"These beds represent the psychiatric equivalent of ICU patient beds," says John Snook, executive director of the Treatment Advocacy Center. "Their loss has been disastrous for our nation and those most in need."

Part of the decline in hospital beds is linked to a decades-long shift towards outpatient care for psychiatric patients, a trend that the center and other advocates are not necessarily opposed to. The problem, they say, is that the decline in beds has not been paired with the necessary increase in the availability of robust outpatient services.

The center points the finger in its report at policies that don't incentivize mental health care. Medicare reimbursement rates are inferior for psychiatric care than other care, it says. In addition, reimbursement models favor private hospitals, which make it hard for public hospitals to get the necessary funding to provide mental care to those in desperate need of psychiatric treatment.

The report applauds a recently-implemented federal Medicaid rule that partially repealed the "Institution for Mental Disease exclusion," which prohibited federal Medicaid funds from going to mental health providers with more than 16 beds. The rule was intended to prevent Medicaid from subsidizing state mental health initiatives.

The federal government recently put in place a three-year, $75 million pilot project in which ten states were allowed to direct Medicaid reimbursements to private psychiatric facilities. The project was recently reauthorized for another three years, although the money for the second round has not yet been approved. 

A congressional report suggested that the project helped the participating states provide care to more patients, but Rep. Tim Murphy, R-Pa., the chief backer of mental health legislation currently winding through Congress, told The Washington Post he's not convinced the change was a game-changer.