At the national level, vastly increased public investments in medical research also laid the groundwork for deinstitutionalization. During the immediate postwar period, the mental health system as a whole was reshaped by a new enthusiasm for federal health policy initiatives. With the establishment of the National Institute of Mental Health (NIMH) in 1949, policy makers and leaders of academic psychiatry began to conceive of mental illness as a public health problem, amenable to high-level systemic interventions. The architects of mental health policy aimed professional services at a broader population, including both inpatients and outpatients, with mild to severe symptoms. The public health perspective produced the paradigm of community mental health, which envisioned a dispersed, nationwide network of small outpatient clinics to replace the large, centralized state hospitals.
Other mid-century developments, both technological and ideological, made the large state mental hospital seem “antiquated, outmoded . . . and obsolete,” in the words of the 1958 presidential address of the American Psychiatric Association. In 1954, the first phenothiazine drugs were introduced into American hospital use. Chlorpromazine, marketed as Thorazine, had the dramatic effect of calming belligerent and loud patients and making it easier to discharge them without opposition from family members or neighbors. The expanding arsenal of antipsychotic medications (such as halperidol, introduced as Haldol in 1958) justified the goal of emptying the back wards and reintegrating long-term patients into society (see Gronfien 1985). Ideological shifts of the era also endorsed the vision of noninstitutional care. Sociologists criticized long-term psychiatric hospitalization as inherently humiliating and an assault on personal dignity (Goffman 1961, Belknap 1956). Within professional psychiatry, reformists shared in the early 1960s idealism about improving society through government programs. At a time of federal interventions to end segregation and combat poverty, a top-down recipe for refiguring mental health services was enormously attractive. The federal government seemed better equipped than the states to solve social problems, including the provision of mental health services. In 1961, an NIMH working group predicted that new community mental health programs, combined with public education to reduce the stigma of psychiatric illness, would make “the mental hospital as it is now known to disappear from the scene in 25 years” (quoted in Grob 1994: 253).
The cascade of public sentiment, professional interests, and pharmacological developments eventually produced an important shift in federal policy: the Community Mental Health Centers Act of 1963 (Title II of Public Law 88–164). The Act was the key driver of the planned replacement of custodial institutions with community-based treatment facilities. According to the dominant psychiatric opinion at that time, new medications meant that most of the mentally ill could be successfully treated in their own communities and returned to a useful place in society (see Rochefort 1997). The distance between such utopian rhetoric and the real-world results is widely documented. The legislation called for 2000 community mental health centers (CHMCs), but by 1980 only 754 had been built. The Act did not require planning to connect CHMCs to state hospitals. It did not specify the services needed by people after they were discharged. Indeed, contrary to reformers’ expectations, state resources did not follow the ex-patients into the community. The savings from hospital closures essentially flowed back into state budgets, and local communities did not take over the financing of CHMCs when federal support declined. The populations of large state mental hospitals did decline, as intended by the 1963 legislation, but few ex-patients received services from the community mental health network.
The next phase of the deinstitutionalization process was driven by the expanding federal welfare state. Monies available through Medicare and Medicaid (federal health insurance programs established in 1965) did not pay for state mental health facilities, but they did reimburse other forms of long-term care. As a result, vast numbers of the elderly mentally ill were transinstitutionalized, that is, moved directly from state hospitals to nursing homes, which could capture federal payments. In the 1970s, Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) started to provide monthly living subsidies that enabled unemployed individuals with serious mental illness to live in room-and-board residences or independent apartments. Thanks to federal insurance and income maintenance programs, therefore, the states could realize substantial savings by closing or radically shrinking their large mental hospitals. These financial incentives sped up the deinstitutionalization process and essentially competed what earlier ideological, professional, and technological developments had begun.
Deinstitutionalization quickly and dramatically lowered the total number of psychiatric inpatients from the high point of 559,000 in 1955 to 193,000 in 1978, 110,00 in 1985, and 80,000 in 2002.2 Over the same period, the average inpatient stay also shortened considerably. Before 1965, people would often spend years, if not decades, in institutions. In 2006, the average length of stay in U.S. psychiatric hospitals was seven days (U.S. Dept. of Health and Human Services 2008), and that figure has remained constant ever since. However, a snapshot of before and after statistics hides the long-term effects of deinstitutionalization and hence the background of practice in today’s community psychiatry. By the late 1960s, the rising cohort of young people with severe psychiatric disorders—which usually begin in people’s late teens to early thirties—entered into a new array of treatment options. For the first time in nearly a century, people now experienced the onset of severe disorder while remaining outside of long-term institutional control. These young adults established a new pattern in their use of psychiatric services that continues until today: a “revolving door” of inpatient stays, stabilization via medication, discharge to the community, resumption of isolated and disorganized lives, and subsequent rehospitalization. Many members of this group live in marginal, often dangerous surroundings, and they depend on an uncoordinated and underfunded collection of outpatient medical and social services. The severity of the illness, the fragmentation of services, and the realities of urban poverty (including easy access to alcohol and street drugs) make it enormously difficult for people to recover fully or to establish independent lives outside the welfare, medical, and criminal justice systems.3
What these young adults faced in the 1970s fundamentally drove the development of new forms of public mental health services. For the first half of the twentieth century, housing, food, daily occupations, medical and psychiatric treatment, and even social identity came bundled together for patients, who lived in self-contained state hospitals with populations as large as 11,000. As states scaled back these custodial institutions and shifted the costs to federal programs, the de facto responsibility for ex-patients fell onto a fragmented network of psychiatrists, police, judges, and social workers. In the current landscape, many different authorities target the needs of people with severe mental illness, but in an uncoordinated fashion. Separate agencies do not communicate well, and each has its own discrete mandate (housing, medications, employment training, addiction treatment, access to public subsidies, social rehabilitation, and criminal justice). They have little knowledge of each others’ rules and operating procedures, and they enforce different expectations and eligibility criteria on clients. Although state and county mental hospitals continue to exist, they now offer short-term stabilization or serve as the last resort for the most treatment-resistant and difficult-to-place individuals. In stark contrast to the earlier era of total institutions, people with severe mental illness are scattered throughout society, and no single organization or profession accepts responsibility for their lives (Mechanic 1989, Grob 1994).
The failures of deinstitutionalization became clear by the mid-1970s. Broad public dismay