Psychiatric Institutionalization and Deinstitutionalization

Psychiatric Institutionalization and Deinstitutionalization

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Updated June 26, 2018
Psychiatric Institutionalization and Deinstitutionalization
The history of mental health care in the United States can
Table 1. Social Movements and Deinstitutionalization
be understood as a period of institutionalization followed by
The civil rights movement of the 1950s and 1960s advocated for
one of deinstitutionalization. Federal law, however, has not
more humane care than was being provided in mental
been fully aligned toward either institutional care or
institutions.
community-based (i.e., noninstitutional) care.
The community mental health movement, which began in the 1960s,
Institutionalization
supported community-based mental health programs, which later
The early U.S. health care system offered little treatment
narrowed their focus to individuals with long-term il nesses.
for mental illness. People with serious mental health
The evidence-based practice movement of the 1980s and 1990s
conditions often ended up in prisons or shelters for the
(with roots dating back to the 1960s) advocated the use of
poor. Few privately or publicly funded asylums had been
treatments supported by research findings.
established by the mid-19th century, when state psychiatric
hospitals began to grow in number and size. Institutional
The recovery movement applied the principles of the consumer
mental health care was viewed as a state responsibility and
movements of the 1980s and 1990s to mental health care.
was not funded by the federal government. Community-
Sources: Testa and West, “Civil Commitment in the United States,”
based (i.e., noninstitutional) mental health care was mostly
Psychiatry, vol. 7, no. 10 (2010), pp. 30-40; and Drake and Latimer,
unavailable.
“Lessons learned in developing community mental health care in
North America,” World Psychiatry, vol. 11, no. 1 (2012), pp. 47-51.
Even as institutionalization was on the rise, the foundations
for its decline were emerging in the form of perceived
Recent Developments
problems with institutional care and benefits of community-
Stakeholders continue to debate the best balance of
based care. Stories of poor living conditions in psychiatric
institutional and community-based services. Most agree that
hospitals raised concerns about the well-being of their
the supply of psychiatric beds in hospitals is not adequate to
patients. During World War II, psychiatrists began to
meet the demand for institutional care. Some argue for
forego or shorten hospitalizations as they learned that
more psychiatric beds to meet the demand; others argue for
patients fared better when rapidly reintegrated into their
more community-based care to reduce demand for
social milieu. Approval of the first antipsychotic medication
psychiatric beds by preventing mental health crises.
(chlorpromazine) in the 1950s made community-based
Policymakers have pursued both paths—increasing options
treatment of mental illness seem more feasible. These
for Medicaid coverage for residents of IMDs and creating
developments set the stage for the decline of the asylum.
incentives for community-based mental health care.
Deinstitutionalization
 The Demonstration Programs to Improve Community
The number of beds in state and county psychiatric
Mental Health Services support participating states in
hospitals declined by more than 90% from 1955 to 2005
certifying community behavioral health clinics meeting
(per HHS Publication SMA 09-4424). The shift from
criteria related to quality of care; the demonstrations
institutional care to community-based care was influenced
(which were authorized by P.L. 113-93) are underway.
by several social movements (see Table 1) and
developments in two areas of federal policy (see Figure 1):
 In July 2015, the Centers for Medicare &Medicaid
grants supporting community-based services and Medicaid
Services (CMS) informed states that they could pursue
coverage for Medicaid-eligible residents of institutions for
Section 1115 waivers to receive federal Medicaid
mental disease (IMDs).
payments for coverage of substance use services
provided to nonelderly adults in IMDs.
Also of note, a 1999 Supreme Court decision further
encouraged deinstitutionalization. Olmstead v. L.C.
 In April 2016, CMS issued a rule that clarified a
involved two women with mental illness and developmental
Medicaid managed care option to fund behavioral health
disabilities, each of whom remained confined in the
services in an IMD services with a 15-day per month
psychiatric unit of a state hospital for several years after
limit.
clinicians determined that her treatment needs could be met
by community-based care. The Supreme Court held that
 The Helping Families in Mental Health Crisis Reform
unjustified segregation of persons with disabilities violates
Act of 2016 (P.L. 114-255 Division B) reauthorized and
the Americans with Disabilities Act (P.L. 101-336) and that
modified many grant programs that support community-
public entities must provide community-based services to
based care; most are administered by the Substance
persons with disabilities when such services (1) are
Abuse and Mental Health Services Administration
appropriate, (2) are acceptable to the affected persons, and
(SAMHSA).
(3) can be reasonably accommodated.
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Psychiatric Institutionalization and Deinstitutionalization
Figure 1. Selected Federal Laws (1955–2018)

Source: Congressional Research Service. Figure created by Jamie L. Hutchinson, Visual Information Specialist.
Notes: For more information about SAMHSA-administered grants supporting community-based mental health services, see samhsa.gov/grants.
For more information about Medicaid’s IMD exclusion, see CRS In Focus IF10222, Medicaid’s Institutions for Mental Disease (IMD) Exclusion.

Johnathan H. Duff, Analyst in Health Policy

IF10870

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Psychiatric Institutionalization and Deinstitutionalization

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