Deinstitutionalization: Medicines to the Rescue?

The continual (and, many feared, financially unsupportable) growth of patient populations, the shameful conditions of the hospitals, and the postwar interest in psychiatry created a groundswell for reform.

The signing of the National Mental Health Act in 1946 and the subsequent creation of the National Institute of Mental Health (NIMH) signaled that the federal government would play a larger role in overseeing mental health and soliciting the input of psychiatrists. By the mid-1950s, NIMH studies were calling for community care rather than hospitalization.

A poster presentation at the Minneapolis Health Fair in 1944.

The postwar period also saw the arrival of psychotropic medications and treatments. Thorazine became the first antipsychotic, making its way to the United States in 1954, and soon proving effective at alleviating certain symptoms. Effective medications raised the possibility of moving people out of the hospitals permanently.

Generally, deinstitutionalization began around 1955 as the number of people in hospitals began to decline afterward. New York became one of the first states to reform its mental health care system, beginning with its Community Mental Health Act in 1954. This act provided funding to outpatient clinics for patients to visit for therapy or medications. Other states followed suit.

1955 and 1956 advertisements for the antipsychotic drug Thorazine in Mental Hospitals magazine.

State governments proved unwilling to pay for extensive networks of clinics, however, and counties resisted the financial responsibility. California’s mental health act asked families of those in treatment to pay, thus minimizing the tax burden. Complaints about state hospital systems frequently circled back to its cost to the states, especially as patient rosters grew longer.

At the same time, other reformers were optimistic about new, in-hospital treatments such as milieu therapy. At its core, milieu therapy tried to divide patients into small “communities” that would make decisions about collective behavior and daily life in the hospital wards. It aimed to create collaborative patient-staff relationships and teach people how to live independently.

An Expanded Role for the Federal Government

The Kennedy Administration and the Great Society helped to break the financial logjam at the state level and give politicians the monetary support to shutter their hospitals. In 1963, the president called for a new approach that would allow mentally ill individuals to live successfully in their communities.

The Kennedy Family at Hyannis Port, MA in 1931 with Rosemary Kennedy on the far right (left). President John F. Kennedy signing the Mental Retardation Facilities and Community Mental Health Center Construction Act in late October 1963 (right). 

Kennedy proposed a program to “assist in the inauguration of a wholly new emphasis and approach to care for the mentally ill,” he said in a speech. “This approach relies primarily upon the new knowledge and new drugs acquired and developed in recent years which make it possible for most of the mentally ill to be successfully and quickly treated in their own communities and returned to a useful place in society.”

Kennedy’s sister Rosemary had been born with a mild intellectual disability and in her teenage years reportedly became difficult to manage. Fearing that Rosemary’s behavior might embarrass the family, Joseph Kennedy, Sr. had her lobotomized, hoping to improve her symptoms. Instead, it left her an invalid hidden away in an institution. Her father reportedly never visited her again.

A graph showing the decrease in inpatients from 1950 to 1995.

Kennedy’s bill offered $150 million in grants for states to construct community mental health centers (CMHCs), with the federal government sharing between one- and two-thirds of the total cost. The centers would be required to offer inpatient services, outpatient services, partial hospitalization, 24-hour emergency services, and educational work. The bill called for 2,000 CMHCs to be built by 1980, with the goal of rendering most state hospitals obsolete. Signing the Community Mental Health Act was one of Kennedy’s last acts; he was assassinated a few days later.

The Community Mental Health Act was the brainchild of just a few psychiatrists: Robert Felix, Stanley Yolles, and Bertram Brown. They categorically opposed any significant role for state hospitals in the future, and largely bypassed the directors of state mental health programs. Felix hoped that his CMHCs would have a preventive effect on mental illness. Certainly, Kennedy seemed optimistic about the prospects of medications, which he said could successfully and quickly treat people to return them to a “useful place in society.” 

Felix’s belief that the CMHCs would prevent mental illness was unfounded; there is little evidence that they had any positive effect. Underfunded from the beginning, by 1980, only 754 of the promised centers were in operation. But the CMHC program did have the effect of undermining the role of hospitals in mental health care.

The states, in turn, had an ambivalent relationship with the CMHCs, in part because the funding structure demanded that states pay increasingly more for the centers. Because of that, many CMHCs sent patients requiring significant care back to the hospitals. Absent a suitable number of centers, states fell back on developing aftercare and clinics, which were spotty at best.

Originally known as the Great Asylum for the Insane, Agnews State Hospital in Santa Clara, CA opened in 1885 and closed in 1998 (left). Built after World War II, the Demented Men’s Building at Agnews State Hospital (right) was an attempt to move toward preparing patients to leave the hospital. 

Other federal programs had the effect of further emptying the state institutions. Medicare provided funds for the elderly to be treated in nursing homes rather than hospitals. In 1972, Social Security was modified so that payments could be made to individuals not living in a hospital, to encourage people to live independently. Medicaid also was designed to encourage states to move people out of hospitals and into smaller facilities. States could only be reimbursed for expenses if individuals were living in a facility with 16 or fewer beds.

States Get Out of the Business of Mental Health, or Try To

Under the new federal strictures, states had incentives to close their asylums. California, under Governor Ronald Reagan, became a leader in deinstitutionalization and set an example for other states.

Yet California’s deinstitutionalization also reveals the dual impulses that drove politicians. Nick Petris, a state legislator, worked to limit the number of involuntary commitments by passing laws that restricted how people could be sent to a hospital. Once those hospitals were closed, Petris hoped the funds would follow the patients. Instead, in the landmark Lanterman-Petris-Short Act that Petris authored, Governor Reagan diverted the funds that were supposed to pay for patient care at the county level into the state’s general fund.

A graph depicting inpatient psychiatric beds by type from 1970 to 2002.

Even states that had historically been sympathetic to funding mental health care followed the pattern. New York counties resisted opening centers because of the funding formula the state had instituted. In Massachusetts in the mid-1970s, under Michael Dukakis, hospital closures accelerated partly out of the need to slash budget expenditures. Once budgets were slashed, many hospitals saw their quality of care decline further, leading to more demands that they be emptied and closed.

Decisions in both the state and federal courts also changed how commitment worked, further shrinking state hospitals. The culminating Supreme Court decision, O’Connor v. Donaldson (1975), held that people not deemed to be a threat to themselves could not be hospitalized against their will.

Confined to Florida State Hospital against his will for fifteen years, Kenneth Donaldson filed the lawsuit that eventually became the Supreme Court decision O’Connor v. Donaldson and wrote a book about his experiences.

After the 1975 decision, hospitals became (as they remain today) forensic institutions for the most part, housing criminal offenders or individuals awaiting trial. As a result, from 1970 to 2016, the number of inpatient psychiatric beds in the United States declined from 413,000 to 37,679.

Deinstitutionalization: What Happened to the People?

Many individuals’ quality of life improved after leaving the hospitals—a process that accelerated from the 1950s. Medications significantly enhanced their ability to manage their symptoms.

Once people exited hospitals, their destinations varied. Reformers hoped that they would go home to families, but in many cases, people had no family connections. Without family to support them, and often having never lived independently, people with mental illness often turned to the federal government for support.

The number of halfway homes exploded. Often these group homes were opened by ex-hospital staff. They tended to cluster in low-rent areas of major cities, partly because that was where the operators could afford to run them, and because neighborhood associations were generally unwilling to accept group homes in safer, more affluent neighborhoods.

The quality of these homes could vary dramatically: most states paid the operators of such homes by the head, which gave them incentives to maximize profits. Horror stories became distressingly common from the 1970s onward. A house fire in Worcester, MA, killed seven people in a group home, while nine people in Mississippi were found living in a 10- by 10-foot shed with no running water and only two mattresses. The worst of these houses came to resemble the hospital wards people had left, with drab environments and limited contact outside the house.

A 1966 advertisement in The Journal of the American Medical Association for the antipsychotic drug Thorazine.

The promise of medications to “cure” mental illness has also faltered. Medications have proven variable in their efficacy from person to person. They might be useful in controlling one set of symptoms while failing to address another.

They also frequently involve a number of side effects, the most widely known of which is the “Thorazine Shuffle” (a combination of the tranquilizing effect of drugs with restless legs, making consumers walk with a shuffling gait) but others include severe weight gain, facial tics, and muscle spasms.

A 1962 advertisement for Thorazine, an antipsychotic and tranquilizer.

Medications must be taken consistently to remain effective. This helped to reinforce the so-called “revolving door” of mental health in which a person discontinues a medication, decompensates psychiatrically, is arrested or hospitalized, recovers, and repeats.

Policy makers never considered these complications of drug-based solutions. Doctors were often circumspect about the effectiveness of medications, but professional medical input into federal government programs was limited.

The era of deinstitutionalization reached its denouement with Reagan’s 1981 Omnibus Budget Reconciliation Act. It repealed federal funding for CMHCs, transformed other federal aid to the states into block grants, cut the dollar outlays by as much as 30 percent, and left the states with broad discretion over how to spend the money. By the mid-1990s, hospitals had mostly shrunk to their present size.

Mental Health Today

It would be a mistake to paint deinstitutionalization as a through-and-through failure.

The hospitals that existed in the 1940s were often abusive, and many people today can live their lives in a way they might only have dreamt of a century ago. Hospitalization was not the best option for people with mild symptoms that could be managed through medications.

Yet many people were left behind as well, either on the street or in jails and prisons.

What is striking about the legacy of deinstitutionalization is how much of it was motivated by financial opportunism on the part of the states. Over the course of the 20th century, states’ elderly patients could have their treatment funded by Medicaid, hospitals could be shrunk and staff ratios could be improved without having to actually spend more money, clinics would be cheaper to run than hospitals, and medications would maybe even obviate the need for any treatment at all.

This focus on reducing funding outlays helps to explain the limitations of this brand of reform: it was supposed to be cost-effective. Those individuals who required more support once they left the hospitals found themselves abandoned.

Opened in 1837, Central State Hospital in Milledgeville, GA became the largest insane asylum in the world with over 13,000 patients and, by the 1950s, had a staff-to-patient ratio of one to 100. It stopped accepting new patients in 2010 and four of the asylum's buildings have been converted into prisons. 

The creation of a large, indigent class of people with mental illnesses was not inevitable from a policy perspective. Studies from the United States, Germany, and Switzerland, among other countries, have confirmed that even people who have been institutionalized most of their lives and who have experienced severe mental illness for years on end can live independently if they have certain supports available: housing, aftercare, support networks, and jobs.

However, in the United States, those supports frequently have not existed, or in certain cases, have been eroded or ended once people returned to the community. Psychiatrists such as Robert Felix underestimated the extent to which they would be necessary, and politicians at the state and federal level were unwilling to spend the money.

As the mental health system again reemerges in public and policy discussions in the wake of another mass shooting, the question remains: Is there a link between closing the hospitals and mass shootings? In all likelihood, no. Americans do not suffer from higher rates of mental illness than other people in the world.

While not all agree, the general consensus among psychiatrists is that there is no meaningful link between mental illness and the number of mass shootings. Representing this majority scientific view, epidemiologist Matthew Miller argues that the number of mass shootings in the United States has far more to do with the availability of guns. In contrast, some psychiatrists such as E. Fuller Torrey maintain that there are certain links between untreated mental illness and violence (although Torrey’s conclusions are controversial and are challenged by other experts).

Students from a Brooklyn, NY high school demanding elected officials enact gun legislation as part of a broader national student walkout on the one-month anniversary of the Parkland, FL shooting.

President Trump has recently suggested that the United States needs more hospitals and asylums to prevent future shootings. Whether this proposal is serious is up for debate. Current commitment laws would make it difficult to hold people against their will en masse.

To respond in this manner would simply reframe mental illness as a problem of violence, not of mistreatment and maltreatment of Americans with mental illness. Such a program would be unlikely to fix a broken system.

As for the state of Florida, legislators are trying to pass additional appropriations for mental health care. The long history of American approaches to mental illness should leave us doubtful that the funding would remain for long.


Read more from Origins on mental health, medicine, and guns: Health Policy Precedents, Fluoride and Public Health, Gun Control in Canada and the U.S., Free Market Health Care, Second Amendment Goes to Court.

Listen more from Origins on public health and policing: Policing in America, Affordable Care Act.