Mental Health A-Z How Deinstitutionalization Works By Arlin Cuncic, MA Arlin Cuncic, MA Arlin Cuncic, MA, is the author of "Therapy in Focus: What to Expect from CBT for Social Anxiety Disorder" and "7 Weeks to Reduce Anxiety." She has a Master's degree in psychology. Learn about our editorial process Updated on September 08, 2022 Medically reviewed Verywell Mind articles are reviewed by board-certified physicians and mental healthcare professionals. Medical Reviewers confirm the content is thorough and accurate, reflecting the latest evidence-based research. Content is reviewed before publication and upon substantial updates. Learn more. by Akeem Marsh, MD Medically reviewed by Akeem Marsh, MD LinkedIn Twitter Akeem Marsh, MD, is a board-certified child, adolescent, and adult psychiatrist who has dedicated his career to working with medically underserved communities. Learn about our Medical Review Board Print Getty / Slavica Table of Contents View All Table of Contents History Goals Types Impact Deinstitutionalization is the process of transitioning individuals with mental illness from inpatient psychiatric hospitals to less restrictive community-based settings, such as group homes or supported housing. The goal of deinstitutionalization is to provide better care for people with mental illness while also reducing overall treatment costs. History of Deinstitutionalization Deinstitutionalization began in the United States in the 1950s as a response to the poor conditions and treatment of patients in psychiatric hospitals. At that time, most people with mental illness were confined to large state-run institutions where they received little to no individualized care. These facilities were often overcrowded and understaffed, and patients were often subjected to inhumane and degrading treatment, such as lobotomies and electroshock therapy. The deinstitutionalization movement gained momentum in the 1960s. In 1963, President John F. Kennedy signed the Community Mental Health Centers Act, which provided funding for the construction of community mental health centers across the country. The goal of these centers was to provide comprehensive mental health care services to people in their communities, rather than confining them to institutions. The deinstitutionalization movement gained even more momentum in the 1970s when a series of court cases, known as the "Olmstead decisions," ruled that it was a violation of patients' civil rights to confine them to psychiatric hospitals if they could be adequately treated in less restrictive settings. Deinstitutionalization has been a controversial policy because it has often been poorly implemented, resulting in a lack of community-based mental health services and an increase in homelessness and incarceration among people with mental illness. However, in recent years, there has been a renewed focus on deinstitutionalization, as policymakers and advocates have argued that it is possible to provide high-quality community-based care that meets the needs of people with mental illness. Goals of Deinstitutionalization The goals of deinstitutionalization are to provide better care for people with mental illness and to reduce overall treatment costs. When deinstitutionalization is properly implemented, people with mental illness can receive the help they need while living independently. In addition, deinstitutionalization can save money by reducing the need for expensive inpatient hospital care. Types of Deinstitutionalization Deinstitutionalization can take many different forms, depending on the needs of the individual and the resources of the community. Some common types of deinstitutionalization include the following: Supportive housing: This type of housing provides people with mental illness with a place to live as well as access to support services, such as case management, counseling, and psychiatric care. Assertive community treatment (ACT): This type of intensive community-based care involves a team of mental health professionals who provide comprehensive services to people with mental illness, including case management, counseling, and psychiatric care. Integrated dual diagnosis treatment: This type of treatment is designed for people who have both a mental illness and a substance abuse problem. It includes both mental health and addiction treatment services. Peer support: This type of support involves people with mental illness helping each other to recover and live fulfilling lives. Deinstitutionalization can also take the form of changes to public policies, such as increasing funding for community-based mental health services or reforming laws that discriminate against people with mental illness. Purposes of Deinstitutionalization Deinstitutionalization is often used as a method of treatment for people with mental illness who are discharged from psychiatric hospitals. When people with mental illness are discharged from psychiatric hospitals, they typically go to community-based mental health centers or supported housing programs. In addition, deinstitutionalization can also be used to prevent people with mental illness from becoming institutionalized in the first place. This can be done by providing community-based mental health services that meet the needs of people with mental illness and their families. It is important to note that deinstitutionalization is not a cure for mental illness. Rather, it is a way of providing care that meets the needs of people with mental illness and helps them to live on their own. Impacts of Deinstitutionalization Deinstitutionalization can have a number of positive impacts on the lives of people with mental illness and their families. These impacts include the following: Increased access to community-based mental health services: Moving care into the community naturally requires an increase in community-based mental health services. Improved mental health: Individuals who might otherwise be institutionalized are given the opportunity to live independently, which may improve mental health despite their diagnosis. Reduced overall treatment costs: Properly implemented, deinstitutionalization can reduce overall treatment costs by providing high-quality care that meets the needs of people with mental illness. Increased independence: Deinstitutionalization can increase independence. Instead of living in a psychiatric hospital, people with mental illness are able to live on their own or in supportive housing. Improved quality of life: Deinstitutionalization can improve quality of life by providing people with mental illness with supportive housing and other community directives. Potential Pitfalls of Deinstitutionalization Despite the potential benefits of deinstitutionalization, there are also some potential pitfalls that should be considered. These pitfalls include: Lack of community support: One of the potential problems with deinstitutionalization is that it can lead to a lack of community support for people with mental illness. When people with mental illness are discharged from psychiatric hospitals, they go to community-based mental health centers and/or supported housing programs. However, these programs may not have enough resources to meet the needs of all people with mental illness in their communities. Increased stigma: Another potential problem with deinstitutionalization is that it can lead to increased stigma against people with mental illness. For example, when people with mental illness are discharged from psychiatric hospitals, they may be seen as a burden on their families and communities. This can lead to increased stigma and discrimination. Overburdened mental health system: A final potential problem with deinstitutionalization is that it can lead to an overburdened mental health care system. General hospitals may not be equipped to deal with the influx of people with mental illness who are discharged from psychiatric hospitals. This may mean that people with mental illness do not get the care they need in a timely manner and that the quality of care suffers. Despite the potential pitfalls of deinstitutionalization, it is important to remember that this process can have a number of positive impacts on the lives of people with mental illness and their families. When properly implemented, deinstitutionalization can improve mental health, reduce overall treatment costs, increase independence, and improve quality of life. 6 Sources Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Scherl DJ, Macht LB. Deinstitutionalization in the absence of consensus. Hosp Community Psychiatry. 1979;30(9):599-604. doi:10.1176/ps.30.9.599 Substance Abuse and Mental Health Services Administration. Reflecting on JFK’s Legacy of Community-based Care. Olmstead Rights. Olmstead v. LC: History and Current Status. United States Interagency Council on Homelessness. Supportive Housing. Bjørkquist C, Hansen GV. Coordination of services for dual diagnosis clients in the interface between specialist and community care. J Multidiscip Healthc. 2018;11:233-243. Published 2018 May 15. doi:10.2147/JMDH.S157769 Shalaby RAH, Agyapong VIO. Peer Support in Mental Health: Literature Review. JMIR Ment Health. 2020;7(6):e15572. Published 2020 Jun 9. doi:10.2196/15572 By Arlin Cuncic, MA Arlin Cuncic, MA, is the author of "Therapy in Focus: What to Expect from CBT for Social Anxiety Disorder" and "7 Weeks to Reduce Anxiety." She has a Master's degree in psychology. See Our Editorial Process Meet Our Review Board Share Feedback Was this page helpful? Thanks for your feedback! What is your feedback? Other Helpful Report an Error Submit Speak to a Therapist Online Advertiser Disclosure × The offers that appear in this table are from partnerships from which Verywell Mind receives compensation.