Nebraska Could Save $300 Million Annually with Mental Health Treatment Expansion

LINCOLN, Neb. (KOLN) – Nebraska’s State Advisory Board for Behavioral Health is urging state lawmakers to secure stable funding for long-term mental health treatment and substance abuse programs, stressing that investment now could save the state hundreds of millions in the future.

During its quarterly joint meeting on Thursday, the Advisory Board and the Committee on Substance Abuse discussed the strategic use of incoming federal funds. A major focus was supportive housing for individuals with mental, physical, and emotional disabilities, ensuring they have the necessary resources to live independently and thrive through consistent mental health treatment.

“We give advice based on what we experience and see in the community to provide that feedback to the state so they can make appropriate decisions on how to spend federal and state dollars,” said Tim Heller, chairman of the advisory board.

Assisted Outpatient Therapy: A Proven Model

Heller highlighted Assisted Outpatient Therapy (AOT) — a court-ordered, community-based mental health treatment model — as a potential game-changer for Nebraska.

AOT connects individuals with severe and persistent mental illness to case managers, therapy, medication management, and housing assistance, helping them remain stable and avoid crises.

States like Kentucky have already adopted AOT, with notable results in Louisville:

  • 40% decrease in arrests
  • 79% decrease in mental health-related emergency room visits
  • 86% decrease in psychiatric hospitalizations
  • 57% decrease in incarcerations of individuals with mental illness

Potential Savings for Nebraska

Heller estimates that implementing AOT statewide could save Nebraska over $300 million annually, with potential cost reductions such as:

  • 40% decrease in arrests – $40M saved
  • 79% decrease in mental health-related ER visits – $40M saved
  • 86% decrease in psychiatric hospitalizations – $61M saved
  • 57% decrease in incarcerations – $132M saved
  • Reduction in homelessness, leading to lower shelter and social service costs

The estimated implementation cost: $100 million, still leaving around $200 million in net annual savings.

Mental Health Context: Why Long-Term Care Matters

Nebraska, like many states, faces growing challenges with untreated severe mental illness and co-occurring substance use disorders. Without long-term mental health treatment:

  • People cycle between hospitals, jails, and homelessness
  • Law enforcement and emergency services become overburdened
  • Recovery rates remain low due to lack of consistent support

Long-term, community-based care like AOT ensures continuity of mental health treatment, reducing relapse rates and improving quality of life for individuals and their families.

Moving Forward

The Advisory Board’s recommendations will be shared with state senators before upcoming funding decisions. Heller also encouraged leaders to explore resources from the Treatment Advocacy Center in Washington, D.C., which promotes nationwide implementation of AOT.

“The things I’d like to see is that we improve addressing severe and persistent mental health,” Heller said. “We know the solutions — now we need to invest in them.”

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Frequently Asked Questions (FAQ ) –

Q1: What is Assisted Outpatient Therapy (AOT)?

AOT is a court-supervised mental health treatment program for individuals with severe mental illness who have a history of non-compliance with treatment. It combines legal oversight with comprehensive support services to promote recovery and stability.

Q2: How does AOT benefit the community?

It reduces homelessness, emergency room visits, arrests, incarcerations, and psychiatric hospitalizations, saving taxpayer dollars while improving public safety and individual outcomes.

Q3: Who is eligible for AOT?

Typically, individuals with diagnosed severe mental illness (e.g., schizophrenia, bipolar disorder) who have been hospitalized or arrested due to their condition and are at risk of repeated crises.

Q4: How much could Nebraska save with AOT?

Estimates suggest over $300 million annually in reduced criminal justice, healthcare, and social service costs.

Q5: Is AOT a replacement for voluntary mental health services?

AOT complements voluntary services and is used when individuals cannot or will not engage in mental health treatment on their own, but still need structured care to remain safe and stable.

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