Incentives and Intentions in Mental Health Policy: A Comparison of the Medicaid and Community Mental Health Programs

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Abstract
Deinstitutionalization has been government policy with respect to the mentally ill for more than two decades. During this time, the inpatient populations of the nation''s state and county mental hospitals have fallen by nearly 75%. The mechanisms by which these declines have taken place are a matter of signal importance for present and future mental health policy. In this article, I compare the effects of the Community Mental Health Center (CMHC) Program on inpatient decline, with the effects of the Medicaid program on the reduction in state hospital censuses. The results indicate that Medicaid had a much stronger effect than the CMHC program, and suggest that the structure of reimbursement schedules, rather than the philosophy of community care, was decisive in promoting deinstitutionalization.