State Schools Should be Closed or Consolidated

Background

The Texas Department of Mental Health and Mental Retardation (MHMR), established in 1965, has primary responsibility for providing services to the mentally ill and mentally retarded citizens of Texas. These services are provided through both direct service delivery and contracted service delivery. MHMR operates 27 state institutions for mentally retarded and mentally ill persons. MHMR also contracts with 35 locally governed community MHMR centers which provide residential and nonresidential services. Total appropriations to MHMR for the 1990-91 biennium were approximately $1.7 billion, and the agency has a staff of about 28,000 full-time-equivalent employees for fiscal year 1991. Approximately 85 percent of the appropriated funds for the agency are provided by the General Revenue Fund.

National Trends. Since the early 1960s, the trend in the U.S has been to shift care from institutional settings to the community. A major reason for this shift was passage of the federal Community Center Act in 1963, which provided federal funds for the creation of community centers for mental health and mental retardation services. Community centers were created to provide an effective alternative to treating mentally retarded and mentally ill citizens in large residential settings.

In 1967, there were approximately 195,000 patients in U.S. mental retardation institutions.[1] By 1988, the census had dropped to about 91,000, or a decrease of 53 percent. Figure 1 shows the census decline from 1977 to 1988. The national mental retardation institutional census has now declined for 21 consecutive years.

In 1977, about 51 percent of the individuals being treated in residential settings (24-hour care) were served in state institutions. By 1988, the percentage served in state institutions had decreased to approximately 29 percent.[2]

Expenditures for community services have been climbing rapidly, while the fiscal commitment to institutional services has been leveling out across the states. In fiscal year 1988, the U.S. spent $11.7 billion for services for individuals with mental retardation. Of these expenditures, 48.1 percent ($5.6 billion) were expended for community services and 51.9 percent ($6.1 billion) were used for large congregate residential (16+ beds) services.[3] With the declining national census and increased expenditures the average national institutional daily costs per resident have increased from $45 in 1977 to $154 in 1988 (Figure 2).

Due to the significant declines in state institutional populations, a number of states have closed some of their state facilities for the mentally retarded. The first closure of an institution was in 1970, and currently, 22 states have closed or are in the process of closing 53 facilities. In January 1991, New Hampshire became the first state to provide services to its mentally retarded citizens without the use of a state institution.[4]

Trends in Texas. Trends in mental retardation services in Texas have in many cases paralleled those of the country. In 1965, the legislation which created MHMR also authorized the establishment of nonprofit community mental health and/or mental retardation centers by local sponsoring agencies.[5] Before that time, virtually all mental health and mental retardation services were provided by state institutions.

Litigation in Texas and other states has called for better care for mentally retarded persons. In 1974, a class action lawsuit, Lelsz v. Kavanagh, was filed against MHMR in federal district court. In 1983, the parties signed a resolution and settlement, which focused on services and conditions in three named schools (Austin, Denton and Fort Worth state schools) and emphasized the least restrictive residential services for class members. In June 1985, the judge in the case ordered 279 persons from the named state schools had to be moved to community residences by August 31, 1986. MHMR appealed this ruling, and in January 1987, the Fifth Circuit Court of Appeals vacated the order and ruled that there is no constitutional right to least restrictive placement.[6]

In October 1987, the state and all other parties signed an implementation agreement which contains specific requirements that, when completed, will reduce and eventually end monitoring by the federal courts. Currently, the state is still not in compliance with all requirements of the implementation agreement.

In response to the court order to serve members of the certified client population (the Lelsz lawsuit population) in the least restrictive environment possible, MHMR implemented the Prospective Payment Program (PPP) in 1985. This is an incentive program that pays local mental retardation authorities (MRA) an annual incentive payment if the MRA provides specific services to a member of the certified client population who has been transferred to a community residential setting. The program has resulted in increasing the staff-to-client ratios in the state schools, aided in compliance with Lelsz, and expanded and increased the number of community residential options.

In 1977, the Texas Legislature enacted the Mentally Retarded Persons Act, which called for a continuum of quality services to meet the needs of persons with mental retardation. The Act recognizes the right of mentally retarded persons to treatment and habilitation in the least restrictive setting appropriate to their individual needs and abilities.[7]

MHMR estimates there are about 480,000 mentally retarded Texans. State legislation requires that resources be directed to those most in need. Currently, those eligible for services from the MHMR system make up about 15 percent (72,000 people) of all those with mental retardation. About 36,000, or 50 percent, of this population are currently being served by the MHMR system. Another 12 percent of the population are being served in nursing homes or other private sector programs. MHMR estimates there are about 25,000 persons who are eligible for services but get no services at all.[8]

MHMR operates 13 state schools which provide residential, educational, training, health care, and habilitation services for the mentally retarded. Table 1 lists the state schools, their locations, and other information. MHMR also contracts with 35 locally governed community centers to provide services to the mentally retarded in their communities.

Table 1

State School Information

1st Quarter 1st Quarter

Fiscal Year 1991 Fiscal Year

April 1991 Full-Time Existing 1991 Cost

Fiscal Year Average Equivalent Gross Square Total Per Client

State School Location 1991 Budget Daily Census Employees Footage Acreage Per Day

Abilene Abilene $ 33,170,752 750 1,575 604,800 580 $ 145.40

Austin Austin 29,799,511 476 1,315 551,237 95 173.40

Brenham Brenham 19,820,141 502 939 264,415 200 131.70

Corpus Christi Corpus Christi 20,377,475 399 842 246,820 201 154.71

Denton Denton 36,913,305 650 1,747 398,035 201 186.65

Ft. Worth Ft. Worth 25,436,738 345 1,050 312,770 270 196.17

Lubbock Lubbock 18,588,985 429 896 322,809 226 147.94

Lufkin Lufkin 21,557,765 488 991 328,594 160 143.79

Mexia Mexia 34,252,180 762 1,633 654,372 842 136.56

Richmond Richmond 32,566,748 733 1,527 401,594 241 141.48

San Angelo San Angelo 15,766,475 417 774 346,398 1,030 137.95

San Antonio San Antonio 19,843,130 321 746 141,665 43 178.52

Travis Austin 28,721,509 606 1,318 426,878 432 140.06

Total $336,814,714 6878 15,353 5,000,387 4,521

SOURCES: TDMHMR Executive Fact Book--FY 1991 Quarter 1; TDMHMR Management and Reporting Unit; Deloitte, Haskins and Sells--The Douglass Group, TDMHMR Master Plan Facility Assessment (September 1989).

In 1988, Texas served 47 percent of its residential clients in state institutions, while the U.S. average was only 29 percent.[9] During this period, the state had 46 institutional residents per 100,000 population, ranking 15th nationally.[10]

Texas spends less per capita on mental retardation services than most other states. It also expends a larger proportion of its funding for mental retardation services on care in large congregate residential settings with 16 or more beds than most other states.

The national average for per capita expenditures on all mental retardation services in 1988 was $48.14. Texas spent $31.81 per capita during this period, which ranked 37th nationally. The state ranked 26th nationally in per capita spending for institutional services and 44th nationally for community services. The U.S. average for institutional cost per day in 1988 was $154 while Texas' cost per day was $117, which ranked 40th nationally.[11]

In 1988, the states on average spent approximately 48 percent of their mental retardation expenditures for community services and 52 percent for services in congregate facilities with 16 or more beds. During the same time, Texas spent 72 percent, or 20 percent more than the national average, for services in congregate residential facilities with more than 16 beds.[12] Texas spent a larger percentage of its total expenditures on large congregate care residential facilities than any of the other ten most populous states (Figure 3).

With the development of community alternatives to institutional care, the proportion of people served in community settings by the MHMR system has increased over the past decade. In 1980, the MHMR system served 11,543 people (44 percent) in state institutions and 14,576 (56 percent) in community services. By 1990, the percentage served in state institutions had decreased to 23 percent (8,065 people), and the percentage served in community settings had increased to 77 percent (27,758 people). Figure 4 shows the numbers served by institutional and community services from fiscal year 1980 to fiscal year 1990.

Due to the increased use of community-based services, the average daily census in the state schools has dropped from 10,152 in 1980 to 6,878 by April 1991 (32 percent decrease). MHMR projects that the average daily census will continue to decline. Figure 5 shows the decline in the state school average daily census from 1980 to April 1991. About 1,600 persons in the schools have been determined to be ready for placement in a community setting.[13]

MHMR's budget has increased substantially over the past five years. The total budget for mental retardation services increased 56 percent from fiscal year 1986 to fiscal year 1991 based on 1983 inflation adjusted dollars. In fiscal year 1986, $242.4 million (80 percent) was budgeted for institutional services and $60.1 million (20 percent) for community services. By fiscal year 1991, the budget for institutional services had grown 23 percent, to $298.3 million (63 percent) and the community services budget had increased 187 percent, to $172.5 million (37 per-cent).[14]

Since a significant part of the state school's cost are fixed and therefore do not vary proportionately to the client census, costs per patient increases as the census declines. As a result of the declining census and increasing institutional expenditures, the average daily cost per resident at the state schools has increased 179 percent during the last decade, from $53 in 1980, to $148, or $54,020 a year in 1990.[15]

Statutes require TDMHMR to develop a long-range plan for at least a six years length which must be updated every two years. This plan must include MHMR's goals, objectives, descriptions of the services which will be needed, and a plan for the future role of the state schools.[16]

In its strategic plan for 1992-97, MHMR emphasizes the development of community-based services and states that significant increases will be necessary in community-based residential services to meet the needs of those eligible for these services. The plan also projects that the number of persons served in state schools will continue to decrease and that all thirteen state schools will continue to be an integral part of the residential services offered by MHMR.[17]

The creation and expansion of community-based services has required the proration of budgetary resources between the institutional and community service components. Currently, the state is funding a large institutional services component and also trying to expand community services. Due to limited resources, it will be very difficult for the state to adequately fund both large institutional and large community services programs.

If all 13 state schools remain open they must each be adequately funded to meet the needs of their residents and cover significant fixed costs. If the census at the schools continues to decline, as projected by MHMR, it will become increasingly more inefficient to continue operation of all the schools.

MHMR states in its strategic plan that significant increases are needed in community-based services, and that the number of people served in the state schools will continue to decrease. It appears that more funding will be necessary if community-based services are to be expanded.

By statute MHMR is directed to establish objective criteria for determining when a state school may be expanded, closed or consolidated. MHMR has not developed these criteria.

Closure or consolidation of institutions serving mentally retarded persons has occurred in other states. Experiences in these states indicates that careful planning must be done to ensure that beneficial results occur for both the clients and their community.

The schools not only provide services to the clients but also provide the areas in which they are located with economic benefits. If a facility is closed, it may have a negative impact on the community where it is located. The extent of the impact will depend on the importance of the facility to the local economy and the strength of the economy at the time of the closure. Since many of the facilities are located in less populated areas, the facility is often a principal employer and major contributor to the economy.

As the census continues to decline in the schools, the need for criteria that can be used to determine when MHMR should initiate closures or consolidations becomes increasingly important. The criteria needed would cover many topics including the cost per resident in relation to other facilities, the potential for alternative uses for the facility, the availability of community resources, and so on.

The Developmental Disabilities Council has recently made funds available to support examination of the many complicated elements involved in finding alternatives to Texas' continued use of institutional services for mentally retarded and developmentally disabled persons. The Texas Performance Review staff has used the council's resources to obtain much of the information about other states presented in this issue. As discussed above, there are no easy, quick solutions to the continued operation of the state schools, which will become cost-inefficient as more clients move out into community settings.

Recommended Policy

TDMHMR should develop, as required by statute, objective criteria for determining when it is appropriate to close or consolidate an institutional facility. These criteria should be incorporated into MHMR's strategic planning process. As the plan is updated, the assessment of the state's position in relation to the criteria can signal if the timing is appropriate to initiate closure or consolidation.

MHMR's statutes should also be amended to require that the impact on the residents and their families, facility employees, receiving facilities, economic effects on the school's community and possible alternative uses for the facility should be determined if the decision is made to close or consolidate facilities. Any savings from the operation of a closed school should be allocated to increase funding of community-based services as currently required by statute.[18]

Other states have closed facilities and studies have been conducted of the closure process; therefore, MHMR should evaluate their experiences to aid the department in the closure of a facility, if that decision is made.

In developing the criteria for consolidation or closure, MHMR should make use of the funding available from the Developmental Disabilities Council to conduct any necessary surveys or work needed to develop an effective planning system for future use of the state schools.

Implications

The development of criteria to determine when institutional facilities should be closed or consolidated will help TDMHMR properly plan for the future role of the state schools. If it is decided to close a state school there are many factors which must be considered to properly carry out the process. Key factors which should be considered are possible alternative uses for the facility, effects on the residents and their families, facility employees, receiving facilities, and the community where the facility is located.

Since closure of a facility will have a negative economic impact on the area where it is located alternative uses for the facility should be strongly considered. Other states have used their closed facilities for various alternative purposes. In some cases, options for alternative uses is dependent on the location of the facility.

Due to the increasing prison population, many states have converted residential institutions to correctional facilities.[19] Texas currently has a great need for more prison beds. The schools would be best suited for minimum security uses such as substance abuse treatment centers or pre-release facilities.

There are also other possible alternative uses for a facility, such as offices for state/local agencies or a multipurpose center for human services agencies. The state should also consider selling the property. If the property was sold the proceeds could be dedicated to improve services for mentally retarded persons.

Fiscal Implications

This recommendation has no fiscal implications.

Endnotes