Adding Up the Hidden Costs of Mental Healthcare

May 9, 2019
By Mark Flatten

When a person with severe mental illness has a psychological meltdown, what comes next is predictable—and often tragic.

Maybe the person will commit some minor crime like disturbing the peace or trespassing, though usually not. Maybe his bizarre behavior is enough to attract the attention of a passerby, or to prompt a family member to call for help. Eventually, a police officer will show up. Next will come time spent handcuffed in the back of a patrol car, and then a booking into the local jail.

But the trouble will not end there. A severe shortage of inpatient mental health hospitals means the person who needs psychiatric treatment will instead sit in jail, usually untreated, waiting for a spot at an appropriate treatment center to open. That might take hours, days, or weeks. Then will come the long drive to some far-flung hospital, riding with one or two sheriff’s deputies who were taken off their beats to transport the patient to the psychiatric hospital hours away—sometimes on the other side of the state, because that is the only facility willing and able to take the new patient.

At each step, the hidden costs in time and money add up. Dealing with and transporting people with mental illness accounts for about 21 percent of the average police officer’s time and consumes about 10 percent of the average police department’s budget, according to a new study from the Treatment Advocacy Center (TAC) in partnership with the National Sheriffs’ Association.

The problem is made worse by a severe shortage of inpatient psychiatric facilities, where patients can be held in a therapeutic setting, receive treatment, and have their medications adjusted. Because of the lack of inpatient beds, people with severe mental health issues typically end up in jail, waiting days or weeks until a coveted bed in a psychiatric hospital opens. When a bed does become available, it falls on police to transport the patients to distant hospitals that are typically hours away.

The TAC report echoes the findings of a Goldwater Institute investigation, published last year, documenting how the shortage of psychiatric treatment centers is driven in part by anti-competitive laws that block private companies from using their own money to build badly needed mental health facilities, all to protect existing healthcare companies from competition.

In its report, CON Job: Certificate of Need Laws Used to Delay, Deny Expansion of Mental Health Options, the Goldwater Institute focused on the efforts of different companies to build new mental health facilities in Iowa, Oregon, and Tennessee, all using their own money without any subsidies or tax breaks from the government. But in each case, existing providers used certificate of need laws to block or substantially delay the state’s approval.

Though they vary, certificate of need laws in 38 states require government approval before a new healthcare facility can be built, even with private money. Initially passed in the 1970s, they have failed in their stated goal of saving money by preventing overcapacity in the healthcare industry. Instead, they are used primarily by existing providers to block competitors from encroaching on their markets, according to a series of reports and letters from the U.S. Department of Justice and Federal Trade Commission dating back more than 15 years.

CON Job described many of the consequences that the new TAC report quantified with survey data from police agencies nationwide. Focused primarily on a proposal in eastern Iowa, where a private company sought to build a 72-bed inpatient hospital, the investigative report cited the same consequences: sheriffs’ deputies spending entire shifts transporting mental health patients to far-away hospitals willing and able to admit them; emergency rooms crowded with disruptive mental patients they are ill-equipped to handle; judges holding people who need psychiatric care in jail on minor charges because they are too dangerous to release and there is no place else for them to go.

While the TAC report does not address certificate of need laws, it did conclude that “the most prominent theme emerging from the survey is that the psychiatric bed supply for people with severe mental illness is extremely limited.”

“Faced with limited community treatment options and a dire shortage of psychiatric inpatient beds, those in need of mental health treatment may not receive it until a crisis occurs and law enforcement intervenes,” the TAC report says. “Law enforcement officers are thus often on the front lines of psychiatric care, charged with responding to, handling and even preventing mental illness crisis situations. The predictable results have been criminalization of severe mental illness and extreme overrepresentation of people with mental illness in jails and prisons.”

To read the Goldwater Institute’s CON Job report, click here. To read the TAC report, Road Runners, click here.

Mark Flatten is the National Investigative Journalist at the Goldwater Institute.