California’s Mental Health Services Act: Is It Working?

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The Mental Health Services Act (MHSA) became California law in 2005 after the voters passed Proposition 63. Funded through a 1 percent tax on personal incomes in excess of $1 million, the MHSA established a broad continuum of community-based prevention, early intervention, and other services for Californians with severe mental illnesses. The California Department of Mental Health administers the act, and counties and their contracted agencies provide the direct consumer services.

Nicholas C. Petris Center on Health Care
Markets & Consumer Welfare
UC Berkeley School of Public Health

Richard Scheffler PhD

Richard Scheffler PhD
Director and Distinguished
Professor of Health Economics

Timothy Brown PhD

Timothy Brown PhD
Associate Director and
Adjunct Assistant Professor

Five years after the MHSA implementation, Berkeley Health asked a panel of experts and stakeholders to weigh in on its progress. Have mental health services in the state improved since 2005? Are Californians getting their money’s worth? Our panelists represent a range of perspectives: academia, state, county, private business, and client advocacy.


1. How have mental health services changed in California since the passage and implementation of the Mental Health Services Act?

What’s interesting about the Act is that its focus was to foster innovation. Some people have used the word “transformation,” but it is really about new ideas and new ways of delivering mental health services to the seriously mentally ill populations in California.

The MHSA continues a tradition of change that started with AB 2034; it was basically built on the success of these previous programs, which were largely a variation of a key program in the MHSA, the Full Service Partnership (FSP). The FSP program was probably the most significant change in the delivery of mental health services; it provides the most comprehensive level of services to individuals with serious mental illness in the California public mental health system, including assistance in housing, employment, schooling, physical health care, co-occurring substance abuse disorder, and in learning effective social interactions.

A key point is that in the FSP program, each individual consumer is at the center determining his or her own goals, working with clinicians, social workers, and/or family members. This goes beyond the clinical model that was used before, which was pretty much treatment by a mental health professional, psychotherapy, and perhaps drugs. It’s a big departure to treat the whole person with an integrated team.

The focus of the FSP is to facilitate recovery, which is about people being able to achieve the highest level of functioning possible, as they define it. In the past, clinicians focused more on standard goals using standard treatment modalities. In the FSP program, while some of these treatment modalities are still used, such as pharmaceutical interventions, treatment modalities and treatment goals and are much broader.

2. Looking back at the past five years, would you say the Act has been a success? By what measures?

At the Petris Center, we have been studying the MHSA since its implementation, with funding from the California HealthCare Foundation and the Department of Mental Health. We have been the primary evaluator of the program. For reports describing the Petris Center’s findings, visit the Petris Center website.

We can say that the overall outcomes of services for consumers in the FSP program are significantly better than those receiving usual care. The odds of mental-health related emergency room use have dropped dramatically for those in the FSP program compared to those receiving usual care. Homelessness has virtually disappeared among those in the FSP program, and employment has increased beyond our expectation. These are really big effects. We would be willing to say that the program is quite a success.


3. Looking forward the next five to ten years, what do you see for the future of the MHSA and of California mental health services policies? Will the state’s current budget problems have an impact?

The current budget problems have an impact on everything in the state, including mental health service programs. Of course, there is an issue about continuing to fund the MHSA. The Act tries to protect these new funds by including language stating that the Legislature and the governor are not permitted to take these funds out of the program—a so-called firewall. There are also issues of whether the state will be able to put additional money into this program beyond the MHSA, and obviously this will be difficult without an additional funding source. There is some threat to the continued overall funding of MHSA in California, but we all have to live within our means and with the budget crisis.


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Stephen W. Mayberg PhD

Stephen W. Mayberg PhD
Director, California Department of
Mental Health


1. How have mental health services changed in California since the passage and implementation of the Mental Health Services Act?

The mental health system in California has changed in a variety of significant ways since the passage and implementation of the MHSA. These changes have not just been limited to services and infrastructure, but also the areas of perception and politics. The voters sent a clear message that resonated throughout the United States that citizens firmly believe mental health is important, and not only is treatment essential, it works. The residents of California clearly understood that lack of access to care and the stigma of mental illness has profound social consequences including homelessness, school failure, incarceration, and unemployment. It was the vote of Californians that directed resources to treatment, not only initially, but on a second vote when voters rejected redirection of funds.

The MHSA has changed values, redesigning a system around the needs of a community and specifically the needs of the client and family members, and that has proven to be more successful than anticipated. Shared ownership of the system and responsibility for outcomes with local and statewide accountability has contributed to the successes of implementation. Never has a change of this magnitude been attempted in a state, much less one the size of California. We have changed language and delivery systems. We have changed access and now have more than 200,000 new individuals engaged, and more than 450,000 persons in MHSA-funded services. Most of all, we have developed tremendous grassroots support through our stakeholder process. It is hard to envision that more than 125,000 people would participate in program planning and design and still continue to be actively involved in implementation, monitoring, and advocacy.

2. Looking back at the past five years, would you say the Act has been a success? By what measures?

The MHSA has been a success by any measure, but that is not to say it was perfect or implementation was easy. In this type of major system reform, the number of “moving pieces” is exponential, and issues and programs are complicated, complex, and not always readily apparent. However, credit has to go to the stakeholders, providers, advocates, counties, and oversight bodies for persevering and working through these difficult issues, guided by a universally held vision of hope and recovery. In spite of these challenges, the program outcomes are better than expected. Studies by the Petris Center (UC Berkeley), UC San Diego, and state and county evaluations continually report outstanding outcomes. The reduction of homelessness, incarcerations, hospitalizations, and utilization of emergency rooms by Full Service Partnership (FSP) members reinforce the power and effectiveness of this model of service. Participation in employment and education has increased, outreach and engagement is dynamic, and access for many unserved individuals has dramatically increased. The evaluations uniformly report excellent results, and independent, objective research supports our perceptions that this is a dynamic, successful program.

Not only has the service delivery system changed, the engagement of other state departments has been very productive. Currently, at the state level, approximately 19 departments use MHSA support and principles to leverage development of mental-health-related programs. Plans for suicide prevention, stigma reduction, mental health and the justice system, and veterans outreach programs—all have resulted from catalytic infusion of resources and a strong mental health focus.

3. Looking forward the next five to ten years, what do you see for the future of the MHSA and of California mental health services policies? Will the state’s current budget problems have an impact?

As we embark on National Health Care Reform (HCR) and California explores an 1115b waiver, issues of mental health parity, benefit design, and integration with primary care become essential for our state to address. Lessons learned from the MHSA process should help inform system reform issues in HCR. Outcomes and accountability are hallmarks of the Patient Protection and Accountable Care Act, and are requirements that MHSA has already addressed. The MHSA provides a model of processes and challenges that help inform health care reform efforts.

If the MHSA continues to have good outcomes; reduce disparities; create better access, stress prevention, and early intervention; and reduce the consequences of untreated or undertreated mental illness, it will become the national model of care. In spite of difficult state and national budgets, the MHSA dedicated funding stream has guaranteed continuity, and the investment in treatment may be cost saving in many other areas of government spending. The model of change, identified outcomes, raised expectations, and community accountability is powerful. The importance of collaboration and integration cannot be underestimated. Opportunities for system change are rare and must be capitalized on. California has embraced this challenge well with the MHSA, and this initiative will be the framework, vision, and guiding principles for the public mental health system for years to come.


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Marvin J. Southard

Marvin J. Southard DSW
Dept. of Mental Health,
Los Angeles County


1. How have mental health services changed in California since the passage and implementation of the Mental Health Services Act?

For counties that seized the opportunity, I believe the most profound and lasting change was in using the required stakeholder planning process for MHSA to make choices about the shape of the mental health system in a way that put the voices of clients and family members at the center of the decision-making process. This approach had the effect, at least in Los Angeles, of allowing the public mental health system, and all who rely on it, to adapt more successfully to the turbulent fiscal and political environments we have endured lately.

The network of services available has also changed almost everywhere in three very important ways: First, a greater availability of Assertive Community Treatment (ACT) and Wraparound modeled programs has improved the life outcomes for the segments of the population most disabled by mental illness. Second, the creation of a network of “wellness”-oriented mental health programs has embedded services in the mainstream of communities, rather than constricting them within clinic walls. And third, a much wider use of peer advocates in the treatment system modeled the social inclusion of individuals with mental illness into the mainstream as one of the important goals of the public mental health system. The infrastructure for successful service delivery has also changed with the addition of many more permanent supportive housing resources.

Finally, I would say that the confluence of the opportunities inherent in the funding and structure of MHSA and the fiscal challenges created by the recession ironically brought about a quicker transformation of mental health services in California from a medical model to a recovery model than would otherwise have been the case.

2. Looking back at the past five years, would you say the Act has been a success? By what measures?

Looking back, I think the Act has been a rousing success in most places, especially compared to what would almost certainly have been the situation for public mental health systems without the safety net provided by the Act. In the face of the recession, the safety net provided additional financial resources, mandated the necessity for tracking outcomes, and—most of all—opened the chance to create a network of engaged stakeholders.

Some of the most vehement criticism of the Act has been by people who object to a “two-tiered” mental health system with a few of the most ill receiving intensive service while the most basic services, especially for uninsured clients, continued to erode because of the recession. I think the criticism is short-sighted for two reasons: First, the creation of programs and models “good enough” to show effectiveness (eventually even cost effectiveness) is essential for the long term survival of recovery-oriented mental health programs; and second, the switch to evidence-based early intervention programs, especially those focusing on trauma, though slow, will eventually provide a level of care superior to the services now being eroded.

There have been some weaknesses in the implementation of the Act. The complexity of the planning and approval process meant that program implementation was much slower than most had expected that it would be. Additionally, the boundaries between sub-sections of the Act (Community Services and Supports, Prevention and Early Intervention, Capital Projects, etc.) sometimes led to confusion about what the priorities in a county should be and therefore to decisions that could seem quixotic.

3. Looking forward the next five to ten years, what do you see for the future of the MHSA and of California mental health services policies? Will the state’s current budget problems have an impact?

Over the next five to ten years, everything will change. The implementation of health care reform in 2014 with the complicating demands from parity legislation in both mental health and substance abuse treatment means that both the mental policy arena and the context for the provision of all mental health service is likely to be very different from what we see today. I think the public mental health system will be faced with three categories of work.

First, there are those services which, by their nature, will likely continue to be provided under the auspices of public entities. These include crisis and disaster response, 5150 and other involuntary services, law enforcement partnership programs, and the like. Next, there are those services for persons with high need for intensive community treatment, which could theoretically be provided by a private health care entity, but in actual practice have been provided much more successfully in the context of public programs. These would include the Full Service Partnership, ACT, and other recovery-oriented programs. I think this represents an area in which public programs, especially with the availability of both the insights and the resources provided by MHSA, would remain extremely competitive even after 2014. Finally there are the mental health services for milder sorts of mental illness, including some types of depression and anxiety that typically are now treated in private care networks or in primary care. I think public systems ought to consider entering into the competition to serve these customers if only to provide a complete spectrum of care for individuals who choose our care networks.

At all three of these levels, the key challenge will be in creating a care coordinating mechanism that brings together primary care and mental health and substance abuse treatment in a manner that serves the needs of clients as they experience those needs. And of course the state budget will matter, not so much right now, but in planning for the time in which states start to assume some share of the costs of Medicaid expansion.

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Anne L. Baker

Anne L. Baker
President and CEO


1. How have mental health services changed in California since the passage and implementation of the Mental Health Services Act?

From a provider perspective, there have been significant changes in the system. One of the most positive of these has been the increase in Assertive Community Treatment (ACT)-type programs. Evidence suggests that ACT programs have been successful in reducing the negative consequences of untreated mental illness while enhancing individual well-being. Telecare has more than 5,500 clients in ACT programs in 12 counties across California. We are working to more systematically transition clients from ACT programs to less intensive services, not only celebrating the recovery process but opening slots for others to receive these intensive supports.

Another positive development is that the infusion of substantial new funds from MHSA led to a temporary shift of power to the state, which set an important direction. The state set the tone for a larger role for consumers and family members, not only in MHSA planning, but in administrative and direct service. The Telecare collaborative recovery model has historically engaged consumers, but the tone set by the MHSA added fuel and support to our direction.

Also, since the implementation of the MHSA, wellness/recovery/resilience language has become almost universal within the state’s mental health system, and the Act has directed funding toward underserved populations, where the needs have long been unmet.

Some of the changes brought about by the MHSA, however, have been more challenging. While MHSA programs were being created, existing programs for people already in the system were cut. As an example, the elimination of AB 2034 funds meant that many programs for homeless individuals with serious mental illness were eliminated. In addition, the state did not use this time as an opportunity to adopt a standardized information technology system. This missed opportunity has resulted in tremendous resource inefficiency that could have been redirected to services.

2. Looking back at the past five years, would you say the Act has been a success? By what measures?

There have been significant and meaningful gains as a result of the MHSA. First, it’s been a safety net for the system. Without MHSA dollars, the mental health system as a whole would have shrunk over the last five years as state and counties experienced massive budgetary problems. While the hope (and stated policy) of the Act was that it would expand the system, these earmarked dollars did succeed in offsetting some fiscal cutbacks.

Second, it’s reached new populations. The Act has pushed the mental health system to serve populations, such as transitional-aged youth and older adults, as well as ethnic/cultural minorities. Without this specific requirement, this effort would not have occurred.

Finally, it allows for policy direction. Public mental health systems are large bureaucracies with numerous constraints that make change difficult. The professional work force—trained and experienced in older treatment methods—is hard to influence. Holding out new funds only for programs that incorporate newer and more progressive treatment orientations and methods is one way in which change can be fostered.

3. Looking forward the next five to ten years, what do you see for the future of the MHSA and of California mental health services policies? Will the state’s current budget problems have an impact?

I think the transformative nature of MHSA will lessen. MHSA funds are replacing existing funds, counties are reasserting their primary control over the system, and the criterion for who qualifies for MHSA-funded services is being broadened. Such a result is inevitable in this fiscal climate and is likely to continue unless/until the fiscal picture improves.
I believe some MHSA changes, however, will be long-lasting. The shift to a recovery orientation for adults with serious mental illness has been broad and deep enough to have become “business as usual,” even if not fully embraced or implemented. Similarly, the empowerment of consumers and family members will continue, even though they may have to fight more to maintain their seat at the table.

The budget will continue to have an impact. Some counties are experimenting with strategies for managing ongoing funding shortages. One way is by establishing levels of care, which address the needs of clients with different severity of illness. This helps counties to maximize their limited resources and is seen as a more rational way to determine what services clients receive rather than the historical happenstance of whether a client was already in the system when the MHSA was enacted.

The impact that health reform legislation will have on mental health in California is an open question that will evolve as state regulations get drafted. There is some possibility that accountable care organizations, including private sector providers, will take on greater responsibility for managing mental health populations. Mental health parity is also making integration with physical health a higher priority within both public and private sector. These trends should result in a wider network of services for individuals with mental illness, greater choice, and better medical care. It may also stimulate accountable care organizations to look more seriously at the question of how mental illness influences physical health.

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Eduardo Vega

Eduardo Vega MA
Executive Director,
Mental Health Association of San Francisco and
Commissioner, California Mental Health Oversight and Accountability Commission


1. How have mental health services changed in California since the passage and implementation of the Mental Health Services Act?

Although MHSA funding represented a small portion of overall mental health dollars at the outset, the vision set forth by the MHSA—and the process of planning and implementing it—has had a dramatic effect on services everywhere. In particular, the contributions to program design by people who have lived with mental illness and recovery, and the widespread introduction of peer-support services, have brought focus to the important role played by recovery, hope, and natural supports in the process of reclaiming lives from the devastation of mental illnesses.

The influence of these models has driven change across systems, and we now see innovative programs taking focus in services throughout the state. Mental health systems are initiating anti-stigma, suicide prevention, age-group and culturally-effective services, and prevention-focused programs that are completely new to them. In this way the MHSA has served as a massive agent of change, sparking creativity and engaging communities outside the “usual suspects” of mental health leadership and programming that is affecting services and supports globally.


2. Looking back at the past five years, would you say the Act has been a success? By what measures?

The MHSA has absolutely been a success. It has been powerfully effective in driving community-developed interest and knowledge into new programming related to mental health services and supports. It has served as the central catalyst for bringing the most modern recovery-oriented programs supports such as Full Service Partnerships (FSPs), peer-run services, family advocacy and culturally focused services to the fore in a way that would never have happened otherwise.

Objectively, MHSA resources have funded programs that have reduced the most serious impacts of mental illness for thousands across the state, most prominently through the widespread adoption of the FSP model. In addition, the connections built between public mental health, the private sector, criminal justice, and community-based organizations—while difficult to quantify—are ultimately huge gains for anyone affected by mental illness, as these continue to evolve cross-systems collaboration and problem solving. In my opinion, this “secondary” gain is very powerful, because it has broken new ground in bridging the gaps between services and systems that are a result of infrastructure barriers and silos. Health care service reform will build on these starts to ensure that people in their most desperate times are not shunted from one closed door to another.


3. Looking forward the next five to ten years, what do you see for the future of the MHSA and of California mental health services policies? Will the state’s current budget problems have an impact?

The MHSA will continue to provide a growing focus on leading-edge services and supports for mental health. The structure through which these are provided will probably not shift away from county mental health authorities, but community-based programs, federally qualified health centers, etc., will play an increasingly important role in the review, implementation, and development of new MHSA programs. As health care reform introduces systemwide opportunities, there will be challenges in integrating MHSA services with new financing structures and with a changing environment for county-provided programs, which up to now have been the primary or only provider of services to the uninsured.

Due to the forethought placed into the legislation, there are significant legal barriers to shifting MHSA resources into otherwise or previously funded programs—in particular, entitlement and federally-mandated services such as those under Early and Periodic Screening, Diagnosis, and Treatment. If today’s budget deficits are not significantly improved in coming years, the pressure may increase for the Legislature to take action to amend the statute. This was previously attempted through a ballot initiative in 2009, which California voters did not support. In addition, state-level services through public hospitals, etc., will continue to challenge the thinking about how much and what type of services should be provided by the state, as these cannot be funded by MHSA resources.

Consumer advocates believe in the vision of the MHSA and its power to sustain a real transformation in California—transformation away from disempowering clinical practices and institutionalized stigma to community-integrated services grounded in hope and human dignity that give all people affected by mental illness the best resources and supports for recovery. founders-swirl-16px

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