Mental Health Care and Budget Cuts

A March 2011 report,State Mental Health Cuts: A National Crisis, from the National Alliance on Mental Illness, analyzes the impact of the economic downturn on mental health services. For two years states have scrambled to reduce spending across many areas, including social service and health programs, but with stimulus monies set to expire and austerity measures guiding appropriations will people lose access to mental health care?

According to the report (based on data from state reports and documents between the fiscal years of 2008-2011) Medicaid and state general funds provide the most support for mental health services not covered by private insurance. The temporary increases in Medicaid funding – tied to the American Recovery and Reinvestment Act (ARRA) – are set to expire in June, and with state funds being sparse, additional cuts to both will negatively impact an already strained mental health system. Yes, the need for mental health services has increased according to industry reports. The fallout from the economic crisis that continues to impact state budgets has also resulted in stress (unemployment, home foreclosure, financial loss) to individuals and families and may be related to the recent increase in demand for mental health care.

NAMI’s data indicate that between 2009 and 2011, 10 states cut their general funds for mental health, some by as much as 35 percent. States are making deep cuts, most often in workforce development programs for adults with mental illness, acute inpatient, clinic services, and long term inpatient programs (often by reducing the number of psychiatric beds). As an example of why these cuts need to be examined carefully, NAMI’s report mentions that one state reported a steep increase in the number of children with mental illnesses staying in public hospital emergency rooms due to a lack of available treatment facilities. But emergency rooms are not the only segment of the health and safety services that will feel the impact of these cuts, schools, churches, paramedics, the police, the court system and jails (all with resources curtailed by the economic climate) may find themselves dealing with an increased amount of crisis situations related to psychiatric emergencies.

There is not a quick and easy way to achieve a satisfactory balance of public safety, care for those who are ill and fiscal responsibility. Informed discussion of the benefits and consequences of major funding cuts and comprehensive plans to deal with the latter are critical. NAMI offers several policy suggestions including:

  • increase the transparency of funding,
  • connect funding for mental health services to performance, and
  • increase programming focused on the education of families, public service professionals, peers and the public about mental illness and how to respond to persons living with a serious mental illness.

The report is available at the NAMI website.