Historical Context: The National Deinstitutionalization Trend State-run psychiatric hospitals were once the primary providers of long-term mental health care in the U.S., peaking in the 1950s with around 559,000 inpatient beds nationwide.
By the 1990s, this number had plummeted to about 40,000, a roughly 92% reduction, as facilities closed or downsized dramatically.
This wasn’t isolated to Oregon; it happened across nearly every state, driven by a combination of factors: Policy Reforms and Federal Incentives: The Community Mental Health Act of 1963, signed by President Kennedy, aimed to shift care from large institutions to community-based centers, supported by new antipsychotic medications and civil rights advocacy against abusive asylum conditions.
Federal funding encouraged states to deinstitutionalize, but promised community resources were chronically underfunded — only about half of the planned 1,500 community mental health centers were ever built.
Budget Pressures and Cost-Shifting: States faced rising costs for institutional care amid economic shifts in the 1970s–1980s. Many closed facilities to cut expenses, relying on Medicaid and other federal programs to fund outpatient alternatives. However, this often meant discharging patients without sufficient follow-up, housing, or treatment options.
Examples Across States: Closures mirrored Oregon’s timeline (e.g., Dammasch in 1995). Nationally, facilities like Topeka State Hospital (Kansas, 1997), Metropolitan State Hospital (Massachusetts, 1992), and Allentown State Hospital (Pennsylvania, 2010) shut down in similar waves.
By 2023, many states had fewer than 10 state-operated psychiatric hospitals left, with total public beds dropping to historic lows.
In Oregon, the closure of Dammasch — opened in 1961 and shuttered amid reports of inhumane conditions — exemplified this, releasing patients into communities ill-equipped to support them.
The state’s Eastern Oregon Psychiatric Center in Pendleton closed in 2014, further reducing capacity.
Today, Oregon has only about 743 state hospital beds for adults, with even fewer staffed.
How This Contributed to the National Homeless Crisis While deinstitutionalization wasn’t the sole cause of homelessness — factors like affordable housing shortages, poverty, and substance use disorders play major roles — it undeniably exacerbated the issue by leaving many with severe mental illnesses without stable support. Here’s how the evidence connects the dots: Discharge Without Adequate Safety Nets: Many patients were released from institutions with minimal planning. Nationally, the lack of community mental health funding meant former inpatients often ended up cycling through emergency rooms, jails, or streets.
Studies show a direct correlation: as hospital beds vanished, homelessness among the mentally ill rose, with estimates that 25–30% of homeless individuals have severe mental illnesses like schizophrenia or bipolar disorder.
In Oregon, around 40% of the homeless population has a serious mental illness, higher than the national average, and closures like Dammasch directly led to increased street homelessness in Portland in the 1990s.
Rising Homelessness Statistics: U.S. homelessness hit a record 771,480 people on a single night in January 2024, up 18% from 2023 and 40% from 2018.
Chronic homelessness (long-term, often with disabilities including mental illness) surged 73% over the same period, from 97,000 to 168,000.
About 22% (140,000) of homeless adults in 2024 met criteria for serious mental illness.
Researchers attribute part of this to deinstitutionalization’s “trans institutionalization,” where people shifted from hospitals to prisons or homelessness.
Broader Systemic Failures: The affordable housing crisis amplified the impact — median rents outpaced wages, making stable housing unattainable for those with mental health challenges.
In states like California and Oregon, this led to visible increases in unsheltered homelessness (36% of the total in 2024).
Oregon’s experience echoes this: without enough community treatment or housing post-closures, many cycle between the Oregon State Hospital, jails, and streets.
Nationally, experts note that while deinstitutionalization aimed for better outcomes, underfunding turned it into a “system designed to fail.”
Key Nuances and Ongoing Implications Not every closure was detrimental — some states maintained or repurposed facilities, and advances in outpatient care have helped many. However, the national bed shortage (now about 50 per 100,000 people, far below the recommended 50–60) leaves gaps, especially for acute crises.
In Oregon, this manifests in long waits for care and over-reliance on emergency departments.
Recent federal efforts, like executive orders promoting institutionalization for homelessness reduction, highlight the debate: some advocate for more beds, others for better community funding to prevent crises.
Overall, Oregon’s closures are a microcosm of a national policy that prioritized deinstitutionalization without the necessary infrastructure, directly fueling homelessness by stranding vulnerable people. If you want to dive deeper into this topic, sources like HUD’s Annual Homelessness Assessment Reports or AMA ethics journals provide robust data for further exploration.
