A shift from organizing patients in hospitals by their illness to organizing patients by geographic locations occurred as well. More specifically, when grouped according to illness, many patients were lodged in chronic treatment wards where they received custodial care in the worst sense of the term. In order to rectify this situation, patients were grouped according to geographic location. As a result all patients from a particular city were housed together and received equitable treatment.

These three developments worked in conjunction to democratize the clinical decision-making process, create a closer working relationship between the hospital and the community and lower the hospital census. However, they ultimately contributed to the perception that all psychiatric hospitalizations were undesirable. As a result, there was a demand to examine how hospitalization could be prevented. More specifically, it was envisioned that state hospitals could be converted into community based mental health centers or into vocational training schools (Bloom, 1977).