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The Starvation of Our Mental Health Care System

teenager - psychiatric inpatient hospitalizationIn early spring 1999, I received an urgent call from a managed care company asking me if I could make time that day for a 16-year-old girl who was ‘too exhausted to attend school, had lost 10 lbs. in the past three months, cried for hours on end, and thought constantly about death and dying.”

A brilliant student in the advanced track of her high school, a member of the debate team, and working part-time in a card and gift shop, this young lady explained that she was “burned out” and saw no reason to carry on. Her parents were divorced and her father, a drug addict, had been diagnosed with HIV.

This kind and compassionate 16-year-old was going to school and working while attempting to care for a dying father. Clearly overwhelmed, we withdrew this teenager from school, placed her on a homebound educational program, referred her for antidepressant medication, and initiated weekly psychotherapy. Three months later, I was told by the managed care company to finish up the therapy by the tenth session.

The mental health system has been broken for decades and we are no closer to fixing it than we were 10 years ago before the forces of managed care promised to reform the system. A more accurate statement may be that the mental health system has never really been in good shape and we as a nation have struggled to face the reality of disordered behavior, emotions, and impulses that frequently run rampant in our society.

The Binge and Purge Cycle in our Mental Health Care System

Over the past decade, the behavior of the mental health system has resembled a patient diagnosed with anorexia nervosa, alternately bingeing and purging the public’s appetite for mental health services.

Just a decade ago, private psychiatric facilities were multiplying at a dizzying rate to accommodate the numbers of individuals, particularly children and teenagers, who were referred for psychiatric inpatient hospitalization. The more patients these hospitals treated, the more money they made in the unfettered, unmanaged days of fee-for-service medicine. Money poured into the coffers of these corporate psychiatric facilities and the companies that operated them. A significant number of admissions were unnecessary and some of these large hospital chains were investigated by the government for utilizing practices that were not always in the best interests of their patients.

Ten years later the pendulum has swung in the opposite direction. Patients are regularly discharged from the hospital within days of a severe suicide attempt. Research findings are beginning to identify an increased risk for those suicidal patients who are discharged from a hospital prematurely or without adequate outpatient support. In the days of managed care, often more profit seems to flows to those who restrict or deny care than those who provide treatment. Ironically, some of the corporate hospital chains that heavily promoted their psychiatric inpatient facilities throughout the 1980s have purchased managed care companies and are now in the business of denying the very same care in the 1990s.

The Starvation of Mental Health Care

One chilly winter night I evaluated a young adult male to determine whether he met the criteria for an emergency commitment to an inpatient unit. In my state, to be committed to a psychiatric facility against one’s will one must be in imminent danger of hurting oneself or someone else and suffer from a mental disorder that could not be better addressed in a less restrictive setting. Forty-eight hours earlier this gentleman was rushed to an emergency room after overdosing on various medications in an attempted suicide. Once medically stabilized the patient’s physician referred the gentleman to an inpatient psychiatric facility. The patient voluntarily sought admission to the hospital; however, his managed care company would not approve his admission to an inpatient unit. Instead, the care manager directed me to admit this deeply depressed individual to a program where patients attended during the day and returned home in the evening. Despite the managed care directive, I supported the patient’s admission into a psychiatric inpatient unit.

Right now our mental health system is in trouble …. deep trouble. According to a recent study by the World Health Organization, the World Bank, and Harvard University, mental disorders account for 4 of the 10 leading causes of disability in the more established market economies throughout the world. Research has estimated that the cost of mental illnesses in the United States, including indirect costs such as days lost from work, was $148 billion in 1990, the last time the total costs were measured. In the meantime, our states are spending a third less money on their citizens mental health needs today than they did in the 1950s after adjusting for inflation and population growth.

Violence and Mental Illness

The largest state supported facilities for the mentally ill in this country are not hospitals but prisons. There are now far more mentally ill in our nation’s jails and prisons than in state hospitals. A Justice Department survey indicated that the nation’s prisons and jails held an estimated 283,800 mentally ill inmates in 1998, and they were more likely than other offenders to have committed violent offenses. Substance-abusing criminals were also found more likely to engage in violent offenses. In contrast, there are approximately 61,000 seriously mentally ill in our nation’s state psychiatric facilities. The findings that the prison population of behaviorally disordered inmates is growing and that mentally ill and substance-abusing criminals are more likely to be violent suggests that an important contributor to violent crime may be untreated mental illness and substance abuse. Although the forces involved in violence are likely manifold and complex, could there be a relationship between the cutbacks in treating the mentally ill and the increase in mass violence and murder in the United States? The prevention, early identification, and treatment of mental illness seems especially crucial in a culture that grapples with the containment of violence, yet prizes freedom of thought, speech, and behavior.

The Disappearance of Mental Health Services

Mental health services are not just disappearing in the public sector. There are indications that privately funded behavioral health resources are evaporating at an ever-increasing rate as well. Sam Muszynski, JD, follows payment trends for the American Psychiatric Association. He says that typically about 80 percent of the premium dollar is spent on patient care by a health plan. However, some companies that provide managed behavioral services only return 50 cents on the premium dollar to actual treatment, a trend that Muszynksi portends as “frightening.”

In what may be the first national study of managed care’s impact on the coverage of mental health services, researchers acknowledged there have been profound treatment cuts, not only for hospitalized patients, but also for outpatients. Co-author of the paper Douglas Leslie, PhD, a health economist in the Yale School of Medicine’s department of psychiatry, West Haven, Conn., described the findings as startling. “We actually knew that inpatient care was falling, and falling dramatically, but then what was surprising about this study was the outpatient care was also falling,” says Leslie.

The study, published in the August issue of the American Journal of Psychiatry, reviewed the mental health claims of nearly four million individuals who had private health insurance through big corporations. For the three-year study period between 1993 through 1995, the researchers found that mean costs for psychiatric inpatients dropped $2,507 or 30.4 percent. The key factor apparently was a nearly 20 percent decline in the number of days a patient spent in the hospital on a yearly basis. During the same period, the study shows for those getting only outpatient care costs also dropped by nearly 15 percent.

A concerted, systematic and sustained examination of this country’s mental health delivery system has never been undertaken and as a result, our views and approaches toward mental illness remain largely informed by myth, fear, and our financial appetites. Even today, with our splendorous scientific and technological advances, tendencies to trivialize and oversimplify the problem abound. The media, in their rush to judgement, to obtain ratings, and increase advertising revenues often demand reflexive and premature answers to questions about the violent tragedies in our schools, workplaces, and communities.

Treating Our Disordered Mental Health System

How should we go about caring for our disordered mental healthcare system? The fee-for-service mental healthcare of the 1980s and the present managed behavioral healthcare system have a major feature in common. The distribution of mental health services, the methods of delivering them and the selection of treatments are shaped largely by financial incentives. So, what is wrong with that? Unchecked, it has led to extreme oscillations in the delivery of mental health services. The unrestrained corporate driven fee-for-service mental health system contributed to the excessive reliance on psychiatric hospitalizations over a decade ago. Likewise, the unfettered market driven system has now resulted in providers and patients having to navigate among a minefield of clerks, paperwork, and restrictions before mental health care can be delivered. If the patient is fortunate enough to receive permission to access a provider, a managed care company often dictates the nature of the treatment received by the patient.

I can tell you what changes I would like to see in the mental health system. First, I would like to witness a greater commitment on the part of providers, payors, and governmental agencies, to an evidence-based behavioral healthcare.

Second, given the enormous unmet needs of the mentally ill that exist in the United States, I desire to see a greater financial commitment on the part of our society to the mental health of our nation. However, unlike the out-of-control economic spiral triggered by the unimpeded fee-for-service system, I want evidence-based mental healthcare to have a greater say in where the money goes in the system and how our financial resources are spent.

More Evidence and More Money for Mental Health

Since there are so many more questions than answers about the causes and effective treatments for mental illness, I propose a substantial increase in funding available for research targeting the causes of mental disorders and their prevention and treatment.

How might an evidence-based approach to mental health change the distribution and implementation of health care resources? As much as possible, we need data to determine diagnostic and treatment decisions, not the financial well being of large corporate entities and providers. The costs of mental health diagnoses and treatment remain very important factors; however, short-term profit cannot be the primary driver of a fiscally and socially responsible mental health system. If we want more efficacious treatments, lets put our money where our mouth is and support the necessary research to develop these cost-effective treatments.

In many instances, an evidence-based mental health care delivery system can save us money. For example, research, in many cases, does not support expensive long-term inpatient psychiatric treatments as an effective therapeutic modality for many psychiatric problems. However, there is evidence that less expensive long-term outpatient therapies for some serious psychiatric difficulties can be effective. For many behavior problems short-term or brief outpatient treatments have been found to be quite beneficial while other emotional disturbances respond most positively to more intensive and extensive outpatient therapeutic regimens.

Ultimately, a proficient approach to mental health care in our country involves neither financial deprivation nor excessive monetary indulgence. A vital and competent mental health care delivery system requires both a healthy fiscal diet and an investment in evidence based approaches in the diagnoses and treatment of mental illness.



Lancet 1999; 353: 1397-1400.

The National Institute of Mental Health, “Mental Illness in American”, NIH Publication No. NIH 99-4584

Winerip, M., “Bedlam on the Streets,” The New York Times Magazine, May 23, 1999.

Sniffen, M.J. “Many Mentally Ill Americans Jailed,” The Associated Press, July 11, 1999.

Forwarded Communication from Dr. D.B. Adams, August 16, 1999 of a report by Jeff Levine, Medcast, August 16, 1999.

Leslie, D.L., and Rosenheck, R., “Shifting to Outpatient Care? Mental Health Care Use and Cost Under Private Insurance,” Am J Psychiatry 1999 156: 1250-1257.

Seligman, M., “The Consumer Reports Study of Psychotherapy,” Consumer Reports, November, 1995.

The Starvation of Our Mental Health Care System

This article has been updated from the original version, which was originally published here on September 8, 1999.

Psych Central Staff

Psych Central Staff writers are vetted, professional authors and science journalists. All work written under this moniker is editorially and scientifically reviewed by Psych Central.

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Psych Central. (2019). The Starvation of Our Mental Health Care System. Psych Central. Retrieved on October 29, 2020, from
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Last updated: 15 May 2019 (Originally: 8 Sep 2014)
Last reviewed: By a member of our scientific advisory board on 15 May 2019
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