STATE BUDGET AND MENTAL HEALTH

UNTREATED MENTAL ILLNESS COSTS CALIFORNIA BILLIONS

Background
Mental illness is an often severe and disabling medical condition that can nearly always be effectively treated. An estimated 20 percent of the population has some sort of serious mental illness during their lifetime – that’s one in 5 Californians. Individuals with mental illness are also both the largest and fastest growing group of people with disabilities receiving Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) disability payments. According to the President’s New Freedom Commission on Mental Health, an estimated $25 billion is spent annually for these disability payments. There are many forms of mental illness, which like almost any illness, vary in severity. Some of the most common forms of mental illness include schizophrenia, manic depressive/bi-polar disorder, major depression, anxiety disorder and obsessive-compulsive disorder.

• AB 34 (Steinberg, 1999) funds community mental health programs that provide voluntary outreach, access to medicines and a variety of support services for the homeless who suffer from mental illness. An initial investment of $10 million produced millions in savings by reducing hospitalization and incarceration. Because of AB 34’s success, the program was expanded in 2000 to 34 cities and counties, helping 4,720 homeless mentally ill individuals. As a result, state and local governments are seeing a $23 million savings through an 81% reduction in jail days, a 66% reduction in hospital days and an 80% reduction in homelessness.
• The state spends more than $1 billion to incarcerate and treat 15% of the inmate population -- the approximately 24,000 with a mental illness. This doesn’t include local corrections costs or the total cost to the criminal justice system, which is estimated at $1.8 billion. The success of AB 34 proves the state saves money when it invests revenue in community-based programs. Pacific Research Institute, California Dept. of Corrections, Mental Health Association in Calif.
• Funding community based programs that provide integrated services to the mentally ill before they enter the vicious cycle of homelessness and incarceration would save significant state resources. Currently it costs the state about $40,000 per year to treat a mentally ill person in a state prison and approximately $120,000 per year for treatment in a hospital. It costs as little as $10,000 per year for treatment through a community based mental health program. Mental Health Association in Calif.
• According to the American Psychological Association, for every dollar spent on mental health services, $5 will be saved in overall health care costs.

Next Steps
Sustained funding for mental health treatment in California is critical because of the direct impact mental illness has on all aspects of society – education, homelessness, law enforcement and overall health costs. Reductions in available resources for comprehensive mental health treatment will ultimately result in additional costs transferred to another segment of our community. Funding of mental health services should remain a priority for California because it is clear the investment saves both money and lives.

For questions or additional information call Kami Lloyd at 916-658-0144

3/28/03

1127 – 11 th Street, Suite 925, Sacramento, CA 95814
Telephone: 916-557-1167 Fax: 916-447-2350 Email: mhac@cwo.com