Is U.S. mental health policy penny wise and pound foolish?

The rate of incarceration for mentally ill patients is climbing as a result of Medicaid tightening control on certain antipsychotic medications, according to a new study. In some states, Medicaid is seeking to contain healthcare costs by requiring physicians to obtain prior authorization before prescribing newer, more costly antipsychotic medications known as atypical antipsychotics.

In a study published this week in The American Journal of Managed Care, researchers compared the rates of incarceration for people with schizophrenia in states which require prior authorization with those who do not. They found that in states requiring prior authorization, someone with schizophrenia has a 22 percent increased risk of being incarcerated.

Atypical antipsychotics were introduced in the 1990s and in many cases they offer more effective treatment. About 40 percent of patients taking first generation drugs relapse. The rate drops to 25 percent with atypical medications.

Restrictive prescribing policies may lead to suboptimal treatment because a patient’s symptoms may worsen while waiting for the prior authorization process. In the meantime, physicians may be more inclined to prescribe the older, less effective medications that don’t require authorization.

When mentally ill patients don’t receive adequate medical care, the worsening of symptoms often leads them through a revolving door to the nearest jail. Jails are not equipped to handle serious mental health issues and a patient’s symptoms often get worse in confinement. The patient is eventually released with a criminal record and deteriorating mental health, a recipe for recidivism.

In the past, the mentally ill were frequently confined in prisons and jails until 1820, when society began to view this practice as inhumane and started to shelter them in hospitals. The development of antipsychotic medications in the 1950s led people to believe the mentally ill could be maintained in the community. The deinstitutionalization movement emptied out psychiatric hospitals in the 1970s. But with few community resources in place to make a successful transition, the mentally ill ended up being dumped on the streets and ultimately confined once again behind bars. Today, an estimated 400,000 people in the United States with mental illness are incarcerated in jails and prisons, according to Mental Health America.

The incarceration of the mentally ill has led to overcrowded conditions, behavioral issues, and violence. Mentally ill prisoners often pay the price of worsening symptoms and victimization. And it all comes at an increased cost for taxpayers.

Limiting access to effective medication may save states some upfront money on healthcare, but Dana Goldman, director of the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California, questions whether or not the long-range consequences won’t be much more costly.

“This paper demonstrates that our policies around schizophrenia may be penny-wise and pound foolish,” she said.