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Editorial: Cardinal’s rule must end

The profit motive and state-funded behavioral health care don’t mix.

Just ask people who have tried to get help — or financial accountability — from Cardinal Innovations, the managed care organization responsible for mental health services in Rowan and 19 other counties.

For years, people have complained about Cardinal Innovations’ unresponsiveness to people’s needs. Earlier named Piedmont Behavioral Health, the organization was among the first to receive state and Medicaid funds in a lump sum to manage care for people with mental illness, substance abuse and intellectual and developmental disabilities. Officials said they were able to improve quality of care while spending less money on that care. What they saved on care they spent in other areas — such as using Medicaid funds to build a $14.7 million headquarters in Kannapolis, and then moving its offices to the NASCAR Hall of Fame.

Trouble has been brewing for a while over Cardinal’s spending on expensive parties, private planes and lavish salaries. Cardinal officials thought of the agency as a business and claimed autonomy. The day of reckoning came last week when the Department of Health an Human Services announced it was taking control. DHHS fired Cardinal’s board, which had given $3.8 million in severance to CEO Richard Topping and three other departing managers.

Of course, there two sides to the story. Salisbury architect Bill Burgin, a member of Cardinal’s former board and chair of its compensation committee, defended the payouts in. “If you set a contract up to keep somebody and all of a sudden you’re forced to let him go, there’s a price to pay,” Burgin told The Charlotte Observer. He also said Topping’s $635,000 salary (up to 3½ times more than his peers) was market-driven. “It’s just what happens when you write a contract for someone you want to keep.”

At least part of Cardinal’s problem is that it grew so large and, like Frankenstein’s monster, veered out of state control. What started out as a pilot project for a handful of counties grew into a 20-county agency, the largest of North Carolina’s seven behavioral health managed care organizations, with an annual budget of more than $600 million. Though the agency relies on taxpayer money, Cardinal’s executives claim that it is not a public entity and is not subject to state personnel statutes. The state disputes that.

Lawmakers who want to privatize government services should study this example of an agency that began to consider itself separate from the state. Imagine what a truly private organization might do with public funds — and how powerless the state could be to do anything about it.

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