MENTAL ILLNESS: SOME ECONOMIC AND LEGISLATIVE CONSIDERATIONS

Speech to National Governors' Conference
June 26, 1961.
Honolulu, Hawaii
by

Mike Gorman, Executive Director, National Committee Against Mental Illness

As a newspaper reporter who toured scores of state mental hospitals in
the period 1945 ~ 1950, I can state categorically that care of the mentally
ill then was at a frightfully low ebb.

The “philosophy™ underlying legislative provisions for the mentally iil
was a very simple one. They were a hopeless segment of our society, untreatable
and incurable, and therefore certainly not a medical problem, They were
accordingly given minimum custody in large institutions whose superintendents
were frequently more concerned with the animals on the institution farm than
with the patients on the crowded wards.

Apart from humanitarian considerations, the operation of most of these
institutions struck those of us who observed them closely as extraordinarily
uneconomic, Because staff salaries were frightfully low, the turn-over of
personnel was exceedingly high. Although the daily maintenance cost per patient
was minimal, the lengthy hospital stay of the average patient - eight years -
meant that the total cost per patient involved a tax outlay running into
thousands of dollars,

Because intensive treatment of the mentally ill was a rarity, it was
inevitable that the flood of patients would create an incessant demand for more

and more institutions.
page two

For example, in the decade from 1945 through 1955, the resident population
of these human warehouses was increasing at the rate of 12,000 patients a year.
This massive addition of more than 100,000 patients in a decade necessitated
the appropriation of hundreds of millions of dollars of state revenue for new
buildings. In many states, because of the tight revenue picture, this additional
construction had to be financed through the expensive fiscal mechanism of bond
issues.

When some of us argued that the whole system was bankrupt and in need of
drastic overhaul, we were told that since the establishment of the first public
mental institution in Virginia in 1773, this had been the way things were done.

Since society rejected the mentally ill, the best sanctuary for them was
a haven in the wilderness.

In a few states, there were sporadic revolts against the old custodial
morass. Spurred on by newspaper exposes, governors and legislators allocated
monies to clean up the snake pits. But most of these reforms were of a surface
nature - they rectified some of the more flagrant inhumanities, but did not
touch the rotting foundations at the core of the whole system, They were crisis-
oriented reforms, buckets of water designed to put out sporadic fires of public
indignation.

The first attempts at a widening attack upon the custodial philosophy came
through the aegis of the National Governors' Conference.

In 1949, the Conference authorized a study of the status of treatment of
mental patients in all state institutions; the 1951 Conference authorized a
survey of possible alternatives to the weary, tradition-bound system which had

outlived its usefulness.
page three

These studies led to a National Governors' Conference on Mental Health
in 1954. Proclaiming that traditional custodial care of the mentally ill had
reached a dead-end, that historic Conference advocated a new emphasis upon
“active treatment of mental illness through psychiatric direction of state mental
hospital systems and through increased appropriations for psychiatric research
- and training.

A few of the states moved in the direction of carrying out the major
recommendations of the Conference, but most of them lacked either the will or
the financial resources to implement them.

The advent of the tranquilizing drugs provided a new therapeutic weapon
to stir up the stagnation of state mental institutions.

In the five-year period since the introduction of the drugs, there has been
a remarkable drop of 23,000 patients resident in our state hospitals. This
appreciable reduction, as contrasted to the seemingly inevitable rise in resident
mental patients before 1955, has resulted in a saving in construction of new
beds which would have cost in excess of $14 billion.

Despite these advances, the burden upon the states for care of the mentally
111 continues to be a very heavy one.

| In 1960, according to the National Institute of Mental Health, the fifty
states spent $927 million for maintenance and treatment of patients in state
mental hospitals. In addition, the states spent more than $250,000 for the
operation of institutions for the mentally retarded. Fur thermore, it is important
to note that these figures do not include mental hospital construction costs

running close to $100 million a year.
page four

In looking at the total sums expended by the several states for care of
the mentally ill, several factors should be emphasized.

First of all, there has been an encouraging increase in state and local
support of community mental health services designed to replace, in some
degree, the monolithic emphasis upon institutional care. As against less than
$10 million allocated for these services in 1948, it is estimated that about
$80 million is now appropriated by state and local governments for a variety
of these community psychiatric services.

Secondly, and in response to those who point to greatly increasing invest-
ments by state governments for care of the mentally ill, it should be carefully
noted that the portion of the state tax dollar going for these purposes has
not increased ~ it has actually shown a small decrease since 1952, Education,
which obtains 31% of the state tax dollar, and highways, which claim 28%, have
shown the sharpest proportionate increase over the past decade, with care of
the mentally i11 being allocated only a little more than six percent of the
state tax dollar.

Mental illness also accounts for only about one percent of accumulated
state debt, as against more than 50% accounted for by highway construction,

| However, these fragmentary figures tell only a part of the story ~- they
are restricted to state activities in the field, and do not give us a broad
look at the total impact of mental illness upon this democracy.

In 1958, with the publication of the ‘Economics of Mental Illness", we as

a nation obtained our first clear picture of the staggering cost of mental

illness. |
page five

Estimating the total direct and indirect cost of mental illness as in
excess of $3 billion a year, the 1958 study cautioned that this estimate did
not include capital construction and represented only a minimal approximation
of the cost of private psychiatric care,

Furthermore, it emphasized the tremendous loss to society involved in
the more than 200,000 admissions to our state mental hospitals each year.
Pointing out that the greatest wage and productivity loss occurred in those
patients aged 25 to 34, it underlined the stark finding that potential earnings
of all first admissions in any one year to state mental hospitals alone exceed
$2 billion.

This is one dimension of the real cost of mental illness to our society.

These rough estimates overlook a multitude of additional costs to our
economy through disturbed and ineffective behavior.

For example, the industrial mental health division of the Menninger
Foundation has reported that emotional ills among industrial employees cost
‘this nation billions of dollars in productivity losses each year. Absenteeism,
most frequently due to psychological causes, costs nine billion dollars a year.
Alcoholism represents an annual loss to industry in excess of a billion dollars.

What of the costs of juvenile delinquency, of drug addiction, of broken
homes due to emotional incompatibility of marriage partners?

The important point here is that we bear these costs whether we know it
or not. In other words, we bear the heavy, below-the-iceberg cost of mental
illness even if we insist upon continuing to focus upon the small part of the

iceberg which is visible.
page six

For the first time in the history of the care of the mentally ill in this
country, we now have a comprehensive report which puts these problems into
proper focus,

It takes a sweeping look at every governmental and non-governmental
resource available for the handling of mental illness, and it finds these
resources pitifully inadequate to the size of the problem,

In the very simple statement that only 50% of the patients in state mental
hospitals are being treated, and that only 20% of these hospitals have embraced
new methods to make them active treatment rather than custodial institutions,
there is contained the core of the challenge facing all of us.

In the forthright admission by the Commission that the large state mental
hospitals of today are therapeutically bankrupt is embedded the spark of the
revolutionary reforms which must gradually replace them as the major locus of
care for the’ mentally ill. |

Of particular interest to this gathering is the Commission's finding that
we have two rigidly distinctive classes of public care for the mentally ill -
one for our veterans and one for the rest of the population.

The mental hospitals of the Veterans Administration operate at a per diem
in excess of $12.00 per patient. They have a ratio of one staff employee to
every patient and their rehabilitation programs meet the highest standards,

By way of contrast, state mental hospitals operate at a level of a little
better than $4.00 a day per patient, and they have but one employee for every

three patients.
page seven

In order to lift state mental institutions and related services to
acceptable standards, the Joint Commission recommends a tripling of national
expenditures for mental health services by 1970, with the federal, state and
local governments sharing in these expenditures. |

Pointing out that it is impossible for state government to finance so
vast a program, the Joint Commission report criticizes the heavy past reliance
upon state expenditures in these frank words:

"It was a historic mistake to make the state alone virtually
responsible for public care of its mentally ill residents,
relieving the local communities of all future concern and
until recent times sparing the federal government anything
but peripheral involvement in the problem, Their single
source of financial support guarantees the isolation of state
hospitals and the dumping ground effect we have stressed,"

The proposal for a federal matching grant is anything but revolutionary.

In 1854, the Congress passed legislation granting 12 million acres of
federal land for the purpose of aiding in the construction and maintenance of
state mental institutions. The bill was vetoed by President Franklin Pierce,
and the problem was then thrust in even greater degree upon the states.

The Joint Commission proposal for matching grants does not envisage a crash
program which would be very wasteful in pouring monies into many areas with
insufficient psychiatric manpower and facilities to spend these funds wisely.
Time and time again, the report emphasizes that the federal share of the
matching grant should be arrived at in a series of graduated, carefully planned
steps over.a period of years, with the matching formula adjusted each year to
the amount of state funds spent during the previous year.

It is also important to note that the states are required to qualify for

participation in this matching grant and must meet certain minimum standards
page eight

to be formulated by an expert advisory committee appointed by the National
Institute of Mental Health. While a certain proportion of the grant would go
to bolstering and improving existing treatment services, a major part of the
grant would be of the incentive type, serving as a stimulus to the states to
create new psychiatric services.

The Joint Commission is acutely aware of the tight revenue situation at
the state level and therefore it does not make unrealistic fiscal demands
upon the states. It offers an incentive to states and localities which adopt
new treatment services, but it also aids these jurisdictions of government in
bolstering their existing treatment services,

It would not relieve any segment of the government of its financial
responsibility.

First of all, in noting that care of the mentally ill is the one large
health problem without any sizeable federal grant, it substantiates the need
for federal involvement in the nation's number one health problem.

The Joint Commission proposal asks state governments to do much more than
they have been doing.

It particularly charges the states with responsibility for the development
of research and training programs designed to convert state hospitals into
active treatment centers. It also calls upon the states to develop experimental
facilities - small intensive treatment hospitals, day and night hospitals,
half-way houses, etc. - designed to eventually replace mental institutions of
1,000 beds or more,

It requires local governments, which in many states have used the public

mental hospital as dumping grounds for their unwanted citizens, to provide
page nine

expanded community psychiatric services before receiving any matching financial

assistance. The report notes:

"The program would not only relieve the states of the sole
responsibility for public care of the mentally ill, but would
also meet the great objection to federal aid to the states
which is that it usurps or weakens local responsibility. Our
proposal would encourage local responsibility of a degree
that has not existed since the state hospital system was
founded,"

We of the Joint Commission have been delighted and frankly, somewhat
amazed, at the favorable reception our proposal has received within both the
executive and legislative branches of the federal government. We think this
reception is all the more amazing because it involves a fairly heavy additional
cost to the federal government.

In a speech at St, Elizabeths hospital on May 3rd of this year, Secretary
of Health, Education and Welfare Abraham A. Ribicoff endorsed the principle
of additional federal financial responsibility in these very forthright words:

The facts are in. ‘The Joint Commission on Mental Illness and
Health, which was authorized by the Congress, took more than
5 years, spent some $1.5 million, to gather them for us. I
commend the Commission's 10 monographs and its final report,
“Action for Mental Health", to you, to the Governors of our
States, to members of the Congress and State legislatures,
and to citizens across the land.

Can we take the Joint Commission's bold, carefully documented
report and subject it to the process of public discussion and
debate? Can we then take intelligent, constructive action?

I think we can.

Today, mental illness, like heart disease or cancer, is a
problem that concerns us all, We must move as a whole
people-- through our democratically elected Federal, as well
‘as State Governments, "to promote the general welfare" of
each citizen,

At the legislative level Senator Lister Hill, who was the main sponsor of

the legislation creating the Joint Commission, described its proposal for a
page ten

federal matching grant as "not only needed but warranted." Congressman John
Fogarty, the acknowledged leader on all health matters in the House of
Representatives, has also enthusiastically endorsed the recommendations of
the Commission.

At the request of both the executive and legislative branches of the
government, we have submitted draft legislation carrying out the Commission's
major recommendations. Within a very short time, we hope to have a specific
piece of legislation which can be thoroughly discussed at the state and local
level.

Can we as a nation afford a tripling of mental health expenditures by
1970?

According to the American Psychiatric Association, the annual per capita
expenditure for mental hospitals is only $4.42 - figured on the hypothetical
basis of each American contributing an equal sum for support of these services.

To triple this investment, the average American would have to give up one
extra bottle of liquor and one chrome rod on his car.

It really gets down to a question of values; of how much we as a democracy
want to spend for services designed to produce more effective and happier
individuals.

We obviously place a great value upon highways, since we will spend $41
billion in the next decade on them; this breaks down to a cost of one million
dollars for every mile of this highway system.

We realize that the proposals of the Joint Commission will not be easy to
legislate into effect, any more than its was easy to reform the hospital system

of the Veterans Administration after World War II.
page eleven

We could have gotten by with some patchwork solutions to the problem, but
we decided that for once someone would tell the American people and their
elected representatives the true costs of major reform. As we noted in the
final report:

"Our proposal is the first one in American history that
attempts to encompass the total. problem of public support
of mental health services and to make minimum standards of
adequate care financially possible."

We are aware that many of our major recommendations need further discussion
and technical study. They must be related to existing state programs and they
must be carefully planned in relation to new federal and local efforts.

It is therefore our hope that you will authorize a special Governors'
Conference, similar to the one in Detroit in 1954, at which the chief executives
of the 50 states will sit down with their state mental health commissioners and
local community mental health officials to plan ways in which the recommendations
of the Joint Commission report can be applied at the grass roots level.

We who have been associated with the hammering out of this report over
the last six years mean business.

I can also assure you that the 36 national organizations which have
endorsed it, including the American Medical Association, the American Psychiatric
Association, and the American Legion, mean business.

We are confident that the National Governors' Conference, which has done
so much to improve care of the mentally ill in the several states over the

past decade, will seize this golden opportunity to spearhead a major revolution

in the handling of mental illness in this country.

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