Eight of 14 social workers and three psychiatrists who staff Creekwood will lose their jobs.
The program this week moved to new offices in Willow Grove and Warminster.
Meg McGoldrick, chief operating officer of Abington Health, said the system has been losing $2 million a year on the program. "We're just not able to sustain those losses in this economic environment," she said.
The changes will not affect a 23-bed inpatient unit at Abington Memorial Hospital. That unit, McGoldrick said, is losing a similar amount of money. The system will beef up mental health coverage at three clinics for patients with Medicaid or no insurance.
Integrating mental and physical primary care in the same office is a trend that has been building for 15 years. More popular in public sector settings, it has been growing in private systems like Abington as the government and other insurers have begun rewarding efficient, high-quality care for populations of patients, rather than paying purely by the visit or procedure.
Many patients treated in primary care offices also have mental health or substance-abuse problems that affect their physical symptoms or their ability to manage chronic diseases. Experts say having therapists and doctors work together improves care and heads off more serious problems.
"It's very appealing because we're hoping that people will wind up healthier," said Mary Anne Delaney, chairwoman of Abington Health's department of psychiatry.
Main Line Health plans to try a similar model in six of its primary care practices in August.
"It's really starting to take off," said Russ Hartman, vice president of behavioral health services for Main Line Health.
Josh Shapiro, chairman of the Montgomery County Board of Commissioners, said the county is evaluating other service providers for its clients. He said that some other agencies may need to hire workers, but that capacity is adequate. "It is not at all insurmountable," he said.
With 11 days left in its fiscal year, the county has paid Abington Health $446,328 for those 680 patients this year.
Benjamin Miller, a psychologist who is director of health policy in the department of family medicine at the University of Colorado, said the interest in integrating mental and physical care picked up after the influential Institute of Medicine concluded in 1996 that mental health care and primary care are inseparable.
Efforts to bring the two together, though, have been frustrated by a long-standing history of separate payment systems.
Miller said there is evidence that integrated care leads to better outcomes and lower cost for certain conditions, such as depression. Population results are still unclear because the research is so difficult.
Health care consultant Alan Zuckerman, president of Health Strategies & Solutions Inc., said primary care doctors have told him they like the model because many of their patients have behavioral health problems that have not been well addressed.
He said they tell him, "'This is so much better care.' ... They are messianic about it."
Abington plans to offer relatively short-term therapy - up to about 12 weeks - in primary care offices. People who need more help likely will be referred outside the system.
McGoldrick said hospitals have to cut costs because the recession is not over for them. "Hospitals have to transform themselves," she said, "and that's what we're doing."
Zuckerman agreed that health care changes are "creating some very significant negative economic consequences" for hospitals.