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Budget for Mental Health Needs Scrutiny

An Opinion by Michael B. Friedman, CSW
First Published in The Journal News, February 5, 2003

The Governor's budget request for mental health may be better than it might have been in a terrible year, but there are very important questions to be answered before sighing with relief. Here's why.

Adult Home Reform Centerpiece of Budget Proposal

The centerpiece of the budget proposal for mental health is adult home reform--a response to the revelation of scandalous conditions in residences housing 12- 15,000 people with serious mental illnesses.

The budget request includes three reform proposals-

Capital funding of $65 million to construct 1000 housing units for people with serious mental illnesses in future years
A promise of funding in future years to operate new housing and to build another 1,000 units
$8 million (which, with federal match for Medicaid might become $16 million) for improved services for adult home residents

Matching Funds From Local Governments Required

However, the promised 2,000 housing units are contingent on local governments providing matching funds of $104 million. Given the fiscal woes of New York's local governments, will matching funds be available?

And the 2,000 units are not only for adult home residents. They are also for people with mental illnesses who are homeless, those leaving state hospitals, and children and adolescents with serious emotional disturbances. A minimum of 10% is set-aside for kids. Other housing will be distributed based on local priorities.

Good News For Some But Others Will Be Left Behind

Providing new residential services for homeless people, for people leaving state hospitals and for kids is good news. But the likely consequence is too few new housing units for people in adult homes. Five years from now there may still be 10-15,000 people with mental illnesses living in adult homes.

It is possible that the conditions in the homes will be substantially improved in five years-if more funds are made available in future years. But $1.50 per person per day (which is what $8 million provides if funds are used only for people with mental illnesses) or even $3.00 per person per day (which is what $16 million would provide) is not going to turn the system around.

Community Mental Health Services Not Safe in All Budgets

The Governor's budget request also promises that current community mental health services will not be cut. At best, however, this is a commitment to those community mental health services covered in the budget of the Office of Mental Health. In the Department of Health's budget, there is

A 5% cut in rates for psychiatric inpatient services
Psychiatric outpatient rates at general hospitals are frozen at 2002 levels
Medicaid coverage of costs not covered by Medicare for elderly and disabled people will be reduced, saving the state $150 million

How much of this cut will affect people with mental illnesses is not clear at the moment.

Children Will Lose Services They Need

In addition children now on Medicaid whose families are just above the poverty line will be shifted to Child Health Plus-which provides less mental health coverage than Medicaid does. As a result some children with serious mental health needs could lose access to mental health services they now get.

Even community mental health services within the Office of Mental Health's budget are not clearly safe.

There is no adjustment for inflationary costs, a de facto cut.
No effort is made to address the problems of dangerously under funded housing programs.
The Office of Mental Health's budget is contingent on a number of proposals which are far from done deals-the closure of three state psychiatric centers, the reduction of 90 beds in state hospitals and the consolidation of New York State's two mental health research institutes.

In addition, stable funding for a variety of rehabilitation and community support programs for people with psychiatric disabilities depends on the substitution of federal Medicaid funds for state funds.

Questions About Governor's Saving Plan

Sharp questions will undoubtedly be raised about the Governor's saving plans.

Are there adequate plans for the people in the hospitals to be closed?
Should more beds be reduced from state hospitals without reinvestment in community services in 2003-4?
Will consolidation of research facilities result in the loss of vital research?
Will the plan to supplant state funds with federal Medicaid funds result in the loss of some very good programs because they are unable to serve people under Medicaid rules?
Given the recent announcement of federal Medicaid reform so as to hold down both federal and state expenditures, has New York State's strategy of substituting federal Medicaid funding for state funding become dangerous?

It may be a year when we should be grateful for small kindnesses, but this budget proposal for mental health needs scrutiny nevertheless.

(Michael B. Friedman is the Public Policy Consultant for the Mental Health Associations of New York City and Westchester County. The opinions expressed in this column are his own and not necessarily the positions of the Mental Health Associations.)

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