Witnesses Tell House Subcommittee Michigan Lacks Psychiatric Beds; CEOs, Psychiatrists Urge CON flexibility, EHR funding and workforce support

Hospital executives and practicing psychiatrists told the Michigan House Subcommittee on Public Health and Food Security that the state lacks enough psychiatric inpatient beds and associated services, leaving patients — including children — waiting in emergency departments for days.

Representatives of Universal Health Services and two Michigan psychiatrists testified that short-term policy changes to the certificate of need process, investment in electronic health records for freestanding psychiatric hospitals, and targeted workforce incentives could expand capacity more quickly than building facilities alone.

The testimony offered both patient vignettes and systemwide data. Steve Vernon, chief executive officer of Cedar Creek Hospital in Saint John's, and Jamie White, chief executive officer of Havenwick Hospital in Auburn Hills, said Universal Health Services (UHS) now operates five freestanding behavioral health facilities in Michigan and is planning or building additional beds. They said Southwick Behavioral Health in Byron Center opened about a week before the hearing as a 96-bed facility; Cedar Creek plans to add 16 beds and expects to break ground soon on a 48-bed Lansing facility (24 pediatric, 24 adult); and Havenwick is planning roughly 52 additional beds over a multiyear period. White said the facilities defer thousands of adult referrals each year and cited a figure of 4,626 adult referrals deferred between January and May of the current year because of bed capacity limits.

Both executives asked lawmakers to allow more flexibility under Michigan’s certificate of need (CON) regulations so that licensed pediatric beds could be converted to adult beds when community demand shifts. "We're turning away 15, 20, 25 adults a day as I sit over here with 18 kid beds open," Vernon said, describing seasonal swings in pediatric demand during summer and school breaks. They also urged state support for an EHR match program similar to legislation moving in Texas, saying many freestanding psychiatric hospitals still rely on paper charts; Vernon said implementing an EHR costs about $1 million per hospital and that Texas is considering roughly a $20 million statewide investment for private psychiatric hospitals.

Dr. Kai Anderson, associate director of psychiatry at Central Michigan University’s residency program, spoke about patient cases she has treated and broader capacity data. She recounted a case she anonymized as “Miss Jackson,” whose 10-year-old waited three days in a crowded emergency department for an inpatient bed. "I fear like I am failing all of my kids," she quoted the mother as saying. Anderson cited state-level capacity figures: as of February 2022 Michigan had about 1,945 licensed psychiatric beds (about 19 beds per 100,000 residents), below the commonly cited minimum of 30 per 100,000 and far below an optimal target sometimes referenced at 60 per 100,000. She emphasized that shortages are worse in rural and northern parts of the state, including the Upper Peninsula, and recommended strengthening the bed-tracking system, expanding psychiatric residential treatment facility (PRTF) capacity for children, and improving reimbursement policies to sustain hospitals and emergency departments that end up providing de facto inpatient mental-health care.

Dr. Zakiyah Alavi, chief medical officer for NorthCare Network (the PIHP covering Michigan’s Upper Peninsula) and Mid-State Health Network (Mid Michigan), described how Medicaid coverage and the state’s managed regional structure affect access. She said the shortage is particularly acute for patients covered by Medicaid and that historical shifts away from state-run inpatient facilities in the 1980s–1990s left gaps in community infrastructure. She noted that many remaining inpatient beds are financed at lower Medicaid reimbursement rates and that some licensed beds are not operational because of staffing shortages. Alavi recommended including medical leadership when planning systemwide reforms, aligning the Michigan Mental Health Code with contemporary practice, addressing Medicaid underfunding and parity in payment, and improving staff recruitment and retention programs for both clinical and frontline support staff.

Committee members asked witnesses about concrete policy options. Witnesses repeated several proposals that appeared most actionable in the near term: (1) modify CON rules to allow bidirectional flexing between pediatric and adult psychiatric beds, (2) create a state match/grant program to help freestanding psychiatric hospitals implement electronic health records and automate bed-state reporting to the statewide registry, and (3) boost targeted workforce incentives — including loan repayment, salary premiums and rural recruitment bonuses — especially for child and adolescent psychiatrists and other behavioral health clinicians.

The hearing included one formal procedural action: Representative Serniglia moved to approve the minutes of the committee's June 3 meeting; with no objection, the minutes were approved. No other formal votes or bill actions were recorded during this session.

Lawmakers thanked the witnesses and closed the hearing; the committee did not set a formal legislative vote or adopt text of any bill during the session.