Mental Health: A Policy Mistake to Learn From

February 12, 2013

How a shift to “smaller government” derailed a good government plan.

I became a social worker in 1980, treating well-functioning adults and some children who needed brief inpatient care or outpatient treatment.

What I have seen happen in mental health system since I began my career can serve as an important policy lesson—one that we need to pay attention to now that bipartisan legislation has been introduced in Congress, which would tweak how mental health services are provided at the community level.

The new bill would establish standards of care for about 2,000 community behavioral health centers—including requiring that they provide substance abuse treatment and 24-hour crisis care, which would be covered by Medicaid.

It’s sponsored by Sens. Debbie Stabenow (D-Mich.) and Roy Blunt (R-Mo.), with co-sponsorship from Sens. Marco Rubio (R-Fla.) and Susan Collins (R-Maine), Jack Reed (D-R.I.), Patrick J. Leahy (D-Vt.) and Barbara Boxer (D-Calif.).

Here’s why consistent standards matter.

When Policy & Funding Don’t Reflect What Works

Since the 1950s, with the advent of psychiatric drugs and better diagnostics for mental illness, there has been an ongoing move toward deinstitutionalization of mentally ill patients. That movement gained major momentum in the 1970s and 1980s, when federal and state policies emphasized closing psychiatric hospitals and shifting patients from institutions to outpatient care by community clinics.

For many patients, the shift from institution to community-based services meant more autonomy and better quality of life.

But not for all patients.

For a minority of those with severe mental illness, the shift led to inconsistent care and soaring rates of homelessness—and that’s because policy and funding decisions did not match what we knew about what worked.

In the late 1970s and in 1980, mental health experts and the feds issued several blueprints for a system of effective community care. But in 1981, before they could be enacted, the federal government—amid calls for “smaller government”— cut funding for community care by 25 percent and turned it into a block grant, as a Kaiser Commission report notes.  

As a result, many community clinics lost funding and disappeared. With only private insurance to turn to and fewer public psychiatric hospitals, approximately 2.2 million severely mentally ill people did not receive any psychiatric treatment, according to a PBS Frontline report.

For children with developmental disorders or mental illness, there’s another significant challenge: the transition from child Medicaid to adult Medicaid is far from seamless and often ends up in interrupted care.

That’s a policy oversight—or, put another way, a policy solution waiting to happen.

This time, let’s use what we know to guide policy and funding.

Another policy solution waiting to happen is in the juvenile justice field. Recent advances in behavioral and neuroscience research belong in juvenile justice reform efforts, particularly with regard to adolescent development and offending, according to the National Research Council.

The new proposed bill is expected to cost taxpayers about $1 billion over the next ten years.

That may be a bargain. After all, parents affected by mental illness and/or substance abuse often end up unable to maintain a job or housing. They become the “expensive” multi-need families that use up the bulk of community services and their children often need community support to thrive.

To say nothing of the costs to families and communities, of which the tragedy in Newtown, Conn., is just one terrible example.

This time, let’s use what we know to guide policy and funding.

Learn more:

  • This guide from SAMHSA offers guidance and tools for early identification of children and adolescents with mental health or substance use problems in various settings such as child welfare, early and primary care, family, domestic violence, and runaway shelters.
  • Juvenile Justice and Mental Health: A Collaborative Approach, explains the benefits of a collaborative model for juvenile justice and mental health. That collaboration includes "all relevant youth-serving agencies and families." This summary from Reclaiming Futures includes a link to the report.
  • Brookings scholar Kavita Patel says we need to balance the need for action with the need for credible and informed mental health models which can truly transform care, not to slow down reform but to make sure our reforms are effective and improve access to treatment.
  • The Mental Health in Schools Center at UCLA warns that in the current public concern to improve mental health services, we should not just settle on quick fixes at the expense of a comprehensive, full-continuum approach to improving school safety and improving school referral and treatment procedures.

Jan Richter is a retired clinical social worker and child psychotherapist, and long-time children's advocate and writes the SparkAction Update. Read her bio here.



Jan Richter


The link to the SAMHSA guide referred to above connects to an issue brief on Behavioral Health Issues Among Afghanistan and Iraq U.S. War Veterans NOT the resource described above

Hi Susan,
Thanks so much for notifying us of the incorrect link. I apologize that it was not the right resource. It&;s now been fixed to link to the correct SAMHSA guide, which you can find at

Alison Waldman
Editorial associate, SparkAction

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