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Q: How many individuals should be on Assisted Outpatient Treatment and how much money would be saved?

A: 123,000 individuals. $6 billion saved.

By DJ Jaffe

Summary:
By combining the best research on how many people would be eligible for Assisted Outpatient Treatment with the best research on costs, it is possible to roughly estimate the potential savings that could be achieved by each state through appropriate implementation of Assisted Outpatient Treatment (AOT). Using this method, it is estimated that 123,000 individuals with serious mental illness could be helped by Assisted Outpatient Treatment and states would realize a net combined savings of $6 billion primarily in reduced hospitalization and incarceration costs. (See Table)

State

Adult population

(age 18 and over)

Adults with severe mental illness who should be on assisted treatment

Criminal Justice, Hospitalization, and other Costs of those elibigle for AOT at 100K each before AOT

Cost after AOT at 40% net savings

Savings

 

Alabama

3,579,844

1,897

189,700,000

94,850,000

94,850,000

Alaska

514,927

273

27,300,000

13,650,000

13,650,000

Arizona

4,863,759

2,578

257,800,000

128,900,000

128,900,000

Arkansas

2,179,482

1,155

115,500,000

57,750,000

57,750,000

California

27,525,982

14,589

1,458,900,000

729,450,000

729,450,000

Colorado

3,796,985

2,012

201,200,000

100,600,000

100,600,000

Connecticut

2,710,303

1,436

143,600,000

71,800,000

71,800,000

Delaware

678,129

359

35,900,000

17,950,000

17,950,000

District of Columbia

485,621

257

25,700,000

12,850,000

12,850,000

Florida

14,480,196

7,675

767,500,000

383,750,000

383,750,000

Georgia

7,245,419

3,840

384,000,000

192,000,000

192,000,000

Hawaii

1,004,817

533

53,300,000

26,650,000

26,650,000

Idaho

1,126,611

597

59,700,000

29,850,000

29,850,000

Illinois

9,733,032

5,159

515,900,000

257,950,000

257,950,000

Indiana

4,833,748

2,562

256,200,000

128,100,000

128,100,000

Iowa

2,294,701

1,216

121,600,000

60,800,000

60,800,000

Kansas

2,113,796

1,120

112,000,000

56,000,000

56,000,000

Kentucky

3,299,790

1,749

174,900,000

87,450,000

87,450,000

Louisiana

3,368,690

1,785

178,500,000

89,250,000

89,250,000

Maine

1,047,125

555

55,500,000

27,750,000

27,750,000

Maryland

4,347,543

2,304

230,400,000

115,200,000

115,200,000

Massachusetts

5,160,585

2,735

273,500,000

136,750,000

136,750,000

Michigan

7,619,835

4,039

403,900,000

201,950,000

201,950,000

Minnesota

4,005,417

2,123

212,300,000

106,150,000

106,150,000

Mississippi

2,184,254

1,158

115,800,000

57,900,000

57,900,000

Missouri

4,556,242

2,415

241,500,000

120,750,000

120,750,000

Montana

755,161

400

40,000,000

20,000,000

20,000,000

Nebraska

1,344,978

713

71,300,000

35,650,000

35,650,000

Nevada

1,962,052

1,040

104,000,000

52,000,000

52,000,000

New Hampshire

1,035,504

549

54,900,000

27,450,000

27,450,000

New Jersey

6,661,891

3,531

353,100,000

176,550,000

176,550,000

New Mexico

1,499,433

795

79,500,000

39,750,000

39,750,000

New York

15,117,370

8,012

801,200,000

400,600,000

400,600,000

North Carolina

7,102,917

3,765

376,500,000

188,250,000

188,250,000

North Dakota

502,873

267

26,700,000

13,350,000

13,350,000

Ohio

8,828,304

4,679

467,900,000

233,950,000

233,950,000

Oklahoma

2,768,201

1,467

146,700,000

73,350,000

73,350,000

Oregon

2,952,846

1,565

156,500,000

78,250,000

78,250,000

Pennsylvania

9,829,635

5,210

521,000,000

260,500,000

260,500,000

Rhode Island

826,384

438

43,800,000

21,900,000

21,900,000

South Carolina

3,480,510

1,845

184,500,000

92,250,000

92,250,000

South Dakota

612,767

325

32,500,000

16,250,000

16,250,000

Tennessee

4,803,002

2,546

254,600,000

127,300,000

127,300,000

Texas

17,886,333

9,480

948,000,000

474,000,000

474,000,000

Utah

1,915,748

1,015

101,500,000

50,750,000

50,750,000

Vermont

495,485

263

26,300,000

13,150,000

13,150,000

Virginia

6,035,408

3,199

319,900,000

159,950,000

159,950,000

Washington

5,094,603

2,700

270,000,000

135,000,000

135,000,000

West Virginia

1,433,328

760

76,000,000

38,000,000

38,000,000

Wisconsin

4,344,524

2,303

230,300,000

115,150,000

115,150,000

Wyoming

412,245

218

21,800,000

10,900,000

10,900,000

TOTALS

232,458,335

123,203

12,320,300,000

6,160,150,000

6,160,150,000

 

Background on AOT
Assisted Outpatient Treatment (AOT) laws allow courts to order those who have mental illness and a past history of violence or needless hospitalizations to stay in treatment as a condition of living in the community. It also allows courts to order the mental health system to provide the treatment. Extensive due process protections including the right to an attorney assure protection of rights and that few are enrolled.  New York State has the largest and most studied program (Kendra’s Law). Studies found those enrolled in Kendra’s Law are four times less likely to engage in future violence than those in a control group. Other New York studiesfound it reduced homelessness (74%); suicide attempts (55%); substance abuse (48%); physical harm to others (47%); property destruction (43%); hospitalization (77%); arrests (83%); and incarceration (87%).

These results are consistent with those in other localities that use it. Nevada County, California found after implementation of AOT (Laura’s Law) the number of Psychiatric Hospital Days decreased 46.7 percent; number of Incarceration Days decreased 65.1 percent, number of Homeless Days decreased 61.9 percent; number of Emergency Interventions decreased 44.1 percent. Los Angeles found Laura’s Law reduced incarceration, 78 percent; reduced hospitalization, 86 percent; and reduced hospitalization, 77 percent even after discharge from Laura’s Law.

Number of people eligible for AOT: 123,000

In American Psychosis: How the Federal Government Destroyed the Mental Health System, (Oxford Press, October 2013, Page 148) Dr. Fuller Torrey notes
little research has been done on the question of how many people could benefit from Assisted Outpatient Treatment other than estimates that approximately 10% of seriously mentally ill individuals are the most problematic (e.g., have repeated incarcerations, homelessness, repeated hospitalizations, etc.) and that other research notes that 10% of those who are problematic, or 1% of the total, are a danger to themselves or to others. The National Institute of Mental Health estimates the total number of adults (ages 18 and over) with severe mental illnesses (schizophrenia, severe bipolar disorder, and severe depression) in a year is 5.3% of the adult population, or about 12.3 million people. Multiplying that number by 1% gives a total of approximately 123,000 seriously mentally ill adults who should be on some form of assisted treatment at any given time. Columns 1, 2 and 3 of Table 1 (from American Psychosis) provide a breakdown of this number by state. These numbers include those who are receiving treatment in hospitals or other institutions (e.g., jails, prisons, nursing homes) at any given time.  

Savings: $6.16 billion

Implementing AOT causes certain costs to decline (trials, incarceration, hospitalization) and other costs to rise (prescriptions, outpatient treatments, case management). 

A major study The Cost of Assisted Outpatient Treatment: Can It Save States Money?” by Jeffrey W. Swanson, Ph.D., compared the costs incurred by New York for patients in Kendra’s Law during the 12 months prior to receiving AOT and two subsequent 12 month periods. They calculated the costs and savings in both New York City and five less urban New York State counties. Swanson found “In the New York City sample, average costs declined 50%, from about $105,000 to about $53,000 per person, and in the five-county sample, average costs declined 62%, from about $104,000 to about $39,000 per person. Most of the decline was seen in the first year after assisted outpatient treatment was initiated. In the New York City sample, net costs declined an additional 13% in the second year. In the (other counties) costs declined an additional 27% in the second year.”  

These cost savings are similar to those found in out localities that use AOT. In Nevada County, California Laura’s Law implementation saved $1.81-$.2.52 for every dollar spent and “receiving services under Laura’s Law caused a reduction in actual hospital costs of $213,300 and a reduction in actual incarceration costs of $75,600.  Los Angeles County found Laura’s Law implementation cut costs 40%.

Using Swanson’s numbers as a base, we calculated the cost per patient prior to AOT at $100,000 (rounding down the $104,000-$105,000 he calculated) and used the 50% savings found in New York City, rather than the 62% savings found in the other New York counties. We also limited our calculation to first year savings and did not calculate the additions savings in year two. This provides the most conservative estimates possible.

Columns D, E, and F show implementation of AOT would save states a combined $6.1 billion.

Discussion: If the savings are so large, why isn’t it used more frequently?
The incremental expense, albeit nominal, of implementing AOT is between $4,000-$10,000 per patient over the cost of providing the same services to individuals who are not under court order. These are the administrative costs of the program. Some of these would be borne by the mental health department or court system while the bulk of the savings accrue to criminal justice and local hospitals that are not funded by the state. Hence few state mental health directors have made implementing AOT a priority. 

Likewise, state psychiatric hospital costs rest with the state, while the cost of jails is often a county cost. By discharging people from state psychiatric hospitals without AOT, the state can effectively transfer state mental health costs to county criminal justice budgets. Put another way, when individuals become incarcerated, that is a ‘success’ for the mental health department, in that it is one less person they have to serve.  

It is also important to note that not everyone does well on AOT so some may need inpatient commitment. However, since AOT is less restrictive, more humane, and less expensive than inpatient commitment, it makes sense to use it where appropriate to help consumers live in the least-restrictive, most integrated setting possible.

Summary of studies available at http://kendras-law.org/kendras-law/research/kendras-law-studies.html. Accessed 10/6/13.

Michael Heggarty, Behavioral Health Director, Nevada County. “The Nevada County Experience,” Nov. 15, 2011).

County of Los Angeles. “Outpatient Treatment Program Outcomes Report" April 1, 2010 – December 31, 2010. And Michael D. Antonovich, Los Angeles County Fifth District Supervisor, Los Angeles Daily News, December 12, 2011).  

National Institute of Mental Health. “Prevalence of Serious Mental Illness Among U.S. Adults by Age, Sex, and Race” Available at http://www.nimh.nih.gov/statistics/SMI_AASR.shtml Accessed 10.6/13


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