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FEBRUARY 27, 1997


Chairman McKeon, Congressman Kildee, members of the Subcommittee, I am Annie Saylor, President of the National Alliance for the Mentally Ill (NAMI). I deeply appreciate the opportunity to offer NAMIís views on reauthorization of Rehabilitation Act of 1973. NAMI has a strong interest in this important legislation which impacts people with severe mental illnesses.

NAMI is the nationís largest grassroots organization dedicated to improving the lives of persons with severe mental illnesses, including schizophrenia, bipolar disorder (manic-depressive illness), major depression, and anxiety disorders. NAMIís membership includes more than 140,000 people with brain disorders and their families, and 1,100 state and local affiliates in all 50 states, the District of Columbia, Puerto Rico, and Canada. NAMIís efforts focus on advocacy for nondiscriminatory and equitable federal and state policies, research into the causes, symptoms and treatments for severe mental illnesses and education to eliminate the pervasive stigma toward those who suffer from these serious brain disorders.

The development of new, state of the art medications for treating brain disorders such as schizophrenia has led to employment being a viable option for many persons whose symptoms were previously too severe to allow them to work. However, despite the fact that persons with these brain disorders want to work, they rarely succeed in obtaining or maintaining employment. Currently, more than 85% of all individuals with severe mental illnesses are unemployed.

There are many reasons why persons with severe mental illnesses face barriers to employment. Job opportunity is a key element to employment success; economic downturns and recession disproportionately impact individuals with disabilities in general and those with severe mental illnesses specifically. Also, fear, ignorance, and prejudicial attitudes lead to discrimination in the workplace and limit job opportunities and career advancement. Finally, even with the very best treatments and support services, some individuals will only be able to work part-time, and still others, not at all.

Public programs established to benefit people with disabilities are another barrier to work for people with severe mental illnesses. Medicaid, a key funder of community-based services for people with these brain disorders, has historically prohibited payment for vocational services. The Social Security Administration's income-replacement programs--Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI)--that provide needed resources as well as access to Medicaid and/or Medicare health benefits also create barriers to employment.

Research reveals that programs which are successful in providing vocational rehabiltiation services to persons with severe mental illnesses have the following characteristics:

Blended Services And Supports: Vocational rehabilitation services must be provided in conjunction with an array of other services and supports required by persons with severe mental illnesses. The services and supports needed vary from person to person, but typically include medication and other forms of treatment, housing, intensive case management, and social supports.

Flexible Responses To Individualized Needs: Some individuals with severe mental illnesses require intensive, life-long services and supports. Other individuals may require less intensive services over time. The latter category particularly includes persons with bipolar disorder, major depression and other disorders which are more responsive to treatment. Therefore, services should not be designed with a "one size fits all" approach, but rather in a manner which allows providers to respond to the unique needs of individual consumers.

Ongoing Or Long-Term Interventions: Severe mental illnesses such as schizophrenia and bipolar (manic depressive) disorder are episodic in nature and vary in intensity over time. Therefore, persons who suffer from these brain disorders may experience periods during which their symptoms are controlled or abated, followed by periods when their symptoms are more severe. During these latter periods, these individuals require more intensive services and supports to remain in the community. Therefore, vocational rehabilitation services for these individuals must be designed in a way which allows for intermittent or long-term job supports, as needed, on a case by case basis.

Extensive Job Supports, Provided On Or Off The Job Site: The success of Supported Employment (S.E.) or Transitional Employment (T.E.) job placements is frequently predicated upon the ability of job coaches or job counselors to provide ongoing job supports. In some cases, these job supports are required at the job site. In other cases, job supports are best provided away from the job site. Regardless of how these supports are structured, they must be available on an ongoing basis after the initial job placement, and should be available on a long-term basis should the individual consumer require them.

Unfortunately, the federal-state vocational rehabilitation system has achieved very poor outcomes in serving persons with severe mental illnesses. These programs remain largely oriented to providing short-term, time-limited vocational rehabilitation services to persons with less severe disabilities. They are unable to effectively address the complex, ongoing needs of persons with severe mental illnesses or others who experience severe disabilities characterized by episodic or long-term needs.

Recently, NAMI released a report detailing the results of a comprehensive survey of vocational rehabilitation services and practices nationally. This report, entitled "A Legacy of Failure: The Inability of the Federal-State Vocational Rehabilitation System to Serve People with Severe Mental Illnesses", concludes that the federal-state vocational rehabilitation system has, for the most part, been an abject failure as a viable source of vocational rehabilitation services for people with severe mental illnesses. Moreover, as it is currently structured, this system is unlikely to ever be an effective source of services for people with these brain disorders. There are a number of reasons why this is true.

First, state vocational rehabilitation services are time limited and predicated on the idea that once people obtain employment, they no longer require services and supports from the vocational rehabilitation system. This idea is entirely contrary to the realities of severe brain disorders such as schizophrenia and bipolar disorder (manic-depressive illness), which are episodic in nature and fluctuate over time in terms of severity and impact. Yet state vocational rehabilitation agencies are generally unwilling to provide the ongoing services and supports people with these disorders need to effectively function in the workplace.

Second, since its inception, state vocational rehabilitation agencies have perpetuated a system that rewards counselors for putting their greatest efforts and resources into those individuals who are easiest to place into employment and most likely to retain employment after placement. Despite lip-service about the importance of serving individuals with the "most severe disabilities," the majority of state vocational rehabilitation agencies have demonstrated little real interest in developing or implementing ideas such as "weighted closure" systems that would establish true incentives for serving individuals with more complicated, long-term needs.

Third, a disproportionate percentage of state vocational rehabilitation dollars are wasted on administrative expenses and other non-service related functions. A study released in 1991 by the National Association of Rehabilitation Facilities (currently the American Rehabilitation Association) concluded that in that year, state vocational rehabilitation agencies expended 48 percent of their total Title I monies on what they termed "operational expenditures", i.e. administrative costs plus guidance and counseling. This report also revealed that during the period between 1975 and 1987, state vocational rehabilitation expenditures for services purchased for clients declined by about six percent despite the fact that overall program funding (including the state match) for Title I increased from $869 million in 1975 to $1.7 billion in 1987. A report issued by the Congressional Research Service in 1996 revealed roughly the same breakdowns for administrative versus purchased services.

Fourth, state vocational rehabilitation agencies still put a large proportion of their resources into disability and eligibility-determination activities and other administrative functions, while inadequate resources go into direct services for people with disabilities, including severe mental illnesses. Moreover, resources used for determining the eligibility of applicants with severe mental illnesses are often spent on evaluation methodologies that are inappropriate for this population and have extremely low validity for predicting employability.

Fifth, many state vocational rehabilitation administrators and counselors lack knowledge about severe mental illnesses and the characteristics and needs of people who suffer from these brain disorders. Opportunities for counselors to receive training about severe mental illnesses and systems that serve individuals with these brain disorders are very limited. Moreover, a number of state vocational rehabilitation agencies stubbornly adhere to "counselor-generalist" models, resisting counselor specialization despite clear evidence that specialization is necessary to adequately serve individuals with complex needs such as those with severe mental illnesses.

Sixth, the codes used by the federal Rehabilitation Services Administration (RSA) and the state vocational rehabilitation agencies to describe mental illnesses are hopelessly outdated. These categories--"psychotic disorders" and "psychoneurotic disorders"--have not been used in the field of psychiatry for many years. The ongoing use of these terms by the federal-state vocational rehabilitation system speaks to the lack of interest and commitment on the part of this system to providing effective services to this population. Among other things, use of these inappropriate diagnostic codes makes it impossible to determine what percentage of people with "mental impairments" that state vocational rehabilitation agencies claim to serve actually do suffer from severe mental illnesses.

Seventh, state vocational rehabilitation agencies have, by and large, done a very poor job of working cooperatively with mental health agencies and other involved systems to best meet the needs of people with severe mental illnesses. There is little evidence of effective coordination between state vocational rehabilitation and mental health agencies.

Finally, artificial, time-limited funding and durational limitations established by state vocational rehabilitation agencies serve as disincentives for community-based providers to contract with these agencies. In many parts of the country this results in an overall shortage of qualified vocational rehabilitation "vendors" to provide services for people with severe mental illnesses.

The long-term outcomes achieved by state vocational rehabilitation agencies in serving persons with severe mental illnesses (and persons with disabilities generally) are dismal. This is not surprising, considering the short-term orientations of these programs. A study released in 1993 by the U.S. General Accounting Office (GAO) revealed that while vocational rehabilitation services appear to produce some benefits in terms of earnings for certain individuals the first year or two following case closure, these benefits are generally not long-term. A review of cases closed as "successfully rehabilitated" in 1980 revealed that average earnings were lower in 1988 for both clients with "emotional disabilities" and clients with physical disabilities than they were in the years before referral for vocational rehabilitation services. Earnings in 1988 were slightly higher than in the years before referral for clients with mental retardation.

Research further reveals that even short-term outcomes of state vocational rehabilitation services are poor for persons with severe mental illnesses relative to other populations of persons with severe disabilities. For example, a study published by Andrews, et. al., in 1992 revealed that the rates of successful rehabilitations were significantly lower for persons with severe mental illnesses than they were for persons with severe physical disabilities. More than for any other type of disability, people with severe mental illnesses are "closed-out" of state vocational rehabilitation systems as "failures." In many cases it is actually these state systems that have "failed" to provide the services individuals with these brain disorders require.

NAMIís comprehensive review of state vocational rehabilitation plans revealed that no state was able to provide information in response to all three of the following questions, questions that surely represent the bare minimum of information needed for public accountability.

1) How many people with severe mental illnesses do you estimate will be served in the upcoming year?

2) How much money would be spent on services to this population?

3) What are the expected outcomes?

Furthermore, NAMIís analysis revealed that, while a few states demonstrate some forward thinking in their comprehensive planning efforts, in general few state plans showed evidence of strategic, measurable objectives for improving services for people with severe mental illnesses.

Perhaps most distressing, many state vocational rehabilitation agencies (and the Washington D.C. based trade association representing them) apparently do not place much emphasis on being accountable to the constituency populations they serve. Repeated requests from NAMI for state vocational rehabilitation plans were ignored by twenty state vocational rehabilitation agencies, forcing NAMI to either seek intercession from the governors of those states or to invoke the public document disclosure laws in those states.

Policy Recommendations

Despite efforts by Congress to compel state vocational rehabilitation programs to place greater emphasis on services to individuals with the most severe disabilities, NAMIís study raises serious questions whether the estimated $490 million currently spent in federal and state funds on vocational rehabilitation services for persons with severe mental illnesses are being spent wisely. The multiple factors discussed above lead us to conclude that these monies would be more effectively spent by separating them from the federal-state vocational rehabilitation monopoly and rechanneling them in ways which enables psychosocial rehabilitation programs and other community rehabilitation providers to have direct access to them. While the vocational character of these monies must be retained, it is critically important that vocational services are integrated with the array of other services and supports required by persons with severe mental illnesses. In this way, the best short-term and long-term outcomes will be achieved for this population.

The rechanneling of federal-state vocational rehabilitation monies to community rehabilitation providers could be accomplished in several ways.

Privatization: Private mechanisms should be considered for allocating the $387 million federal share of the $490 million of vocational rehabilitation funds for the delivery of continuous, non-time limited services for individuals with severe mental illnesses, without passing it through costly and inefficient state government bureaucracies. Private providers, or coalitions of providers, could apply directly to the federal RSA or to a private, Fannie-Mae type agency for fixed sums of money, established through a formula, to assume responsibility for vocational rehabilitation services for all persons with severe mental illnesses within specific geographic regions. Psychosocial rehabilitation programs and other community rehabilitation providers should be encouraged to raise funds necessary to replace monies lost from the previous state match.

Establish a new section in the Rehabilitation Act for vocational rehabilitation services for persons with severe mental illnesses: Under this new Title, state vocational rehabilitation agencies would assume responsibility for filtering the $490 million of combined federal and state vocational rehabilitation funds to psychosocial rehabilitation programs and other community rehabilitation providers which satisfy pre-established criteria for receipt of these funds. A system of this nature could be structured similarly to the Independent Living Center (ILC) or Projects with Industry (PWI) programs which already exist within the Rehabilitation Act.

Integrate into the Mental Health Services Block Grant: Consideration should be given to integrating the $387 million in federal vocational rehabilitation funds into the existing Mental Health Services Block Grant authority for funding of vocational and psychiatric rehabilitation services on a continuous, non-time limited basis. However, this should occur only if careful protections are put into place to ensure (a) that these monies are spent for vocational rehabilitation services, and (b) that they are spent on people who are truly severely mentally ill.

Vest responsibility for administering the $387 million federal share with the Social Security Administration (SSA): Persons with severe mental illnesses represent a significant proportion of current Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) beneficiaries. There is currently significant attention being paid to creating stronger incentives for SSI and SSDI beneficiaries to work. Among the proposals being considered are mechanisms to strengthen the ability of the SSA to contract directly with community rehabilitation providers to provide vocational rehabilitation services designed to help beneficiaries achieve independence and get off the disability roles. Consideration should be given to shifting the $387 in federal vocational rehabilitation resources to the SSA, but only if the system(s) established for direct contracting by the SSA with community rehabilitation programs contain meaningful incentives for these programs to provide intermittent or long-term vocational services to individuals with severe mental illnesses who require them.

Integrate the $490 million in the federal-state Medicaid program: Medicaid is currently the largest federal financier of community treatment and services for persons with severe mental illnesses. Conceptually, integrating vocational rehabilitation monies with other services for persons with severe mental illnesses currently financed through Medicaid makes good sense. However, protections must be established to ensure that these funds are not eroded through conversion to other non-vocational services for non mentally-ill Medicaid beneficiaries.


Although vocational rehabilitation services are vitally important for persons with severe mental illnesses, these services, as they are currently structured, are largely ineffective in meeting the long-term needs of persons with these brain disorders. Consequently, NAMI cannot support a simple reauthorization of the Rehabilitation Act of 1973. Rather, we urge the Committee to consider changes to the Act which will create true opportunities for persons with severe mental illnesses (and other severe disabilities) to receive the ongoing services and supports they need to maintain long-term employment. We would welcome opportunities to work with the Committee in developing these changes.

Once again, I appreciate the opportunity to offer testimony, in behalf of NAMI, concerning the reauthorization of the Rehabilitation Act of 1973.


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