Research Highlights Article
October 9, 2024
Mental health reform in Brazil
The effects of deinstitutionalization.
Source: monkeybusinessimages
Since the mid-twentieth century, mental health care reformers have pushed for community-based models of care and natural support systems. But experience suggests that community-based care alone may not be adequate to address the consequences of severe mental illness.
In a paper in the American Economic Journal: Economic Policy, authors Mateus Dias and Luiz Felipe Fontes found that while community-based health reform can reduce psychiatric hospitalizations, it can also lead to an increase in violent crimes. The researchers analyzed a major mental health reform in Brazil that reoriented public mental health care toward mental health centers as a replacement for inpatient care.
The research contributes to the scarce, but growing, economic literature on the impact of large-scale government policies’ on mental health.
The community centers primarily offer psychosocial care. And this type of care can be good for people with moderate problems, but people with severe problems may require different forms of treatment. I think we need more investments for these people with severe problems.
Luiz Felipe Fontes
Before Brazil’s health care system was reformed in 2002, mental health care was almost exclusively provided at hospitals where people received inpatient care. But this institutionalized setting sometimes led to inhumane treatment of the mentally ill.
“People had their rights violated,” Dias told the AEA in an interview. “I think that this was the one of the main reasons for the reform, and it motivated the creation of a new system based on community mental health centers instead of hospitals.”
The reform was rolled out slowly across Brazilian municipalities, introducing mental health centers to provide psychosocial and outpatient procedures, such as talk therapies, occupational therapies, and medical consultations.
Using a difference-in-differences estimation strategy, the authors compared reformed municipalities to not-yet reformed municipalities, before and after the changes, and found that the reforms successfully increased access to and utilization of community-based mental health care. In particular, the centers saw immediate and significant increases in the density of mental health professionals and mental health outpatient visits, along with an increase in drugs dispensed in outpatient care to treat psychiatric disorders.
At the same time, the reforms decreased hospital admissions due to mental illnesses. This reduction was concentrated in long-stay hospitalizations, largely among individuals with schizophrenia.
However, the authors also found evidence that homicide rates increased in reformed municipalities in tandem with the decreasing hospital admissions.
Although not definitive, these results align with the Penrose hypothesis, which states that there is a strong relationship between deinstitutionalization and violent crime. The hypothesis suggests that confining patients who are more prone to violence—as either victims or perpetrators—leads directly to less violent crime.
Homicide rates in reformed municipalities
The chart below shows estimates for the effects of the health care reform on the number of homicide deaths per 10,000 people. The vertical bars are 95 percent confidence intervals.
Given data limitations, the authors were not able to make an overall welfare assessment of the reforms. Any final evaluation would need to incorporate the impact of the policy on less severe aspects of mental health and the benefits of reducing institutional abuses.
Overall, the results suggest that when moving towards community-based care, policymakers need to consider the needs of different types of mental illnesses.
“The community centers primarily offer psychosocial care. And this type of care can be good for people with moderate problems, but people with severe problems may require different forms of treatment,” Fontes said. “I think we need more investments for these people with severe problems.”
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“The Effects of a Large-Scale Mental Health Reform: Evidence from Brazil” appears in the August 2024 issue of the American Economic Journal: Economic Policy.