North Carolina Legislature Studies Privatizing State Psychiatric Hospitals Under New Law
North Carolina enacted legislation (H1104) directing a feasibility study on privatizing or transferring operation of the state's three public psychiatric hospitals. The state's psychiatric hospital system has faced severe capacity constraints since early 2000s reforms cut bed capacity by half, with current bed availability further reduced by staffing shortages and increased court-ordered admissions for competency restoration. The provision authorizes examination of transferring operations to private companies or universities. If implemented, privatization would affect the state's safety-net behavioral health infrastructure, which currently serves indigent and complex Medicaid patients and provides critical workforce training for North Carolina's behavioral health system.