Economic Impact of Our Current Mental Health System

06/12/2015 02:18 pm ET | Updated Jun 12, 2016

The mental health system has come to the public's attention after repeated incidents of mass shootings taking place all over the U.S. It is unfortunate that this well-deserved attention came as a result of such tragedies, but at least now there are a number of important segments of the society taking interest in improving the situation and raising awareness about mental health issues. However, there is still a lot more to be done to improve the system, since the mental health care system in the U.S. desperately cries out for resources and increased funding.

In the early years of the last century, the people of the U.S. were shocked to see the treatment of most mentally ill patients with a large number of them being placed in prison cells or local jails.

Such conditions naturally led to widespread disproval. In the 1840s, there was a movement initiated by Dr. Dorothea Dix, which was meant to improve the conditions and treatment that the mental patients received. The efforts of Dorothea Dix and the movement she started led to the state building up mental institutions for the well-being of such people (Torrey et al., 2010).

Today, however, the system of mental health care seems to have taken a step back with jails being the largest mental institution in the U.S. today (Frances, 2013). This means that the state funding that was once taken out of the budget and the countries' economic revenue is now being used on state prisons instead of mental health system hospitals. As a matter of fact, the state prisons alone in U.S. spend $5 billion annually to incarcerate the inmates of the prison that are mentally ill but not violent (Frances, 2013).

The current number of patients being treated in hospitals today is only five percent of what it was back in the 1850s to 1950s era. Having said that, it is worth noting that the current number of beds in mental hospitals today is the same as it was back in the 1850s era. While people can argue that the low rates of admission are because of advancement in treatment medications, yet most of it actually comes down to the simple shift in institution for medical patient treatment from mental hospitals to prisons. This is due to the lack of the state's willingness to accept the economic impact of the mental health care system (Torrey et al., 2010).

This can be seen primarily when one looks at the state of the people who try to get into mental health care hospitals. Tens of thousands of people try every year to gain access to mental health care treatments, only to be turned away or not entertained owing primarily to the lack of funding and availability of psychiatric beds.

This means that the government's policy to send the patients to jail has had an economic impact in terms of lack of funding for the mental health care system. A large amount of revenue from the economy is funneled into the jail and prison systems, and a big part of these funds is therefore not being used to the benefit of the population. The diverse allocation of these funds means that the government's developmental spending would be hampered by the demands of the jail cells (Frances, 2013).

On the other side of the spectrum, there are many who argue in favor of keeping the mentally ill in the prisons, because they think it is likely to allow the economy to function better with a lower financial load. This, however, is not the case in reality. It has been proven through various studies that a mental patient in prison is likely to cost a lot more than a regular inmate. For example, if we take a look at the state of Florida, a regular housemate tends to cost the State $80 a day but a mentally ill patient in a jail cell costs the government around $130 per day (Miller and Fantz, 2007).

Similarly, the Texas prisons with normal inmates cost the government a figure of around $22,000 a year to look after, yet mentally ill patients are considerably expensive with each costing the Texas state government $30,000 to $50,000 annually. Add to that the charges of lawsuits filed by the relatives of the mentally ill patients after accidental deaths of the mentally ill inmates in prison. For example, the one brought on the Camden County Jail in New Jersey on 2006, for the death of a 65-year-old mentally ill stockbroker (Miller and Fantz, 2007).

Mental health care continues to be an important part of the health care system and the economic impacts of it cannot be ignored. One way to begin mitigating the effects of a broken mental health care system is to begin mental health parity in states. Slowly but surely our system can be fixed but it will take dedicated efforts by all.

• Torrey et al. (2010). More Mentally Ill Persons Are in Jails and Prisons Than Hospitals: A Survey of the States. National Sheriffs Association, 2(3), 1-20. Retrieved June 8, 2015, from

• Frances, A. (2013). Prison Or Treatment For the Mentally ill. Retrieved June 8, 2015, from

• Torrey, E. F. 1997. Out of the Shadows: Confronting America's Mental Illness Crisis. New York, Wiley.

• C. M. Miller and A. Fantz, Special "psych" jails planned, Miami Herald, November 15, 2007

• E. Bender, Community treatment more humane, reduces criminal-justice costs, Psychiatric News 2003;38:28

• A. J. Gottschlich and G. Cetnar, Drug bills at jail top food costs, Springfield [OH] News Sun, August 20, 2002

• A. Guenther, Family sues Camco over prisoner's death, [NJ] Courier Post, June 14, 2006.

• Florida's Baker Act needs reform: change law to put mentally ill in treatment, not jail [editorial], Miami Herald, February 12, 2004