This study examines policy effectiveness, system-level efficiency, and system-level equity after the devolution, or "Realignment," of California's public mental health system in 1991. There were three primary stated goals of this 1991 Realignment. First, program responsibilities for the public mental health system were shifted from the State to the counties. Second, counties were provided a dedicated revenue stream for these services from the State instead of the previous model, in which they had relied on varying amounts of annual appropriations from the Legislature. Third, counties were given financial incentives to contain or decrease spending on institutional care and granted increased flexibility to address local mental health needs within a more community-based framework. A fourth and arguably secondary goal was to address equity differences between public mental health systems by providing financing supplements to counties with a greater need, based on population and poverty measures. The first and second goals of transferring program responsibilities and providing a dedicated stream of funding to counties were relatively quickly achieved with the 1991 Realignment. This study focuses on the child, youth, and young adult Medi-Cal (California's Medicaid program) population to analyze whether the third and fourth goals of having a more community-based and equitable public mental health system were realized.
A mixed methods research design is used to evaluate whether the legislative intent for a greater focus on community-based care was met in California, and the extent to which it was achieved in different counties. The quantitative portion of the analysis focuses on changes over time in public mental health service delivery and expenditures. In the statistical analysis, 11 years of Medi-Cal claims data from fiscal year 1993-94 to fiscal year 2003-04 are analyzed for all full-scope 0-25 year old beneficiaries who received specialty mental health services. Preliminary data findings were shared with historical and administrative key informants during in-depth interviews to gain qualitative insight into data trends and regression analyses. Key informants also commented on the precursors of Realignment, both the intended and unintended consequences of Realignment, and the generalizability of the Realignment experience beyond public mental health systems and in other states.
One of the major findings is that, overall, counties were able to effectively achieve one of the primary goals of Realignment - to have their public mental health systems more focused on community-based care. Budgetary flexibility and security as well as financial incentives provided the environment necessary for counties to increase the efficiency with which they manage public mental health systems.
Although the improvement of the system's equity was not a primary goal of Realignment, the lack of emphasis on equity allowed for the continuation of disparities: those counties with low funding for their public mental health system continued to have lower funding than those counties with historically higher spending levels per beneficiary. These disparities are most noticeable in counties with larger racial/ethnic minority populations when they also have low spending levels per beneficiary. As these counties were already dedicating the vast majority of their total expenditures to community-based care, the incentives to shift to a more community-based system did not affect their service allocation trends. Furthermore, because their ability to increase their funding for the public mental health system was not enhanced, disparities persisted. Thus, financial resources play an important role for communities with larger racial/ethnic minority populations. This un-addressed inequity in the system is another important finding.
As suggested by this study and others concerning devolution and social services, although realignment policies can be effectively implemented and can show good performance in addressing efficiency in the system, future efforts that place more attention on system-level disparities will be better suited to increase equity in the system. In the case of the public mental health system, a greater focus on racial/ethnic minority populations and transition-age youth in the Mental Health Services Act of 2004 might help to address disparities for the child, youth, and young adult populations studied here. As of 2006, cultural competence reports have to be submitted [California Code of Regulations 2006] by each county. However, these efforts could be compromised if differences are not addressed as further services benefitting this population have recently been devolved to county-based public mental health systems - Early and Periodic Screening, Diagnostic, and Treatment (EPSDT), mental health managed care, and Assembly Bill (AB) 3632 services. Thus, oversight of these issues and future studies concerning policy effectiveness, system-level efficiency, and system-level equity are warranted for this population and others following devolution.
