The History of U.S. Federal Mental Health Policy: Part I

Dorathea Dix

Mechanic (1989) characterized the history of treatment for mental illness in the United States as one of “advances and setbacks.” In the mid-1800s Dorothea Dix worked to separate people with mental disorders from those incarcerated for criminal activity, and she and other reformers sought to develop more humane institutions for those with severe mental illness. Reformers who followed early in the 20th century, such as Clifford Beers, Albert Meyer, and others involved in the mental hygiene movement, pressed for community-based hospital care as well as clinic treatment, but the institutional philosophy prevailed. 

Over time, state psychiatric hospitals have improved in many respects. These improvements were made partly in response to in-depth journalistic studies like Deutsch’s 1948 The Shame of the States, but in some states such improvements were primarily the result of court decisions and legislative action (see, for example, Wyatt v. Stickney, 1972).

World War II had an important effect on mental health policy. Many potential recruits were rejected for military service, and others were later discharged, for psychiatric reasons (Mechanic, 1989). The accuracy of these screenings was suspect; nonetheless, the exercise served to focus attention on mental health concerns and provided impetus for passage of the Mental Health Act of 1946, P.L. 79-487 (Mechanic, 1989). The act established the National Institute of Mental Health (NIMH) which was operational by 1949. The creation of this institute, along with the introduction of psychotropic drugs in the 1950s, spurred the community mental health movement. 

The Mental Health Study Act of 1955 (P.L. 84-182) provided funds for the Joint Commission on Mental Illness and Health to produce an exhaustive report, Action for Mental Health, published in 1961. This report, as well as President Kennedy’s active interest, contributed to the development and passage of the Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (P.L. 88-164). 

In 1965 amendments to P.L. 88-164 (P.L. 89-105) authorized initial funding for professional and technical personnel for community mental health centers (CMHCs), and provided for the establishment of CMHCs throughout the United States. These centers were to provide at least five essential services—outpatient care; inpatient and partial hospitalization; 24- hour emergency care; as well as education and consultation to community caretakers. Services were to be provided with continuity and to catchment areas of 125,000 - 250,000 people. To create a consistent funding stream for CMHCs, the federal government required states and localities to match the amounts of its annually increasing allocations.

Funding for community-based treatment was also supported ideologically by the nation’s focus on civil rights in the 1960s. However, by the 1970s (and despite the 1975 amendments to the CMHC Act), federal contributions were decreasing and matching funds were unavailable for a number of programs. Consequently, the civil rights principle of inclusion was neglected because of a lack of resources to provide the range and depth of community services that individuals with severe mental disorders need. Some view this as the origin of the rhetorical position that many federal apologists assumed at the time. That is, that the movement toward deinstitutionalization was a way for states to avoid responsibility for expensive institutional care (Scull, 1977; Mechanic, 1989).

Based on the recommendations of President Carter’s Commission on Mental Health, the Mental Health Systems Act of 1980 was passed. This Act sought to provide improved services for the mentally ill. However, the Omnibus Budget Reconciliation Act of 1981, signed by President Reagan, repealed the Mental Health Systems Act and dramatically curtailed the federal government’s involvement in service provision. Specifically, the Alcohol, Drug Abuse, and Mental Health Administration’s (ADAMHA) funding of rehabilitation and treatment services was consolidated into a single block grant given to each state to administer. This relegated the federal role to providing technical assistance to enhance the capacity of State and local mental health services providers.

In the late 1960s most states revised their mental health codes to protect consumers’ civil rights and to standardize criteria for involuntary hospitalization. In most cases, involuntary hospitalization can only take place if a person is found to be a current danger to self or others, and/or incapable of self-care by reason of active mental illness.

Over the past 30 years, there has been movement from the use of institutional treatment to community-based programs. Wisconsin’s Program for Assertive Community Treatment (PACT) served as a model for the development of ACT and similar programs across the na-tion. Such programs have consistently been shown to produce two important outcomes. The first is consumer progress toward independence and improved functioning. Together with traditional clinical measures, this is typically determined using the amount of time spent in stable housing as a dependent variable. The second is cost offset primarily from reducing the lengths of inpatient stays, and secondarily from decreasing the number of emergency room visits (Latimer, 1999; Lehman et. al, 1999). 

While mental health care delivery is now generally considered a state responsibility (Torrey, 1997), federal assistance can play an important role. Federal–state collaboration on community mental health services is now guided by the State Comprehensive Mental Health Services Plan Act of 1986 (P.L. 99-660), with its focus on people with severe mental illness, especially those who are homeless. 

The failures of deinstitutionalization to provide less-restrictive housing alternatives has also prompted legislation that has established housing options for homeless people with severe mental illnesses. For example, the Stewart B. McKinney Homeless Assistance Act of 1987 (P.L. 100-77) helps this population through programs that target the mentally ill, such as the Projects for Assistance in Transition from Homelessness. 

The McKinney-Vento Act, as it is commonly called, also established programs that include services for mentally ill persons but target wider groups to which they belong. (As such, they provide non-mental health services, as well.) More recent additions include Programs to Address Homelessness and Co-Occurring Disorders and Comprehensive Drug/Alcohol and Mental Health Systems for Persons who are Homeless, all of which are now administered through the Center for Mental Health Services of the Substance Abuse and Mental Health Services Administration. (SAMHSA is the 1992 successor to ADAMHA.)

Several pieces of legislation have focused on the needs of other subgroups. The 1975 Education for All Handicapped Children Act (P.L. 94-142), now called the Individuals with Disabilities Education Act (IDEA), guarantees all children with disabilities a free public school education and encourages mainstreaming or inclusion whenever possible. In 1984 NIMH awarded its first grants under the Child and Adolescent Service System Program. In 1992, SAMHSA made available the community mental health services block grant, which included a focus on children and adolescents who have “serious emotional disturbance” (Kessler, Berglund, Zhao, Leaf, Kouzis, Bruce et al., 1996). 

SAMHSA now includes an Older Americans Technical Assistance Center, an Advisory Committee for Women’s Services, as well as various programs targeting ethnic and age groups. The nursing home reform amendment, in the 1987 Omnibus Budget Reconciliation Act (P.L. 100-203), initially helped to ensure that individuals with mental illness are treated in the least restrictive environment that is appropriate to their needs (Fellin, 1996). However, many states have seen significant increases in the percentage of nursing home residents who are mentally ill, without sufficient, concomitant enhancements to either intra-facility services or standards for discharge. 

Many other policies establish programs that also influence the treatment of people with mental illness. Cash assistance is provided through the Social Security Disability Insurance (SSDI) program for former workers and through the Supplemental Security Income (SSI) program for people with disabilities who have very limited financial resources. Both programs use strict criteria for determination of mental disorders. There has been a good deal of controversy over the federal system of disability determination. More stringent criteria have been imposed for determining mental disorders in children. Individuals with only a substance use disorder no longer qualify for SSDI or SSI.

The Centers for Medicare and Medicaid Services (CMS) play a major role in supporting mental health consumers, as well. Medicare is an insurance program covering physical and mental health care for people who are elderly, regardless of income, and for former workers who have been disabled at least two years. The Medicaid program is equally important for consumers who are poor and meet other program criteria.

The Americans with Disabilities Act of 1990 (P.L. 101-336) covers people with mental and physical disabilities and provides protections to job applicants, employees, and individuals wishing to use public and private accommodations. It does not, however, grant all the same employment protections to those with substance use disorders that it does to individuals with other mental illnesses.

Please continue to Part II, which will cover the period from the 1990s to 2010