A policy paper by the Mental Health Association in New York State (MHANYS)

“Governor Carey is determined to improve the quality of life for our mentally ill and mentally retarded populations. This entails improving both services rendered to inpatients of state psychiatric centers and to the mentally ill who are most appropriately served in community-based settings. The ultimate goal of state policy is the creation of a balanced system of treatment that maximizes both public and non-public resources,”

Robert J. Morgado, Secretary to Governor Hugh L. Carey, June 15, 1978

Prepared by the Mental Health Association in New York State, Inc.
October 18, 2002

The early 1970s was a period of huge turmoil in the provision of services for people living with mental retardation and developmental disabilities. Today, what is simply known as Willowbrook was in fact the catalyst for revamping the entire service system for people with mental retardation and developmental disabilities. From a state school for the mentally retarded mostly known for its horrific conditions, Willowbrook as a form of care was wrestled into a system cooperatively providing quality care across the entire state of New York. Willowbrook will always be remembered for changing the way our state treats and serves people living with mental retardation and developmental disabilities.

Mental illness in this state, contrary to the long-forgotten “Morgado Memorandum” cited above, has not been the beneficiary of such concern, attention and reform. The Morgado Memorandum clearly stated the intent of the Carey Administration: Meeting the Willowbrook decision’s court-ordered reforms to fully care for and meet the needs of all three populations -- people with mental retardation, developmental disabilities and mental illnesses.

This report illustrates that due to a lack of governmental commitment to proper structure and funding, New York State has failed to meet its “responsibility for the prevention and detection of mental illness and . . . to comprehensively plan care, treatment and rehabilitation of mentally ill citizens,” (Mental Hygiene Law Section 7.01).

How it is

In the mid-1960s, the movement known as deinstitutionalization began in earnest. Pressure was building to move people out of state run institutions for mental illness, mental retardation and developmental disabilities.

In 1965, U.S. Senator Robert Kennedy visited the now-infamous Willowbrook School on Staten Island, unannounced. Afterward, he declared the “wards were less comfortable and cheerful than the cage in which we put animals in the zoo.” In 1971, Geraldo Rivera brought the horrors of institutional existence into our living rooms with his Willowbrook expose, forever changing the role of the state run institutional system. Rivera’s expose and book on Willowbrook titled, “A Report on How It Is and Why It Doesn't Have to Be That Way,” was the catalyst that brought about the class action lawsuit primarily responsible for changing this archaic system, New York State Association for Retarded Children, et. al. and Parisi, et. al. v. Rockefeller.

The Willowbrook case led New York State to adopt sweeping change. Moreover, it became popular opinion that these deplorable conditions were unacceptable for people in state-run institutions, regardless of mental disability diagnosis. In furtherance of the goal to better meet the needs of these distinct and vulnerable populations, in 1978, the state Department of Mental Hygiene was separated into three, diagnosis-based offices – The Office of Alcoholism and Substance Abuse, the Office of Mental Retardation and Developmental Disabilities, and the Office of Mental Health.

Twenty-five years later, our state continues to lack that “balanced system of treatment that maximizes both public and non-public resources,” referred to by Secretary Morgado. What was accomplished for people with developmental disabilities and mental retardation has not been attained for people living with mental illnesses.

When looking at what has become of deinstitutionalization, in theory, it was an exceptionally well-intentioned effort. However, in practice, at least on the mental health side, it has been historically underfunded, and utterly lacking a plan. Because of political impotence here in New York, the census of our psychiatric hospitals dropped by nearly 80,000 before the first dollars finally began to follow people from institutions into the community in 1994. By the time the Community Mental Health Reinvestment Act became fully funded in 1996, there were only about 8,000 people occupying the more than two dozen state-operated psychiatric centers. The savings from most of those 3,500 bed closures have gone into community-based services, totaling well over $100 million. But over the period of a quarter-century prior to the law’s adoption, billions of dollars were lost from the mental health system to general fund purposes.

Because of the failure to create a system to meet the demands of deinstitutionalization, we instead have experienced ‘transinstitutionalization.’ An entire population of people have moved, by way of police cars and courtrooms, from psychiatric hospitals to prisons and jails. In 1978, approximately 35,000 New Yorkers were living in state, city or county correctional facilities. Nearly 97,000 New Yorkers reside in these same correctional facilities today. When today’s inmate population is considered with the US Department of Justice estimate that approximately 16% of inmates throughout the US have a diagnosable mental illness, we realize that approximately 15,000 individuals with mental illnesses are in correctional facilities in New York, alone.

However, not only have prisons and jails been housing individuals with mental illnesses, this population has also been ‘transinstitutionalized’ to adult homes and nursing homes. Recent news reports have featured the unacceptable conditions in which many adult home residents, including as many as 15,000 individuals with mental illness, reside. In addition, news reports have also reported and the Federal government is now investigating allegations that as many as 1,000 nursing home residents with mental illnesses are being housed in locked wards without the services and protections afforded to patients in psychiatric centers. While these housing options are technically community-based residential facilities, many advocates argue that housing individuals with mental illness under these conditions is more like inpatient psychiatric treatment of the era deinstitutionalization began, rather than residential housing.

So, today, in 2002, 30 years after the Willowbrook expose, and nearly 25 years after the Carey administration declared its intent to fix the mental health system this is, to borrow a phrase from Geraldo, “how it is”.

…And why it doesn’t have to be that way

The Morgado Memorandum indicates that 25 years ago, the Carey Administration believed that meeting the program objectives of creating a balanced system of treatment required the creation of a plan. As part of the 1978 reorganization of the Department of Mental Hygiene, language found in sections 5.05 and 5.07 of the Mental Hygiene Law was included to require the three new state agencies to each create a statewide comprehensive plan and that such plans shall reflect a partnership between the state agencies and local governments, highlighting how gaps in services for the mentally disabled would be filled. With a law on the books signed by his boss, Morgado fully detailed in his memorandum how the planning process should be completed.

The memorandum detailed plans for full staffing of the existing psychiatric hospital system, with a census of 26,000 adults in 1978. Discharge planning – preparations made as people leave psychiatric centers and return to communities for their care – would be required, and only appropriate discharge plans were to be made. Like that which was accomplished in OMRDD, the intent was to properly fund state-operated community-based programs, and link them to private programs. The Memorandum called for job training and re-training, building on the skills and experience of the existing institutional workforce.

With regard to changes proposed for people living with mental illnesses, the Morgado Memorandum concluded, “Recognizing that these policies hold profound historic significance for meeting the needs of the mentally ill, the Executive urges employee representatives to pledge their utmost devotion to, and mutual cooperation in the implementation of a balanced system of services.”

The goal was explained more recently by Mr. Morgado, saying, “The intent was to try and reconcile the service issues between the two systems”. In the state mental health system, it was an effort to “[A]ddress the size and remoteness of the psychiatric facilities.” He added, “Our intent was to make them part of the solution and less a part of the problem.”

The greatest obstacle to overcome in deinstitutionalization is the need for community-based housing, and the funding stream necessary to provide it. That has been accomplished for the mental retardation and developmental disabilities service system, but has woefully failed for mental health. The root of the problem, initially impacting both systems, was the Medicaid Institutions for Mental Disease (IMD) Exclusion. Found in Section 1905 of Title XIX of the Social Security Act, the IMD exclusion states that “Medicaid does not cover services to . . . patients . . . (in) a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care and related services.”

In the mid-1970s, the federal law was changed, and developmental disabilities were excluded from the definition of mental disease. This meant that Medicaid funding could be used to meet the needs of people with developmental disabilities, whether they resided in an institution or in the community. For the 30,000+ people with mental illnesses living in institutions in the mid-1970s, 50% reimbursement from the federal government was not available under Medicaid.

Thus, while the psychiatric hospitals have been reduced to a fraction of the former population, the exclusion stands today for all individuals with mental illnesses residing in any institutional setting. Medicaid reimbursement is not available for many people living with mental illnesses - the 15,000 New Yorkers with mental illnesses living in adult homes as well as the 15,000 who are incarcerated.

Non-institutional residential services are Medicaid reimbursable. If deinstitutionalization was the goal, shouldn’t overcoming the IMD exclusion have been central to the crafting of a plan?

There is no hard and fast explanation as to why the goals of the Morgado Memorandum were only half met. We simply live with the fact that they were.

Fulfilling the Promise

To meet the goals of the Morgado Memorandum, we must develop a comprehensive system of community-based care, focusing first and foremost on people residing in their community. To that end, parts of the OMRDD system success can be adapted for our purposes. OMRDD has created an exceptional program that creates fully individualized services for those in the system, no matter where they reside. The same must be created in the mental health system.

The major obstacle in comparing the two systems is that it is generally accepted that people with mental retardation need housing for a lifetime. That is not the case for people with mental health needs. Recovery rates for people with even the most serious mental illnesses are almost as high as they are for people with other chronic illnesses. However, recovery from mental illness is largely dependent on the availability and accessibility of care and treatment. People who cannot get treatment for mental illness have no greater chance of recovery than a person who can’t get treatment for diabetes.

Compared to mental retardation and developmental disability, for people with mental illness there is the hope of ultimately having the ability to live independently. Like other diseases, there is always the possibility of set-back, loss of treatment efficacy and relapse. What is needed is not housing for a lifetime, but a lifetime guarantee of housing.

The actual cost of providing housing, even to those with the most persistent health and mental health care needs who are presently homeless is negligible, when factored against all the other social program costs already being incurred. In a 2001 study conducted by the University of Pennsylvania of the New York City and State cooperative NY/NY Agreement to House Homeless Mentally Ill Individuals, which created nearly 3600 units of housing with supports, and the 5000 individuals tracked by the study, they found:

  • “A homeless mentally ill person in New York City uses an average of $40,449 of publicly funded services over the course of a year.”

  • “Supportive housing – independent housing linked to comprehensive health support and employment services – provides major reductions in costs incurred by homeless mentally ill people across the seven services systems - $16,282 per person in a housing unit year round.”

  • “The annual cost of the most common type of service-enriched housing, supportive housing, amounts to only $995 more (sic) per person in a housing unit year round.”

  • “The reduction in service use pays for 95% of the costs of building, operating and providing services in supportive housing, and 90% of the costs of all types of service-enriched housing in New York City.”

  • Most of the savings realized in the NY/NY program were due to the 49% decline in psychiatric hospitalizations.

With a proven track record, both the first NY/NY program and the second, a few years later, are excellent examples of the housing and supports individuals with mental illness need.

In light of the recent news accounts regarding adult homes, nursing homes and the homeless, tremendous public pressure to fix the mental health system has mounted to a level not seen since the 1970s. Still, we will need to summon great political courage and fortitude to pursue a comprehensive system of community-based care, and there are several truths about the present state of our mental health system we must first consider. Each has some bearing on the direction we must take to reshape that system into a comprehensive system of community-based care.

Those truths include:

  • Community-based care is simply not a governmental priority. New York State spends too great a share of the mental health budget on the state psychiatric hospital system, depriving needed funding from the vast majority of New Yorkers with mental health needs, who receive their services in the community.

  • Prior to Reinvestment, the money saved from closing psychiatric hospital beds went into the state’s general fund. While hailed as a great accomplishment, the Reinvestment Act has allowed New York State to avoid putting any general fund dollars back into the mental health system. Today, our state simply shifts money around throughout the system.

  • The Community Mental Health Reinvestment Act expired at the end of September 2001. In 2002, the legislature passed a “Community Workforce Reinvestment Act”, which will take the bulk of the savings from further bed closures and allow it to be used to increase wages and benefits for community mental health workers. While it will help stem staff turnover and vacancy rates, it does not force the state to create a comprehensive system of community-based care, something we were promised nearly 30 years ago by Governor Carey. And, even that measure, passed three months ago, has yet to be signed by Governor Pataki.
    In fact, although Reinvestment became the law in 1993, effective for the 1994 fiscal year and beyond, more than $200 million has been diverted by the Governor and the legislature. Money that should have gone into community-based services as beds closed was redirected to fill other state budget needs.
  • The failure to properly fund and plan deinstitutionalization has resulted in transinstitutionalization – people have gone from psychiatric hospitals to prisons, jails, adult homes, nursing homes and often the streets.

  • There are gaps in the community mental health system sufficient to ensure that failure of recovery is all too great a possibility.

  • Community mental health workers are underpaid, agencies are understaffed, and quality and continuity of care are at great risk.

  • We have a mandate, stemming from the Carey administration, which has gone unfulfilled, to fix the system.

Erroneous Assumptions

Add to these truths some rather broadly held erroneous assumptions, and you begin to get a better picture of the direction necessary to create a comprehensive system of community mental health services and supports.

Those erroneous assumptions include:

  • Community-based care is synonymous with outpatient care.

  • The state psychiatric hospital system must be eliminated.

  • Government run services and privately run services in the community are in direct conflict and competition.

Refuting the Assumptions

These assumptions predate many of us, but must be put to rest before we can move on.

  • Community-based care is synonymous with outpatient care: We must accept and encourage access to inpatient treatment in the community. While it is true that we no longer need a disproportionately large number of psychiatric hospitals, particularly in light of the fact that the length of stay for inpatient hospitalization is a fraction of what it was in the past, we continue to need inpatient care. It is a very different kind of inpatient care than that which was used to warehouse people a half century ago.

    Similar to the length of stay reduction we have seen for the successful treatment of physical health needs, inpatient treatment can be a necessary first step to identifying, stabilizing and beginning intensive treatment for a person with mental health needs.

    Continuity of care and effective discharge planning requires a direct link between inpatient and outpatient services and supports, and providing community-based inpatient services that seamlessly move to an outpatient regimen would be the best method of providing for a comprehensive system.

  • The state psychiatric hospital system must be eliminated: In its present form, the state psychiatric hospital system, for both adults and children, is outmoded. With a daily census of under 5,000 adults, and almost 1000 kids in state hospital beds (half aren’t even housed here in New York), it cannot be credibly argued by anyone that we are getting full value from a system that consists of 28 state-operated psychiatric hospitals. That does not mean however, that New York State should get out of the psychiatric hospital business completely. With its abundance of both financial and human resources, our state government has the ability to provide the most cutting edge services on a regionalized basis, with a very limited system of hospital facilities. We can easily model this system after the trauma center and burn center networks developed here and in other states. Existing state properties can be converted into state run residential communities, modeled after the successful OMRDD system that overcame the IMD exclusion.

  • Government run services and privately run services in the community are in direct conflict and competition: Conflict in services occur not inherently, but because of the lack of a comprehensive system of community-based care and proper funding for such care. Because of the unique nature of the underlying functionality of each type of entity, proper roles can and must be utilized to ensure that the skills and intrinsic value attributable to each are brought to bear.

    It must be noted that public employees are not opposed to change per se; Danny Donohue, President of the Civil Service Employees Association, while endorsing increased pay for not-for-profit direct care workers, stated in his 2001 budget testimony, “We should be looking to improve services in the community. CSEA worked with the state to close institutions in OMRDD (Office of Mental Retardation and Developmental Disabilities) and move people into the community and today we have a better system of care. If that’s the model…then we can be for it.”

    Without a complete payment system, we will never have a comprehensive system of care. The gaps in the system are difficult enough to negotiate without the added burden of gaps in payment. Therefore, it is imperative that Medicaid, Child Health Plus, Family Health Plus and other public and private insurance coverage be maximized. This requires the adoption of mental health and chemical dependency insurance non-discrimination (parity) laws. Only then will we have the financial structure in place to meet everyone’s mental health needs.

If Comprehensive Means “Inclusive,”
What Should Our System Include?

A comprehensive system of community mental health services and supports has five major components. We believe it must be developed with input from all stakeholders including consumers, providers, advocates, direct care workers, parents, family members, etc.

1. It is built on the recognition of a right to live in the community.
2. It is built on the recognition that a broad range of services and supports are needed.
3. A comprehensive community mental health system must serve multiple populations.
4. A comprehensive system in NYS includes multiple providers.
5. A comprehensive system requires coordination.

  1. Right to live in the community
    Hospital and institutional services should be a last resort. Recognizing a need for such services does exist, the preference should always be for services and supports in the community. We add to this that in all but the most extreme cases, inpatient treatment should be provided in the community. In all cases it should be seen as part of a larger system of care that is therapeutic in nature and recovery oriented by design. Simply put, the right to live in the community means as an equal participant. No one should be denied, based on their having a disability, the right to have a roof over their head, a family or gainful employment. Far and away, most New Yorkers living with mental illnesses are doing so in the community. They are not, however, equal partners in that community.

    People who tend to reject traditional mental health services need to be engaged, not coerced. Services should be designed to serve to engage all those who need them. Assertive outreach throughout the community is necessary, with a special emphasis on peer-run and peer provider organizations and efforts.

  2. A broad range of services and supports
    It is necessary to have range of services which are responsive to need. Treatment and rehabilitation must be the crux of each. The traditional OMH and systemic lexicon includes crisis, inpatient, outpatient, community support, and residential services. While this is a pretty good list, it does not capture the constant struggle to provide what people need and want rather than fitting them into what is available.

    There need to be supports as well as services. Supports such as income, housing, access to health care, access to work and family supports are what people with psychiatric disabilities need to be able to live in the community. Through both the Donaldson decision in the mid-70's and the Olmstead decision in 1999, the Supreme Court has affirmed the right of people with mental illnesses to live in the community if they can live there with supports. And the Olmstead decision makes clear that government has an obligation to provide the supports that are needed.

    Supports are often outside the mental health system - e.g. income maintenance, Section 8 housing, Medicaid, Medicare, family support, etc. Accessing, and assisting with access to these supports is yet another reason that peer initiatives are crucial. The Medicaid Buy-in, passed early this year, which will allow people with disabilities to return to work, and become taxpaying citizens at the same time they are contributing to the cost of their health insurance, is one example of the supports necessary.

  3. Serve multiple populations
    Mental health issues cut across the entire societal demographic. We need a comprehensive system of community-based care that addresses the needs of adults, kids, seniors, people with disabling conditions and people who cope with illnesses which impair their abilities but are not disabling.

  4. Multiple providers
    There is such a critical need for services at the community level that we must utilize all the possible avenues for providing care, assistance and support. State, local, voluntary and for-profit; peer-run as well as professionally run should be incorporated into a planned system of care. Utilization of the funding stream and employer base should be structured so that services complement, and not conflict.

    It is critical to avoid battles about which service-providing sector should provide the services and supports that are needed. The fundamental issue is what services and supports are needed, not who should provide them. There is more than enough work to go around.

  5. Coordination
    The system continues to be painfully fragmented. We have not yet succeeded in creating a seamless system of community care. Case management was designed to provide the glue in the system, but it has had only limited success. Managed care was supposed to assure coordination, but it has come to mean rationing care, which is unacceptable in an already gap-ridden system. New approaches are still needed. The single point of entry could be a proper framework for this, but would require a coordination of payment streams and service providers along the entire continuum to include the broad range of services and systems mentioned above. From intake to discharge planning to services and case management, each step must be coordinated and seamless.

Much is still needed, especially

More "community supports" such as housing, case management, and access to supports provided outside the mental health system such as income maintenance, medical coverage, etc.

More efforts to engage people in the community via assertive community treatment, Intensive Case Management, peer outreach, etc.

  • Improved crisis services
  • Improved quality of services
  • More funding for staff and operations, research and training
  • More attention to quality of life
  • Family support
  • Access to employment, education/training, comprehensive insurance coverage during employment, and placement and support
  • Planned and emergency respite

To truly be complete, the system must include response to the vast unmet needs of people with mental illnesses caught in the criminal justice system, people with mental illnesses who also are chemical dependent, kids with serious emotional disorders and the rapidly growing population of elderly people with mental illnesses.

What will a comprehensive system of
community-based care look like?

Initially, there should be an inventory of services, needs and gaps in the existing system. A baseline should be established and services provided in both the public and private systems should be evaluated for access, quality and orientation toward recovery, rehabilitation and support.

From there, the data should assist in the development of a state-wide framework of treatment, recovery and support. Working through an independent planning mechanism like that proposed in Assembly bill A.11616, and tying recognized need to models for service (some of which have yet to be developed), many of the long-standing roadblocks based on the erroneous assumptions can be removed.

This should include a regional system of state run hospitals providing the most intensive and therapeutic services available. Such a network will require substantial support in state funding, albeit much less than now spent. The necessary skills and costs would be prohibitive if the revenues came from Medicaid and private pay dollars alone.

Each major geographic area of the state (most likely based on county lines, as New York has ceded primary responsibility for public health provision to the counties) should have a number of community-based inpatient beds. Those beds should meet the needs of the community, with a goal of providing services that meet individual needs, focusing on a seamless transition into a complete array of community-based outpatient services and supports.

We must develop a community framework of housing, case management, services, supports, vocational and employment services, jail diversion, and connection to physical health and chemical dependency needs, in a fully funded, payor-optimized system.

We must be willing to pay for it. Recognizing that bed reductions as a source of revenue are a finite resource, we must look at long term funding strategies. On the public side, we must capture savings from debt service, facility closure and sale, and be willing to make a substantial commitment of public dollars to make up for the billions lost while 80,000 beds closed absent the dedicated community mental health funding stream of Reinvestment. We must maximize federal funding and programs, like the OMRDD system has. We must optimize commercial insurance coverage through full mental health and chemical dependency parity.

The first step is for government to establish community-based care as the priority of the mental health care delivery system, as promised by Governor Carey. Then, adopting this framework could be the cornerstone of a complete planning process, finally bringing about a system that meets the needs of New Yorkers living with mental illnesses, the people who serve them, and our communities at large.

For twenty-five years, our state’s leaders, including those at the highest levels, have understood our need for a comprehensive system of community-based mental health care. While clearly outlined during the Carey administration, the direction recognized was not pursued. While the system for mental retardation and developmental disabilities made great strides, the mental health system has crept backwards.

Parts of the current mental health system, like some adult homes, nursing homes, jails, prisons and services for the homeless equate to conditions for people living with mental illnesses that are indistinguishable from what was found at Willowbrook the days that Sen. Kennedy and Geraldo Rivera walked through its doors.

We know the promise was made 25 years ago. One question remains – does our state have the political will to keep the promise?

Please also see MHANYS October 18, 2002 Press Release.

ph. 518-434-0439 fax 518-427-8676