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NAMI Testimony on VA HUD Appropriations

For Immediate Release, April 18, 2000
Contact: Chris Marshall

* Included below is the testimony of NAMI board member Fred Frese before the House VA HUD Appropriations Subcommittee. Dr. Frese's testimony, on behalf of NAMI, covers FY 2001 funding requests for two critically important agencies for NAMI's interests: the Department of Veterans' Affairs and the Department of Housing and Urban Development. In his testimony Dr. Frese emphasizes the critical need for increased funding for research and services for veterans with severe mental illnesses. He also urges Congress to more effectively focus HUD funding on adults with severe mental illnesses who are homeless or are living in substandard housing. In the coming weeks, the House and Senate appropriations committees will begin work on the FY 2001 VA HUD appropriations bill. NAMI advocates are urged to contact their members of Congress to support a VA HUD bill that addresses the priorities set forth by Dr. Frese in his testimony.




APRIL 11, 2000

Chairman Walsh, Representative Mollohan and members of the Subcommittee, I am Fred Frese of Akron, Ohio. I am pleased today to offer the views of the National Alliance for the Mentally Ill (NAMI) on the VA-HUD-Independent Agencies Subcommittee's FY 2001 bill. I would like to direct my testimony to two of the important federal departments that are within the Subcommittee's jurisdiction: The Department of Housing and Urban Development (HUD) and the Department of Veterans' Affairs (VA).

In addition to serving on the NAMI Board, I am also a veteran myself. In 1966, I had been selected for promotion to the rank of Captain in the U.S. Marine Corps. That is when I was first diagnosed as having the brain disorder schizophrenia - perhaps the most severe and disabling mental illness diagnosis. Since my original diagnosis, I have been treated within the VA medical system, both as an inpatient at the VA hospital in Chillicothe, Ohio, and as an outpatient. Over the years, I have served on numerous advisory panels to the VA on care for the seriously mentally ill, including the VA's new National Psychosis Algorithm. I also currently serve as a member of NAMI's Consumer Advisory Council on veterans with severe mental illness.


NAMI is the nation's largest national organization, 210,000 members representing persons with serious brain disorders and their families. Through our 1,200 chapters and affiliates in all 50 states, we support education, outreach, advocacy and research on behalf of persons with serious brain disorders such as schizophrenia, manic depressive illness, major depression, severe anxiety disorders and major mental illnesses affecting children.

Mr. Chairman, for too long severe mental illness has been shrouded in stigma and discrimination. These illnesses have been misunderstood, feared, hidden, and often ignored by science. Only in the last decade have we seen the first real hope for people with these brain disorders through pioneering research that has uncovered both a biological basis for these brain disorders and treatments that work. From NAMI's perspective, this progress was confirmed for all Americans through two watershed events in 1999 - the White House Conference on Mental Health on June 7 and the release of the Surgeon General's Report on Mental health on December 13. Taken together, these two events brought together national leaders and the most comprehensive scientific report ever to substantiate what we have been saying for years - that severe mental illnesses are diseases are brain disorders that are treatable.

Both the White House Mental Health Conference and Surgeon General's report also established that a new generation of scientific discovery and treatment is changing our expectations for recovery for adults living with severe mental illness. NAMI believes that this good news for the Subcommittee as you consider funding for both HUD and the VA. Recovery should mean more than just accessing treatment. It should mean access to community-based housing, services, rehabilitation and employment that help consumes move toward independence and dignity. NAMI believes that while treatment is central to recovery, it is not an end in itself. Housing and supports provided by agencies such as HUD and the VA play a critical role in this process. NAMI is therefore pleased to offer our views on the Administration's FY 2001 requests for these two cabinet level departments.


In NAMI's opinion, the lack of access to treatment and community supports for veterans with severe mental illness is the greatest unmet need of the VA. According to VA's Care for the Severely Chronically Mentally Ill Veteran (SCMI Committee), approximately, 649,814 veterans have a mental illness. This figure is based upon 1998 estimates of the number of veterans seeking mental health care. Of greater concern to NAMI is the number of veterans with the most severe mental illnesses who are directly impacted by the Veterans Health Administration's (VHA) efforts to close down inpatient psychiatric beds. For example, a very conservative 1998 estimate by the SCMI Committee indicates that between 20,000 and 30,000 veterans with serious mental illness could benefit from intensive case management services in the community.

Veterans Health Administration

As members of this Subcommittee know, in 1995 the VHA began making the transformation from a confederation of individual medical centers and clinics focused primarily on inpatient care to a fully integrated system that promotes primary ambulatory care. As part of this process, the VHA created 22 separate regional management centers, known as Veterans Integrated Service Networks (VISNs) - to administer the health services (including mental illness treatment) for VA hospitals and clinics. The idea of these VISNs is to decentralize services, increase efficiency and shift treatment from inpatient care to less costly outpatient settings. The VHA is in charge of allocating annual appropriations for each of these 22 VISNs, but does not specifically direct funds to be spent for mental illness treatment and services. Once funding is received, each VISN has authority to allocate resources to hospitals and clinics within their jurisdiction with broad autonomy.

While NAMI supports the overall goal of increasing efficiency and placing greater authority shifting authority to local hospitals and clinics, we are very concerned that in their efforts to reduce overall costs, many VISN administrators have closed long-term psychiatric beds without adequately shifting these resources into outpatient community settings. For example, between 1995 and 1998, the number of seriously mentally ill veterans treated as inpatients decreased by 30%, from 52,383 patients per year, to 36,649. It is estimated that as a result of these cuts in funding for inpatient care, the VHA saved more than $70 million between 1996 and 1998.

From NAMI's perspective, it is obvious that this significant decrease in inpatient care has not resulted in a sufficient transfer of resources to community-based treatment and supports for veterans with severe mental illnesses. For example, as of last year, over two-thirds of VHA facilities did not have intensive case management services for chronically mentally ill veterans, despite the VHA's own estimate that at least 15,000 veterans are in need of such care. Moreover, in 1998 less than 40% of the community-based outpatient clinics for veterans even include basic mental illness services.

NAMI is extremely grateful for the leadership this Subcommittee has provided in holding the VHA accountable for its inability to ensure that savings derived from the closure of inpatient psychiatric beds is transferred into community-based treatment services. We are especially pleased that the Subcommittee directed the VHA to produce a report on where these savings have gone and what the unmet needs are with respect to community-based treatment services.

NAMI would urge the Subcommittee to go further in FY 2001 and specifically direct the VHA to require reinvestment of all savings from cuts in inpatient psychiatric beds toward intensive case management services for veterans with severe mental illnesses. NAMI believes that such services should be modeled after proven evidence-based approaches such as the Program of Assertive Community Treatment (PACT). Moreover, NAMI recommends that the VISNs be directed to submit written reports indicating how dollars saved from cuts in inpatient psychiatric beds will be redirected to provide community-based treatment services. The VHA should not be allowed to make the same mistakes that so many states and communities have made over the past quarter century with deinstitutionalization. Dollars saved through the closing of state psychiatric hospitals were either never transferred into the community, or squandered on community-based services that lacked focus and accountability.

NAMI would also urge the Subcommittee to continue to monitor progress on implementation of restrictive drug formularies by VISNs that cover psychotropic medications. NAMI's Veterans Committee continues to hear reports of veterans with mental illness not getting access to the newest and most effective atypical anti-psychotic medications. Specifically, our members tell us about the VA imposing limited formularies that require veterans to fail first on older medications, or in extreme cases, include only a single medication within an entire classification of drugs for major disorders such as schizophrenia and depression. NAMI feels strongly that veterans with mental illness deserve unfettered access to the newest and most effective medications.

Homeless Veterans

NAMI applauds the Subcommittee's efforts to expand services for homeless veterans. As you know, severe mental illness and co-occurring substance abuse problems contribute significantly to homelessness among veterans. Studies have shown that nearly one-third (approximately 250,000) of homeless individuals have served in our country's armed services. Moreover, approximately 43% of homeless veterans have a diagnosis of severe and persistent mental illness, and 69% have a substance abuse disorder.

NAMI is pleased that the Subcommittee continues to support initiatives at the VA to support residential options for homeless veterans with mental illness through the Homeless Providers Grant and Per Diem Program and the new Loan Guarantee for Multifamily Transitional Housing for Homeless Veterans Program. NAMI would urge that these initiatives be expanded to offer clinical outreach, case management and support services in communities with high concentrations of homeless mentally ill veterans.


Even though the VA has made genuine progress in recent years in funding for psychiatric research at the VA, such research remains disproportionate to the utilization of mental illness treatment services by veterans. Veterans with mental illness account for approximately 25% of all veterans receiving treatment within the VA system. Despite this fact, VA resources devoted to research has lagged far behind those dedicated to other disorders. In 1998, only 11% of all research at the VA was dedicated to chronic mental illness, substance abuse and PTSD. This level has remained unchanged for the last 15 years, despite the fact the 22% of patients in the VA system receive mental illness treatment.

NAMI was pleased last year when the VHA announced that six Mental Illness Research, Education and Clinical Centers (MIRECCs) were to be funded. These centers are designed to serve as infrastructure support for mental illness research. However, the NAMI Veterans Committee was disappointed that out of the four schizophrenia research treatment centers that were proposed by the VA last year only two were funded. For FY 2001, NAMI urges the Subcommittee to support the recommendation of the Friends of the VA to increase the overall VA research budget by $65 million. More importantly, NAMI urges that $34 million of this increase go toward severe mental illness research. This increase would double mental illness research within the VA, an amount that has remained flat over the past 15 years.

Finally, in the area of medical research, NAMI would like to thank the Subcommittee for ensuring that the Institutional Review Boards (IRBs) that oversee VA-funded clinical research involving human subjects include representation of stakeholders - including veterans with mental illness and their families. NAMI is hopeful that future inclusion of properly trained consumers and families on IRBs can go a long way toward ensuring that protections are adequate for vulnerable human subjects with mental impairments and that standards for consent are established and complied with.


NAMI is a member of the Consortium for Citizens With Disabilities (CCD) Housing Task Force and has endorsed CCD's recommendations that were recently submitted to the Subcommittee regarding HUD 's FY 2001 budget. NAMI agrees with CCD's findings that people with disabilities - including severe mental illnesses - are increasingly "priced out" of the rental housing market. This has occurred both as the "buying power" of Supplemental Security Income (SSI) benefits has eroded and as federally subsidized housing for people with disabilities has continued to disappear due to "elderly only" housing policies. As CCD's 1998 "Priced Out" report found, the national average median income for a head of household living on SSI is only 24.4%. Moreover, on a national average, the cost of 1-bedroom apartment is 69% of monthly SSI income, and more than an individual's total monthly SSI income in 125 of the housing market areas across the country.

As a result of the leadership of this Subcommittee - particularly Representative Rodney Frelinghuysen - over $170 million in new Section 8 rent subsidies (approximately 30,000 overall) have been appropriated for people with disabilities since 1997, including $40 million this past year. This year, HUD's budget proposal continues to be unsatisfactory - requesting only $25 million in new Section 8 funding, apparently to assist Housing Authorities to implement "elderly only" housing policies and relocate people with disabilities to alternative housing. Clearly more funding is needed to help non-elderly adults with disabilities that are no longer able to live in HUD public and assisted housing developments.

HUD Section 811

In the Section 811 Supportive Housing for Person with Disabilities program, HUD proposes only $210 million - a small increase of $9 million over FY 2000. HUD also continues to propose that 50 percent of the Section 811 appropriation be used to create new vouchers for people with disabilities - a proposal that NAMI and CCD strongly oppose. It is vitally important that the Section 811 appropriation be increased. This year, only $109 million was made available for new housing production activities, $48.5 was utilized for tenant based rental assistance, and $43 million for new and renewing Project Rental Assistance Contracts. NAMI believes strongly that tenant-based rental assistance is not the answer for all people with disabilities, especially those with severe mental illnesses who typically need intensive services and supports to live in the community. Given the future need for permanent community based supportive housing which will result from the Supreme Court's 1999 Olmstead decision, the production of new and accessible housing for people with the most severe disabilities (including severe mental illness) must be a high priority.

NAMI recommends increasing the funding for the Section 811 Program to $300 million and to appropriate no more than 25 percent of this funding for tenant based rental assistance. Housing production goals for people with disabilities must be increased. Given the housing crisis facing people with severe mental illnesses, the Section 811 program needs to be restored to the $387 million funding level of five years ago. A $300 million appropriation for FY 2001 will send a strong message about the future of the Section 811 program, and encourage more non-profits to apply. NAMI also urges the Subcommittee to direct HUD to exercise its waiver authority and permit only non-profit disability organizations -- and not PHAs -- to apply for the Mainstream tenant-based rental subsidies available through the Section 811 program. Given the poor track record of PHAs in administering Section 8s for people with disabilities, we believe it is appropriate for Section 811 tenant-based rental assistance funds to be provided only to non-profit disability organizations, and that HUD refrain from converting Section 811 funding to Section 8. Finally, NAMI endorses CCD's recommendation for the Subcommittee to appropriate at least 1 percent of this increased funding (or $1 million which ever is greater) to fund a technical assistance program for non-profit disability organizations administering the Section 811 tenant based assistance program.

Section 8

NAMI also urges the Subcommittee to appropriate $50 million to support 9,000 new Section 8 tenant-based rental assistance funding for people with disabilities. While a host of problems have hindered the effective distribution of these subsidies by HUD and PHAs, all of the funds have been allocated and the need is still critical. Each year, more PHAs are designating "elderly only" public housing, and more than 58 percent of HUD assisted housing providers have implemented "elderly only" designation policies, according to a recent General Accounting Office study. NAMI supports CCD's recommendation that PHAs requesting the designation of "elderly only" public housing be required to set-aside 33 percent of their Section 8 turnover for people with disabilities.

Shelter Plus Care & Permanent Supported Housing Programs

Finally, NAMI would like to call the Subcommittee's attention to the emerging crisis in the Shelter Plus Care (S+C) and Supported Housing (SHP) permanent housing programs. The S+C and SHP programs are critical permanent housing resources for adults with severe mental illnesses. As a model, S+C is proven to end homelessness among people with the most severe disabilities who need supports and services linked to housing in order to ensure a permanent break from the cycle of shelters, jail and the streets. A recent survey compiled by Abt Associates found that 20% of households entering the Shelter Plus Care program had no income at all and that over 98% of S+C tenants continue to live at incomes below $12,000 (many of them on SSI because of severe mental illness). By the end of FY 2000, there will be 28,816 units of S+C housing on line, (53% tenant-based, 29% sponsor-based, 14% project-based and 4% SROs) - clearly, the major federal housing resource for addressing homelessness and mental illness.

As members of the Subcommittee know, many S+C and SHP permanent housing projects that were begun in the mid and early 1990s are now facing a funding crisis as 5-year rent subsidies are now coming up for renewal. In states and communities across the country, this housing is at risk because local officials are giving low priority ratings to rent subsidy renewals as part of HUD's "Continuum of Care" process for allocating federal homeless funds at the local level.

The result is that formerly homeless adults with severe mental illnesses are now, and for the foreseeable future will be, at risk of losing subsidized housing through no fault of their own. The solution that NAMI supports is to shift renewals for all expiring S+C and SHP permanent housing rent subsidies into the HUD Section 8 program. This will ensure that access to subsidized housing for formerly homeless adults with severe mental illnesses is not subject to the local "Continuum of Care" process and the limited resources in the federal homeless program. NAMI is pleased that the Clinton Administration is supporting this shift. We urge the Subcommittee to do the same through its FY 2001 bill.

NAMI is grateful to you Chairman Walsh and to you Mr. Mollohan for supporting the emergency designation of $6.2 million as part of the FY 2000 Supplemental Appropriations bill (HR 3908). This emergency designation is needed in order for HUD to fund one-year renewals of all S+C and SHP permanent housing rent subsidies that were not renewed through their local Continuum of Care process. NAMI is hopeful that the Senate and the Administration will follow your lead and support this as part of any FY 2000 supplemental spending bill. Nearly 1,000 formerly homeless individuals - most of whom have a severe mental illness - should not be forced back into homelessness this year because of shortsighted decisions of local officials or because of the lack of accountability in HUD's Continuum of Care process. NAMI would like to remind the Subcommittee that HUD and Congress have never failed to renew an expiring rent subsidy for an otherwise eligible, lease-compliant low-income household. Congress and HUD should not allow this historic first to occur to the most vulnerable among us, formerly homeless adults with severe mental illnesses.


Mr. Chairman, on behalf of NAMI's 210,000 members, 1,200 affiliates, and the members of the NAMI Veterans Committee, I would like to thank you for the opportunity to share our views on the Subcommittee's FY 2001 bill.