The final report of the President’s New Freedom Commission on Mental Health identified self-direction as one possible means of creating a more consumer and family-centered mental health system. Self-direction or self-directed care is a method of delivering services that is based on giving each consumer control of an individual budget with which to purchase goods and services to meet his or her needs.

This report describes the range of self-directed care programs for adults with serious mental illness currently being pursued by states. It brings together existing evidence relating to the impact of these programs on individuals and on state resources.

The study is based on case study visits between February and May 2007 to Florida, Michigan and Oregon. Information about programs in other states was obtained through meetings and telephone conversations with state officials and program managers. The case studies were supported by twenty structured interviews with policymakers, academic experts, consumer advocates and provider representatives in mental health.

Major Findings

  1. There are currently five states with self-directed care pilots or established programs for adults with serious mental illness: Florida, Iowa, Maryland, Michigan and Oregon, with a pilot under development in Texas. These programs are in the early stages of development and currently serve a very small number of consumers.
  2. The most important difference between programs across states is the scope of self-direction permitted. This has two related dimensions: first, the extent to which consumers are able to direct services provided by the traditional mental health system as well as recovery support services; and second, the extent to which individual budgets are separate from Medicaid funding or whether consumers have control over the way in which Medicaid resources are used.
  3. The four largest spending categories among self-direction consumers in District 8 in Florida are medication (16%), transportation (13%), psychiatric services (12%) and counseling (8%). The four largest spending categories among self-directing consumers in Multnomah County in Oregon are household items (15%), alternative therapies (14%), IT supplies (12%) and goods and services relating to personal appearance (10%).
  4. Self-direction has been shown to improve consumer satisfaction with services compared to traditional community mental health services. In interviews, consumers attribute this to the following features of self-direction: the focus on recovery rather than symptoms; its flexibility in meeting individual needs; and the support provided by counselors and peers in articulating goals and developing spending plans.
  5. Early evidence indicates that outcomes for self-directing consumers improve. Participants in self-directed care in Florida have been shown to make less use of crisis stabilization units and crisis support and greater use of routine care and supported employment than non-participants in the traditional community mental health system.
  6. The extent to which self-direction can be supported through Medicaid is highly significant for the expansion and sustainability of programs. Self-direction pushes at the limits of what Medicaid will support. States have overcome this issue to date by relying on general revenue funding but general revenue funds face many competing priorities. There is a need to develop a funding model for self-direction that will better ensure sustainability at the same time as maintaining the flexibility that consumers value.
  7. Other issues that need to be addressed if self-direction is to successfully expand and make a significant contribution to improving the quality of the public mental health system include: extending the scope of self-directed care to include traditional mental health services; developing an active peer movement as a source of advocacy and as alternative service providers; and improving the efficiency of administrative systems.

The full report is available at

For further information, contact the report’s author:

Vidhya Alakeson
Office of the Assistant Secretary for Planning and Evaluation
US Department of Health and Human Services

Phone: 202 460 3646