Quizzed in parliament recently about what the government was doing with the National Mental Health Commission’s review into mental health services, health minister Sussan Ley said she would be making “strong statements” about mental health before the end of this year.

Let’s hope so. There were 32 reports and inquiries into mental health between 2006 and 2012 alone. The common finding – including from the Mental Health Commission, which released its report in April – is the characterisation that Australia’s mental health system is in crisis.

One key reason for this is the “missing middle”. Most of Australia’s asylums were closed by the 1990s, though the Australian Institute of Health and Welfare reports there are still 1,831 acute and sub-acute beds operating in specialist psychiatric hospitals (as opposed to general hospitals), costing more than half a billion dollars annually.

It is widely accepted that on closing the asylums, Australia failed to invest in an alternative model of community mental health care. This means that for people seeking mental health assistance, there are few alternatives between the GP’s surgery and the hospital emergency department.

These alternatives reflect the financial demarcation between the federal government, which pays for primary care, and the states and territories, which manage hospitals. Nobody currently “owns” or has responsibility for community mental health services.

The federal government has been ramping up investment in primary mental health care. This has been principally through the Better Access program, now costing taxpayers more than A$15 million per week, mostly in payments to psychologists. Apart from a small sample of selected consumers in 2010, we know little about the merit of this spending other than it has continually increased since the program was introduced in November 2006.

In relation to hospitals, costs increase but the rate of access to care does not. People often refer to the grim term “the revolving door”, when people are admitted with acute symptoms of mental illness and are at risk of harm to themselves or others. They are commonly stabilised, provided with some medication and then discharged with little or no ongoing community support. They can become unwell again quickly and need re-admission.

Connections to community services within a week of discharge vary wildly depending on where you live. In Victoria, this connection is made in around 72% of all mental health hospital discharges. In New South Wales, it’s only around 48%, which is almost exactly the national average.

It is this middle ground of community support that is missing in Australia’s approach to mental health care. But what exactly does this look like?

A new approach would have a much greater role for the range of mostly non-government organisations which, over many decades, have built deep skills in the provision of psycho-social support – living skills, housing and employment support, increasingly mixed with specialist and even clinical skills. These organisations receive only around 7% of Australia’s mental health budget.

Another element of contemporary community mental health is step-up/step-down services. These generally provide short-term supported accommodation options to either prevent further escalation of problems and hospitalisation, or smooth transition to home following discharge. They are not overflow wards from acute care.

There would also be much greater involvement from multi-disciplinary community mental health teams, operating from the “high street” not the hospital campus. Such teams are multi-disciplinary, comprised of social workers, psychologists, peer workers, occupational therapists, nurses and medical professionals.

These teams provide assessment, treatment, case management and support services to people with a mental illness. They could also have a capacity to assist in responding to crises. Ironically, such teams did exist in Australia 15 years ago but have been largely dismantled.

Community mental health nurse outreach services would add considerable capacity to the system, as already proven by the success of the Mental Health Nurse Incentive Program. This program is currently tiny, however, costing just over A$40 million a year.

Peer workers would also be a much greater element in our service system, ensuring our scarce and valuable professional staff can work to the top of their practice. There are programs such as Personal Helpers and Mentors and Partners in Recovery, which aim to help fill this void in community care, but these now look likely to become restricted to recipients of support under the National Disability Insurance Scheme.

With community mental health falling between federal and state governments, there is a lack of leadership to address the problem. Despite this, I am aware of at least four different approaches being taken to fill in the missing middle:

A large metropolitan hospital, keenly aware that the existing “revolving door” approach is unsustainable and results in poorer care, is establishing new relationships with new partners in the community to keep people well. The New South Wales government has introduced social impact bonds, a new mechanism to finance innovative alternatives to hospitalisation. A new primary health care network has similarly concluded that the current funding and service system is inefficient, wasteful, creates duplication and provides disintegrated care. It is exploring pooling existing funds to create new approaches. A regional health district has invested considerable resources in establishing a new collaborative forum to engage the community sector in a dialogue about better organising mental health care in the community.

There are differences between all these approaches but they all share some characteristics. They are borne from a frustration with existing policy and funding approaches, which are viewed as inadequate, siloed and unsustainable. They seek to create local solutions and not rely on any central government planning or intervention.

What they also reveal is that despite our leadership vacuum, 20 years after the asylums closed people working in the system recognise the situation is too serious to wait any longer.