In the 1800s, mentally ill people were in jail. Then they were put in more humane mental hospitals. But then mental hospitals got vilified in mainstream news stories and horror movies and they were closed and now mentally ill people are back in jails, 10 times as many as are in mental health facilities.

Policy makers don't buy that psychology has value any more, and they feel only slightly better about psychiatry. Scrutiny and abuse has led politicians to demand tighter Medicaid policies governing antipsychotic drugs and a new paper links those tighter policies to increased incarceration rates for schizophrenics. 

Danvers State Insane Asylum, Massachusetts. Closed since 1992.
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For many procedures, health plans require an extra approval step before tests or treatments can be ordered for patients. That prior authorization encourages physicians to justify expensive options and as health care costs continue to go up, there is only going to be more prior authorizations needed. Because drugs can be so easily abused, Medicaid requires prior authorization to keep costs reasonable but the authors say as consequence is that more mentally-ill patients are being incarcerated when they go off their medication. 

Drugs may be expensive, but they are not as expensive for society as jail time. 

In The American Journal of Managed Care, they write that states requiring prior authorization for atypical antipsychotics had less serious mental illness overall but higher shares of inmates with psychotic symptoms than the national average. The study concluded that prior authorization of atypical antipsychotics was associated with a 22 percent increase in the likelihood of imprisonment, compared with the likelihood in a state without such a requirement. 

"This paper demonstrates that our policies around schizophrenia may be penny-wise and pound foolish," says Dana Goldman, director of the Leonard D. Schaeffer Center for Health Policy&Economics at the University of Southern California. "Limiting access to effective therapy may save States some Medicaid money in the short run, but the downstream consequences -- including more people in prisons and more criminal activity -- could be a bad deal for society."

The study examined survey data from 16,844 prison inmates in states with and without restrictive authorization requirements overlaid with state Medicaid policies and data as well as usage rates of atypical antipsychotics (a newer drug class that is frequently targeted by prior authorization requirements).

The study's findings come amid a wave of scrutiny surrounding the cost and consequences of failing to adequately provide for mental health care, including the nexus between shortchanging mental health and rising prison expenditures.

"The media has picked up on how incarcerating the mentally ill raises a range of troubling concerns, from the high cost of incarceration, to the inadequate treatment of mentally ill inmates, and the potential for self-inflicted harm among these patients," says Darius Lakdawalla, Quintiles Chair in Pharmaceutical Development and Regulatory Innovation, and a professor at the Schaeffer Center at USC. "At the same time, the American public is increasingly worried about untreated mental illness triggering violent behavior in the community. Our study suggests state Medicaid policies may be part of the solution to these problems."