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Easing Mental Illness Through Money Throwing Cash at a Social Problem Can Do Some Good

Over the past half century, with little fanfare, the lives of people with mental illness have improved markedly. While new medications have enhanced patients’ control of their symptoms, there is another reason why most people with mental illness live better lives: they have been the unanticipated beneficiaries of often-maligned social welfare programs.

For people with mental illness, the most important of these programs was Medicaid, introduced in 1965, and Supplemental Security Income, which began in 1971. Neither program was designed with mental illness in mind. Their intent was more general. But through these programs, low-income people with serious disabilities, including mental illnesses, qualified for benefits.

Medicaid paid for mental health treatment outside of state mental hospitals. Before Medicaid, almost all funding for mental health care flowed to those institutions. There is no reason for nostalgia about state mental hospital systems. Living conditions were toxic, and people with mental illnesses had no say in the treatment they received or whether they received any at all.

Medicaid provided a dependable means to pay for care provided in the community. It drew psychiatrists, psychologists, and social workers into outpatient mental healthcare. It created a market for psychotropic medications that could be used outside of hospitals. Medicaid meant that, for the first time, money for treatment went to people and not buildings. People with severe illnesses could now choose among providers and get treatment without entering a hospital.

Even when financing for care was centered on state hospitals, most people with mental illness spent extended periods outside of these institutions. They remained at home, until the costs of their support impoverished their families. Or they subsisted in the community, living on skid row, with the sporadic help of local general assistance or charitable handouts.

Supplemental Security Income provided a meager but reliable source of income. This income helped disabled people with mental illness to live outside of the state hospitals and offered financial assistance to families who supported a relative with mental illness. Today, well over half of those with the most serious illnesses live independently or with their families.

Some people have not been able to navigate the new, more fragmented, and more complicated system. People with mental illnesses have suffered disproportionately from the rise in homelessness in the 1980s and the rise in incarceration in the 1990s. Today, about 7{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of those with severe mental illness are homeless or in jail, up from about 2{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} five decades ago.

To protect vulnerable citizens properly much more remains to be done.

For example, expanding federal and state housing voucher programs targeted at low-income people with mental illness would reduce homelessness and make medical treatment more effective. Setting national quality standards — and using them in state and federal health insurance purchasing decisions — would improve mental health care for all Americans. Redesigning Medicare to cover evidence-based treatments for mental illness would bring appropriate care within the reach of many more people.

The persistence of serious problems, though, should not divert our attention from the larger success story. Medicaid and Supplemental Security Income gave new opportunities to people with mental illness.

Freed to live independently and obtain treatment outside public mental hospitals, people who had long been separated from their fellow citizens could participate in mainstream America.

The success of social welfare policy in helping people with serious mental illness upends the conventional wisdom about the role of government. We often assume that persistent social problems can’t be solved by an infusion of government money. But sometimes, as in the case of mental illness, throwing money at a problem can make lives much better — even if the underlying problems are never fully solved.

And while government social welfare programs are often accused of fostering a climate of dependency, quite the opposite is true in the case of people with severe mental illness.

Richard Frank is a professor of health economics at Harvard Medical School. Sherry Glied is a professor at the Mailman School of Public Health at Columbia University. They are coauthors of ‘Better but Not Well: Mental Health Policy in the United States Since 1950.’ This article first appeared in the Boston Globe.