medications became available to treat or manage mental illness, health care costs began to rise, and the abusive treatment often endured by patients was exposed, the effectiveness of state mental hospitals came under scrutiny.

The Center for Mental Health Services reports that in 1962, nationally there were 526,000 people in state and county mental hospitals; by 1996, only 70,000 people remained in these residential treatment facilities. Prison populations increased by roughly 500% in Pennsylvania between the years 1965 and 1996.
Public policies over the last several decades, in both the mental health and criminal justice arenas have exacerbated an already complicated problem. For example, few communities are prepared to deal with the influx of people released from state mental hospitals who often lack housing, employment, and access to continuing mental health services. Treatment for people who have co-occurring disorders (i.e. mental illness combined with substance abuse) are even more limited. Additionally, changes in laws concerning the involuntary treatment of the mentally ill have made it difficult to provide the necessary and adequate services for those who will not accept treatment voluntarily.
Changes in criminal justice policies further compounded the problem. Stiffer sentencing laws for drug and alcohol offenses, for example, snare many mentally ill people who frequently abuse alcohol and drugs as a way to mitigate the effects of mental illness. The Bureau of Justice Statistics reports that almost 60% of mentally ill inmates were under the influence of drugs or alcohol at the time of their offenses. Restrictions on access to public assistance programs for ex-offenders, zero tolerance policing, and the public's perception of mentally ill people's potential for violence also contributes to the criminalization of the mentally ill.
Aside from the dynamics of public policy, mentally ill offenders frequently end up in prisons because of minor infractions or misdemeanors. The experience of arrest and confinement can heighten the manifestations of their illness and result in additional charges and longer sentences. Mentally Ill Offenders in the Criminal Justice System: An Analysis and Prescription, a report by The Sentencing Project, states: "Once the mentally ill are within the criminal justice system, their condition may deteriorate as a result of inadequate treatment and because the circumstances of life behind bars are likely to exacerbate their condition." For many offenders, diversion to community treatment services for adequate care would keep them out of the criminal justice system altogether.
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