The past, present and future of California’s mental-health system

At first, I was confused in my search for State Senate President Pro Tem Darrell Steinberg’s office in Room 200 of the state Capitol. When I asked a fellow passing by for directions, he gave me a look that New Yorkers give when you ask “Where’s the Empire State Building?”—a look that says, “You’re clearly not part of our world.”

But I found Steinberg’s office. And when I walked into Room 200, it was plain to see it was not your normal crammed state senator’s workplace. It was gigantic—more like a living room than an office. The layout did not direct you to a front desk. Instead, this was more like a day-care center with many different play stations. A desk here, a sitting area with couches there, some work stations someplace else. This was clearly a room where more than one thing was going on at once, where important stuff happened or will soon be happening.

Room 200 says a lot about its current tenant—the focus should be on the happening, not the man.

Steinberg is, in many ways, an unusual choice to head up the California Senate. He is from Sacramento, not Los Angeles or San Francisco where there are larger populations and more campaign dollars. Well-liked and extremely knowledgeable, Steinberg has been the author of many pieces of legislation that have significantly improved the operations of government.

But this signature achievement is Proposition 63, the Mental Health Services Act, which put a 1 percent tax on California millionaires, raising $1 billion dollars per year for mental-health services in the state.

With health experts and agencies readying for the 2014 rollout of the national Affordable Care Act, this seemed a good time to begin a broad-ranging discussion with Steinberg about Proposition 63, the future of mental-health services in California, and how it all ties into the implementation of health-care reform.

Just the kind of far-reaching subject you might expect to hear discussed by a politician whose base of operation looks as expansive as Room 200.

The following is an edited version of the text of our conversation.

Jeff vonKaenel: I’d like to focus our discussion on what’s happening with mental-health services in the state and how that fits into the rollout of health-care reform in 2014. Can we start by talking about the genesis of Prop. 63?

Darrell Steinberg: Well, I was on the [Sacramento] City Council. Specifically, it was February of 1997—I remember it very well because it was … the month my son, Ari, was born, and the month the council made the decision, on a 6-2 vote, to sue Loaves & Fishes for exceeding its feeding capacity on Sundays. [Mayor] Joe Serna and I were the two members of the council to vote against that lawsuit, and it was an anguishing period for the city. We ended up in People magazine and Hard Copy, as sort of a man-bites-dog story, “Why would the city be suing an entity whose mission is to feed people?” [Editor’s note: The case ended up settling out of court.]

I was just beginning my thoughts about running for the State Assembly in 1998, and I decided I wanted to make homelessness and the issue of mental illness and mental health, as related to homelessness, my cause. That’s because I recognized at the time that the underlying cause of the tension between the city and Loaves & Fishes was the fact that as a society and a state, we have failed to grapple with the fact that there are so many people who need help who aren’t getting the help that they need.

Was this because of Proposition 13?

There were many reasons; Prop. 13 was one. And the fact that state finances never were what they had been in the ’60s and ’70s. But I also think mental health is an issue that, by and large, people have been unwilling and afraid to talk about. So, I got elected in 1998 … and I met up with Rusty Selix and said, “I want to do something about homelessness and mental illness.” Rusty is the executive director of the Mental Health Association in California and the California Council of Community Mental Health Agencies. So he and I cooked up Assembly Bill 34 together. And in its original version, it sought $350 million dollars of funding for community mental-health treatment. And we came up with that number because we estimated that there were 50,000 homeless mentally ill people in the streets of California in any one night. And that would be a cost of about $7,000 a person, really $14,000 because you would match it up with federal Social Security disability funds. It was an estimate. By the end of year, we declared a great victory when Gov. Gray Davis signed the bill with $10 million of funding. That was my first lesson on how it really works.

So you were after $350 million, and you wound up with $10 million?

I was brand-new, obviously not experienced. But definitely full of energy. So I went to see [President Pro Tem] John Burton and [Gov. Davis’ wife] Sharon Davis, and I was just a pain in the butt. … I will say that once the bill was signed, the Department of Mental Health did a great job in taking that $10 million and getting it out on the street. We had three pilot projects—in Sacramento, in Los Angeles and Stanislaus counties. And we had 1,000 people enroll in something that was a very different concept of treating mental illness—integrated services … which really means “whatever it takes.” So much of government funding is restricted. But what we said here was that if you are homeless and mentally ill—with the array of challenges that puts in your life—the money should be unrestricted in terms of housing, mental-health treatment, substance abuse treatment, vocational assistance … whatever it takes so long as somebody meets the definition of serious mental illness. It was so successful that the next year, since the state budget was still in good shape back then, that we got it to $55 million. And so we expanded.

When did you decide that a ballot initiative was necessary?

Rusty and I sat down with our coalition in about 2003 and asked the question, “Are we satisfied?” We decided that we weren’t satisfied, and we wanted to do more. So we cooked up the idea of an initiative—to take the program that we had built and bring it to scale. We did a bunch of polling and focus groups. And this was well before the Occupy movement, but we centered on a 1 percent tax on million-dollar earners. So we put together an initiative that not only focused on the full-service partnership model, but we said, “Look, if we are really going to do this right, we need to build the whole system.” And that means focusing on prevention and early intervention, and innovation and technology and housing.

And so Prop. 63 was written very deliberately to put a significant emphasis on prevention and early intervention. The initiative reads that 20 percent of the money every year has to go to prevention and early intervention, and an additional 5 percent to innovation and the remainder for services. And Rusty and I have both been very fond of saying for many years, “The real goal of the initiative, the real goal over time, is to flip those numbers so that 75 percent of the money eventually would be spent on prevention and early intervention.” The science [on mental illness] is much more advanced now than it was when we started.

So Prop. 63 passed in 2004.

Yes, and we were very lucky! You know, I’ve had this conversation a lot over the last couple of days because the California Federation of Teachers is going after a millionaires tax now, but I always say—you know, humbly—that I’m the only politician in the state, maybe in the country, that’s ever successfully passed a tax on millionaires. … The only funded opposition we had was a very limited Howard Jarvis Taxpayers Association and the Church of Scientology. I raised the minimum amount of money necessary to go one week on TV, and we won, not overwhelmingly but with 53 percent of the vote, and people ask, “How did you win?”

[One] reason we won was because this is an issue that affects everybody. Everybody knows somebody. And as I campaigned around the state, the stories from people from all walks of life, all socioeconomic categories, all races and ethnicities, genders … everybody knows somebody with mental illness. So this thing touched a chord. And so we passed the law. And it generates about $1 billion a year, and for the last number of years its implementation has been sometimes slow, but now is really beginning to take off. The beauty of the Mental Health Services Act is that, it’s not just like a one-time shot of money or one-time pilot. It repeats—the funding repeats itself every single year. As great as this is now, it’s going to be even more significant a decade from now, 20 years from now.

So $1 billion comes into the system and creates this frenzy of different people wanting to get funding. Let’s talk about that process and what you’ve learned.

The mental-health community—which is large and diverse and includes clients themselves who are very, very active—have felt excluded from the political process. And no one really expected that this opportunity would arise. Because for years what they dealt with were diminished funding, budget cuts and not much attention paid to this issue. So, one of the things that we’ve said from the beginning is that it shouldn’t just be a top-down decision as to how these funds are actually invested—the community and the clients need to be involved. There’s an estimate that, at one time, we had 100,000 people involved around the state in various stakeholder meetings to determine the act’s priorities. And this was a very important and positive thing. But there was a cost to it, and not just a literal cost. I would say the first round of funding was a little bit slow as everyone sort of adjusted to this gift, really and how to properly invest it.

And so it took some time, but once everything got off the ground it worked. I know 25,000 people have now benefited from full-service partnerships. … The counties are where to invest the money. Some are investing in the more traditionally homeless mentally ill population, some are focused on the ethnic communities that have been underserved for a long period of time, and some are investing in transition-age foster youth with serious mental illnesses. The counties are all defining how they want to spend the funds.

You’ve said the “whatever it takes” approach has been successful from early on. Do you mean in specific outcomes? And in reducing other kinds of expenses?

Yes. We saw reduced hospitalization, days of homelessness and jail time. Those are three major indicators. You know, with politicians it’s become a bit of a cliché that an ounce of prevention is worth a pound of cure. There is no question.

One of the things we did earlier with Sharon Davis was we toured the county jail systems, including the Los Angeles County jail which was renowned for being the biggest mental-health program in California, the county jail system. I mean, even conservatives were writing about the fact that we had criminalized the mentally ill in California, because the only place for anybody to get help was to get arrested, or to get in some kind of trouble, or find themselves on the street. And, of course, the philosophy behind Assembly Bill 2034 and Prop. 63 has always been about early intervention and case management. That means having one stop where someone can get the help that they need and regain their lives.

Some people say that, especially at first, there was a very cumbersome process in terms of allocating the Prop. 63 money. True?

Yeah, well, we were very concerned when we wrote the initiative that if we were going to ask the public for this kind of money—and of course it was from million-dollar earners but still public money—that there should be a real emphasis on accountability for the dollars. So we set up a process that had the counties, the state Department of Mental Health and an oversight and accountability commission as sort of co-equal partners in checking and balancing one and other. What we found in the first round is that the grant applications were just too cumbersome and it was taking too long to get the money out. So what we’ve done is essentially gotten the state out of the application-review process. The focus of the state is now on evaluations and outcomes. Counties are much happier now, because the money is flowing a lot easier.

The other thing is I wanted the money to go to counties, but I also wanted there to be a statewide focus on a couple of key issues. And that includes housing. I think there’s been a recognition that if we are really going to end or significantly reduce homelessness, supportive housing has got to be a lead strategy. If somebody is not in a safe place, all of the array of services will often go unused because the person is out on the street.

So getting housing for homeless people with mental illness is key?

Yes. My push was to set $400 million dollars aside for permanent supportive housing for people living with mental illness. And in a number of different instances—including, right here in Sacramento—that money is not the exclusive financing for housing, but it’s a major catalyst where units have been set aside for people living with mental illness. It’s not segregating them; it’s all integrated within a community. But it’s where we have the money. And right now we are at 1,800 [units] that are actually built and up and running. And more to come. And if you think about it, 1,800 units—that’s 1,800 fewer homeless people on the streets. Obviously, though, there’s a lot more to do there. …

We are also taking a statewide approach to suicide reduction, prevention and student-mental-health services where we now have programs in all three public-university systems to enhance their ability to provide help to young people. The college campuses are often where the first signs of schizophrenia turn up.

Prop. 63 requires that lots of the funds go to new services. That’s caused some controversy, right?

Well, this has been another challenge. The idea is that the money cannot be used to supplant. In other words, we didn’t want this new pot of money to come forward and have the state and counties then take the same amount out of their core system intentionally, leaving us with the same amount of money. So there is a strict no-supplant clause. But what’s happened is … the bottom has dropped out on state and county finances. So, we’ve had this odd situation where the core system is being reduced while the whatever-it-takes and prevention system is kicking in. And some have complained that some people are getting the Cadillac while the Hyundai is no longer working. Of course, I reject that. Because what we are attempting to do, and what we are doing slowly, is building one system. And it’s one system that is premised on a very different and better philosophy, which is recovery—doing whatever it takes, which is not just having people cycle in and out of clinics or in and out of institutional care and hospitals.

To put the question a different way, and as I once said to [an SN&R reporter], “Given what has happened to the core system, where would mental-health services be today without the Mental Health Services Act?” I mean, it would be horrible, because there would be so much less. So there are some challenges because we are trying to integrate an old system and a new system in a time where one pot of money is increasing and another is decreasing. But we are trying to integrate them; the goal is one system.

Let’s talk about that one system. You mentioned earlier how we’ve learned that people who are prone to schizophrenia generally have their first episode sometime in their late teens or early 20s. With early intervention and prevention, how much mental illness do you think we can actually reduce in California?

Well, it’s earlier than college, even. For example, at the MIND Institute at the University of California at Davis, the researchers are doing a lot of research on some of the indicators for early onset schizophrenia. And it’s evolving, but they believe that as early as age 13 or 14—with the right kind of awareness and education—parents and pediatricians and school officials can know, or at least have some sort of suspicion, that a young person needs intervention. If we have the resources, over time we may not be able to absolutely prevent the onset of a biologically based, chemically based illness, but we can do a whole lot more to make sure it’s manageable. And then individuals can get the support they need to lead a regular life. That’s the goal. Mental illness does not have to be a life sentence of homelessness, hopelessness. It does not have to be.

I saw a program in Los Angeles a couple of months ago [that involved] single moms, many of them teenagers with some mental-health issues, who had given birth. They take a mother-child approach to mental-health intervention and mental-health treatment and work with the mother on her issues and make sure that bonding between mother and child occurs early on. So it’s going back to the earliest stage possible to intervene and help somebody who, because of their life situation, because of their family history, because of their circumstances, or because of their own behavior that they need help.

What does the Mental Health Services Act do to address the stigma that’s often attached to mental illness?

Well, the act was really premised on what we call “attaining cultural competency.” A lot of attention is now being paid to how to best serve the diverse communities of California. … There is stigma in the general society, and sometimes an even deeper stigma in [certain] communities and so it’s a challenge how to approach and how to help people living with mental illness. In Sacramento County, for instance, some of the monies are going directly to multicultural centers that are focused on those sorts of outreach. So diversity, cultural competency and also there’s a real focus on the resources being spent in a client-centered way. In other words, it’s not about this is what we are going to do for you, because recovery is about the person living with mental illness being part of their own recovery. … There needs to be a whole lot more work on educating people on what those signs are so they can either get help for themselves or help a friend or help a family member.

I’ve heard that 5 percent of the people use about 50 percent of total expenditures when it comes to Medi-Cal. And that about half of them involve some mental-health issue. Are we in the ballpark there?

It’s probably not far off. We’ve done some work here in Sacramento on the emergency-room crisis and the fact that the emergency rooms are impacted by [the mental-health issue]. The police bring somebody to the emergency room, then the emergency room has to figure out how to treat the person. Just like the county jails, the emergency room shouldn’t be the primary place where people are referred for mental-health care. But that’s because we haven’t had an act like this before, with its focus on outreach, case management and whatever it takes.

How will the federal Affordable Care Act, which includes mental-health coverage, impact the efforts of Proposition 63 with its emphasis on early intervention and prevention?

Proposition 63 passed in 2004. It was way ahead of its time with its emphasis on early intervention and prevention. Both the Mental Health Services Act and the Affordable Care Act are very compatible working on similar principles. The real push in the Affordable [Care] Act is the creation of a medical home model.

A medical home model?

There is where each patient would have a medical home where many of their health needs were met such as mental health, physical therapy and primary care. There would be different medical homes or community clinics that have different emphasis.

What’s the end result of combining both Prop. 63 and the Affordable Care Act?

To help people get healthy without the experience of a dramatic life event or more serious illness is the goal. It is one of the primary goals of the Affordable Care Act, and it is the primary goal of the Mental Health Services Act.