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Late last week, New York governor Kathy Hochul announced a $27.5 million investment in inpatient psychiatric care that will fund “more than 600” beds in New York City. Though modest in scope, this represents an important course correction. Hochul’s predecessor, Andrew Cuomo, slashed hundreds of state psychiatric hospital beds via his misbegotten Transformation Plan for the state Office of Mental Health.

It’s a new day for mental health in city government, too. In testimony to state legislators earlier this month, Mayor Eric Adams argued that, to prevent crime, the city needed “immediate assistance in expanding the number of beds for those in critical need of mental health care, and funding for the medical and support staff they require.” On the same day as Hochul’s announcement, Adams released his Subway Safety Plan, which puts a strong focus on serious mental illness. Adams’s predecessor Bill de Blasio never took much interest in psychiatric hospitals.

New York City and State will have to do much more to reverse the damage of the last decade and beyond, but at least for now the bleeding has stopped. Avoiding doing more harm to inpatient care systems counts as a resounding success by the standards of mental-health policymaking. Ever since modern homelessness burst on the scene back around 1980, concerns have persisted that the deinstitutionalization of the mentally ill has gone too far. On a slightly later schedule, worries over the large and growing rate of serious mental illness among jail and prison inmates prompted criticism that what mental-health policymakers had really enacted was not deinstitutionalization but “transinstitutionalization.” Nevertheless, government in New York and elsewhere kept on closing inpatient beds and facilities.

Hochul’s funding will go to psychiatric beds in general hospitals. The traditional asylum system, which once cared for more than 90,000 patients in New York State, consisted of specialized state-run psychiatric hospitals. When the state started dismantling that system, general hospitals, many run by private health-care systems, picked up the burden for a while. But since the 1990s, another wave of deinstitutionalization has crashed, as the general hospitals have moved out of inpatient mental health and into areas of health care that promise richer reimbursement rates. During the pandemic, inpatient psych providers in New York repurposed hundreds of beds to meet Covid-19 overflow needs. Some critics feared that hospital systems were just using the pandemic as an excuse to get out of the inpatient psych business entirely. State government has pledged to work on bringing back all the repurposed beds. To that end, and to address the more fundamental fiscal problem, New York State will raise the Medicaid reimbursement rate for inpatient psychiatric care.

During last year’s budget cycle, state government cut 200 beds from the stock controlled by the Office of Mental Health, though Cuomo had initially proposed larger cuts and seriously considered the closure of an entire facility, Rockland Children’s Psychiatric Center. The governor’s office offered the standard justification that New York didn’t need the beds in question, as they were “vacant.” The hope, as ever, was that mental-health programs “in the community” would stabilize the mentally ill and obviate the need for hospitals. But there was rarely much accounting as to how much or how effectively those community programs, expanded at hospitals’ expense, served the hardest cases, such as subway pushers. Still, state officials pressed on with their “reinvestment” and “right siz[ing]” of the state hospital system, as the Office of Mental Health’s chief, Ann Sullivan, put it during last year’s budget cycle. In the post-Cuomo era, however, Sullivan is singing a different tune, praising Hochul’s spending on psych beds as “truly historic.”

It will take political will to sustain and build on Hochul’s investment. Even after all that’s happened with homelessness and the incarceration of the mentally ill, it remains an article of faith among leading advocacy organizations that the only problem with bed slashing is that it hasn’t gone far enough.

Mayor Adams’s call, in his Subway Safety Plan, for a repeal of Medicaid’s Institutions for Mental Disease (IMD) exclusion offers further hope for mental-health reform. This is the most important reform needed to shore up inpatient psychiatric care in New York and across the nation. Since Medicaid was enacted in the 1960s, it has been barred from funding inpatient care for adults in specialized psychiatric hospitals. Repealing the IMD exclusion would provide a powerful fiscal incentive to state governments to begin to replenish the stock of beds lost over decades of deinstitutionalization. Only Congress can enact IMD reform, but given Adams’ growing clout within the Democratic Party, his support matters. It’s also encouraging that New York’s inpatient funding push appears to be arriving at the same time that state legislators are developing an expansion of Kendra’s Law (New York’s outpatient commitment program). Leading advocacy organizations insist that Kendra’s Law is, in fact, overused—but they seem, for once, not to have the wind at their sails.

Photo by Lev Radin/Pacific Press/LightRocket via Getty Images

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