Mental HMO plans expansion in Southland from San Diego base.

Mental HMO plans expansion in Southland from San Diego base

A mental health maintenance organization now operating only in San Diego plans to expand in Los Angeles County and throughout Southern California next year.

Vista Health Plan, sold by the San Diego-based Vista Hill Foundation, filed an expansion request with the state Department of Corporations this month. If the approval is granted, as expected, Vista Health Plan will be offered in six more counties: Los Angeles, Orange, Riverside, San Bernardino, Ventura and Santa Barbara.

Vista Health Plan is one of six HMOs in the state that specialize in mental health, said Keith Dixon, executive director of the plan.

Mental health HMOs are a new phenomenon and still relatively unknown even among experts. Lori Price, an HMO analyst with Los Angeles-based Seidler Amdec Securities, said she does not follow mental health HMOs and didn't know of any analysts who did.

But that attitude may change if Vista Health Plan meets its ambitious goals.

The company now has about 75,000 enrollees, Dixon said, and aims to have at least 17,000 more from the new territories by the end of next year. It now has annual revenues of about $3 million; Dixon expects that number to rise about 25 percent to 30 percent by 1992.

Vista Health Plan has just opened its first regional service center in Irvine, Dixon said. A second service center opens in Los Angeles this fall, and a third will open in the Inland Empire this winter, he said.

Vista Health Plan will add more staff to keep up with the expansion. A regional director will run each service center along with an unspecified number of case managers, Dixon said. The firm also will hire a few more case managers in its San Diego office.

The actual enrollee increase could be much greater, Dixon said, because negotiations are now under way with some large employers, whom he declined to name. If those employers sign up, Vista's enrollment could double by 1992.

Vista Health Plan already has some choice contracts, including one with another health care provider, Sharp HealthCare. About 4,000 Sharp employees in the self-funded health program are Vista Health Plan members, Dixon said.

In San Diego County, Vista Health Plan has contracts with 635 mental health professionals and 27 hospitals.

Cost of coverage varies, Dixon said, but typically ranges between $10 and $22 per employee per month. Vista's benefits include counseling for depression, substance abuse and other conditions, on an outpatient or hospital basis. It also offers partial hospitalization, in which the employee stays at a hospital during the day and goes home at night.

Officials at traditional HMOs question the need for the service, saying they can provide any service a mental health HMO can provide.

A spokesman for California's largest HMO, Kaiser Permanente, said there are serious drawbacks to severing medical and mental health treatment from each other.

"Many patient diagnoses contain both psychological and physical components," said Kaiser spokesman Jim McBride. "Often, treating the patient requires extensive cooperation between the primary care physician and the mental health provider to assess the most effective treatment for the patient."

For example, McBride said, there are psychological effects on patients diagnosed with cancer or other life-threatening illnesses.

It's also less expensive in the long run to provide both physical and psychological care with one HMO, McBride said.

Dixon countered that an HMO specializing in mental health can offer services for employers and employees that other HMOs either don't have or don't cover well. These include more accurate diagnoses of mental health conditions and treatment.

Traditional HMOs stress treatment of physical illness over mental health problems, said Dixon. Moreover, many are curtailing the benefits they offer to control costs. It's also difficult to get experts to agree on a diagnosis.

"If someone has a broken arm, five doctors are going to prescribe the same treatment -- a cast," Dixon said. However, diagnosis of a mental problem and finding the appropriate treatment is more subjective, and opinions may vary widely among mental health professionals.

Vista Health Plan copes with this uncertainty, Dixon said, by carefully selecting its contracting mental health providers and letting them know what guidelines it uses to decide what symptoms indicate when treatment is warranted.

Bradley J. Fikes is a staff reporter for the San Diego Business Journal