A great deal of attention is paid to the health care industry and its remarkable rates of growth. However, one segment of that industry has not experienced growth, has in fact shrunk. That segment is psychiatric hospitals. Because of changing policies and attitudes about how the mentally ill should be treated, psychiatric hospitals have been on a steady decline for many decades in the United States. The number of beds available in psychiatric hospitals in 1955 was equal to 1 bed for every 300 people in the general population. In 2005, that number had fallen to 1 bed for every 3,000 people.

Yet the rate of serious mental illness in the society has not changed during the fifty years between these two measures. This means that many, many mentally ill people end up incarcerated and/or, when they reach a breaking point, in the emergency rooms of general hospitals. According to a 2007 report from the National Health Policy Forum, there were nearly 2 million admissions to general hospitals in 2004 of patients suffering from mental health problems. Clearly, demand for some important things is not met through the mechanisms of a free market.

Today’s market size is the number of beds available in psychiatric hospitals in the United States in 2005.

Geographic reference: United States
Year: 2005
Market size: 99,800
Source: “More Mentally Ill Persons Are in Jail and Prison Than Hospitals: A Survey of the States,” a report published by the National Sheriffs Association and the Treatment Advocacy Center, May 2010, available online here. Eileen Salinshy and Christopher Loftis, PhD, “Shrinking Inpatient Psychiatric Capacity: Cause for Celebration or Concern?” National Health Policy Forum, August 1, 2007.
Posted on April 30, 2013