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Scull, “repealed its provisions for inspecting boarding homes the same year (1967) it began ‘a massive deinstitutionalization program aimed at moving patients out of mental hospitals into community programs.’ ” The absence of such oversight virtually guaranteed that residents of those homes would be abused and victimized, and this is what has happened. 32
6. To protect vulnerable mentally ill individuals living in nursing homes and board-and-care homes, there must be periodic, unannounced inspections by an independent state agency. Evaluations and corrective actions must be made public.
• Federal Financing of Mental Health Care
The third fundamental error of deinstitutionalization was in many ways the most egregious. For more than a century, mental health services had been the fiscal responsibility of state governments except in a few states, such as Iowa and Wisconsin, where some of the responsibility was assigned to the counties. The state department of mental health, the governor, and the legislature were ultimately responsible, and when things went wrong, as they sometimes did, they could be held accountable.
In 1963, with the passage of the community mental health centers legislation, the federal government assumed a significant role in funding mental health services for the first time in American history. With the subsequent passage of Medicare, Medicaid, SSI, and amendments to SSDI, the federal government effectively assumed responsibility for the majority of mental health funding, even if this development was mostly unplanned and unintended. In fact, the most striking aspect of the history of this massive shift in fiscal responsibility from the states to the federal government is the lack of any planning.
What has emerged is a chaotic system for funding mental health services, a system that is more thought-disordered than most of the seriously mentally ill persons it is intended to serve. As early as 1978, it was observed that “eleven major Federal departments and agencies share the task of administering 135 programs for the mentally disabled,” and it has grown even worse over the years. The bewildering complexity of the system defies logical thought processes. Directors of mental health services for cities, counties, and states must be equal parts accountant, corporate executive, and mental health professional to understand what services to charge to which funding source. Providing clinical services is the easy part of such jobs compared to figuring out how to pay for the services. 33
Out of a half-century of chaotic funding, several lessons have emerged that should be incorporated into any system of future funding. One such lesson is that turning mental illness services over to for-profit providers does not work. Some fiscal conservatives have argued that the profit motive makes human services more efficient and have thus recommended the privatization of mental health services to for-profit companies. What such people fail to note is that this has largely already been tried and failed. Some of the original community mental health center grants were given to private, for-profit entities. As psychiatrist Alan Stone observed, this development produced “a series of self-interested grabs by our colleagues to build fancy offices to pursue private patients [and] to avoid the seriously mentally ill and to exploit the federal monies.” Then, in the 1970s and 1980s, for-profit corporations opened nursing homes and board-and-care homes to provide accommodations—and usually not much else—for seriously mentally ill individuals being discharged from state hospitals. 34
The results, as detailed in preceding chapters, have been scandalous. Rather than being the wave of the future, the for-profit privatization of mental illness services hasbeen a present-day tsunami. Anyone who doubts this need only visit North Carolina. In 2003 the state decided to privatize their entire state mental health system, which a