Deinstitutionalization second time around – What can we learn from the psychiatric experience?

Abstract

This historical opinion article draws parallels between mid-20th-century psychiatric deinstitutionalization and today's rapid expansion of home-based medical care. While psychiatric conditions differ fundamentally from acute medical illnesses, lessons from deinstitutionalization can inform current and future telemedicine models. Deinstitutionalization resulted from social, legal, and pharmaceutical advances but also produced unforeseen consequences, including increased incarceration, homelessness, medication misuse, and significant family burden. Similarly, shifting acute care to the home may expose patients and caregivers to new stresses: elevated risk of medical complications, uneven access to technology, cost-shifting, and the potential neglect of those most vulnerable or socially disadvantaged. Historical patterns show that successful community-based care demands strong infrastructure, equitable resource allocation, and thorough patient selection. This manuscript urges stakeholders to heed these lessons and build robust, multidisciplinary, and family-centered systems to support patients transitioning to home care. With proper planning, the current dehospitalization process can achieve its promise of high-quality, cost-effective care without repeating the pitfalls of past reforms.

Introduction

The digital transformation in healthcare, accelerated by the COVID-19 pandemic, has rapidly advanced remote care through telemedicine and telehealth innovations. ¹ Policymakers and entrepreneurs now envision widespread hospital-at-home care, driving a shift from traditional hospital-based acute care toward community settings. ² The primary goals are maintaining high-quality medical care while avoiding hospital-related drawbacks such as high costs, nosocomial infections, and patient dissatisfaction. Like any significant change, home hospitalization will inevitably present challenges, both anticipated and unforeseen. In this perspective article, we attempt to draw lessons from the psychiatric deinstitutionalization movement in the mid-20th century, in order to mitigate potential pitfalls of the current process.

Deinstitutionalization refers to the reduction of traditional institutional settings alongside expanded community-based services. ³ This shift in psychiatric care began in the 1950s due to multiple factors, including the development of the antipsychotic medication chlorpromazine, increased governmental healthcare responsibility, civil rights movements, and pivotal legal rulings such as O'Conner versus Donaldson (1975). This movement dramatically reduced psychiatric hospital populations; in the United States, state mental hospital admissions peaked at nearly 559,000 patients in 1955, declining to 47,000 by 2003. ⁴

Although deinstitutionalization is foundational to modern psychiatry, its implementation had unintended negative consequences, many still controversial. ⁵ One well-known critique, the “Penrose effect,” describes the inverse relationship between psychiatric treatment infrastructure and criminal incarceration rates. ⁶ Although described in 1939, before massive deinstitutionalization began, modern studies repeatedly show that shrinking psychiatric treatment capacity consistently coincides with larger prison populations, and while socioeconomic and policy shifts may complicate this inverse link, their interplay underscores the Penrose Effect's validity. ⁷ As of 2012, ∼4% of Americans with serious mental illness (SMI) are incarcerated, and 15%–24% of inmates have SMI. Another associated issue is homelessness: conservative estimates suggest 6% of individuals with SMI are homeless, while about one-third of the homeless population has SMI. ⁴ Although critical, these problems might be less directly relevant to the current dehospitalization; nonetheless, they provide valuable insights into potential systemic failures, and to our main question—what can we infer from the psychiatric deinstitutionalization to improve the telemedical dehospitalization?

What are deinstitutionalization's potential caveats associated with expansion of dehospitalization of medical patients?

Research indicates that patients who experienced poorer outcomes were those considered “too sick” for deinstitutionalization—such as those with severe psychosis, significant physical or mental impairments, elderly individuals, and those with complex concurrent medical issues. ³ Recent experiences demonstrate that some patients previously deemed too ill for home care can successfully transition to hospital-at-home services.^8,9 However, an overly aggressive push toward deinstitutionalization risks harming patients with severe illness, comorbid conditions, or complex biopsychosocial needs, potentially resulting in readmissions or, worse, neglect and deterioration.

Another critical lesson from psychiatric deinstitutionalization is that benefits primarily accrued to middle- and upper-class patients, leaving impoverished and marginalized groups disadvantaged. ³ This also seems to be true in the hospital-at-home setting, as suggested by a contemporary Israeli survey. ¹⁰ Successful home hospitalization requires a robust, integrated public health infrastructure capable of consistently delivering high-quality community-based care to all demographics. The COVID-19 pandemic has also underscored the importance of digital inclusion—requiring accessible infrastructure, adequate digital literacy, and affordability. A US study highlighted that Black patients more frequently participated in audio-only telehealth visits rather than the preferable audio-video interactions due to limited access to technology. As of 2018, over 40% of Medicare beneficiaries lacked home access to a high-speed internet-connected computer. ¹¹ Conversely, higher digital health literacy correlates with increased telemedicine engagement and appointment attendance, indicating the need to address digital barriers in healthcare via community-supported digital literacy programs. ¹²

Patients transitioning to home-based care risk “bringing medical complications home with them.” Psychiatric deinstitutionalization increased community availability of psychiatric medications, leading to higher instances of recreational abuse and intoxication. ¹³ Similarly, expanded hospital-at-home services might result in increased community incidents of medication adverse effects and overdoses previously uncommon outside hospitals, such as complications from advanced intravenous antibiotics and diuretics. Consequently, the rising need for intravenous access through peripheral or central catheters could lead to increased catheter-related bloodstream infections, previously rare in the home setting. ¹⁰ Addressing these new risks requires heightened clinical awareness, technological solutions (e.g. video-observed therapy), and pharmacological innovations like extended-release intramuscular formulations. With these implemented, hospital-at-home can be feasible and safe for selected patients, even those with acute medical illnesses. ¹⁴

While reduced healthcare costs often represent a touted benefit of deinstitutionalization, cost-benefit analyses sometimes challenge this assumption, particularly during the initial phase when community-based services may remain immature and inefficient. Initially, healthcare costs frequently shift from third-party payers to patients and their families, elevating risks of uncovered or poorly estimated expenses. Optimal patient selection will be essential to maximizing efficiency and efficacy in telemedical dehospitalization. Patients with severe conditions and limited social support inevitably require more intensive and potentially costly care. Additionally, telemedicine services introduce new technological expenses—applications, wearable devices, infrastructure, and mobile data—that were irrelevant during earlier psychiatric deinstitutionalization efforts. However, emerging evidence suggests hospitalization avoidance by home hospitalization reduces costs in real-world settings, without sacrificing medical outcomes. ¹⁵ Ultimately, the incorporation of hospital-at-home services into public insurance frameworks will be paramount to its adoption. ¹⁶

Lastly, family burden—the emotional and financial stress experienced when a patient returns home after institutional care—is significant. ¹¹ Although achieving complete familial normality without patient confinement might be unrealistic, family directed support can substantially reduce these stresses. ¹² Effective strategies include family-oriented rehabilitation and treatment services, home visits, relatives’ support groups, and respite care programs—short-term breaks crucial for sustaining long-term community care. ¹¹ Table 1 summarizes main similarities and differences between the two processes.

Table 1.

Comparison of deinstitutionalizations.

Aspect	Psychiatric deinstitutionalization	Medical dehospitalization
Era	1950s–	2020s–
Primary enablers	Antipsychotic medications and social reform	Digital health technology and cost reduction
Population focus	Chronic psychiatric conditions (e.g. schizophrenia)	Acute medical illnesses (e.g. pneumonia and heart failure)
Technological context	Limited; primarily medication-focused	Advanced; telemedicine, wearables, and remote monitoring
Key benefits	Reduced institutionalization and greater autonomy	Reduced hospital-acquired complications, improved patient satisfaction, and cost saving
Major risks	Increased incarceration and homelessness (the Penrose effect) and social equity concerns	Medical complications at home, digital inequities, and social equity concerns
Family impact	Increased caregiver burden, emotional and financial stress	Similar potential for caregiver burden, emotional and financial stress
Infrastructure needs	Community mental health services and support networks	Integrated digital infrastructure and robust home-care systems

Conclusion

Psychiatric conditions fundamentally differ from medical illnesses targeted by home hospitalization, as chronic psychiatric disorders like schizophrenia involve complexities distinct from acute medical conditions such as pneumonia. Additionally, psychiatric diagnoses, although diverse, are relatively limited compared to the innumerable medical conditions. Furthermore, these two deinstitutionalization processes span more than 70 years, occurring within substantially different medical and technological contexts.

Despite these differences, we must learn from past experiences to avoid repeating historical pitfalls. Poor patient selection could trigger unnecessary readmissions, medical complications, increased family burden, and exacerbate social and economic inequities. Properly implemented, home-based care can significantly enhance patient quality-of-life and healthcare outcomes. Achieving this potential requires comprehensive administrative, financial, and technological structures that integrate local services into coordinated care systems, alongside careful physician-driven patient selection.