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Those pressures, coupled with industrywide insurance cutbacks, were soon felt in psychiatric wards, former company officials said.
Dr. Santora, who quit in August, said that while insurance cutbacks played a role, the 1997 deal resulted in a pattern of neglect.
The company says that Charter's woes were caused by insurance cutbacks, not by the 1997 plan, and that patient care was not affected.
In written responses, their spokesmen said that Charter Behavioral's financial woes were caused by insurance cutbacks, not by the 1997 plan.
Officials of Magellan Health, Crescent Operating and Charter Behavioral have said that the chain's problems were caused by the insurance cutbacks, and that the 1997 plan did not affect patient care.
The health insurance cutbacks would have been even worse if not for the $20 billion in emergency state aid that was reluctantly approved by the Bush administration and the Republican-led Congress last year.
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This tendency has led to higher insurance premiums, cutbacks in employer health plans and a rise in the number of uninsured.
The stimulus will also include up to $100 billion for state and local governments to meet their severe budget shortfalls, including grants, Medicaid and unemployment insurance funds, preventing cutbacks in public services, and investment and jobs in several recession-hit states.
Because doctor and hospital costs continue to rise at an even faster rate, the modest slowdown in insurance inflation mainly reflects cutbacks in coverage by many health plans, which have found ways to make employees pay more for their care.
For medical treatment, many dermatologists have been able to compensate for cutbacks in insurance payments by offering new services and by increasing their patient volume through hiring "physician extenders" — nurse practitioners and physicians' assistants — to do basic tasks like biopsies and chemical peels.
"Coinciding with the end of the slump in the job market is the end of the recession-related expansion of the safety net," Dr. Levitan wrote, which could reduce food stamp benefits on top of cutbacks in unemployment insurance, tax credits and the payroll tax rate.
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