The other major change in the 90’s was the implementation of managed care. Private and public sectors were now somewhat integrated with some sort of large private organization which used its management to reduce costs by shortening inpatient stay and utilizing psychiatrists (Mechanic, 2007). According to David Mechanic (2007), “managed care has made specialty mental health services more accessible and reduced the intensity of service and cost without obvious reduction in quality” (p.1549). This seems to be a controversial statement as we look further into the fragmented system of mental health.
As the mental health system evolved into a community-based program, it gradually integrated into the mainstream health system of the US. Now Medicaid and other mainstream programs controlled the mental health dollars, and were in charge of eligibility for who could be covered. With tight state budgets and increasing Medicaid costs, many states tried to contain costs through reduction of eligibility requirements, lower Medicaid reimbursements as well as increasing cost sharing and restrictions