Alcoholism or drug addiction may not fit the classic definition of mental illness. But there's a direct link: More than 20 percent of the patients admitted to state mental hospitals last year were dependent on alcohol or drugs.

Funding to treat financially dependent addicts before they end up in mental institutions is scarce. Medicaid generally will not pay the bills. Adults who seek treatment frequently don't qualify for the federal insurance for the poor and disabled.

That leaves the companies dependent on state money that county and regional mental-health offices control.

The procedures required to get that money are arduous and can result in companies' doing work they don't get paid for.

"You can provide all the services you want, they won't all be paid," said Trish Hussey, executive director of Freedom House Recovery Center in Chapel Hill.

Freedom House offers treatment for substance abuse and operates crisis centers and halfway houses. Big mental-health providers don't want to offer substance-abuse treatments, she said, because they are a financial drain.

State officials know there's a problem. It shows up in the state psychiatric hospitals: Last year, they admitted more drug addicts than schizophrenics.

About two years ago, legislators pumped more money into drug treatment. But $13.8 million in state and federal money for substance-abuse care went unspent. Local mental-health officials say they can't find enough providers offering drug and alcohol treatment. Those in the business say the money that's available is too hard to get.

"We know now this system is not working in this state," said Bert Wood, president and chief executive officer of Partnership for a Drug-Free North Carolina.

Wood's agency runs substance-abuse treatment services in 17 counties and mental-health services in nine.

"Instead of screening people in," he said, "we're screening people out."