Sufficient investment in community-based mental health and substance use treatment has been an enduring struggle in the United States. Underfunding was a principal cause of the failures to deliver on the vision of deinstitutionalization set forth in the Community Mental Health Act in 1963 and later revived in Mental Health Systems Act of 1980. Both legislative initiatives promised robust networks of community mental health centers to replace inhumane, costly state mental institutions, and both fell short.

Over the past three decades, insufficient financial support for community treatment resources, coupled with an increase in quality-of-life prosecutions, among other factors, have resulted in a phenomenon known as transinstitutionalization. As funding for community behavioral health services shrinks or dries up, and the prevalence of behavioral health disorders remains relatively constant, costs and responsibilities shift from the health sector to institutions neither designed nor equipped to efficaciously address this population’s treatment needs and the quality of care deteriorates. Police, indigent defense systems, the judiciary, correctional facilities, and parole officers have become de facto mental health service providers.

Jurisdictions across the country continue to experience this unfortunate pattern. When people with chronic behavioral health needs lack access to care in the community, they are more likely to decompensate and end up in hospital emergency rooms, police cars, jails, or prisons. This reality is behind the gloomy fact that Rikers Island in New York City and the Los Angeles County Jail house more people with mental illness than any hospitals.

Since the nadir of the financial crisis, states have dramatically cut funding for mental health and substance use services, at a rate not witnessed since the mid-1960s, according to the National Association of State Mental Health Program Directors. Nationwide, since the Great Recession, from 2009 to 2012, these cuts amount to around $4.35 billion. Local jails are definitely feeling the burden from these cuts. For example, in Chicago, Sheriff Tom Dart has been urging government leaders to re-open community mental health treatment clinics, after closure of nearly half of these centers resulted in people with unmet psychiatric needs pouring into the Cook County Jail. Similarly, in Sedgwick County, Kansas then-Sheriff Robert Hinshaw pleaded with his state officials for more support to address the growing numbers of people with mental illness in the jails, following a series of deep cuts from 2009-2012.

In a time of fiscal constraints, government officials have to make tough choices about spending. One path to restoring solvency is for policymakers to rethink how they conceptualize behavioral health costs. For example, public health and justice agencies should find more structured ways to collect, report, analyze, and share data for purposes of policy planning. Because policy choices for one system affect institutions in other systems, sharing information across agencies, where appropriate, is critical when addressing complex social problems such as chronic behavioral health needs. Viewing the fiscal impact of policies across these institutional boundaries should help governments make more efficient, effective use of scarce tax money.

Building information-sharing capacity between health and justice systems may also be of value for states pursuing justice reinvestment. For example, when behavioral health care services successfully support people in the community and reduce recidivism there may be opportunities to reinvest the savings to police courts and corrections back into community services. Justice reinvestment and data-sharing efforts could be avenues to give the responsibility of behavioral health care back to the community and counter recent spending cuts. For example, savings from programs like Treatment Alternatives for Safer Communities, which saves Cook County $2 million each year, could be reinvested to support dwindling community mental health centers.

The Affordable Care Act (ACA) offers opportunities for states and local governments to strengthen community health services for a substantial portion of the population—uninsured childless adults—who currently only receive care in emergency rooms or jail. For states choosing to implement ACA’s Medicaid expansions, there may be more avenues to obtain Medicaid reimbursements for mental health services delivered to defendants pending disposition  as well as more permanent diversion solutions, such as linking people with chronic behavioral health needs leaving prisons to health homes, which has been shown to be effective in reducing emergency room use.

The bottom line is that cuts to community mental health budgets mean rising costs elsewhere. In some counties, correctional health care costs are among the fastest growing budget item. Governments should remain aware of the clear difference between cutting and shifting costs, especially when the latter can be more expensive in both dollars and quality of life. As Sheriff Tom Dart summed it up, “This is not higher math... If you reduce programs and remove funding, it isn’t as if fairy dust will be spread throughout the clouds and these peoples’ mental health issues will go away. They will still have them, and it’s a question of where they will go from there.”