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The great mental health experiment … and why it went so wrong.

Half a century ago, governments around the world ditched their old psychiatric hospitals for something they said would work better. It didn’t.

In 1975, Ken Kesey’s novel about a cruel and dysfunction American lunatic asylum was released as a film. It was a global smash-hit and helped change attitudes towards mental illness.

But it also characterised those who treat mental illness as the villains and the hospitals they worked in as hell-holes and torture prisons. Some were like that. Most, including the vast majority of Australian psychiatric hospitals, were the polar opposite.

But the damage was done.

By the time that film was released, Australian psychiatric institutions had been undergoing fundamental reform for well over two decades. At the vanguard of that reform was a progressive British psychiatrist, Dr Eric Cunningham Dax, who was recruited by the Victorian government in 1952 to head the state’s Mental Hygiene Authority.

He found Victoria’s mental health system in a state of disarray: he had “never seen mental hospitals so neglected”. Over the next 16 years he revolutionised and humanised mental health care, setting up community facilities, pioneering art therapy, introducing a two-year training course for psychiatric nurses, campaigned successfully for increased funding and better staffing levels.

As a young reporter in Melbourne in the late 1960s, I interviewed Dr Dax several times. By then he had become a revered figure in that state and gained an international reputation. He was a remarkable man.

In 1969 he moved to Tasmania and brought that state’s services into the modern era.

In 1997 I spoke to him again. He was scathing about the systems around Australia that had replaced those he had pioneered. There was nowhere near enough community-based treatment. And he was profoundly critical of the treatment being offered in general public hospitals: insufficient staff, often with insufficient experience, in entirely inappropriate and anti-therapeutic settings.

Eric Cunningham Dax’s vision of mental health care that is effective, humane and adequate is now a fragmented, inefficient and under-resourced shell.

What went wrong?

A 50-year failed experiment

Australia has a poor record in treating the massive mental health problems in the population. More and more money is spent, without achieving any overall improvement in either the mental health of the community or in the performance of services.

This conundrum can be traced back to the 1970s and 1980s, when state governments around Australia closed their 19th century psychiatric hospitals and shifted patients into community-based care. Psychiatric hospitals were also seen to be expensive, so the switch to community-based care was seen as a welcome cost-saving measure by state governments. In fact, as we now know, the opposite was the case. Expenditure continued to grow and the quality of services declined and fragmented.

Growth in community treatment was far slower than the decline in hospital-based care, which was substantially transferred to general hospitals. Dax had pioneered community treatment, but this was the opposite of his vision.

In a 2020 inquiry report, the Productivity Commission revealed the extent of failure.

“Australia’s current mental health system is not comprehensive and fails to provide the treatment and support that people who need it legitimately expect,” it said. “The clinical care system has gaps, including, but not limited to, the so-called ‘missing middle’ …

“The system of community supports in Australia is ad hoc, with services starting and stopping with little regard to people’s needs.”

A key reason for this failure is the mismatch between mental health policy and the people who need care. Many people can be treated successfully in community settings with appropriate consultation with therapists and other social support. But many of the most seriously ill cannot, and are being failed by the mental health system in Australia and in other countries where these policies have been followed. Without more structured surroundings, these people are highly vulnerable to living on the streets or going to prison.

A national advocacy group has commented:

“Around 57% of Australia’s prisons have become de facto mental-health institutions for our society’s sickest and most vulnerable. Right across the country those who examine and report on the quality of this care are telling a similar, alarming story.”

Data from the Australian Institute of Health and Welfare show around 51% of prison entrants nationally have been diagnosed with a mental illness; in Tasmania, the figure is 83%. 17% of Tasmanian entrants were assessed as being at risk of self-harm against 7% nationally, and 20% reported self-harming while in prison against 5% nationally.

A review of the national evidence by the Australian Institute of Criminology found that serious mental illnesses, such as major depression and schizophrenia, were between three and five times as common in prisoners as in the general population. Rates of psychotic illness, including schizophrenia, were 8% for men and 14% for women, compared with an estimated global average of 4% for both men and women.

“These findings are astounding when compared with the general health of the population, where less than 1% of adults are admitted to hospital with mental health problems in any year and lifetime prevalence rates for schizophrenia are 0.3% to 1%,” the Institute found.

“A number of contributing factors have been identified to help explain the high numbers of people with mental illnesses in the criminal justice system, including the deinstitutionalisation of mentally ill people, an increase in the use of drugs and alcohol by people with mental illnesses, and the limited capacity of community-based mental health services to address the needs of mentally ill offenders.

A 1997 study of a community-based centre in California documented what can happen when inadequately equipped services are forced to deal with seriously ill patients. Staff at this centre had to deal with patients with serious and long-term schizophrenia, schizoaffective disorder, bipolar disorder and dementia. Almost all displayed psychosis. They were poorly compliant with medication and almost all were involuntary admissions.

“Many patients displayed unacceptable sexual behaviour, such as exhibiting themselves or masturbating in public; others tended to urinate or defecate in public places. As a result of patient violence, the study facility averages two staff injuries and more than four patient injuries a month that require medical attention …

“The use of community alternatives to state hospitalization, which is often driven by lower costs and an ideology that highly structured care is seldom needed, is not suitable for all patients.”

In Australia, the capacity to provide long-term institutional care for the minority of patients who require it has been massively diminished as a result of de-institutionalisation.

But even for people in need of less-intensive care, and who could benefit from treatment in the community, such support is too often missing. The result is that, though we are spending more and more, we are getting progressively poorer results.

The money

Over the past 30 years, expenditure on mental health services has grown (in constant 2020-21 dollars) from $3.4 billion to $12.2 billion, an increase of 258%. The increase has been in an almost-straight line, despite various state and federal governments being in office, and despite varying policy initiatives, many inquiries and five successive National Mental Health Strategies.

Some of that increase can be attributed to population growth: with more people, we need more services. But that does not explain most of the increase. The amount spent (again, in constant 2021-22 dollars) per head of population has increased by 145%.

“Despite this enormous expenditure,” said recent report from the Australian National University, “there is evidence that a substantial proportion of people with the most chronic severe mental health conditions – schizophrenia, bipolar disorder and severe depressive disorders – do not receive adequate care, if they receive care at all.

“The prevalence of mental illness in Australia is greater than in many other high-income countries.”

The impact of mental illness

That finding is confirmed by the World Burden of Disease Study, run out of the University of Washington. In all five of the major disease categories, Australians suffer at greater rates than in most rich countries.

This has major ramifications for the overall burden of disease in the community. That’s measured by disability adjusted life years, a unit calculated from estimates of premature death and the impact of disease on the quality of life.

To put this into more context, the AIHW’s latest Burden of Disease Study has found that mental and substance use disorders comprise Australia’s fourth most serious cause of the loss of amenity.

It helps, perhaps, to put the toll of mental illness into perspective, and nothing does that more eloquently than the statistics on suicide. Comparing the numbers of suicide deaths in Australia with the road toll shows that, though road deaths are a major blight on the community, suicide – the ultimate consequence of poor mental health – is, at least arithmetically, two-and-a-half times as bad.

For at least the past three decades, mental health spending in Australia has followed total health expenditure fairly closely, at around 7.5%. The recent apparent fall probably reflects the impact of the pandemic.

To the extent that the available data reveal the trends, the overall impact of mental illness and psychological stress also remained relatively steady from the beginning of the present century until around 2014, when mental health scores fell, particularly among younger people. These averages do not reveal the likely parallel increases in the numbers declining into seriously poor mental health who are newly in need of treatment.

The lower the score, the worse someone’s mental health becomes.

Mental illness is too important, and too disabling to Australian society, for limited services to be unfairly and inefficiently distributed; but that is what is happening. One measure, the number of people who cannot afford to seek professional help even if it’s available, is an indictment of the current system. Women are disproportionately affected. The Australian Bureau of Statistics estimates that overall, 833,500 people avoided or delayed seeing a mental health professional in 2023-24 because of cost.

People aged between 25 and 34 are by far the most likely to be impacted in this way.

“People with chronic severe mental health conditions need care not only for their mental illnesses, but for co-existing physical conditions and substance use problems,” wrote a group of psychiatric and addiction medicine specialists in Don’t Walk By, from the Australian National University.

“Yet treatment efforts are unlikely to be successful unless the person receiving care has secure housing, healthy nutrition, and sufficient social support to attend necessary appointments. We have identified a shortfall in the dedicated mental health workforce of 8,310 full time equivalents (FTE) across all disciplines, from psychiatrists, to social workers, and all professional groups through to peer workers. The alcohol and addiction workforce is short of 838 FTE staff nationally.”

Because mental illness is strongly associated with levels of income and wealth (poverty is both a cause and an effect) publicly funded services attain disproportionately significance. A 2018 study by researchers from Monash University found:

“Overall, more than 1-in-4 people making up the poorest one-fifth of Australians have current psychological distress at a high/very high level, and this compares to about 1-in-20 in the richest one-fifth of Australians. Our findings indicate that about 1-in-10 people making up the poorest one-fifth of Australians have very high distress, and this reduces to  less than 1-in-50 people in the richest one-fifth.”

By the early 1990s, when this series of figures began, de-institutionalisation had already been in train for at least two decades, but continued apace. Progressively, beds previously provided in psychiatric hospitals were transferred into general hospitals or, more frequently, closed.

The policy of de-institutionalisation was described by all state governments as a move from outdated psychiatric hospitals to community-based residential care. But cost-cutting intervened. Public hospital accommodation declined much further than the rise in residential care; supported housing is a relatively new category but does not make up for the shortfall. The result is that although the overall supply of places for mental health patients has hardly moved over 30 years – going from 51 per 100,000 population in 1992-93 to 54 thirty years later – the quality and intensity of care has fallen dramatically.


Despite this, staffing levels in all categories and in all jurisdictions have increased over the past 30 years. This apparent dichotomy raises two important questions: how effectively and efficiently are staff being utilised? And is this apparent decline in efficiency a result, at least in part, of inadequate capital investment?

Staffing levels are uneven around the country. By far the least well-endowed is Tasmania, followed by New South Wales. South Australia has the highest rates.

In all jurisdictions, resources for treating mental illness are inadequate, but even that inadequacy is not evenly spread. Victoria, where Eric Cunningham Dax made such advances over half a century ago, has the nation’s lowest availability of public sector treatment for general patients, by far the biggest category. Facilities have not kept up with population growth. And the lack of population growth in Tasmania, the second-worst state, flatters its result.

Victoria does somewhat better for young people, though this accounts for relatively few patients anywhere. But Tasmania and the two territories do not have specialist units even though young people are heavily impacted by poor mental health. According to the AIHW, “in 2017–18, an estimated 339,000 young people aged 18–24 (15%) experienced high or very high levels of psychological distress.” And in 2019, “there were 461 deaths by suicide among young people aged 15–24.”

Nationally, there are only 62 patient days a year of specialist care for every 1,000 older people. Tasmania’s tiny proportion does not even register.

Despite massive rates of mental illness in prisons, treatment for prisoners is even more inadequate, with only 5.5 patient days nationally for each prisoner.


Just take a pill!

In the absence of sufficient specialist care, general practitioners are left with the impossible task of dealing with the vast majority of mental health patients. Sometimes that can be done adequately in the context of a consultation lasting 15 or 30 minutes; very often it cannot.

Australia’s extraordinarily high consumption of antidepressants – the fifth-highest in the world, according to OECD data – is a direct result of this situation. Antidepressants are very important for many people with major depression but should be used with great caution, if at all, on those whose depression is mild-to-moderate or transitory. These are heavy-duty drugs with significant side-effects and can be very difficult to discontinue.

The first of the new blockbuster antidepressants, selective serotonin uptake inhibitors, was introduced in 1987. Uptake was rapid and sustained. By 2022, the population-adjusted consumption rate of antidepressants in Australia was 954% higher than it had been in 1990.

In all jurisdictions, with the possible exception of the Northern Territory, consumption is high. Nowhere, though, is such a high proportion of the population taking these drugs as in Tasmania. If that state was a nation it would be third in the world, behind only Iceland and Portugal.

Prescriber patterns revel more about what’s happening. Nationally, GPs account for 87% of all patients being prescribed antidepressants. Psychiatrists, psychologists and other specialists account for only 13%.

The way forward

De-institutionalisation of mental health is an experiment that began half a century ago and which has consistently failed throughout that time. It has delivered much worse care, weakened and fragmented the provision of services, while failing to deliver anticipated cost savings. It is time to think again.

Transferring the remaining acute services from specialist psychiatric settings into busy and noisy general hospitals, together with a precipitate decline in such services, has guaranteed both poor mental health outcomes as well as economic inefficiency. Community-based consultations have also been curtailed. The concentration on residential services has been far from adequate and, in any case, are not an effective substitute for long-term specialist treatment of these complex conditions. But long-term, consistent treatment has become a illusion.

Returning to the patterns of 50 years ago is not practical or desirable. Those old buildings had outlived their time. But we need to return to a time in which people with mental illness could find a welcoming, peaceful therapeutic environment with adequate and capable care.

Acute psychiatric facilities should be removed from general hospitals and placed within newly-created mental health precincts surrounded by gardens which, in themselves, are therapeutic. The noise and chaos of general hospitals is a barrier to therapy.

Those new mental health precincts should include separate facilities for children and adolescents, for older people, subacute and community care, training and short-stay facilities. Community-based therapy and support need urgent and substantial enlargement and enhancement. Specialised social housing and other residential facilities are inadequate and need to be expanded. There is an indispensable place in this for non-government organisations.

Mental health precincts have the potential to create the kind of coordinated, long-term approach to treatment that is currently difficult and, usually, impossible. They will also be far less expensive to build than general hospitals, easier and probably cheaper to run, and certainly more effective in treating patients.

None of this represents a panacea. Many critical needs cannot be addressed solely by establishing specialist precincts or by formal treatment options. The need for preventive mental health care remains critical, including (but not only) for young people. Not all these matters can be addressed by state governments working alone with limited budgets. Improving the mental health of the nation is a long-term, difficult and potentially costly process.

But it can be done.





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