Gov. Kathy Hochul’s $1 billion ushers in a new era of mental health care

The day after Gov. Kathy Hochul released her budget proposal in 2023, she declared that “the era of ignoring mental health needs is over.”

She had just announced a historic $1 billion plan to transform the state’s mental health system at the Albert Einstein College of Medicine in the Bronx. Her plan came on the heels of the COVID-19 pandemic, which stripped bare immense mental health needs across the state and beyond. In New York City alone, nearly half of teens experienced symptoms of depression in 2023, according to city data. Teenagers across the country are more likely to say they are persistently sad and think about suicide than a decade ago, a trend exacerbated by the isolation and stress caused by the pandemic. The pandemic also diverted hospital resources away from mental health, leaving fewer inpatient beds for people in mental health crises.

For Ann Marie Sullivan, commissioner of the state Office of Mental Health, the governor’s commitment to mental health expansion is unprecedented. Since 2022, the agency’s budget has seen a whopping 45% increase to a total of $4.8 billion, growth she said she hasn’t seen in 50 years.

“It’s really very impressive that the governor is committing to this,” she said. It really gives us an opportunity to do things that, personally, I’ve wanted to see for decades.”

The governor’s plan touches on many pressing needs: restoring inpatient psychiatric beds, expanding outpatient behavioral health clinics, establishing mental health centers in every school in the state and creating 3,500 housing units. It’s a welcome influx of funding for an issue that mental health advocates say has long languished with insufficient support. It’s too early to tell what impact the governor’s approach will have, as many of its priorities are still in the process of rolling out. But one challenge will likely affect most of them: workforce shortages.

“If you hire good people, then the programs are going to work,” said Glenn Liebman, CEO of the Mental Health Association in New York State. “If you’re unable to hire those folks, then unfortunately, what’s going to happen is that these programs will not be as successful as they should be.”

Jihoon Kim, who previously served as deputy secretary for human services and mental hygiene in the Hochul administration, said the governor’s office sought to take action after someone who had fallen through the cracks of the mental health system had pushed a person onto the subway tracks.

“That really was the impetus for the call for an overview of what the state has done in the past and what needed to be done,” he said.

Several pillars of the state’s mental health infrastructure have seen years of decline. Psychiatric inpatient capacity at hospitals had been decreasing even before the pandemic, dropping by nearly 11% from April 2014 to December 2023, according to a report from the state comptroller’s office. The capacity of clinics to serve people with mental health needs outside of hospitals also had been on the decline between 2015 and 2020, according to state data. Mental health workers hadn’t received a cost-of-living adjustment in about a decade until 2022. The result has been that people seeking mental health care – including youth – often sit on waitlists for weeks or months. More than 1,000 New Yorkers living with a serious mental illness were on waiting lists for community mental health programs in 2022, according to Crain’s New York Business.

“One of the first things I noticed coming in as the new chair for the Mental Health Committee … was just the massive lack of funding that existed,” said state Sen. Samra Brouk, who became chair of the committee in 2021, “and the fact that it would seem, at first glance, that the state really had not taken seriously the massive needs that existed when it came to mental health and mental illness in New York state. So I was really encouraged when the governor came out with that support.”

So far, the state has awarded $68.9 million in operating funding to 694 service providers, with more funding on the way as new programs continue to roll out. That has resulted in some early progress. State-operated hospitals have so far added 150 psychiatric beds, and Sullivan says another 200 will be coming up thanks to this year’s state budget. Another 500 beds in private hospitals were restored as well. The commissioner said the plan is for 600 total to be open by the end of the fiscal year.

The state has also already launched 19 Youth Assertive Community Treatment teams, made up of psychiatrists, psychiatric nurse practitioners, mental health professionals and others to give comprehensive care to youths with significant mental health challenges. About 380 young people have enrolled so far. On the youth mental health front, officials have also provided $5.1 million to support 137 new school clinics. The total number of school clinics now numbers more than 1,200 statewide, with plans to expand to each school that wants one.

“All these services that we’re putting out are to reach kids and their families with the goal of helping the family and the youth solve all this together,” Sullivan said. “You don’t want to be hospitalizing kids when you don’t have to.”

In addition, there are 14 state-funded Safe Options Support teams that have been operating for about two years in New York City, doing outreach to help New Yorkers transition from street homelessness to permanent housing. About 650 people have been connected to permanent housing through that effort, Sullivan said.

Another change that will likely have a more immediate effect is a measure in the state budget that reforms commercial insurance reimbursement rates for mental health and substance use disorder treatment. Commercial insurers – which historically reimbursed little for those services – now must pay rates at least equivalent to Medicaid.

“One of the things we’re very enthused to see is forcing private insurance to reimburse hospitals at the same rate as Medicaid, which is higher – still not as high as physical rates – but substantially higher than they were,” said Michael Lindsey, dean of the NYU Silver School of Social Work. “That lack of reimbursement parity was a big reason why we were losing hospital beds from the private sector.”

There is still more to come in the next few years. The bulk of the $1 billion plan will go toward capital funding for the creation of more than 3,500 specialized housing units, to the tune of $831 million. The number of Certified Community Behavioral Health Clinics, which provide a wide range of outpatient mental health care, will also increase from 13 to 39.

For mental health advocates and providers, there is enthusiasm about the governor’s focus on mental health. But they remain concerned that mental health workforce shortages will limit the state’s ability to provide these new services. Federal data shows that 3.7 million New Yorkers live in areas designated as having a shortage of mental health professionals, with only about 16% of their mental health needs currently being met.

The state has taken efforts to bolster the workforce, spending more than $12 million toward a loan forgiveness program that repays psychiatrists and other mental health professionals for their student debt after serving in the licensed community mental health programs for at least three years. About 1,100 people have participated so far. But providers say more measures are needed, particularly to increase wages. A large part of that is cost-of-living adjustments to account for inflation. The Hochul administration has consistently increased the cost-of-living adjustment for mental health workers for the past two years – a welcome increase for workers who had received none for years – but those increases still fall short of the rate of inflation.

“Under Gov. Hochul, we’ve had more investments in those (cost of living adjustments) than every other governor combined,” said Liebman, of the Mental Health Association. Still, he added, “We’re trying to make up for lost ground.”

Brouk said she’ll continue to push for her bill that would require annual updates to the cost-of-living adjustment that would match the consumer price index, increasing wages at the same rate as inflation.

Still, Kim, who now leads the InUnity Alliance, an advocacy group for mental health and addiction services providers, said many of his members are worried that the workforce crisis may be overshadowed by “some of the shinier things that government and politicians like to do.” He also said there’s also a risk that existing outpatient providers may lose employees to newer models like Certified Community Behavioral Health Clinics, which are expanding under state funding.

More broadly, the workforce crisis also poses a challenge to the state’s efforts to keep people with mental illnesses out of hospitals through community programs – and to making sure people who are hospitalized are connected to needed care once discharged. Jennifer March, executive director of the Citizens’ Committee for Children of New York, said she hopes next year’s budget pays more attention to attracting and retaining a workforce to ensure timely care for youth and avoid costly residential placements.

Though much of the state’s new mental health programs, including housing and expansion of clinics, are in their early stages, there is optimism about the governor’s continued dedication to mental health.

Kim said his decision to leave the administration for a mental health advocacy organization was shaped by the fact that there was a governor in office “who cared so deeply about this issue.”

“Even in internal conversations with the governor, with senior staff, it was clear that we are going to prioritize this, even if that means we’re not going to do something else in someone else’s portfolio,” he said about his time working on state mental health policy. “And I will tell you … that means a lot, because people who know Albany well, who’ve been at budget negotiating tables, know that the portfolio I ran often got the change, often got what was left after all of the other education, health, infrastructure, all of those other needs.”