The Well Being of Our Nation: 

An Inter-Generational Vision of 

Effective Mental Health Services 

and Supports 

 

National Council on Disability 

September 16, 2002
National Council on Disability 

1331 F Street, NW, Suite 850 

Washington, DC 20004 

The Well Being of our Nation: An Inter-Generational Vision of Effective Mental Health 

Services and Supports

This report is also available in alternative formats and on NCD’s award-winning Web site 

(www.ncd.gov). 

Publication date: September 16, 2002 

202-272-2004 Voice 

202-272-2074 TTY 

202-272-2022 Fax 

The views contained in the report do not necessarily represent those of the Administration 

as this and all NCD documents are not subject to the A-19 Executive Branch review 

process.
National Council on Disability Members and Staff 

 

Members 

Lex Frieden, Chairperson 

Kate Pew Wolters, First Vice Chairperson 

Hughey Walker, Second Vice Chairperson 

Yerker Andersson, Ph.D. 

Dave N. Brown 

Robert R. Davila, Ph.D. 

Young Woo Kang, Ph.D. 

Kathleen Martinez 

Audrey McCrimon 

Carol Hughes Novak 

Bonnie O’Day, Ph.D. 

Patricia Pound 

Lilliam Rangel-Diaz

Staff 

Ethel D. Briggs, Executive Director 

Jeffrey T. Rosen, General Counsel and Director of Policy 

Mark S. Quigley, Director of Communications 

Allan W. Holland, Chief Financial Officer 

Julie H. Carroll, Attorney Advisor 

Joan M. Durocher, Attorney Advisor 

Martin Gould, Ed.D., Senior Research Specialist 

Gerrie Drake Hawkins, Ph.D., Program Specialist 

Pamela O’Leary, Interpreter 

Brenda Bratton, Executive Assistant 

Stacey S. Brown, Staff Assistant 

Carla Nelson, Office Automation Clerk 

i 

Acknowledgment

The policy research and analysis was conducted, and a report to the National Council on 

Disability (NCD) prepared, through a contract with Michael Allen and the Bazelon Center 

for Mental Health Law. Michael Allen is a lawyer, a policy researcher, and a seasoned 

writer in the area of mental health services. 

iii 

Contents

Executive Summary.........................................................................................................................1 

Chapter 1: Introduction....................................................................................................................3 

Chapter 2: How Did We Get Here? .................................................................................................9 

Chapter 3: Impact on Children and Youth.....................................................................................17 

Chapter 4: Impact on Adults..........................................................................................................39 

Chapter 5: Impact on Seniors.........................................................................................................57 

Chapter 6: Fulfilling the Promise: Concrete Steps Toward a New Vision....................................63 

Chapter 7: An Inter-Generational Vision for Effective Mental Health 

 Services and Supports..................................................................................................73 

Appendix 

Mission of the National Council on Disability ..................................................................81 

v 

Executive Summary

At a time when more is known about mental illnesses than at any other time in history 

and just three years after the U.S. Supreme Court held that unnecessary institutionalization 

violates the Americans with Disabilities Act, public mental health systems find themselves in 

crisis, unable to provide even the most basic mental health services and supports to help people 

with psychiatric disabilities become full members of the communities in which they live. 

This report does not aim to be a comprehensive review of all that is known about public 

mental health and its shortcomings. That undertaking has been begun by the U.S. Surgeon 

General, in the massive 1999 report entitled Mental Health: A Report of the Surgeon General 

(http://www.surgeongeneral.gov/library/mentalhealth/home.html), and will be carried on with 

President Bush’s New Freedom Commission on Mental Health, which held its first public 

hearings in July 2002. Rather, this report examines some of the root causes of the crisis in 

mental health, and seeks to “connect the dots” concerning the dysfunction of a number of public 

systems that are charged with providing mental health services and supports for children, youth, 

adults and seniors who have been diagnosed with mental illnesses. 

One of the most significant findings of this report is that children and youth who 

experience dysfunction at the hands of mental health and educational systems are much more 

likely to become dependent on failing systems that are supposed to serve adults. In parallel 

fashion, adults whose mental health service and support needs are not fulfilled are very likely to 

become seniors who are dependent on failing public systems of care. In this fashion, hundreds of 

thousands of children, youth, adults and seniors experience poor services and poor life outcomes, 

literally from cradle to grave. 

There is no single antidote for the current dysfunction of the public mental health system. 

Clearly, visionary leadership, adequate funding and expansion of proven models (including 

consumer-directed programs) are essential ingredients. More than these, however, there needs to 

be a dramatic shift in aspirations for people with psychiatric disabilities. 

1 
Public mental health systems must be driven by a value system that sees recovery as 

achievable and desirable for every person who has experienced mental illness. Systems also must 

commit to serving the whole person, and not merely the most obvious symptoms. In other words, 

mental health systems will have to develop the expertise to deliver not just medication and 

counseling, but housing, transportation and employment supports as well. 

There are proven models of success throughout the country, but entrenched forces and 

stale thinking have prevented them from “going to scale” to serve more people with psychiatric 

disabilities. Some such models are referenced throughout the report, and Chapter 6 provides a 

menu of concrete actions to bring about a new vision of public mental health services and 

supports.

2 
Chapter 1 

Introduction

For decades, state mental health systems have been burdened with ineffective servicedelivery programs and stagnant bureaucracies. Their operations have become rote, spurred to 

change only by crises. Combined with ever-increasing fiscal pressures, this situation has 

precluded innovation and kept most systems from incorporating the new and more effective 

interventions developed in recent years. As a result, state mental health systems have all but 

disintegrated, falling ever farther from the ideal of voluntary, accessible and effective services 

and supports that promote meaningful community membership. 

As large state psychiatric hospitals have been downsized or closed over the past 30 years, 

people with psychiatric disabilities, advocates, providers and policy makers have learned that 

recovery from mental illness requires much more than traditional “mental health services.” 

Rather, recovery may require access to housing, transportation, employment and peer supports 

and, for certain individuals, these may be much more important than medication, therapy and 

case management. Yet, with rare exceptions,1

 mental health systems have been slow to 

acknowledge and respond to these needs with meaningful, naturalistic supports. Throughout this 

report, reference will be made to “mental health services and supports” to highlight the critical 

importance of each in providing the tools that a person with a psychiatric disability may need to 

recover from symptoms of mental illness, to overcome isolation and to gain (or regain) economic 

self-sufficiency. 

A growing number of advocates, policymakers and members of the media have 

 1 Vermont has secured a “Medicaid 1115 Waiver” to allow it to provide 

flexible and comprehensive services and supports through its Community Rehabilitation 

and Treatment (CRT) program, and has devoted state funding to provide housing and 

other services not reimbursable under Medicaid. As a consequence, each of the 3,200 

adults in the CRT program has access to a broad range of supports that are tailored to his 

or her specific needs. See Department of Developmental & Mental Health Services, 

DESCRIPTION OF PROGRAMS AND SERVICES, at http://www.state.vt.us/dmh/ 

3 
begun to realize that the public mental health system2

 in most states is highly dysfunctional, 

and rations care in a manner that requires people with serious mental illnesses to “hit 

bottom” before receiving the services and supports they need to live successfully in the 

community3

. The depressing reality is that this approach is shared by systems serving 

children, youth, adults and seniors, creating dependency and perpetuating failure, 

sometimes literally from cradle to grave. 

In fact, the use of the term “mental health system” is, itself, problematic. One of the 

primary problems is that states do not have a single system of mental health care, but a number 

of patchwork systems that are called upon to provide such care, often without a guiding vision of 

how to do so most effectively and frequently without the funding to actually deliver services and 

support to every eligible person. To be diagnosed with a mental illness (or with “severe 

emotional distress,” the term applied to children and youth under the age of 18) is to be 

consigned to one dysfunctional system after another. In fact, the evidence shows that once 

the label has been applied and a person has been failed by one public system, chances are 

high that he or she will frequently be failed by other systems as well. 

Throughout the 1970s, 1980s, and 1990s, whether in times of budgetary deficit or 

surplus, states failed to adequately fund their mental health systems. But the pressing needs 

 2 The term “public mental health system” refers to the system(s) of care in a state 

that serves individuals and families that are poor. The public mental health system provides more 

than half of all funding for mental health services in America. While for health care, private 

insurance is a major payer, the private system contributes only 46 percent for mental health, and 

its role is shrinking. See Health Care Plan Design and Cost Trends: 1988 through 1997, The Hay 

Group, Washington, D.C. 1998. This paper focuses solely on the public systems charged with 

providing mental health care and supports to poor people. 

3

 See, e.g., Bazelon Center for Mental Health Law, Disintegrating Systems: The 

State of States’ Public Mental Health Systems (December 2001); Abigail Trafford, “Second 

Opinion: Writing Off Depression,” The Washington Post, Tuesday, January 1, 2002; Page 

HE01. 

4 
of people with mental illnesses did not just disappear. They were forced underground or, 

more accurately, they were forced onto other public and private systems that were not 

designed to provide mental health services and supports. 

In many communities, jails and prisons become the safety nets and the largest 

providers of mental health services. Homeless shelters and nursing homes have become 

housing of last resort for people with mental illnesses. Hospital emergency rooms have 

provided crisis-oriented care for a few days at a time before sending people with mental 

illnesses back into a community setting where they are destined to fail because of a lack of 

mental health services and supports. 

When children and youth with severe emotional disturbance cannot get the familybased care and supports they need, they often end up in foster care or juvenile justice, and 

may be consigned to institutional settings where they are further cut off from their natural 

support systems. Seniors with unmet mental health needs are often relegated to nursing 

homes or unregulated “board and care” homes where they are left to fend for themselves. 

While they do not appear on the budget line for the state mental health agency, the 

costs of care for people with mental illnesses are borne by these other systems (and by 

taxpayers). Typically, these costs are many times higher than what it would cost to provide 

modest, preventive services and supports, such as counseling, peer support, respite care, 

supportive housing and job training.

Beyond funding, one of the most significant barriers to access is that, outside of 

psychiatric hospitals, the public mental health system is only “open” from 9 a.m. to 5 p.m. By 

contrast, law enforcement, jails and prisons, emergency rooms, homeless shelters and other 

systems are “open” 24/7 and, as a consequence, have ended up taking a larger share of people in 

crisis. 

Through neglect or underfunding, the public mental health system in many states has 

5 
effectively closed its doors, through the use of waiting lists, priorities for service, and 

disqualification of people who are thought to be “hard to serve” or “treatment resistant.” As a 

consequence, adults with mental illnesses have increasingly found themselves caught up with 

law enforcement, the judicial system and the correctional system.

4

Children and youth with severe emotional disturbance are also shunted from system to 

system, without adequate care from any of them. Even where they have a legal entitlement to 

services–such as Medicaid’s Early Periodic Screening, Diagnosis and Treatment (EPSDT) 

program or the right to a “free and appropriate public education” under the Individuals with 

Disabilities Education Act (IDEA)—enforcement of these entitlements is problematic because of 

a shortage of knowledgeable attorneys willing to take on such claims. 

When families can’t enforce their children’s right to services and supports designed to 

keep them at home (or when they run out of private insurance benefits), they are often forced to 

relinquish custody to the state, which then provides fully-funded Medicaid services to secure 

services very similar to those that had been denied to families, or had been difficult for families 

to access. 

As a result of all these shortcomings, people with psychiatric disabilities, family 

members, advocates and members of the general public have extremely low expectations of the 

mental health system, and even these are often frustrated. 

This paper is designed to provide a broad overview of the current state of public systems 

charged with providing mental health services and supports to children, youth, adults and seniors 

and to identify, across these age groups, common trends that have led to the failure of these 

public systems. It will do so by examining the following themes: 

 4 See, e.g.,Criminal Justice / Mental Health Consensus Project, at 

http://www.consensusproject.org/ . “Life on the Outside,” All Things Considered, May 30, 

2000, available at http://www.npr.org/ramfiles/atc/20000530.atc.06.rmm (Cook County Jail is 

Illinois’ biggest mental health facility). 

6 
• Mental health systems are focused on crisis and on those “most in need,” 

requiring that people with psychiatric disabilities “hit bottom” before getting the 

services and supports they need; 

• Missed opportunities for prevention: The failure of community-based and 

preventive systems leads to greater reliance on isolating institutions and 

segregated “residential placements”; 

• Despite clear eligibility, many people are denied mental health services and 

supports, or find them entirely inaccessible; and 

• The failure to provide timely, voluntary and effective mental health services and 

supports leads to tragic consequences for people with psychiatric disabilities and 

for society at large. 

7 

Chapter 2 

How Did We Get Here?

Since the early 1960s, national policy on serving people with serious mental illnesses 

has focused on reducing costly and often neglectful institutional care and relying, instead, 

on providing services more humanely in the community. This movement acquired the 

unwieldy title of “deinstitutionalization.” One impetus in the early 1970s was the landmark 

decision in the case of Wyatt v. Stickney,

5

 which established a constitutional right for people 

confined in state mental institutions to receive treatment for the condition that led to their 

confinement, rather than being merely warehoused. 

In the landmark Olmstead decision (Olmstead v. L.C., 119 S.Ct. 2176, 2188 (1999)), 

which reaffirmed the ADA’s integration mandate, the Supreme Court stated that 

“Unjustified segregation in an institution...is properly regarded as discrimination based on 

disability.” Moreover, in her majority opinion, Judge Ruth Bader-Ginsburg observed that: 

(a) “institutional placement of persons who can handle and benefit from community 

settings perpetuates unwarranted assumptions that persons so isolated are incapable or 

unworthy of participating in community life,” and (b) “confinement in an institution 

severely diminishes the everyday life activities of individuals, including family relations, 

social contacts, work options, economic independence, educational advancement, and 

cultural enrichment.” The decision makes clear that the ingrained neglect of public systems 

constitutes a violation of civil rights. It compels states to consider how their systems of care 

perpetuate needless segregation and its harmful effects. 

Despite many court orders and legislative pronouncements, however, the ambitions 

of deinstitutionalization have yet to be realized. There is no comprehensive community-

 5

344 F.Supp. 387, 391 (M.D. Ala.1972), aff'd sub nom. Wyatt v. Aderholt, 503 

F.2d 1305 (5th Cir. 1974).

9 
based service systems that were deemed necessary for people with psychiatric disabilities to 

thrive as they returned home. Lacking access to the services and supports that promote 

self-sufficiency, adults with serious mental illnesses such as schizophrenia, bipolar disorder 

and major depression, and children and youth with emotional disturbance remain 

vulnerable to homelessness, frequent re-hospitalizations, unemployment and involvement 

with criminal justice systems. 

Access to Services Through Public Programs

People who either do not have private health insurance or exhaust their coverage must 

turn to public-sector mental health programs. Unfortunately, shrinking public-sector resources 

means that most of the uninsured are unable to get the services and supports they need. They are 

given what is available–often no more than a bimonthly appointment with a psychiatrist and a 

supply of medication meant to suppress symptoms. In this fashion most people with psychiatric 

disabilities who are poor are merely being “warehoused” in the community rather than being 

helped toward recovery and independence. 

Federal Medicaid law requires that all covered children and youth have access to all 

medically necessary services, through the Early and Periodic Screening, Diagnosis, and 

Treatment (EPSDT) mandate. But many states do not adequately implement EPSDT, nor do they 

require their managed care contractors to do so.6

 Medicaid law prohibits reimbursement to 

psychiatric hospitals for non-elderly adults. It does, however, permit states to cover a full array 

of comprehensive community-based services. Yet many states have failed to use these options, 

leaving some, particularly adults with serious mental illness, without access to the array of 

effective services detailed in the Surgeon General’s report, such as targeted case management 

and psychiatric rehabilitation, let alone help with housing, transportation and employment. 

 6 Where to Turn: Confusion in Medicaid Policies on Screening Children for Mental 

Health Needs, Bazelon Center for Mental Health Law, 1999. 

10 
Children, youth and adults with the most serious forms of mental disability are victims of 

neglectful public systems that preclude their access to the resources necessary for stable lives 

and meaningful participation in the community. They are further victimized when the 

consequences of unmet needs are punitive—for example, when they are arrested for behavior, 

such as sleeping on the street, that is an outcome of their lack of access to housing and mental 

health services. 

Federal Mental Health Block Grant. The Federal Government, through the Supreme Court's 

ruling in Olmstead has clarified the duties of states to provide appropriate community services 

in lieu of institutional care for people with mental illness. It would be appropriate, at this time, 

for the Federal Government itself to increase its financial contribution to spending on 

community mental health services through the major mental health services program, the 

Community Mental Health Services Block Grant.7

Over the past 18 years, federal appropriations for the mental health block grant have 

fallen in real terms. In 1980, community mental health centers received $293 million in annual 

federal appropriations—a small amount in overall mental health spending, but nonetheless an 

important proportion of the resources available for community care. However, even that modest 

amount looks significant today. In 1981, when the community mental health law was repealed 

and the mental health block grant was enacted to replace it, spending was reduced 14 percent. 

Following this substantial cut, the block grant has continued to drastically lose ground to 

inflation, as the graph below illustrates. 

 7 The Center for Mental Health Services' Community Mental Health Services 

Block Grant awards grants to the States to provide mental health services to people with 

mental disabilities. Through the Community Mental Health Services Block Grant, a joint 

Federal-State partnership, CMHS supports existing public services and encourages the 

development of creative and cost-effective systems of community-based care for people 

with mental disabilities. With the current changes in the health care delivery system, 

improving access to community-based systems is especially important. See 

http://www.mentalhealth.org/publications/allpubs/ KEN 95-0022/default.asp. 

11 
(Source: Bazelon Center for Mental Health Law, Under Court Order: What the Community 

Integration Mandate Means for People with Mental Illnesses) 

The Federal Government could, and should, do more to assist states in meeting the needs 

of individuals who are unnecessarily institutionalized or at risk of unnecessary 

institutionalization. In January 1999, the administration requested that Congress increase 

appropriations for the mental health block grant by $70 million. Such an increase, while helpful, 

is far short of the level needed to restore lost spending power for the block grant. Advocates 

should urge the administration and the Congress to increase federal appropriations for the block 

grant to $1 billion. This would raise spending on mental health to a level more commensurate 

with spending under the substance abuse block grant ($1.585 billion). 

Inadequate federal funding is exacerbating a crisis in community mental health at the 

state and local levels, where budget shortfalls are leading to drastic cuts in vital mental health 

programs. The landmark report on mental health issued by the Surgeon General of the United 

States in December 1999 affirmed that the technology exists to provide effective treatment—

even to people with serious mental illnesses. The problem is that these treatments are simply not 

12 
accessible to all who could benefit from them. 

State Appropriations

Community mental health services are generally no more expensive than institutional 

care. However, to shift a system from over-reliance on institutions to one that provides more 

appropriate and more effective community services and supports requires an investment in the 

community. Start-up costs, along with the need to ensure that people continue to receive care 

while new community options come on line, have hampered states' ability to ensure that 

resources follow individuals into the community. Until community services are up and running, 

Medicaid and other sources of reimbursement cannot be tapped. Accordingly, states may need to 

make a direct appropriation of their general funds for this purpose. 

But far from meeting these obligations, states have been reducing spending on mental 

health services over past years. For example: 

• State only appropriations for mental health services are significantly lower today 

(adjusted for inflation and growth in population) than they were in 1955, when 

most people with mental illness were warehoused in state institutions.8 Given that 

institutions provided little in the way of real treatment at that time, it would be 

expected that state expenditures for mental health would have grown, as new and 

effective approaches to care and supports were developed. 

• State appropriations for mental health have lost ground, by 7 percent, between 

1990 and 1997. This is true for nearly every state, as shown in the comparison of 

states adjusted for inflation in the table below. 

 8 Note: State spending figure includes state and local appropriations for mental 

health and excludes the federal match for Medicaid, the federal mental health block grant, firstand third-party payments and other non-state sources. Lutterman, T., Hirad, A. and Poindexter, 

B., Funding Sources and Expenditures of State Mental Health Agencies, Fiscal Year 1997, 

National Association of State Mental Health Program Directors Research Institute, Inc. 

Alexandria, VA. 1999, Table 23. 

13 
• State appropriations for mental health have been falling in relation to other state 

spending. Spending on mental health has grown more slowly than (1) total stategovernment spending, (2) state-government spending on health and welfare and 

(3) spending on corrections.9 During the 1990s, state mental health spending grew 

by 33 percent, but total state spending grew 56 percent, spending on health and 

welfare services grew by 50 percent and spending on corrections, by 68 percent. 

The overall change in real purchasing power for state mental health appropriations between 

1955 and 1997 is shown in the chart below. While other funds supplement these state expenditures 

(for example, the federal Medicaid match and the federal mental health block grant), these falling 

numbers represent a reduction of states' own efforts over the years.

(Source: Bazelon Center for Mental Health Law, Under Court Order: What the Community 

Integration Mandate Means for People with Mental Illnesses)

Accordingly, it would hardly be a fundamental alteration in programming for states 

to increase their appropriations for community mental health services in order to comply 

with the Supreme Court's ruling in Olmstead. Investment in community services has the 

potential to bring about long-term savings by enhancing states' ability to tap into federal 

dollars, making increased investment in developing community services and supports even 

 9 Id.

14 
more important. 

15 

Chapter 3 

Impact on Children and Youth

Crisis Focus

As is well documented elsewhere,10 children with emotional disturbance experience 

significant gaps between the systems of care designed to serve their needs and to support them

with their families and in the community. Due to the stresses of poverty, children and youth from

low-income families are disproportionately represented among young people diagnosed with 

emotional disturbance. While this labeling theoretically entitles children to a wide range of

services and supports, these are often not delivered. In addition, the labeling itself may serve to 

reinforce a view of these children as dysfunctional, and relegate them to segregated settings. 

Public policy must seek to reduce this stigma while delivering supports and services (including 

naturalistic supports, such as mentoring, after-school programs and improved housing). 

The Substance Abuse and Mental Health Services Administration (SAMHSA) estimates 

that 20 percent of all children from birth to 17 years of age suffer from a diagnosable mental, 

emotional or behavioral illness.11 According to SAMHSA, approximately 7 million children had 

a diagnosable mental disorder in 1997. Between children and adolescents aged 9 to 17, 

SAMHSA estimates 2.1-4.1 million (five to 13 percent) have a mental or emotional disorder that 

seriously impairs their functioning in day-to-day activities. 

 10 National Council on Disability, From Privileges to Rights: People Labeled with 

Psychiatric Disabilities Speak for Themselves, available at 

http://www.ncd.gov/newsroom/publications/privileges.html#5, at Chapter 5; 

Bryant, E. S., Rivard, J. C., Addy, C. L., Hinkle, K. T., Cowan, T. M., & Wright, 

G. (1995). Correlates of major and minor offending among youth with severe emotional 

disturbance. Journal of Emotional and Behavioral Disorders, 3 (2), 76-84.

11 Mental Health Needs Of Many U.S. Children Going Unmet, available 

athttp://www.pslgroup.com/dg/4D1FA.htm . 

17 
America’s youth is the human resource capital of America’s future. The value of these 

human resources is incalculable. We cannot define or put a value on the loss incurred when 

today’s children and youth with emotional disturbance are damaged in their formative years by 

systems’ failures to provide needed mental health care and/or special educational services. For 

example, children who lack these services often cannot utilize the free and appropriate public 

education to which they are entitled under federal law. Children with unrecognized or untreated 

emotional disabilities cannot learn adequately at school or benefit readily from the kinds of 

healthy peer and family relationships that are essential to becoming healthy and productive 

adults. 

Many young people with emotional disturbance are already involved in the juvenile 

justice system.

12 Rates of emotional disturbance among youth in the juvenile justice system have 

been estimated at 60-70 percent. A significant percentage of the 100,000 youth detained in 

correctional facilities each year suffers from serious mental disabilities and a commensurately 

large percentage suffer from addictive disorders. Seventy-five percent of the youth in the 

juvenile system have conduct disorders and more than half have co-occurring disabilities. 

According to a 1999 report by Substance Abuse and Mental Health Services 

Administration, when compared with adolescents having fewer or less serious behavioral 

problems, adolescents with behavioral problems such as stealing, physical aggression, or running 

away from home were seven times more likely to be dependent on alcohol or illicit drugs. 

While major mental illness, such as schizophrenia, is often evident only when the 

individual reaches the late teens or early twenties, there is little doubt that many other disabilities 

found among the adult prison population surfaced at a much younger age—and went untreated. 

The failure to identify (and treat) emotional disturbances is also associated with the 

 12 See, e.g., Children’s Defense Fund, Quick Facts: Mental Health and Juvenile 

Justice (CDF), at http://www.childrensdefense.org/ss_jjfs_menthlthjj.php 

18 
growing problem of teen suicides and/or suicide attempts. If properly implemented, Medicaid’s 

EPSDT screening program should assist parents of youth with emotional disturbance and school 

personnel in identifying their disabilities, providing the appropriate treatment, and preventing 

suicide. 

The lack of home- and community-based services has still other negative consequences. 

The lack accounts for unnecessary hospitalization of children and youth with emotional 

disturbance. It also contributes to readmission. For lack of services that might ease the transition 

from hospital to home, including respite services for their families, these children cycle back and 

forth between hospital and the community without ever achieving stability. In turn, unnecessary 

hospitalization usurps the limited resources of state mental health budgets, thus obstructing the 

provision of services that might have prevented institutionalization and perpetuating an 

unproductive cycle. 

If all aspects of the system—from assessment to treatment—took into account the longterm needs of children, rather than episodic or crisis occurrence, children’s needs would be 

described in terms of their underlying issues and in the context of their family and living 

situation instead of mere documentation of short-term behavior or services available. For some

children, the system must be prepared to make a commitment to serve the child for their entire 

childhood, with easy entry and re-entry into the system. Outcome measures should reflect longterm goals—such as school attendance, living at home with family or independently, and 

working at a job. 

Missed Opportunities for Prevention 

Poor treatment by the system as a child or youth increases the likelihood of encountering 

other dysfunctional systems as an adult. Children with serious emotional disturbance have the 

civil right to receive services in the most integrated setting appropriate to their needs.13 They 

 

19 

13 The U.S. Supreme Court stated that individuals have such a right unless the state 
further have the human right to be raised in their families and communities, with their individual 

needs guiding the service array provided. These civil and human rights are embodied in the 

Americans with Disabilities Act (ADA).14

The failure to identify and treat mental disabilities between children and youth has 

serious consequences, including school failure, involvement with the justice system and other 

tragic outcomes. As outlined in the Adult chapter, below, adults with mental illnesses who find 

themselves in the criminal justice system are significantly more likely to have grown up in foster 

care, under custody of a public agency or in an institution. 

There are large discrepancies between the mental health needs of children and youth and 

the services they actually receive. A recent study found that only one in five children with 

emotional disturbance used any mental health specialty services, and a majority received no 

mental health services at all. This is consistent with an earlier finding by the Office of 

Technology Assessment (OTA) which estimated that only 30 percent of the 7.5 million children 

who needed mental health treatment received it. However, children with serious emotional 

disturbance often do not receive the services to which they are entitled under the Individuals 

with Disabilities Education Act (IDEA). 

Individuals with Disabilities Education Act: IDEA has long been the primary vehicle 

for securing mental health services and supports for children and youth with mental, emotional 

or behavioral disabilities. The Act’s basic tenet is that, until age 21, children and youth are 

entitled to “a free and appropriate public education.” Under IDEA, children with emotional or 

 

can show that implementation would be a fundamental alteration. Olmstead v. L.C., 119 S.Ct. 

2176, 2188 (1999). 

14 Children also have rights under the Individuals with Disabilities Education Act 

(IDEA), including the right to services in the least restrictive setting appropriate for the child. 

See, generally, Bazelon Center for Mental Health Law, Olmstead Planning for Children 

with Serious Emotional Disturbance: Merging System of Care Principles with Civil Rights Law, 

available at http://www.bazelon.org/olmsteadchildren2.pdf 

20 
behavioral disabilities that interfere with their ability to learn are entitled to special education 

services, including any related mental health services and supports that enable them to benefit 

from their education. Yet despite the intent of this strong federal entitlement, parents and 

advocates report that children are not receiving many of the promised and needed services. 

Children and youth with emotional and behavioral disabilities are the least likely to receive the 

services and supports mandated by IDEA. 

The 1997 IDEA amendments mandated that school systems provide two new services to 

address the needs of children and youth with behavioral problems that interfere with their 

learning or the learning of those around them. Schools must conduct "functional behavioral 

assessments" (FBA) to determine the causes of undesirable behavior and develop "positive 

behavioral interventions and supports" (PBIS) to address them. According to Robert Horner, 

Ph.D., of the University of Oregon faculty, 

“research conducted over the past 15 years has demonstrated the 

effectiveness of strategies that foster positive behavior for 

individual students and for entire schools. Even schools with 

intense poverty, a history of violence and low student skills have 

demonstrated change in school climate when effective behavioral 

systems have been implemented.” 

Despite this history of success, parents and school personnel report that schools are not 

implementing the provisions of the 1997 IDEA amendments. Some profess they don’t 

understand the statute; others are ignoring or actively subverting the law. In almost all cases, it is 

apparent that school personnel are unaware of how effective (and relatively inexpensive) these 

interventions can be. 

EPSDT and Medicaid: Medicaid-eligible children should also benefit from the early 

screening required under the Medicaid’s Early Periodic Screening, Diagnosis and Treatment 

(EPSDT) mandate and a generally broader array of services in state Medicaid plans than is 

available in the private sector. Under EPSDT, all states must screen Medicaid-eligible children, 

21 
diagnose any conditions found through a screen and then furnish appropriate medically 

necessary treatment to “correct or ameliorate defects and physical and mental illness and 

conditions discovered by the screening services.”15

Children and youth up to age 21 have a broader entitlement than adults who qualify for 

Medicaid. For adults, some services are mandatory, but some need only be provided at a state’s 

option. A state will list its “optional” services in its Medicaid plan, but must make available to 

children all services listed in federal Medicaid law “whether or not such services are covered 

under the state plan.”16 Few states have good tools to identify children with mental health needs 

and most fail to monitor providers or health plans to ensure that children receive behavioral 

health screens.

Medicaid’s EPSDT program, especially when used in conjunction with IDEA, is the ideal 

vehicle for meeting the comprehensive mental health needs of children and youth. The program

requires that states conduct regularly scheduled examinations (screens) of all Medicaid-eligible 

children and youth under age 22 to identify physical and mental health problems. If a problem is 

detected and diagnosed, treatment must include any federally-authorized Medicaid service, 

whether or not the service is covered under the state plan. If problems are suspected, an “interperiodic” screen is also required so the child need not wait for the next regularly scheduled 

checkup. 

Child mental health services under Medicaid have undergone considerable change over 

the past decade. For many years, states had included more comprehensive mental health benefits 

for adults than for children and youth. After the enactment of legislation requiring coverage of 

all Medicaid-covered services for children through the Early Periodic Screening Diagnosis and 

Treatment (EPSDT) mandate in 1990, states began revising their rules and expanding coverage 

of child mental health services. 

 15 42 U.S.C. §1396d(a). 

16 Social Security Act, Section 1905(r)(5). See also, Omnibus Budget Reconciliation 

Act, 1989, Public Law 101-239. 

22 
Shortly after these revisions began to occur, states also began to move the Medicaid 

population in need of mental health care into managed care, generally into separate “carved-out” 

specialized managed behavioral health care plans. By 1998, 54 percent of Medicaid beneficiaries 

were enrolled in managed care programs.17 (Health Care Financing Administration, 1998). Due 

to the rapid expansion of covered services early in the 1990s and the subsequent introduction of 

managed care, it is pertinent to question whether children and youth actually receive these 

community-based services and to determine the patterns of service use. Key stakeholders 

continue to cite the lack of attention to the special needs of children and youth as the most 

serious problem with the public mental health system.

18

By offering waivers and options Medicaid law also affords states other policy choices 

that could expand access to mental health services. The Home-and Community-based Waiver 

allows states to provide alternatives to hospitalization to children with disabilities, including 

children and youth with emotional disturbance. The waiver allows states to provide various 

community support services, but only three states have availed themselves of this waiver for 

children with emotional disturbance. Significantly, however, a recent study indicates that the 

Medicaid home-and community-based waiver is effective in reducing the incidence of custody 

relinquishment and institutional placement in the three states where they are in use.19

However, Medicaid does not cover all low-income and other children and adolescents 

who have no access to mental health treatment. Moreover, while the array of covered services is 

 17 http://www.hcfa.gov/medicaid/trends98.pdf 

18 Stroul, B. A., Pires, S. A., Armstrong, M. I., and Meyers, J. C. (1998). The impact 

of managed care on mental health services for children and their families. The Future of 

Children: Children and Managed Health Care, 8, 119-133. 

19 Bazelon Center for Mental Health Law, Relinquishing Custody, The Tragic 

Result of Failure to Meet Children's Mental Health Needs. (Mar. 2000). 

23 
fairly broad, some home- and community-based services are still excluded from coverage under 

many state Medicaid programs. 

Denial and Inaccessibility of Services 

Despite the IDEA and EPSDT entitlements, children and youth in many states fall 

through the cracks of the public systems of care. This happens even in states like California, with 

well-developed local government infrastructure: 

“Despite the integrity of individual programs–and even with the 

extraordinary contributions of so many individual professionals–

incremental efforts add up to less than the sum of their parts. The 

programs often fall short of providing the right services, in the 

right way, to the right children at the right time. Year after year, 

new commitments—even with additional funding—fail to achieve 

the goals so desperately desired.”20

Services are often denied not out of malice, but because of the lack of 

coordination among systems of care and complexity of funding arrangements: 

“Funding is restricted by complex rules that encourage 

communities to forsake those in the path of danger and focus only 

on those children who are physically bruised and emotionally 

broken.”21

 20 Little Hoover Commission, Young Hearts & Minds: Making a Commitment to 

Children's Mental Health, at iv (Report #161, October 2001), available at 

http://www.lhc.ca.gov/lhcdir/report161.html. 

21 Id. 

24 
Moreover, the criteria that youth must meet before they can receive services can easily be 

interpreted to deny services.22 In practice, many states do not have specific definitions of all 

covered services, so it is likely that many Medicaid-eligible children receive neither the mental 

health screens nor the mental health treatment to which they are entitled by EPSDT. The 

shortage of knowledgeable legal advocates virtually ensures that the rights of many children to 

EPSDT services will not be enforced. 

Access to services is limited due to lack of insurance coverage for mental health services 

and inadequate access to the special education and related mental health services for which 

children and youth are eligible through IDEA. For example, ten million children and youth lack 

health insurance and many more are under-insured for mental health treatment and exhaust their 

benefits. An estimated 30 percent (3 million) of those 10 million are eligible for Medicaid, but 

their families are unaware that they qualify.

23

 As states have sought to “do more with less,” they have also sought out managed care 

approaches to limiting Medicaid expenditures. Instead of bridging the gap between child-serving 

agencies, however, states’ shift of Medicaid to managed care has stranded even more children 

 22 For example, to qualify for special education, the child’s mental disability must 

affect educational performance to a marked degree and over a long period of time. The child 

must also exhibit one or more of the following characteristics: 

• an inability to learn that cannot be explained by intellectual, sensory or health 

factors; 

• an inability to build or maintain satisfactory interpersonal relationships with peers 

and teachers; 

• inappropriate types of behavior or feelings under normal circumstances; 

• a general pervasive mood of unhappiness or depression ; or 

• a tendency to develop physical symptoms or fears associated with personal or 

school problems. 

23 The Kaiser Commission on the Future of Medicaid. Medicaid's role for children. 

Medicaid Facts. Washington, DC (1997) 

25 
with serious mental health needs.24

Tragic Consequences for Children, Youth and Society

Custody Relinquishment: Due to lack of community-based services and/or special 

education services, families of children with emotional disturbance are often faced with the 

heart-wrenching choice of not receiving adequate mental health services for their children or 

relinquishing custody of their children in order to qualify for Medicaid. Child mental health 

advocates and professionals have recognized the issue of custody relinquishment for many 

years.25

Requiring families to give up custody: 

 24 Bazelon Center for Mental Health Law, Managed Behavioral Health Care for 

Children and Youth: A Family Advocate's Guide (1996). 

25 Jane Knitzer first identified the problem in a ground-breaking 1978 study and 

elaborated on it in a 1982 publication, Unclaimed Children: the Failure of Public Responsibility 

to Children and Adolescents in Need of Mental Health Services. Several later studies confirm 

Knitzer’s findings. 

• The Research and Training Center on Family Support and Children’s Mental 

Health found that 25 percent of parents whose children have emotional 

disturbance received suggestions that they relinquish custody. One third of those 

parents receiving the suggestion gave up custody in order to get services. 

• The Commonwealth Institute for Child and Family Studies conducted a survey of 

45 states. In 28 states (62 percent), at least one agency used custody transfer to 

gain access to state funding for services for children with serious emotional and 

behavioral problems. Thirty-eight (32 percent) of the responding child-serving 

agencies used custody transfer to obtain funding for children’s treatment. 

• The National Alliance for the Mentally Ill surveyed parents of children with 

mental and emotional disabilities and found nearly one-fourth of them had been 

told by public officials that they needed to relinquish custody to get needed 

services for the children. 

26 
• traumatizes both children and parents; 

• limits family involvement in key decisions about their children’s 

mental health, health and educational needs; 

• undermines family integrity; 

• unnecessarily burdens public agencies with children who are 

neither abandoned; nor neglected, but whose families need services 

and support to raise them at home; and 

• penalizes families for the state’s failure to develop adequate 

services and supports.

Requiring families to relinquish custody to the child welfare system in order to obtain essential 

mental health services and supports for their children wastes public funds and destroys families. 

Inadequate funding of mental health services and support for children and their families 

is the major reason families turn to the child welfare system for help. Private insurance plans 

often have limits on mental health benefits that can be quickly exhausted if the child has serious 

mental health needs. In addition, many private plans do not provide the home and communitybased services and supports that are needed to keep children at home. When their personal funds 

run out, families are forced to turn to the child welfare system. 

Even families whose children are eligible for Medicaid face custody relinquishment. 

Although many of the needed services are covered, states fail to adequately define their 

rehabilitation services, to educate providers on how to bill for those services, or to make sure 

that Medicaid recipients know the array of services to which a child is entitled. When parents 

then turn to the child welfare agency, the agency often requires—as a nonnegotiable condition 

for obtaining those services—relinquishment of custody to the state or county. In large part, this 

is driven by the child welfare agencies’ mistaken belief that custody is required in order to draw 

federal matching funds under the Social Security Act. 

Educational System/Special Education/Discipline: Due to the stresses of poverty, 

children and youth from low-income families are disproportionately represented in the young 

population with emotional disturbance. The inequities of the neglect of these children by schools 

27 
and the public mental health system are further compounded by racial discrimination. 

The failure to provide early screening and mental health services has meant that as many 

as 35 percent of students entering school are considered to be at high risk for social and 

academic failure.26 Once in school, the failure or refusal to provide IDEA services results in 

much greater drop out rates for children and youth with emotional disturbance.27 This has led 

researchers to recommend a new approach to screening, and to identifying a child’s strengths 

rather than deficits. 

In perhaps the classic attempt to blame the victim, school districts that have failed or 

refused to provide preventive services under IDEA has also led, inexorably, to treating children 

with emotional disturbance as “discipline problems.” In a series of attempts to amend the IDEA 

over the past three years, Congress has increasingly expanded the authority of school districts to 

exclude such children and youth from mainstream classrooms. 

The techniques for supporting children with emotional disturbance—known broadly as 

“positive behavioral supports”—in school are well documented.28 The use of punishment to 

 26 Ruth Goldman, Model Mental Health Programs and Educational Reform, 

American Journal of Orthopsychiatry, (1997) p. 347. 

27 ABC Project, Staying in School: Strategies for Middle School Students with 

Learning and Emotional Disabilities (1995), at p. 1: “Nationally, 35 percent of students with 

learning disabilities and 55 percent of students with emotional disabilities drop out of school as 

compared to about 25 percent of students without disabilities. 

28 Among the most recognized of these techniques are to: 

• Personalize instruction through accommodating different learning styles and 

abilities; 

• Create leadership opportunities for less-popular students (such as appointing as 

class helpers); 

• Give student alternatives such as self-imposed time-outs, relaxation techniques; 

and 

• Try to eliminate conditions that lead to reactive misbehavior (such as teasing from

other students) 

28 
correct behavior comes with negative consequences such as negative attitudes on the part of

students toward school and school staff (which leads to increased antisocial acts and behavior 

problems). Punishment of children with emotional disturbance is strongly correlated with 

dropping out of school.29

Foster care: The child protective services and foster care system in the United States 

grew out of efforts by early religious and charitable organizations to serve orphans and "rescue" 

children and youth from abusive or neglectful families. Today's federally supported foster care 

system was created under the Social Security Act of 1935 as a last-resort attempt to protect 

children at risk of serious harm at home. The law obligated states to assume temporary custody 

of children whose parents were unable or unwilling to care for them. 

By the early 1990s almost half a million children were in the custody of state child 

welfare systems and the U.S. Department of Health and Human Services estimated that at least 

one of every 10 babies born in poor urban areas in the '90s would be placed in foster care.30

Children with emotional or behavioral disabilities made up 40 percent of the child welfare 

population and few resources were available for any type of treatment or support services.31 The 

steady increase in foster care placements is very troubling. Most children are deeply traumatized 

when they are separated from their families. Even when their family environment has been 

dangerous or unhealthy, studies have shown that a child often experiences separation from a 

primary care giver as a threat to survival.32

 29 Id. at 5. 

30 "Proposal to Preserve the Family," Associated Press, The Wenatchee 

(Alabama) Daily World, May 24, 1993.

31 Mental Health Law Project (now Bazelon Center for Mental Health Law), 

The R. C. Case: Creating a New System of Care for Children, 1991.

32 Firman, C., On Families, Foster Care, and the Prawning Industry, Family 

Resource Coalition Report, No. 2, 1993. 

29 
Family disintegration and allegations of abuse are the most frequent reasons that children 

are placed in foster care, and these reasons are often rooted in the inability to get mental health 

services and support for parents and/or children. These findings are documented more fully in 

the Custody Relinquishment section, above, and are considered further in the Adult chapter, 

below. 

According to the Annie E. Casey Foundation, every year 25,000 young people in foster 

care turn 18 and leave foster care. This means that young people in state-supervised 

programs must leave foster care whether or not they have the skills to maintain an 

apartment, seek and hold a job, or balance a checkbook. Too many 18-year-olds emerge 

without having had a stable foster-care environment or adequate mental-health services or 

a quality education. According to one recent study, 12 to 18 months after they left foster 

care, half of those who left were unemployed and a third were receiving public assistance. 

Clearly, youths who “age-out” of foster care are among the most vulnerable and the most 

at risk.

Juvenile Justice: Each year, more than one million youth come in contact with the 

juvenile justice system and more than 100,000 are placed in some type of correctional facility. 

Studies have consistently found the rate of mental and emotional disabilities higher among the 

juvenile justice population than among youth in the general population. As many as 60-75 

percent of incarcerated youth have a mental health disorder; 20 percent have a severe disorder 

and 50 percent have substance abuse problems.33 The most common mental disabilities are 

conduct disorder, depression, attention deficit/hyperactivity, learning disabilities and 

posttraumatic stress.34 According to a 1999 survey conducted by the National Mental Health 

 33 Cocozza, J. J. (Ed.) Responding to Youth With Mental Disorders in the Juvenile 

Justice System. Seattle, WA, The National Coalition for the Mentally Ill in the Criminal Justice 

System, 1992. 

34 Garfinkel, Lili F., Unique Challenges, Hopeful Responses: A Handbook for 

Professionals Working with Youth with Disabilities in the Juvenile Justice System, PACER 

30 
Association (NMHA) and the GAINS Center, mental health problems typically are not identified 

until children are involved with the juvenile justice system, if at all. 

Although African-American youth age 10 to 17 constitute only 15 percent of their age 

group in the U.S. population, they account for 26 percent of juvenile arrests, 32 percent of 

delinquency referrals to juvenile court, 41 percent of juveniles detained in delinquency cases, 46 

percent of juveniles in corrections institutions, and 52 percent of juveniles transferred to adult 

criminal court after judicial hearings. In 1996, secure detention was nearly twice as likely for 

cases involving black youth as for cases involving whites, even after controlling for offenses.35

Many youngsters have committed minor, nonviolent offenses or status offenses. The 

increase in their incarceration rates is a result of multiple systemic problems, including 

inadequate mental health services for children and more punitive state laws regarding juvenile 

offenders. These nonviolent offenders are better served by a system of closely supervised 

community-based services, including prevention, early identification and intervention, 

assessment, outpatient treatment, home-based services, wraparound services, family support 

groups, day treatment, residential treatment, crisis services and inpatient hospitalization. 

Intensive work with families at the early stages of their children’s behavioral problems 

can also strengthen their ability to care for their children at home. These services, which can 

prevent children from both committing delinquent offenses and from re-offending, are most 

effective when planned and integrated at the local level with other services provided by schools, 

child welfare agencies and community organizations. 

More than one in three youths who enter correctional facilities “have previously received 

special education services, a considerably higher percentage of youths with disabilities than is 

 

Center, 1997. 

35 1999 National Report Series, Juvenile Justice Bulletin. 

31 
found in public elementary and secondary schools.”36 Many children with emotional disturbance 

end up in detention facilities as a result of incidents at school and/or because they fail to receive 

special education and related mental health services. In addition, many juveniles are released 

from detention facilities without appropriate discharge services, and end up being reincarcerated. 

Young people with emotional disturbance are punished for the failure of systems 

designed to protect them. Because schools fail to identify and serve youth with emotional 

disturbance, these children miss out on much or all of the “free and appropriate public 

education” to which they are entitled under the federal Individuals with Disabilities Education 

Act (IDEA), even though IDEA funds services for such children.37

Although IDEA requires educational plans to be in place prior to a young person’s 

release from juvenile detention, and a well-designed and implemented plan, coupled with 

connections to the services provided under Medicaid, can mean the difference between a 

successful transition to home and community or a repeat of the negative cycle that landed the 

juvenile in detention in the first place, few states implement this requirement. Thus, juvenile 

offenders with emotional disturbance frequently fail to reconnect with the education system upon 

their release. 

Without the appropriate intervention, students whose behavior could and should be 

addressed in school are ending up in juvenile detention. Each year over 100,000 youth are 

 36 “Special Education in Correctional Facilities,” by the National Center on 

Education, Disability and Juvenile Justice (1990). Available at 

http://edjj.org/Publications/pub05_01_00.html. 

37 Almost always for want of special education services, 55 percent of children with 

emotional disturbance drop out—more than twice the rate of other students in the general 

population. Nearly 20 percent of students with emotional disturbance have been arrested, 

compared with an arrest rate of nine percent for all students with disabilities. As these children 

age and leave school without adequate preparation or skills, the arrest rate climbs. Of youngsters 

with emotional disturbance out of school for two years—more than a third had been arrested. By 

the time they had been out of school for five years, more than 70 percent had been arrested. 

32 
detained in correctional facilities. These institutions have been called the “de facto” psychiatric 

institutions for adolescents with mental health problems because they substitute incarceration for 

needed treatment. A recent survey by the Pittsburgh Post-Gazette found that 80 percent or more 

of the residents of Pennsylvania’s juvenile detention centers had a diagnosable psychiatric 

problem. Arkansas and New Mexico reported that 90 percent of their juvenile detainees were on 

psychotropic medication. 

Effects of Welfare Reform: In the implementation of welfare reform, policy makers 

have to date focused rather narrowly on the needs of the adult recipients. In particular, reform

efforts have concentrated on recipients who are relatively well-positioned to enter the workforce, 

that is, who do not have evident disabilities or special needs. States have declared remarkable 

success in their initial efforts to reduce welfare rolls, moving off welfare large numbers of

individuals and capitalizing on the current demand for workers. Now, states are beginning to 

face some unanticipated consequences of return-to-work policies particularly on adults with 

significant problems (such as those who have mental health and substance abuse issues) and on 

parents whose children have special needs. States are facing the reality that there is a residual 

population of welfare recipients whose capacities to work are challenged by these problems. 

What might easily be overlooked in the debate on welfare reform is that the children of 

welfare recipients—both those who have already been counted as “successes” and those 

remaining on welfare due to special needs—may, themselves, have significant problems. 

Recipients who have successfully returned to work may have marginal work skills and find 

themselves in low-level jobs. When they have children with serious emotional disturbance, they 

may be confronted with parental demands that pull them away from already-precarious work 

situations. For example, school systems are often ill prepared to deal with special-needs children 

and seek to exclude them from the classroom. Child care centers are often not prepared to handle 

children with significant behavioral problems and these children may be expelled, creating 

significant job-related problems for the parent. 

Those welfare recipients who have not yet entered the workforce includes significant 

numbers of individuals with significant problems of their own, such as depression, post33 
traumatic stress disorder, and chemical dependency. These problems among parents have been 

identified as risk factors for emotional disturbance among their children. The movement of these 

adults into the workforce, which is already a formidable goal, may pose new problems for their 

high-risk children. For example, children with serious emotional disturbance who have been 

reliant on parental care and supervision within the home may, for the first time, be entering child 

care arrangements outside of the home. These settings must be prepared to offer special 

approaches appropriate to the needs of these children. In addition, it is likely that the workplace 

success of recipients who are already struggling to overcome their own problems will be 

compromised by the added stress of disruptions in their children’s functioning. 

This array of factors suggests that the special needs of children do not simply coexist 

with welfare reform; parental return-to-work has both an effect upon these children and is 

affected by these children. However, few policies thus far have considered the interaction of 

welfare reform and recipients’ children with serious emotional disturbance. Most states have not 

worked to ensure that the needs of these children are addressed. As the policy and legislative 

focus comes to be redirected to the hardest to serve welfare recipients (which may well include a 

significant number of parents of children with special needs), the well being of children will 

increasingly come to be an issue. 

Psychiatric Hospitalization and “Residential Care”: Traditionally, the mental health 

services available to children with emotional disturbance have tended to fall at two ends of a 

continuum: 1) treatment in a residential facility and 2) individual, usually once-a-week therapy. 

Yet youth with emotional disturbance need one or more of a broad spectrum of therapeutic 

modalities between these two poles. These include ongoing intensive services in their home 

community and school. Additionally, their families need support services, education and training 

on how to best handle the youngster and his or her problems. 

In many cases, the lack of home-and community-based mental health services results in 

unnecessary institutionalization. Deprived of services, the condition of many children and youth 

with emotional disturbance worsens and reaches crisis proportions, leaving commitment to a 

residential treatment facility as the only option. Though residential treatment centers lack studies 

34 
supporting their effectiveness, this treatment—which serves a small percentage of youth —

consumes one-fourth the outlay on child mental health.38 Referrals to residential treatment 

facilities—often unnecessary—remove the child far from home and community; sometimes out 

of the county or even the state for extended periods of time. Moreover, after leaving the hospital, 

the lack of transitional services and/or intensive in-home services and supports frequently result 

in children and adolescents cycling from home to hospital and back again without ever achieving 

stability. 

However, effective home- and community-based services—such as in-home services, 

behavioral aides, intensive case management, day treatment, family support and respite care, 

parent education and training, and after-school and summer camp programs—do exist. Of these 

services, the Surgeon General’s report found home-based services and therapeutic foster care to 

have the most convincing evidence of effectiveness.39 These services are furnished in partnership 

between professionals and families, are clinically and fiscally flexible, and individually tailored 

for each child and family, providing whatever intensity of service is needed. Home- and 

community-based services build on strengths and normal development needs rather than just 

focusing on problems, and provide continuity of care. They strive to be culturally competent and 

involve the family in the child’s care. Evaluations of these community-based services have found 

them to be highly effective, less costly than the alternative residential services and much 

preferred by families.40

 38 U.S. Department of Health and Human Services. Mental Health: A Report of the 

Surgeon General (1999), at Chapter 3. 

39 Id. 

40 Hyde, K. L., Burchard, J. D. & Woodworth, K. (1996). Wrapping services in an 

urban setting. Journal of Child and Family Studies, 5, 67-82; Yoe, J. T., Santarcangelo, S., 

Atkins, M. & Burchard, J. D. (1996). Wraparound care in Vermont: Program development, 

implementation, and evaluation of a statewide system of individualized services. Journal of 

Child and Family Studies, 5, 23-38. 

35 
36 
Chapter 4 

Impact on Adults

Crisis Focus 

Every year, youth who have been ill-served by mental health, education and foster care 

“age out” of those systems and become adults, without the explicit entitlements to mental health 

and other care they had as youth. Despite the inevitability of this process, the adult mental health 

system does little to anticipate their arrival, and invests little in programs of prevention. Like the 

youth-serving systems examined in the last chapter, the adult systems devote very few resources 

to people until they reach the point of crisis. 

For adults, neglect or poor treatment by the mental health system increases the likelihood 

an adult with mental illness will encounter other more coercive and crisis-oriented systems, like 

law enforcement, corrections, institutionalization and emergency rooms. Absent the services and 

supports they need in the community, people with serious mental illness become caught up in the 

criminal justice system. Ironically, these individuals are often discharged from jails and prisons 

into the community with little or no planning for treatment. Lacking treatment, their lives 

become a revolving door of arrest, incarceration, release and rearrest. 

With coordination among these systems almost totally lacking, individuals and families 

living with mental illnesses are faced with a mental health system that swings between the 

extremes of abject neglect and unwanted intervention, never quite providing the appropriate 

level of services to sustain them in the community: 

• Underfunded systems ration care to those “most in need,” almost guaranteeing 

that people will be denied services and supports until they are in crisis; 

37 

• Without preventive services and supports, most individuals and families living 

with mental illnesses have difficulty attaining economic self-sufficiency, and 
become more dependent on inadequate “safety net” programs like Supplemental 

Security Income disability and welfare payments; 

• Once in crisis, the mental health, criminal justice and correctional systems are 

primed to respond with coercive measures which tend to undermine the principles 

of self-determination and consumer direction, and make it harder to achieve 

recovery and economic self-sufficiency; and 

• Crisis-driven services (and monitoring of coercive measures) are dramatically 

more expensive; they drain resources away from voluntary, preventive services in 

the community, resulting in long waiting lists and further deterioration of people 

in need. 

By now, it is beyond debate that it is fiscally more prudent to address mental health needs 

before they reach the point of crisis.41 But the extraordinarily low priority placed on mental 

health services, and the “Balkanization” of state budgets virtually ensures that agencies will 

continue to seek out ways to push “bothersome” clients onto the rolls of other public agencies. 

Missed Opportunities for Prevention 

Big Investments in Big Hospitals and Precious Little for Community-Based 

Services: Historically, mental health systems have devoted a large share of their resources to 

 41 See, e.g., Culhane, Dennis, Comparing The Relative Effectiveness Of Transitional 

vs. Supported Housing For Single Persons With Severe Mental Disabilities Exiting Homelessness; 

Culhane, Dennis, The Public Costs Of Homelessness Versus Supported Housing In New York 

City: Assessing The Differential Impact On NYS Medicaid-Funded Services, Veterans 

Administration Programs, The Health And Hospitals Corporation, New York State Psychiatric 

Hospitals, And The New York State Dept. Of Corrections; Corporation for Supportive Housing, 

The New York/New York Agreement Cost Study: The Impact of Supportive Housing on Services 

Use for Homeless Mentally Ill Individuals.

38 
sustaining large psychiatric hospitals in urban centers or in rural areas. One of the most 

straightforward ways to finance community services for individuals who would otherwise be 

needlessly institutionalized is to redirect institutional funds to community services. 

Since 1955, states have been reducing the capacity of their state psychiatric institutions. 

However, until quite recently they accomplished this by reducing the size of the hospitals, not by 

closing them down. More recently, states have begun to close entire institutions, freeing up 

considerable state resources that can be redirected to support community living. For example, 

more state psychiatric hospitals were closed in the first half of the 1990s than in the 1970s and 

1980s combined.42 Since 1990, a total of 40 such hospitals have been closed. 

Recent experience in Indiana demonstrates how such an approach can produce both 

positive outcomes for individuals and savings for the state.43 Indiana closed a hospital that was 

housing individuals with serious mental illness who had a mean length of stay of over eight 

years. After the hospital closed, most went to some form of 24-hour care or monitoring in the 

community and were served by programs providing intensive levels of service. The state also 

provided three years of special funding to local community programs specifically to ease the 

transition for these individuals. This funding, redirected from hospital spending, allowed 

communities to meet the needs of dischargees without squeezing them into existing treatment 

slots or adding to already over strained community programs. 

The individuals benefitted from services in more integrated settings and showed positive 

outcomes, such as improved functioning and quality of life. Savings for the state were 

 42 National Association of State Mental Health Program Directors, State 

Mental Health Agency Profile System Highlights: Closing and Reorganizing State 

Psychiatric Hospitals: 1996. NASMHPD, Alexandria, VA 1997.

43 McGrew, J. H., Wright, E. R., & Pescosolido, B. A., Closing of a state 

hospital: An overview and framework for a case study. Journal of Behavioral Health Services 

& Research, 26:3 August 1999, 236-245. 

39 
significant. Per-person costs went from $68,400 for a year's hospital care to $40,600 for those 

placed in the community. However, some individuals were placed in alternative institutions 

(such as a nursing homes, which do not represent community integration), whose costs were a 

little higher. As a result, the overall average cost for the year following closure was $55,417 per 

person discharged. Still, this represented a savings of 19 percent of funds expended to maintain 

these individuals in the state hospital. 

Counter to this trend, and to the clear mandate of the Supreme Court’s Olmstead

decision, some states have dug in their heels, and have attempted to rebuild large state 

institutions, while starving community-based mental health care. One such example is Laguna 

Honda Hospital, a 1,200-bed skilled nursing facility owned and operated by the City and County 

of San Francisco. Three fourths of the facility’s annual reimbursement comes from Medicaid and 

Medicare. The city is proposing to build another huge public facility and an assisted living 

building on the same grounds as the current nursing home. The citizens of San Francisco passed 

a bond referendum allowing the city to spend up to $299 million to create a facility or facilities 

to replace Laguna Honda. Such an expenditure would foreclose the development of the 

community-care options required under Olmstead.

44

Denial And Inaccessibility of Services

Medicaid is a principal source of funding for the health and mental health services that 

states offer in the community to public-sector consumers released from institutional settings 

under the Olmstead mandate. The Social Security Act allows states to waive traditional Medicaid 

rules to set up systems of managed care for Medicaid enrollees. States began using the waivers 

to offer medical services through managed care. By now, many have expanded their waivers to 

 44 There have also been recent efforts to rebuild state psychiatric hospitals in 

Montana and the District of Columbia, two jurisdictions whose community mental health 

systems have consistently failed adults with mental illnesses. 

40 
include (mental health and addiction treatment for some or all of the Medicaid population. 

This shift of Medicaid into managed care arrangements is beginning to blur the borders 

that have distinguished public and private sectors. At first, the populations with more extensive 

service needs largely remained in fee-for-service Medicaid programs; however, states are now 

planning ways to refine these systems to eliminate the inefficiencies of overlapping, cumbersome

bureaucracies. They are also beginning to evaluate their expenditures in terms of the clinical 

outcomes they are purchasing. Whether directly, through managed care contracts with 

commercial insurance companies, or through states’ application of business practices to fee-forservice systems, the experiences of the private market are being transported to the public sector 

and the respective systems are moving closer together. In communities, individuals and families 

encounter both considerable overlap and significant gaps in services, with no one organizational 

structure that can resolve these defects. The trend appears to be increasing with the introduction 

of managed care plans into Medicaid mental health service delivery.

Community Mental Health is Closed When it Should be Open: As a consequence of 

underfunding, poor resource allocation and the (not infrequent) desire to shift the cost of hard-toserve clients to other public systems, the community mental health system in most states is only 

“open” from 9 a.m. to 5 p.m. Unlike other public systems, like emergency rooms, law 

enforcement and corrections, which are “open” 24 hours per day, seven days per week, the 

mental health system is often “closed” (except for hospital-based services) during evenings and 

weekends, when many people with mental illnesses experience the greatest need. During those 

times, when adults with mental illnesses come to the attention of the police, they are processed 

through the justice system (or taken to an emergency room for psychiatric evaluation), rather 

than being diverted to the less-costly, more appropriate community-based mental health service 

system that should be meeting their needs.

Geographic Inaccessibility: Even if they have some sort of insurance coverage, many 

adults with mental illnesses who live in rural areas lack effective access to the mental health 

services and supports they need because they simply live too far from providers, who are 

41 
typically centered in urban and suburban areas. The advent of managed care in the Medicaid and 

public mental health systems over the past ten years has further diminished the number of 

providers willing to serve rural clients. 

Language and Cultural Barriers: Most state mental health systems still lack the ability 

to serve people of color and language minorities in their own traditions and their own language. 

The Surgeon General recently reported “striking disparities” in mental health care for racial and 

ethnic minorities, and that these disparities “impose a greater disability burden on minorities,” 

and that people from diverse cultures collectively experience a greater disability burden 

from mental illness than do whites. This burden is directly attributable to the fact that 

people from diverse cultures systemically receive less care and poorer quality of care, 

rather than from their illnesses being inherently more severe or prevalent in the 

community.45

TRAGIC CONSEQUENCES FOR ADULTS AND FOR SOCIETY 

Homelessness: On any given day, approximately 150,000 people with severe mental 

illnesses are homeless, living on the streets or in public shelters. Homelessness is not a symptom

of mental illness. It is an artifact of mental health systems that do not link consumers to 

accessible housing and do not offer needed supports and services, or that operate residential 

programs experienced by consumers of mental health care as coercive. Homelessness among 

people with serious mental illnesses underlies many of the problems that spill over from the 

mental health system, including the problem of criminalization. Yet the successes reported by 

many local programs demonstrate that most homeless people with mental illnesses can live with 

stability in their communities if they receive a combination of sustained outreach, case 

management, health and mental health services, housing and employment assistance.46 

 45 Mental Health: Culture, Race, and Ethnicity: A Supplement to Mental Health: A 

Report of the Surgeon General, available at 

http://www.surgeongeneral.gov/library/mentalhealth/cre/default.asp 

42 

46 National Coalition for the Homeless and National Law Center on Homelessness 
Criminalization of Mental Illnesses: Jails are becoming America’s new mental 

hospitals. As a result, jail facilities are faced with a role they were neither designed nor staffed to 

assume. Between 600,000 and one million men and women jailed each year have a mental 

illness. This is thought to be eight times the number admitted to psychiatric hospitals. Many of 

these people are arrested for non-violent misdemeanors, others for “crimes of survival” such as 

stealing food, loitering, or trespassing. Still others are detained in “mercy arrests” by police 

officers who find the public mental health system unresponsive and the process of accessing its 

emergency services cumbersome. 

As many as 16 percent of all jail inmates have a severe mental illness, according to the 

U.S. Department of Justice. Many were arrested for reasons related to their unmet needs for 

mental health or addiction treatment and for housing. Many people with mental illnesses are 

homeless and frequently arrested for “esthetic” or “quality of life” misdemeanors that result from

their lack of access to mental health services and that police routinely ignore when committed by 

others. 

Predominantly, prisoners with mental disabilities are poor and people of color. Along 

with details about the plight of other major racial and ethnic minority groups, a report released 

August 26, 2001, by the U.S. Surgeon General, entitled Mental Health: Culture, Race and 

Ethnicity, indicates that disproportionate numbers of African Americans are represented in the 

most vulnerable segments of the population—people who are homeless, incarcerated, in the child 

welfare system, victims of trauma—all populations with increased risks for mental disabilities. 

People with mental illnesses, with mental retardation, and with associated substance 

abuse (hereinafter “people with mental disabilities”) are increasingly brought into the criminal 

justice system. They are arrested for various minor offenses—many times for “crimes of 

survival” as they struggle to live on the streets—and incarcerated in jails and prisons where their 

 

and Poverty, Illegal to be Homeless: The Criminalization of Homelessness in the United States

(January 2002). 

43 
treatment needs are not met. Typically, these are offenses people who do not have mental 

disabilities either would not commit or which prompt a warning...not an arrest. Often, people 

with mental disabilities are living in circumstances so characterized by neglect that police and 

others in the community may even view these arrests as acts of “mercy.” 

Instead of punitive actions, these individuals need assistance. However, failures in 

service systems and the lack of collaboration between mental health, mental retardation, 

substance abuse, and criminal justice systems prevent them from receiving adequate supports 

and care. This is especially true for individuals who are homeless, whose mental illness is 

particularly hard to treat, and those with co-occurring substance abuse. 

In addition to being greater in number, inmates with mental illnesses tend to have a 

history of more significant problems when compared with other inmates. Many lead chaotic 

lives. Inmates with a mental illness were less likely to be employed in the month before the 

arrest; 37.7 percent in federal prisons were unemployed, compared with 27.5 percent of inmates 

who did not have a diagnosis of mental illness. Inmates with a mental illness are more likely to 

reflect one or more of the factors that put people at risk, such as: 

• growing up in foster care; 

• living with a substance-abusing parent; 

• or being physically or sexually abused; 

• More likely to have been homeless; 

• More likely to be unemployed at the time of arrest;47

 47 Ditton, P.M. (1999). Mental health and treatment of inmates and probationers 

(Bureau of Justice Statistics, NCJ-174463, p.5). Washington, DC: U.S. Department of Justice. 

44 
• More likely to be under the influence of drugs or alcohol at the time of the arrest;48

• More likely to grow up in foster care, agency or institution;49 

• More likely to have been physically or sexually abused while growing up;50 and/or 

• More likely to grow up with a parent who abused alcohol.51

Once incarcerated, these men and women are even less likely to receive adequate 

treatment than when they were at liberty—both because the criminal justice system lacks the 

capacity to deliver comprehensive mental health services and because punitive jail settings are 

the antithesis of a therapeutic environment. In all likelihood, the number of incarcerated people 

with disabilities has increased, given the extensive publicity accorded to violent acts by people 

with mental illnesses, however rare, along with the increased public cynicism about 

deinstitutionalization, the diminished tolerance of abnormal behavior and the expanding use of 

police tactics such as “mercy arrests.”52

 48 Id. at 7. 

49 Id. at 6. 

50 Id. 

51 Id. 

45 

52 Inmates with mental illnesses tend to have a history of more significant problems 

when compared with other inmates. Many lead chaotic lives. The DOJ report found that: More 

than three quarters of inmates with a mental illness had at least one prior prison, jail or probation 

term; twenty percent of inmates were homeless in the 12 months prior to arrest, compared to 8.8 

percent of other inmates; inmates with a mental illness were less likely to be employed in the 

month before the arrest; 37.7 percent in federal prisons were unemployed, compared with 27.5 

percent of inmates who did not have a diagnosis of mental illness; and inmates with a mental 
While some jails and prisons provide mental health services, the emphasis should not be 

on improving these services in a coercive anti-therapeutic environment. Rather, investment 

should be made in diversion. It should extricate people with mental illnesses from the revolving 

door of re-arrest, they must be provided with discharge planning to help them obtain public 

benefits and link them to community treatment. Yet nationally, only one third of inmates with 

mental illnesses receive discharge planning services. 

When released from jail or prison, inmates with mental illnesses seldom receive the 

assistance they need for successful re-entry into the community.53 Without adequate discharge 

planning prior to release, they have no access to medication and other needed mental health 

services, to housing, or to employment or income support.54 Studies have shown that recidivism

rates fall when discharge planning and linkage to effective aftercare services is provided. 

 

illness are more likely to reflect one or more of the factors that put people at risk, such as 

growing up in foster care, living with a substance-abusing parent, or being physically or sexually 

abused. 

53 Until litigation was commenced against it, New York City fought the obligation 

to provide discharge planning in court (Brad H. v. City of New York). The city would drop 

inmates released from Rikers Island at a toll plaza in the middle of the night with $1.50 and 

two subway tokens. People who took medication while incarcerated are released without a 

supply to carry them until they can obtain and fill a prescription. No one ensures that they 

have access to public benefits such as SSI and Medicaid, which they could use to obtain 

housing and mental health treatment. Currently, however, the city has adopted a special 

program where inmates diagnosed with mental illnesses who are discharged from jail can 

have their medications subsidized until they are able to re-establish Medicaid benefits.

54 A 1997 study revealed that only 20 percent of jails nationwide engage in 

discharge planning. This means that most former inmates with serious mental illnesses 

enter a void when they walk out of the correctional facility. It is no wonder that the 

recidivism rate among people with mental illnesses is extremely high. An effective 

discharge plan is crucial to the successful re-entry into the community of an inmate with a 

serious mental illness. Case managers who initiate the appropriate process prior to the 

inmate’s release must also be able to follow up afterwards to make sure the individual has 

in fact received benefits and services. 

46 
Individuals sentenced to jail or prison lose their entitlement to Medicaid and other public 

benefits. There is even a financial incentive for correctional institutions that promptly report 

prisoners’ intake to the Federal Government. But there is no incentive to the criminal justice 

system to help released prisoners reestablish or initiate such benefits. Reinstatement involves 

complex paperwork and applications take months to process—months during which many 

former inmates have no money for medication or housing, much less counseling.

As is the case with discharge from psychiatric hospitals, the incidence of recidivism

among people with mental illnesses is directly related to the quality of post-discharge treatment 

and supports, including housing. The comprehensive support model pioneered for homeless 

people by CSH is highly appropriate for people with mental illnesses who are returning to the 

community from jails and prisons. 

Rather than focus on the handful of far-from-typical violent criminals with untreated

mental illness public policy should concentrate on diverting non-violent offenders with serious 

mental illness from the criminal justice system into community-based treatment programs and 

expanding those programs so as to reduce recidivism and prevent the actions that prompt arrest. 

While those who have committed serious offenses should receive mental health treatment in jail, 

for those who have committed only minor offenses that are the result of or associated with their 

illness, incarceration is neither cost effective, humane nor just. By definition, a penal institution 

constitutes a non-therapeutic environment. In fact, inmates with mental illness are at risk of 

being victimized, sexually abused and at increased risk of suicide. (Ninety-five percent of prison 

or jail suicides involve inmates with a diagnosed mental illness.) 

The problem of criminalization of people with mental illness has been exacerbated by the 

failure of mental health systems to meet the needs of people in the community after 

deinstitutionalization vastly reduced the population in state psychiatric hospitals. The vision of 

deinstitutionalization was to allow individuals with mental illness to be full participants in the 

community. This goal is even more realistic today than it was in the 1960s. New anti-psychotic 

47 
medications, effective community services (even for those with the most serious disabilities),and 

 new breakthroughs in treating co-occurring mental illness and substance abuse, make successful 

community living a real possibility for the vast majority of people with mental illness. To 

succeed, however, they need access to an array of comprehensive services, from housing to 

intensive community mental health services. 

Although preventing incarceration must always be the goal, there will also be a 

continuing need for policies and programs that can provide more effective solutions when people 

with mental illness make contact with the criminal justice system. There have been isolated 

attempts to address this problem through the use of diversion programs, using the criminal 

justice process to steer people with mental illness from jail and into mental health treatment. 

Diversion programs offer a variety of approaches, some of which have been criticized for 

offering no more than a choice “between forced medication or jail.” Although diversion 

programs have been determined effective from a criminal justice perspective—i.e., their use 

reduces the number of inmates with mental illness—their efficacy has not been studied from a 

mental health or civil rights perspective. We need to know whether people with mental illness 

who are diverted from jails are receiving mental health treatment that allows them to participate 

in community life and avoid further contact with the criminal justice system and whether their 

civil rights have been respected during the process. 

Mental Health Courts 

As a response to the growing number of people with mental illnesses being confined to 

jail or prison, a number of local jurisdictions have developed mental health courts. These 

specialty courts are modeled on drug courts, and purport to focus on “therapeutic jurisprudence” 

rather than punishment. In 2000, Congress passed legislation to provide limited funding for 

mental health courts in 50 jurisdictions. 

Advocates, however, are wary of the courts: 

48 
Mental health courts are, to many people, an appealing response to criminalization. But the 

mental health courts that exist so far, with very few exceptions, accept only people charged with 

non-violent low-level offenses. While these courts help some people get services, they do 

nothing to help mental health consumers facing prison or lengthy jail sentences, and they do not 

reduce criminalization. If mental health courts increase the “price” of minor offenses, as some

undoubtedly do, their effect is actually to expand criminalization, a phenomenon known as “netwidening.”55

This “net-widening” is of concern because police officers may arrest people whom they 

would have otherwise warned, told to “move on”, or ignored in an effort to secure them services 

via the mental health court. Mental health courts may also result in people with mental illness 

receiving more severe sanctions for petty criminal offenses than they would have received 

through the regular court system. They may spend more time in jail or other secure confinement; 

 they may find themselves under judicial supervision for a longer period of time, and they may 

have to plead guilty to charges that might otherwise have been dismissed. Moreover, they may 

not be adequately counseled by their lawyers as to these potential risks, and judges and court 

personnel may be giving inaccurate information concerning these risks. 

Poverty/Unemployment: Improvements in treatment and advances in community-based 

rehabilitation services mean that more people with serious mental illnesses are able to work. 

Unfortunately, the unemployment rate for people with mental illness hovers at 85 

percent, higher than for any other disability group. Factors such as stigma and public 

misperception of mental illnesses only partially account for this situation. Many people can and 

do recover from mental illness. A variety of specialized services such as supported employment, 

transitional employment and psychosocial rehabilitation enable people with mental disabilities to 

work and have a satisfying and rewarding career. 

 

49 

55 Heather Barr, Mental Health Courts: An Advocate’s Perspective, available at the 

“Mental Health” tab, at http://www.urbanjustice.org/publications/index.html. 
Several federal agencies provide vocational rehabilitation services for people with 

disabilities: the state-federal public vocational rehabilitation system, the Social Security 

Administration and the Department of Labor. These federal programs work cooperatively with 

state and private rehabilitation providers to increase employment among people with disabilities. 

Recent federal legislation includes provisions to facilitate work for those who receive disability 

benefits by allowing easy re-entry into rehabilitation programs if there is a reoccurrence of

symptoms and by creating a voucher program to allow consumers to go to the provider of their 

choice. 

The federal Vocational Rehabilitation (VR) program provides funds to states for assisting 

individuals with disabilities to work. Unfortunately, state VR programs focus primarily on 

individuals with less serious disabilities. People with severe mental illnesses, in particular, do 

not fare well in these systems, because they frequently require intensive services over longer 

periods of time to obtain and maintain employment. 

Moreover, considerable VR resources are spent on eligibility-determinations and 

administrative functions, while inadequate resources go to direct services. Months or even years 

may pass between the time an individual with a severe mental illness applies for VR services and 

the time that services actually begin. 

While the recently enacted Ticket to Work and Work Incentives Improvement Act of 

1999 theoretically enhances the ability of a person with a psychiatric disability to find work 

without losing income and Medicaid benefits, the new law is very complicated, and has not led 

to significant new job opportunities. 

Involuntary Outpatient Commitment 

In many states, the abject neglect of the needs of people with psychiatric disabilities and 

the predictable deterioration that will be experienced by some has led to a call for more coercive 

practices, like involuntary outpatient commitment (IOC). IOC is a legal strategy that utilizes 

50 
court orders and other means to force individuals with psychiatric disabilities to participate in 

mandatory treatment, merely because someone else has made a judgement that they would 

benefit from psychiatric treatment. An individual can be forced into treatment despite the fact 

that no crime has been committed and notwithstanding that he/she does not meet the 

requirements for inpatient commitment (i.e., that the person is a clear and present danger to self 

and/or others). 

When a court issues a civil commitment order, requiring an individual to submit 

involuntarily to treatment for a serious mental illness, the person has historically been confined 

to inpatient treatment in a public hospital. Today there is new interest in IOC, linked to media 

reports of violent acts by individuals with diagnoses of serious mental illnesses and, 

according to state advocates and mental health consumers, fueled by a sophisticated public 

relations campaign by the Treatment Advocacy Center. Increasingly, the providers of 

mental health services to individuals thus committed are private-sector programs, 

including psychiatric clinics and group homes. 

Private providers—whose cooperation is required to implement these statutes—are 

split on IOC. A good many, particularly social workers, case workers and others working 

on a person-to-person level, believe that the requisite reporting on their clients harms the 

therapeutic relationship and that the clients’—not coerced—but voluntary participation is 

essential to the healing process. 

The National Council on Disability has previously expressed its concerns about such 

coercion, and reiterates them here: 

Mental health treatment should be about healing, not punishment. Accordingly, the use of 

aversive treatments, including physical and chemical restraints, seclusion, and similar techniques 

that restrict freedom of movement, should be banned. Also, public policy should move toward 

the elimination of electro-convulsive therapy and psycho surgery as unproven and inherently 

inhumane procedures. Effective humane alternatives to these techniques exist now and should be 

51 
promoted.56

Involuntary outpatient commitment is a very costly effort to the individual, to the mental 

health system, to the criminal justice system, and to society that holds no promise of the 

avoidance of violence in our society, nor of recovery for the individual. It diverts badly needed 

funding away from effective community-based mental health services, especially those founded 

upon the recovery vision. 

 Like so-called “mercy arrests” that bring people with mental illnesses into the criminal 

justice/correctional system, IOC is used far too often to compensate for gaps in community 

services that would otherwise engage mental health consumers on a voluntary basis. 

Psychiatric Hospitalization 

When all else fails, the mental health system retains the ability to petition for the 

involuntary civil commitment of a person whose mental illness makes him or her a threat to self 

or others. In the civil commitment context, federal courts have said that the Due Process Clause 

requires a balancing of the individual’s interest in liberty against the state’s interest in providing 

care and treatment to the individual in order to protect the public (police power) or to protect the 

individual (parens patriae).57

As outlined above, however, the crisis focus of mental health services virtually ensures 

 56 National Council on Disability, From Privileges to Rights: People Labeled with 

Psychiatric Disabilities Speak for Themselves (January 20, 2000). 

57 Vitek v. Jones, 445 U.S. 480, 491-492 (1980)(“We have recognized that for the 

ordinary citizen, commitment to a mental hospital produces a massive curtailment of liberty.”); 

Addington v. Texas, 441 U.S. 418, 425, 99 S.Ct. 1804, 1809, 60 L.Ed.2d 323 (1979)(because of 

the consequences, a person with mental illness cannot be committed without due process of law). 

52 
that “all else” will fail, and the system will have to rely upon hospitalization. 

53 

Chapter 5 

Impact on Seniors

Crisis Focus 

Like younger adults, seniors with psychiatric disabilities and limited incomes rely upon 

public mental health services and supports they may need to live successfully in the community. 

They rely upon many of the same providers as do younger adults, although the possibility of 

physical disabilities or frailty in this population make it more likely that they may be living in 

nursing homes, assisted living facilities or other similar settings that may not adequately provide 

mental health services and supports. In those instances, many seniors either go entirely without 

such services, accept the marginal services that may be available in those settings, or depend 

upon the limited services and supports funded by Medicare or Medicaid and delivered by 

community-based providers.58

Mental health care for older Americans is no better than for the younger cohorts 

considered in earlier chapters. According to the American Association of Geriatric Psychiatry, 

nursing homes currently are charged each year with the care of 1.5 million older Americans. 

More than half suffer from some sort of cognitive impairment and as many as 80 percent have a 

diagnosable psychiatric disorder. Despite the high prevalence of people with mental disabilities 

in nursing homes, according to the Surgeon General’s report, “these settings generally are ill 

 58 Mental health spending in Medicare, Medicaid and other federal programs has 

grown more slowly than overall program spending. Mental Health: A Report of the Surgeon 

General, 1999, p. 417. Medicare law also limits the program’s effectiveness in meeting the needs 

of enrollees with mental and emotional disabilities. Medicare requires beneficiaries to pay 50 

percent of the cost of outpatient mental health treatment, but only 20 percent of other outpatient 

services. Medicare also provides no coverage for services that are critical for individuals with 

serious mental illness (case management, psychiatric rehabilitation and medication) and imposes 

a discriminatory lifetime limit of 190 days on coverage for care in a psychiatric hospital. 

55 
equipped to meet their needs.”59 

Likewise, in the Journal of General Psychiatry, mental health experts from around the 

country warn that “(a) national crisis in geriatric mental health care is emerging. The present 

research infrastructure, healthcare financing, pool of mental health care personnel with 

appropriate geriatric training, and the mental health care delivery system are extremely 

inadequate to meet the challenges posed by the expected increase in the number of elderly with 

mental illness as well as an anticipated increase in late-onset mental illness as more people live 

longer.” 

Significant challenges to the mental health of older adults relate less to our clinical 

capacities than they do to older adults not having access to services known to be effective. For 

example, notwithstanding the high prevalence of depression among older adults, the Surgeon 

General reports that only 11 percent of older adults are receiving adequate treatment and 55 

percent receive no treatment whatsoever. Indeed, very few of the 15-25 percent of older adults 

over 65 who—according to U.S. Census Bureau estimates—have a mental illness, receive 

treatment. Most community surveys suggest that 1 percent or fewer older adults in their 

community receive psychiatric care. They remain underserved by mental health providers, as 

shown by the following data: 

• Only 4 percent of community mental health center patients are over 65. 

• Fewer than 4 percent of the patients seen by private practitioners are older adults. 

• Less than 1.5 percent of all community-based mental health care goes to older 

adults. 

A number of factors contribute to the lack of community-based services for older adults 

with mental illnesses. Many elders in nursing homes whose chronic physical ailments do not 

 59 Lombardo, N. E. (1994). Barriers to mental health services for nursing home 

residents. Washington, DC: American Association of Retired Persons Policy Institute. 

56 
require institutionalization (e.g., diabetes) are confined to these settings because they have a 

serious mental illness—although effective treatment for both the former and the latter is 

routinely administered in the community. 

 Additionally, to a degree, the low utilization rates for community-based care reflect older 

cohorts’ sense of shame around mental health problems and their aversion to seeking help. But 

they also are testimony to stagnant public systems that have long traditions of neglecting older 

adults’ mental health needs that afford older adults low priority and that, rather than providing 

rehabilitation, relegate older adults to custodial care services. The consequences of the 

unavailability or inaccessibility of appropriate services to older adults with mental illness include 

additional and unnecessary disability, needless dependency and vulnerability to institutional 

segregation. 

Missed Opportunities for Prevention 

Older adults are the most rapidly growing segment of our population. Due in part to 

increasing life expectancy, people over 65 are expected to grow in number from 20 million in 

1970 to 69.4 million by 2030, outnumbering people between 30 and 44. Additionally, there is 

evidence that the number of older adults with mental illness will also increase in terms of both 

numbers and in the percentage of the total population that those numbers represent. Thus, the 

number of older adults with mental illness is projected to swell from about four million in 1970 

to 15 million in 2030. 

Denial and Inaccessibility of Services

The December 1999 Report of the U.S. Surgeon General—the first of 51 such reports to 

focus on mental health—devotes a chapter specifically to older adults and mental health. While 

acknowledging the capacity for sound mental health among older adults, the report notes “a 

substantial proportion of the population 55 and older—almost 20 percent of this age group—

experience specific mental disabilities that are not part of normal aging. Unrecognized or 

57 
untreated, depression, Alzheimer’s disease, alcohol and drug misuse and abuse, anxiety, late-life 

schizophrenia and other conditions can be severely impairing, even fatal; in the United States, 

the rate of suicide, which is frequently a consequence of depression, is highest among older 

adults relative to all other age groups (Hoyer et al., 1999).” 

Yet there are effective interventions for most mental disabilities experienced by older 

persons (for example, depression and anxiety and many mental health problems such as 

bereavement). Further, the Surgeon General’s report asserts that “treating older adults with 

mental health disorders accrues other benefits to overall health by improving the interest and 

ability of individuals to care for themselves and follow their primary care provider’s directions 

and advice, particularly about taking medications.” 

The Supreme Court’s Olmstead decision has particular significance for older adults with 

mental disabilities. Arguably—more so than any other group with mental illness—older adults 

have endured a long history of flagrant segregation and societal neglect, most graphically 

demonstrated in the deplorable “geriatric back wards” of state psychiatric hospitals. Despite the 

shift away from psychiatric institutions and the promise of community mental health services, 

older adults continue to be afforded “back ward” status, as evidenced by a paucity of 

community-based mental health services, limited opportunities for integrated housing, and 

service systems that emphasize custodial care over rehabilitation. In fact, largely motivated by 

cost savings and convenience rather than clinical need, substantial numbers of older adults with 

mental disabilities were trans-institutionalized from state psychiatric hospitals to nursing homes. 

Among other people with mental disabilities, the pivotal Olmstead decision applies to: 

• long-stay patients in psychiatric hospitals who do not need to be there; 

• individuals who frequently cycle in and out of hospitals as a result of a lack of 

community services; 

• residents in nursing homes who can appropriately be served in the community; 

58 
• individuals residing in the community, but at risk of institutionalization unless 

they receive appropriate care. 

Like younger people with mental illnesses, seniors are at significant risk of unnecessary 

institutionalization. A recent analysis of Olmstead complaints filed with the Office of Civil 

Rights of the U.S. Department of Health and Human Services reveals that 60 per cent of the 

complaints have been filed by people living in nursing homes.60 ADA—and the integration 

mandate, in particular—compels states to consider the civil rights of people with disabilities and 

to determine whether their systems of care perpetuate needless segregation and its harmful 

effects. As states move to comply with these legal requirements for diverse populations of 

disabled individuals, aging advocates face the challenge of ensuring that older adults are not put 

at the end of the line as they compete for limited resources. 

 60 Center for Health Care Strategies, An Analysis of Olmstead Complaints: 

Implications for Policy and Long-Term Planning (2001), available at 

http://www.chcs.org/publications/pdf/cas/olmsteadcomplaints.pdf. The report does not 

distinguish between seniors and younger adults living in nursing homes. 

59 

Chapter 6 

Fulfilling the Promise: Concrete Steps Toward a New Vision 

For each population covered in this report, there are concrete steps that can be taken to 

improve the quality and effectiveness of mental health services and supports.

Children and Youth

ENABLING CHILDREN AND YOUTH WITH MENTAL OR EMOTIONAL 

DISABILITIES TO FLOURISH IN THEIR COMMUNITIES: Children with emotional 

disabilities fall through an historic gap between the various child-serving agencies in the public 

sector—notably, the education, child welfare, juvenile justice and mental health systems. Efforts 

to improve this situation should focus on promoting the systems of care that have been 

demonstrated effective in bridging the gap and enabling children to receive Medicaid-funded 

wraparound services in their homes or in residential settings near their families. 

STATE EFFORTS TO EXPAND MEDICAID COVERAGE TO CHILDREN AND 

YOUTH WITH EMOTIONAL DISTURBANCE THROUGH THE USE OF WAIVERS 

AND OPTIONS. Since Congress has recently provided states with an opportunity—through the 

Child Health Insurance Program—to expand Medicaid coverage to families with incomes higher 

than the Medicaid eligibility ceiling, the Medicaid entitlement can likewise be extended to more 

children. Studies of home-and community-based waivers have focused primarily on the growth 

in the number of waivers and the cost-effectiveness for aged individuals, individuals with mental 

retardation and developmental disabilities and persons with AIDS. Among the groups covered in 

the mid-1990s, individuals with mental retardation and developmental disabilities reflected the 

most rapid growth. They increased from 74,000 in 1992 to 146,000 in 1996. The Centers for 

Medicare and Medicaid services is currently funding a study to evaluate the impact on quality 

of life, quality of care, utilization, and cost for individuals with mental retardation and 

developmental disabilities. Few studies have examined the use of home-and community-based 

61 
waivers for children with emotional disturbance.

PREVENTING EXCLUSION FROM SCHOOL OF CHILDREN WITH EMOTIONAL 

DISTURBANCE: Identify and disseminate a range of services that progressive school systems 

have provided through IDEA and under court and administrative rulings, identifying for state 

policymakers and advocates the maximum range of community-based services for children with 

emotional disturbance that can be furnished under the IDEA, and enforce the requirement to 

conduct functional behavioral assessments and to provide positive behavioral supports. 

PREVENTING CUSTODY RELINQUISHMENT THROUGH ACCESS TO CHILD 

MENTAL HEALTH SERVICES: The Family Opportunity Act would create a new state 

option to allow states to expand Medicaid coverage to children with disabilities up to age 18, 

who would be eligible for SSI disability benefits except for family income or resources. Any 

family with a child whose disability meets SSI criteria and whose income does not exceed 300 

percent of the poverty level could be covered under Medicaid if the state chooses this option. 

The bill also creates a time limited demonstration program to extend Medicaid coverage to 

children who have a disability that would become severe enough to qualify under SSI if they are 

left to deteriorate without health care. The demonstration will provide useful information on the 

cost effectiveness of early health care intervention for children with potentially severe 

disabilities. 

The Family Opportunity Act would add residential treatment centers to the waiver statute 

and thus allow states to provide waivers to families seeking home and community based services 

instead of more restrictive care in such centers.61 

 61The bill adds the words “inpatient psychiatric hospital services for individuals under 

21" to the waiver language. This phrase is defined in the Medicaid statute to include any 

facilities that the Secretary of HHS includes in regulations. HHS has promulgated a regulation 

which includes residential treatment facilities as inpatient psychiatric services for individuals 

under 21, if the facilities meet certain criteria. 

62 
EXTENDING MEDICAID AND OTHER BENEFITS TO YOUTH AGING OUT OF 

FOSTER CARE: The vast majority of young people in the foster care system are there because 

they have experienced some form of childhood maltreatment. Research reveals that negative 

childhood experiences, especially abuse and neglect, can adversely affect adult health and mental 

health. Adults with aversive childhood experiences are also more likely to be depressed, attempt 

suicide, have unintended pregnancies, and have personality disorders. Substance abuse problems 

and alcoholism are also correlated with negative childhood experiences. Extension of Medicaid 

benefits will help address the needs of these youths. Health care benefits will allow young people 

to receive treatment for health or mental health problems before the problems become severe.

FEDERAL LEGISLATION ON AMENDING INSURANCE LAWS TO END 

PRACTICES THAT HAVE THE EFFECT OF DISCRIMINATING AGAINST PERSONS 

WITH MENTAL ILLNESS: Legislation should be drafted to address the unequal access to 

mental health care that is prevalent in all aspects of the United States health care system, 

including private insurance, public insurance, and programs designed to bridge the gaps between 

the private and public health insurance sectors. 

DOCUMENT HOW EXISTING ENTITLEMENT PROGRAMS CAN BE USED TO 

PREVENT CONTACT WITH THE JUVENILE JUSTICE SYSTEM AND TO DIVERT 

CHILDREN AND YOUTH FROM JUVENILE JUSTICE. In its 2000 report, From 

Privileges to Rights, NCD called upon Federal, state, and local governments, including 

education, health care, social services, juvenile justice, and civil rights enforcement agencies to 

work together to reduce the placement of children and young adults with disabilities, particularly 

those labeled with emotional disturbance, in correctional facilities and other segregated settings. 

These placements are often harmful, inconsistent with the federally-protected right to a free and 

appropriate public education, and unnecessary if timely, coordinated, family-centered supports 

and services are made available in mainstream settings.

Advocates have begun to document how existing entitlements to family supports and 

community-based intensive mental health treatment can prevent children’s behavior from

63 
deteriorating to the point of warranting incarceration. The National Mental Health Association 

and the GAINS Center have recommended that communities: (1) formalize screening and 

assessment for mental health and substance abuse for youth at all points of contact of the 

juvenile justice system; (2) provide the full range of mental health and substance abuse services 

and supports to youth, and cease the piece meal, stop gap approach that currently exists; and (3) 

establish a coordinating body or task force that focuses on this population of youth.62

PROTECTING BENEFITS UNDER WELFARE REFORM FOR PARENTS WITH 

MENTAL ILLNESSES AND PARENTS WHOSE CHILDREN HAVE EMOTIONAL 

DISABILITIES: As Congress considers reauthorization of the 1996 “welfare reform” law, it 

has the opportunity to strengthen the entitlement to cash payments and Medicaid benefits for 

poor families in which a parent or child has significant mental health issues which prevent a head 

of household from returning to work.

Adults and Seniors

ADA/OLMSTEAD OFFER SOLUTIONS: ENDING ISOLATION AND SEGREGATION 

While a state is not obliged to assume an "undue burden" in its pursuit of integrated services for 

people with serious mental illnesses, nothing in Olmstead requires community placements to be 

"cost-neutral." Indeed, the entire tenor of the decision is to the contrary. The court recognizes 

that needless institutionalization is a wrong that the ADA was designed to redress. It is clear that 

an accommodation under the ADA can be reasonable even if it imposes costs. 

The court did not identify when it would be "too costly" for a state to provide services in 

the community. (The issue was not before the court.) Instead, the court identified relevant 

factors, the most significant being the resources available to the state to fund community 

 62 National Mental Health Association and GAINS Center, Justice For Juveniles: 

How Communities Respond To Mental Health And Substance Abuse Needs Of Youth In The 

Juvenile Justice System. Executive summary available at 

http://www.nmha.org/children/justjuv/execsum.cfm 

64 
services. While the existing community services system constitutes one available resource, the 

court made clear that other resources must also be counted. The Olmstead decision anticipates 

the reallocation of resources to fund community placements. 

In evaluating what resources are available to finance community placements, states need 

to look both at services that are currently funded and at how community services might be 

funded if the state took action to maximize its budget. These "available resources" can include 

resources that the state could obtain by aggressively seeking additional funds—from the 

legislature, by restructuring its Medicaid program or through similar strategies. 

PROVIDE A LEGALLY ENFORCEABLE RIGHT TO MENTAL HEALTH SERVICES 

AND SUPPORTS: By providing a right to services and supports “in sufficient amount, 

duration, scope and quality to support recovery, community integration and economic selfsufficiency,” a law could transcend the age-old debate about inadequate funding. 

For example, the Bazelon Center for Mental Health Law has drafted a proposal which 

would provide a legally enforceable right to recovery-oriented mental health services and 

supports, and will be working with advocates in several states around the country to press for its 

adoption.63 This proposal seeks to reshape the debate about mental health system reform. This 

initiative is driven by a growing consensus among many stakeholders that traces a host of social 

ills affecting adults with serious mental illnesses—homelessness, vagrancy, criminalization and 

so-called “mercy arrests”, unemployment and needless dependency on public systems—to a 

single cause. That cause is the inadequacy of the public mental health system, which does little 

more than provide crisis services and fails to meaningfully address the long-term rehabilitative 

needs of the population it serves. It is clear that the absence of an entitlement to appropriate, 

timely mental health services has increased the number of people with mental illnesses in crisis. 

 63 Bazelon Center for Mental Health Law, A New Vision of Public Mental Health: A 

Model Law to Provide a Right to Mental Health Services and Supports, available at

http://www.bazelon.org/newvisionofpublichealth.html. 

65 
MAXIMIZE THE AVAILABILITY OF MENTAL HEALTH SERVICES AND 

SUPPORTS PROVIDED THROUGH CONSUMER-DIRECTED ORGANIZATIONS: 

People labeled with psychiatric disabilities should have a major role in the direction and control 

of programs and services designed for their benefit. This central role must be played by people 

labeled with psychiatric disabilities themselves, and should not be confused with the roles that 

family members, professional advocates, and others often play when “consumer” input is sought. 

For the past decade, the Federal Government has provided funding and logistical support for 

three consumer-run technical assistance centers. These centers have helped to document, 

establish and refine successful alternative approaches to the provision of mental health services 

and supports through the use of other people who have experienced mental illnesses. The Federal 

Government should increase incentives to state mental health systems to adopt such models and 

to expand their use. 

ENSURE THAT ALL MENTAL HEALTH SERVICES AND SUPPORTS ARE 

VOLUNTARY IN NATURE, AND NOT CONTINGENT ON COMPLIANCE WITH 

MEDICATION OR TREATMENT PLANS: NCD reaffirms its commitment to the principles 

enunciated in its 2000 report, From Privileges to Rights: “Eligibility for services in the 

community should never be contingent on participation in treatment programs. People labeled 

with psychiatric disabilities should be able to select from a menu of independently available 

services and programs, including mental health services, housing, vocational training, and job 

placement, and should be free to reject any service or program. Moreover, in part in response to 

the Supreme Court's decision in Olmstead v. L. C., state and federal governments should work 

with people labeled with psychiatric disabilities and others receiving publicly-funded care in 

institutions to expand culturally appropriate home- and community-based supports so that people 

are able to leave institutional care and, if they choose, access an effective, flexible, 

consumer/survivor-driven system of supports and services in the community.” 

FEDERAL LEGISLATION ON AMENDING INSURANCE LAWS TO END 

PRACTICES THAT HAVE THE EFFECT OF DISCRIMINATING AGAINST PERSONS 

WITH MENTAL ILLNESS: Legislation should be enacted to address the unequal access to 

66 
mental health care that is prevalent in all aspects of the United States health care system, 

including private insurance, public insurance, and programs designed to bridge the gaps between 

the private and public health insurance sectors. 

A longstanding history of discrimination and recrimination has led to policies which 

systemically deny needed health care to millions of Americans with severe mental health needs. 

People with mental illness have been alternatively thought of as possessed by evil spirits, lazy, 

responsible for their own illness, and infantile. In the past, individuals with mental health 

impairments were locked in institutions. Today, they are locked in jails and prisons because they 

are unable to access the care that they need. 

The underlying stigma surrounding mental illness has led to systemic inequality in all 

health care delivery. For example, the private sector refuses to insure individuals with a history 

of any mental health treatment, when they will insure an individual with more severe physical 

health care needs. In addition, caps on doctors’ visits, hospital days and other services are placed 

on mental health care, but not on physical health care. 

Private insurance, however, is evenhanded between physical and mental health care in 

its denial of long term care to individuals with ongoing health care needs. To address this gap in 

private coverage, the Medicaid program has developed waivers and options which provide health 

care coverage for a more intensive package of services to individuals who would not usually 

qualify for publicly funded health care by virtue of their income. These “bridge” programs, 

however, do not meet the needs of individuals with mental health impairments. For example, the 

waiver and option statutory language does not include residential treatment facilities, which are 

where most children with serious emotional disturbance languish for long periods. As a result, 

only 3 states have received waivers for children with serious emotional disturbance, where 50 

states have waivers for children with developmental disabilities. In addition, almost half the 

states with an option program for children do not serve any children with a primary diagnosis of 

serious emotional disturbance. States fail to serve children with mental health needs even though 

the federal statutory language does not exclude them in any way and makes the option available 

67 
to any child with a disability. 

 

Finally, Medicare and Medicaid, the public health safety net, provide unequal services to 

individuals with mental health needs. Medicare reimburses a much lower percentage of mental 

health care costs than physical health care costs. Medicaid also fails to meet the needs of 

individuals with mental illness. States do not include needed mental health services in their 

Medicaid plans. When individuals enter jails and prisons because of a lack of services in the 

community, their Medicaid coverage is immediately terminated in every state, despite federal 

law which allows states to suspend coverage and thus, facilitate reentry into the community upon 

discharge. Under the Early Periodic Screening Diagnosis and Treatment program mandating 

necessary services for children, few states provide an adequate mental health screening tool for 

children and studies indicate that large percentages of children are not screened at all. Federal 

law does not require states to report on mental health screening rates or ensure that an adequate 

mental health screening tool is used. 

All three means of health care coverage—public, private and bridge programs—create 

barriers to the receipt of mental health care. These barriers have led to the current national crisis, 

with individuals with severe mental health needs increasingly relying on emergency room care, 

prisons, and jails to fill the gap. Congress must act to remove those impediments and redress the 

longstanding discrimination against individuals with mental illness which can only be explained 

by ignorance and stigma.

NCD reiterates the concern expressed in From Privileges to Rights that to assure that 

parity laws do not make it easier to force people into accepting "treatments" they do not want, it 

is critical that these laws define parity only in terms of voluntary treatments and services.

IMPROVE VOCATIONAL REHABILITATION (VR) SERVICES: Individuals with severe 

mental illnesses would like the option to seek VR services directly from private programs with 

proven track records in providing effective services, bypassing ineffective, VR bureaucracies. A 

variety of approaches could be considered, such as providing vouchers that would permit 

68 
individuals to purchase services from a range of programs meeting quality standards. 

The Ticket to Work and Work Incentives Improvement Act is a step in this direction 

because it authorizes the Social Security Administration to provide vouchers that allow 

consumers on SSI and SSDI to select their own training and placement provider. The ticket pays 

private providers over a 60-month period, so long as the individual stays off cash benefits, 

thereby creating strong incentives for providers to offer ongoing, flexible supports and services 

designed to keep individuals in jobs. However, to benefit from this program individuals must 

have been receiving federal disability benefits and must be able to work full time. Other 

individuals with disabilities could also benefit from psychiatric rehabilitation services, yet there 

is no program for them under the Rehabilitation Act.

ESTABLISHING A RIGHT TO MENTAL HEALTH DISCHARGE PLANNING PRIOR 

TO RELEASE FROM JAIL OR PRISON 

A national strategy is needed to stop the revolving door for inmates with mental illnesses. 

Establishing a right to discharge planning under federal law would have a far greater impact than 

a series of state decisions, however valuable. Establishing a right to discharge planning is only 

one step toward ending the harmful, often cyclic, incarceration of people with mental illnesses. 

Efforts are also underway to reconnect former inmates with federal benefit programs like 

Supplemental Security Income and Medicaid, so that they have some income, health care and 

medication benefits to help them transition successfully back to the community.64

PROVIDE ADEQUATE FUNDING FOR ENFORCEMENT OF THE ADA, IDEA, FAIR 

HOUSING ACT AND OTHER CIVIL RIGHTS LAWS AFFECTING PEOPLE WITH 

 64 See Bazelon Center for Mental Health Law, Finding the Key to Successful 

Transition from Jail to the Community: An Explanation of Federal Medicaid and Disability 

Program Rules (2001).

69 
PSYCHIATRIC DISABILITIES: Government civil rights enforcement agencies and publiclyfunded advocacy organizations should work more closely together and with adequate funding to 

implement effectively critical existing laws like the Americans with Disabilities Act, Fair 

Housing Act, Civil Rights of Institutionalized Persons Act, Protection and Advocacy for 

Individuals with Mental Illness Act, and Individuals with Disabilities Education Act, giving 

people labeled with psychiatric disabilities a central role in setting the priorities for enforcement 

and implementation of these laws.

70 
CHAPTER 7 

An Inter-Generational Vision for Effective Mental Health Services 

and Supports

As outlined in Chapters 3, 4, and 5, the fragmentation of the public mental health system

has had a devastating impact on children, youth, adults and seniors with mental illnesses. And 

the disconnects between systems of care serving each of these populations have exacerbated 

these impacts further. Children and youth with severe emotional disturbance who do not get 

early screening and preventive services are more likely to find themselves poor and dependent 

on an adult mental health system that does not serve their needs. Unserved adults are likely to 

become unserved seniors. 

Fundamental reform will require new thinking about how systems of care can invest—

over a lifetime, if necessary—in adequate mental health services and supports that will allow 

children to live successfully with their families in the community, and will allow adults and 

seniors to seek recovery from the effects of mental illnesses and to achieve economic selfsufficiency. 

Expanding the Resource Base

While there is no question that additional resources are needed to address America’s 

mental health needs, policy makers must be educated about the “penny-wise and pound-foolish” 

manner in which mental health services and supports are currently delivered. As outlined in 

Chapters 1 and 2, the inability of the public mental health system to deliver preventive services 

and supports often leads people with mental illnesses into more restrictive and less humane 

settings, such as jails and prisons, homeless shelters and state hospitals. But that approach is 

substantially more expensive overall. 

The Supreme Court’s Olmstead decision also demonstrates how funds can be recaptured 

from unnecessary institutionalization. Recently, there has been renewed emphasis on reducing 

71 
the use of long-term hospital care, especially for people with the most severe mental illnesses.65

Improved community treatments, such as psychiatric rehabilitation, consumer peer support and 

intensive case management programs, have become more widely available. Helping to fuel this 

movement are continuing concerns over the relative ineffectiveness and therapeutic limitations 

of inpatient care, including the dependencies it creates, and the fact that community care is 

generally no more expensive than institutional care. 

Ironically, as a society, we may be paying much more for an ineffective patchwork of 

programs than we would for a comprehensive set of preventive services and supports. The cost 

of emergency hospitalization in a private hospital in an urban setting can be over $1000/day. Socalled “residential treatment programs” can cost as much as $750/day. At $350/day, even state 

psychiatric hospital care is quite expensive. People with mental illnesses who find themselves in 

state prisons or local jails cost taxpayers over $100/day, and homeless shelters impose a similar 

tax burden. By comparison, proven models like supportive housing66 cost much less, while 

providing many more opportunities for community integration. 

The challenge here is to convince federal and state policymakers to adopt a longer 

budgetary view, and one that captures all of the costs of neglecting the public mental health 

system and the pressing needs of its consumers. A few communities have attempted such 

dramatic restructuring, with promising results. For instance, Vermont has secured a “Medicaid 

1115 Waiver” to allow it to provide flexible and comprehensive services and supports through its 

 65 Kamis-Gould, E., Hadley, T. R., Rothbard, A. B., et al: A framework for 

evaluating the impact of state hospital closing. Administration and Policy in Mental Health

1995: 22:497. 

66 See, e.g., Sam Tsemberis and Ronda F. Eisenberg, “Pathways to Housing: 

Supported Housing for Street-Dwelling Homeless Individuals With Psychiatric Disabilities,”51

Psychiatric Services 487-493 (2000); Houghton, The New York/New York Agreement Cost 

Study: The Impact of Supportive Housing on Services Use for Homeless Mentally Ill Individuals, 

Corporation for Supportive Housing (May 2001), available at 

http://www.csh.org/NYNYSummary.pdf . 

72 
Community Rehabilitation and Treatment (CRT) program, and has devoted state funding to 

provide housing and other services not reimbursable under Medicaid. As a consequence, each of 

the 3,200 adults in the CRT program has access to a broad range of supports that are tailored to 

his or her specific needs.67 Similarly, in Los Angeles, the Village Integrated Services Agency is a 

comprehensive program for people with serious mental illnesses (clients are called members at 

the Village). The Village offers an array of options for members which supports individualized 

services in all quality of life areas (i.e. employment, housing, social, substance abuse, etc.). Staff 

focus on encouraging members’ free choice of any menu option at any time.68

Federal resources to support the expansion of community services required under 

Olmstead are available to states from several sources, including Medicaid's optional services for 

adults: 

• targeted case management and rehabilitation; 

• Medicaid coverage for services furnished in small community residential 

programs of fewer than 16 beds; 

• Medicaid's array of comprehensive community services for children, mandated 

through the Early and Periodic Screening, Diagnosis and Treatment requirement 

of the law; 

• Medicaid Home- and Community-Based Care Services Waiver; and 

• expanding Medicaid eligibility through various options and waivers of federal 

rules—home- and community-based service waivers (Section 1915(c) of the 

Social Security Act), research and demonstration waivers (Section 1115), the 

option to cover people who are medically needy under Medicaid, and coverage of 

children with emotional disabilities under the "Katie Beckett" option (Section 

 67 See Department of Developmental & Mental Health Services, DESCRIPTION 

OF PROGRAMS AND SERVICES, at http://www.state.vt.us/dmh/ 

68 http://www.village-isa.org/ 

73 
1902(e)(3)). 

Despite the availability of such funding, many states have elected not to apply.69

States also have the authority to allow certain health care providers to "presumptively" 

enroll children in Medicaid who appear to be eligible based on their age and family income. This 

can be done based on the family's declaration that its income is below the state's Medicaid 

income-eligibility guidelines. The child can then be provisionally enrolled in Medicaid and begin 

to receive services, while a full Medicaid application with the necessary information is prepared 

and submitted (this must be done by the end of the following month). States that fail to cover all 

eligible children, adults and seniors under Medicaid are losing the opportunity to secure federal 

matching funds for the home- and community-based services these people need.

Improving Access and Reducing Barriers to Securing Supports, Services, Treatment 

Because cost of services is the most significant problem facing poor people with mental 

illnesses, expanding Medicaid eligibility and reimbursable services—concrete steps available to 

every state—are the most significant steps that can be taken to improve access to mental health 

services and supports for children, adults and seniors. The federal Medicaid program provides 

matching funds for such efforts, but many states experiencing budget shortfalls are loath to 

increase their own contributions, even when these leverage federal funds at very favorable 

levels. 

The Surgeon General has outlined a program of action for improving access and reducing 

barriers for people of color and language minorities. These focus on coordinating early 

intervention and care to “vulnerable, high-need groups.... It is not enough to deliver effective 

mental health treatments: Mental health and substance abuse treatments must be incorporated 

 69 See Bazelon Center for Mental Health Law, Under Court Order: What the 

Community Integration Mandate Means for People with Mental Illnesses, available at 

http://www.bazelon.org/undctord.pdf. 

74 
into effective service delivery systems, which include supported housing, supported 

employment, and other social services.”70 

Barriers caused by geography are more difficult to address. Many rural areas simply lack 

the infrastructure to provide even basic mental health services and supports to any population. 

Rural practitioners are focusing more attention on integrating mental health services into 

traditional family practices, and on the use of telemedicine.71

Promoting Recovery

Today, unfortunately, the services and supports available to most people with serious 

mental illnesses are neither sufficient nor recovery-oriented. They are designed primarily to 

reduce the most obvious symptoms, minimizing the need for expensive hospitalization but 

promising little more. Driven at least in part by low expectations, these stopgap services rarely 

aim at promoting independence, gainful employment and fulfilling relationships—goals we all 

seek. And even these services are in extremely short supply, depriving many consumers of the 

only help, however inadequate, that might enable them to avoid unemployment, homelessness or 

contact with the criminal justice system. 

But we have to avoid the temptation of defining success as the mere reduction of people 

with mental illnesses who are unemployed, homeless or in jail. Clearly, people who have been 

diagnosed with mental illnesses seek more than just abatement of their symptoms. They also 

want and deserve an opportunity to succeed in the community. What is most needed is a new 

vision that promotes the goal of recovery from mental illness, rather than the view that mental 

 70 Mental Health: Culture, Race, And Ethnicity: A Supplement to Mental Health: A 

Report of the Surgeon General (2001), available at 

http://www.surgeongeneral.gov/library/mentalhealth/cre/execsummary-6.html. 

71 See National Association for Rural Mental Health Web site, at 

http://www.narmh.org/. 

75 
illnesses are lifelong afflictions that need to be managed. Just as the national “welfare reform” 

debate pushed the country to conceive of a new way to move families from dependence to 

independence, the mental health community needs to rethink how resources can be allocated to 

promote independence of people with mental illness diagnoses. 

Conclusion 

Thirty years ago, the nation decried conditions on the back wards of state psychiatric 

hospitals, which were often referred to as “snake pits,” in which people with psychiatric 

disabilities were “warehoused” rather than helped to recover. Since then, through years of 

litigation, research and experience, public mental health systems have developed innovative 

models to support people with psychiatric disabilities in integrated settings in the community. 

But lack of visionary leadership and inadequate funding have prevented these models from

“going to scale” in order to serve more people. 

Instead, many public mental health systems are stuck in neutral gear, content that people 

with psychiatric disabilities will be “maintained” in the community, rather than supported in 

their recovery and helped on the road to economic self-sufficiency. In other words, the 

aspirations of many public mental health systems—as measured by actual programmatic and 

financial commitments rather than rhetoric—has not, for most people with psychiatric 

disabilities, changed much in 30 years. Instead of being warehoused on back wards of hospitals, 

many people with psychiatric disabilities today are warehoused in homeless shelters, jails and 

prisons and other isolated and segregated settings throughout our communities. 

What is most needed now is a dramatically new vision of what people with psychiatric 

disabilities can achieve, if given the supports they need to succeed. That vision must start with 

the premise that recovery is possible and ought to be seen as an objective for every person with a 

psychiatric disability. The vision must also incorporate the principles of the ADA and the 

Supreme Court’s Olmstead decision, which declared that the unnecessary institutionalization of 

people with disabilities is a form of discrimination and that each state has an affirmative duty to 

move people with psychiatric disabilities out of isolated and segregated programs (whether in 

76 
hospitals or in the community) and into settings where they are truly integrated into community 

life. A final component of this new vision will require a commitment to fund effective supports 

and services and to fund enforcement of the rights guaranteed under the ADA, IDEA, Medicaid 

and other federal statutes. 

The Federal Government can play an important role in establishing funding and other 

incentives for state mental health systems to adopt new models that support this vision and that 

are consistent with Olmstead and President Bush’s New Freedom Initiative. 

77 

Appendix 

Mission of the National Council on Disability 

Overview and Purpose

The National Council on Disability (NCD) is an independent federal agency with 15 

members appointed by the President of the United States and confirmed by the US Senate. 

The overall purpose of NCD is to promote policies, programs, practices, and procedures 

that guarantee equal opportunity for all individuals with disabilities, regardless of the 

nature or significance of the disability, and to empower individuals with disabilities to 

achieve economic self-sufficiency, independent living, and inclusion and integration into all 

aspects of society. 

Specific Duties

The current statutory mandate of NCD includes the following: 

• Reviewing and evaluating, on a continuing basis, policies, programs, practices, and 

procedures concerning individuals with disabilities conducted or assisted by federal 

departments and agencies, including programs established or assisted under the 

Rehabilitation Act of 1973, as amended, or under the Developmental Disabilities 

Assistance and Bill of Rights Act, as well as all statutes and regulations pertaining to 

federal programs that assist such individuals with disabilities, in order to assess the 

effectiveness of such policies, programs, practices, procedures, statutes, and 

regulations in meeting the needs of individuals with disabilities. 

• Reviewing and evaluating, on a continuing basis, new and emerging disability policy 

issues affecting individuals with disabilities at the federal, state, and local levels and 

in the private sector, including the need for and coordination of adult services, 

access to personal assistance services, school reform efforts, and the impact of such 

efforts on individuals with disabilities, access to health care, and policies that act as 

disincentives for individuals to seek and retain employment. 

• Making recommendations to the President, Congress, the Secretary of Education, 

the director of the National Institute on Disability and Rehabilitation Research, and 

other officials of federal agencies about ways to better promote equal opportunity, 

economic self-sufficiency, independent living, and inclusion and integration into all 

aspects of society for Americans with disabilities. 

• Providing Congress, on a continuing basis, with advice, recommendations, legislative 

proposals, and any additional information that NCD or Congress deems 

appropriate. 

• Gathering information about the implementation, effectiveness, and impact of the 

Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.). 

• Advising the President, Congress, the commissioner of the Rehabilitation Services 

Administration, the Assistant Secretary for Special Education and Rehabilitative 

Services within the Department of Education, and the director of the National 

Institute on Disability and Rehabilitation Research on the development of the 

79 
programs to be carried out under the Rehabilitation Act of 1973, as amended. 

• Providing advice to the commissioner of the Rehabilitation Services Administration 

with respect to the policies and conduct of the administration. 

• Making recommendations to the director of the National Institute on Disability and 

Rehabilitation Research on ways to improve research, service, administration, and 

the collection, dissemination, and implementation of research findings affecting 

persons with disabilities. 

• Providing advice regarding priorities for the activities of the Interagency Disability 

Coordinating Council and reviewing the recommendations of this council for 

legislative and administrative changes to ensure that such recommendations are 

consistent with NCD’s purpose of promoting the full integration, independence, and 

productivity of individuals with disabilities. 

• Preparing and submitting to the President and Congress an annual report titled 

National Disability Policy: A Progress Report. 

International

In 1995, NCD was designated by the Department of State to be the U.S. government’s 

official contact point for disability issues. Specifically, NCD interacts with the Special 

Rapporteur of the United Nations Commission for Social Development on disability 

matters. 

Consumers Served and Current Activities

Although many government agencies deal with issues and programs affecting people with 

disabilities, NCD is the only federal agency charged with addressing, analyzing, and making 

recommendations on issues of public policy that affect people with disabilities regardless of 

age, disability type, perceived employment potential, economic need, specific functional 

ability, veteran status, or other individual circumstance. NCD recognizes its unique 

opportunity to facilitate independent living, community integration, and employment 

opportunities for people with disabilities by ensuring an informed and coordinated 

approach to addressing the concerns of people with disabilities and eliminating barriers to 

their active participation in community and family life. 

NCD plays a major role in developing disability policy in America. In fact, NCD originally 

proposed what eventually became the Americans with Disabilities Act. NCD’s present list 

of key issues includes improving personal assistance services, promoting health care 

reform, including students with disabilities in high-quality programs in typical 

neighborhood schools, promoting equal employment and community housing 

opportunities, monitoring the implementation of the ADA, improving assistive technology, 

and ensuring that those persons with disabilities who are members of diverse cultures fully 

participate in society. 

Statutory History

NCD was initially established in 1978 as an advisory board within the Department of 

80 
Education (P.L. 95-602). The Rehabilitation Act Amendments of 1984 (P.L. 98-221) 

transformed NCD into an independent agency. 

81