A Complex Case: Public Mental Health Delivery and Financing in California

Sarah Arnquist and Peter Harbage, Harbage Consulting

County-administered mental health programs serve more than half a million Californians each year. How does the state finance, administer, and deliver mental health care?

July 2013

In California, about 16% of the adult population, more than 4 million people, have mental health care needs. For those with disabling conditions who do not have private health insurance, publicly funded programs are their primary, if not only, source of mental health care.

Due to the lack of coverage of mental health services through private insurance, over time, public facilities and programs have played an increasingly important role in the provision and coverage of mental health care. Public mental health services in California are delivered primarily through county systems that operate separately from other publicly funded health care services. These county mental health programs are funded mainly through dedicated revenue streams that are not subject to the annual state appropriations process.

This report provides an overview of how California's public mental health system services are financed, administered, and delivered. This overview is offered as background to inform policy discussions about how public mental health services fit within California's overall public health care system.

Key findings include:

  • Public spending on mental health services in California for Fiscal Year (FY) 2012–13 was estimated to be $7.76 billion, of which $3.34 billion was for Medi-Cal (California's Medicaid program) beneficiaries. As the most populous state, California ranked first in the US for total spending on public mental health services but 15th for per capita spending in 2010.
  • For people with severe mental illness, the California public mental health system offers rehabilitative, recovery-focused care. However, many Medi-Cal beneficiaries and uninsured adults with less-severe mental health conditions face significant gaps in coverage and in access to services.
  • State laws shape California's public mental health delivery structure, but nearly all financial and administrative responsibility for delivering these services rests on counties. This decentralization has resulted in wide variation in program operations, quality, and service availability.
  • As in many other states, funding for California's public mental health system is "carved out," or disconnected, from the rest of public health care system funding. As a result, people with mental health needs often must navigate two systems for care.

An interactive graphic maps the wide geographic variation of mental illness in California.

The full report is available under Document Downloads.