, or it can just shift the management of the facility, department or part of a department to the private sector. (see below).

“Many of the services we provide may be privatized as a result of this review, but this effort is very much about meeting rising demand for services in the most cost-effective way possible,” said Health and Family Services commissioner John Liddle. “There are already some services [i.e. tele-psych] that we contract out.”

What’s driving this decision?

Rob Doherty, chair of the legislature, is focused on the opioid crisis.

“Eight people died last month,” from opioids, he said. “You want eight more people dead? Health and family services said it’s our number-one enemy.”

Privatization of community services, he said, would mean more staff and more efficient delivery of services.

“There is a lot of demand” for mental health and opioid-treatment services, said Rajsz. “We just don’t have the resources.”

Recently, a letter to the legislature highlighted the need for more mental health staff. Sullivan County District Attorney Meagan Galligan has talked about how the lack of social workers 24/7 means that police end up dealing with mental health emergencies.

Mental health and substance abuse care are expensive. “County taxpayers are subsidizing between $2 and $3 million every year for these services,” Liddle said. “There is state and federal aid that accompanies our fees, but they are not enough to cover all costs.”

Privatizing, Doherty agreed, would cut the county share. “We’re constantly trying to improve as a county,” he said. That includes “prudent financial management.”

Why didn’t this go through the health and family services committee?

“Why would you want to wait three weeks?” Doherty asked. “You want to lose six people before you get to the full board?”

“I am hoping to have more conversations in my committee in two weeks,” Rajsz said.

What would happen with the staff?

Employees “will be kept apprised of the progress” and can meet with any third-party provider to discuss jobs, the county’s statement said. Those who don’t get an offer “will be given time and assistance to seek other employment,” possibly including other county work.

Couldn’t more staff be hired? Maybe, but “vacancies are not getting filled,” Liddle said. “This problem has been magnified by the fact that we have a disproportionate number of employees who will be retiring in the next two years.”

Raising salaries might be the answer, but that has to go through the legislature.

Who are they looking for?

“We’re looking for who meets the needs best,” Doherty said. “Someone with multiple locations, night and weekend hours. Unfortunately, the [opioid] epidemic doesn’t keep regular hours.”

“Demand significantly outweighs supply,” Liddle said. “To me, the best possible response to this RFP would come from providers up and down the Hudson Valley who would be willing to expand their presence in Sullivan County.”

Again, this is preliminary, officials say.

“If we do find services can be given at lower cost without harming those we serve, then we’ll make a recommendation for the legislature to consider,” county manager Josh Potosek said.

The county will still have responsibility for some services, like competency evaluations before criminal trials, Liddle said. Those are mandated under the state mental hygiene law. “Everyone involved in this project understands that we owe it to ourselves to do some research.”

“Everyone is going through this,” Rajsz said. “There’s a lot of demand for help with behavioral health issues.”

Which government services have been privatized? Where?

Outsourcing government has been a thing since the 1980s, according to Governing magazine back in 2010. Often, especially in social services, the contracts go to nonprofits, not private companies.

Public works: Multiple municipalities have privatized some aspects of public works, especially paving. Centennial, CO started a public-private partnership in 2008 for all aspects of public works. Their website notes that they’ve changed contractors once and have been with the new firm for years.

Public safety: Private prisons are well known and have been in the news frequently. But the Foundation for Economic Education says that “different types of police service are being performed on contract by private firms. In Amarillo, TX, local police have authorized a private security company to respond to alarm calls. Nearly three-quarters of American cities have contracted out the removal of illegally parked cars.” Centennial, CO, has also contracted out part of its public safety services, in an agreement with their sheriff’s office.

Workers comp: Back when he was governor of West Virginia, Joe Manchin farmed out the state’s workers’ comp program to an insurance company. BrickStreet is still running it.

Mental health care: There aren’t many examples of other states or communities privatizing psychiatric services. Florida’s state psychiatric hospitals are privately operated. Several states have outsourced inmate mental health care.

Welfare: The Welfare Reform Law in 1996 allowed states to outsource their entire welfare system, according to the Urban Institute. says that 28 states have privatized their foster care systems to some degree. Kansas privatized both child support collections and its foster care system.

IT: Data entry is often contracted out, but raises questions about third-party access to people’s information. Texas had a partnership with IBM that fell apart in 2010 when an audit criticized the department for “lax oversight, inadequate staffing and sloppy services,” according to Governing magazine.

Sources: Governing magazine 2010, the Urban Institute, the Wichita Eagle,,,, the Foundation for Economic Education

For drug treatment, there’s a lot of money in play

Addiction rehab was worth $42 billion in February 2020, according to John LaRosa on (That probably dropped due to the pandemic.)

A 5.2 percent growth in revenue was forecast through 2025.

“The cost of paying for drug and alcohol rehab can be overwhelming for many people,” says. You can pay for it with Medicaid or private insurance, with grants or payment plans. “In 2019, 20.4 million Americans had a substance use disorder, but only 4.2 million people were treated, and 2.6 million people were treated in rehab facilities. One of the primary reasons people don’t pursue or obtain treatment is because it’s cost-prohibitive.”

Hazelden Betty Ford, a nonprofit provider of inpatient and outpatient treatment, calls the industry “largely unregulated,” and “rife with deceptive and unscrupulous—even illegal—business activities.”


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