The economic burden of mental illness.

Mental illness imposes a substantial burden on individuals and society. Using data from national surveys and a newly developed methodology for calculating costs, the authors estimate that in 1985 the total economic costs of mental illness were $103.7 billion. Of this total, direct treatment and support costs were $42.5 billion, or 11.5 percent of total personal health care spending for all illnesses. Morbidity costs--the value of reduced or lost productivity--amounted to $47.4 billion. Mortality costs--the lost value of productivity due to premature death resulting from mental illness--were estimated to be $9.3 billion, or 5.1 percent of total productivity losses for all deaths. Other related costs, including the cost of caregiver services, amounted to $4.5 billion.     

Governmental spending for mental retardation and developmental disabilities, 1977-1984

A study of public spending for mental retardation and developmental disabilities in fiscal years 1977 through 1984 reveals that combined state and federal government spending grew by 23 percent despite diminished growth in federal spending after passage of the Omnibus Budget Reconciliation Act of 1981. Combined state and federal expenditures for community services grew by 40 percent, primarily because of an unprecedented rise in state spending. Total state and federal spending for institutional services plateaued, as a 26 percent drop in state appropriations was offset by an infusion of federal dollars, mostly through the Intermediate Care Facilities for the Mentally Retarded program. Federal, state, and local expenditures in fiscal 1984, estimated to total $16.49 billion, are assessed, and future trends in the financing of institutional and community services in the U.S. are discussed.     

Expenditures on mental health and addictions for Canadian provinces in 2003 and 2004

OBJECTIVE: To measure total public and private expenditures on mental health in each province. METHOD: Data for expenditures on mental health services were collected in the following categories: physician expenditures (general and psychiatrist fees for service and alternative funding), inpatient hospital (psychiatric and general), outpatient hospital, community mental health, pharmaceuticals, and substance abuse. Data for 2 years, 2003 and 2004, were collected from the Canadian Institute for Health Information (hospital inpatient and fees for service physicians), the individual provinces (pharmaceuticals, alternative physician payments, hospital outpatient, and community), and the Canadian Centre on Substance Abuse. Totals were expressed in terms of per capita and as a percentage of total provincial health spending. RESULTS: Total spending on mental health was $6.6 billion, of which $5.5 billion was from public sources. Nationally, the largest portion of expenditures was for hospitals, followed by community mental health expenses and pharmaceuticals. This varied by province. Public mental health spending was 6% of total public spending on health, while total mental health spending was 5% of total health spending. CONCLUSIONS: Canadian public mental health spending is lower than most developed countries, and a little below the minimum acceptable amount (5%) stated by the European Mental Health Economics Network.     

The Ventura Planning Model: a proposal for mental health reform

The Ventura Planning Model is a proposal for public mental health reform. It addresses the decline in mental health funding. It offers a rationale for increased support--and funding--for public mental health services. The Planning Model grew out of the experience of implementing and operating the Ventura Children's Demonstration Project. The model has five characteristics, or planning steps: 1) multi-problem target population; 2) systems goals; 3) interagency coalitions; 4) services and standards; and 5) systems monitoring and evaluation. The Ventura Children's Demonstration Project implemented these planning steps, with an infusion of $1.54 million in funds from the state legislature. The project offset at least 66 percent of its cost by reducing other public agency costs and improved a variety of client-oriented outcomes. The success of the project in offsetting its costs has led the legislature to provide additional funds for three more California counties to implement the model for children and youth, and $4 million a year for four years for Ventura County to test the model for adults and seniors. Emphasizing cost offsets in addition to client-oriented outcomes provides a practical rationale for proposing increases in public mental health funds. This rationale also implies substantial changes in the operations of many public mental health agencies.     

Expenditure and revenue patterns of state mental health agencies

This paper documents expenditure and revenue patterns of state mental health agencies from 1981 to 1987. Expenditure data show an overall decline of mental health expenditures of 4.9% over this period. Revenue data reveal that federal support for state mental health agencies increased slightly during this period, but solely as a function of the introduction of the Block Grant in 1982. Interstate variability in per capita spending on mental health is also described and found to be significant even beyond adjustments for costs of services.Research supported by NIMH Contract No. 278-88-0021 (Division of Applied and Services Research).     

Behavioral Health Expenditures and State Organizational Structure

The authors present a study on expenditures by state mental health, substance abuse, and developmental disability agencies in the United States for the period between 1981 and 1993. The relationship between agency spending and organizational structure of state bureaucracy was examined. Results indicate that organizational structure is a determinant of agency spending. The more independent an agency, the higher its spending; conversely, the more independent its competitor, the lower the agency's spending. The number of levels between an agency and the governor's office was not significant in explaining agency expenditures.     

Use of outpatient mental health services by a general population with health insurance coverage

Characteristics of use of mental health services by 4,254 persons enrolled in the Rand Health Insurance Study were analyzed in an attempt to predict patterns of use by a general population with assigned insurance coverage. Families in the study, whose members ranged in age from birth through 62 years, were randomly assigned to one of 14 insurance plans covering a wide variety of services by all licensed provider groups. During a one-year period less than 4 percent of the enrollees visited a mental health specialist, and only 7.1 percent saw any provider for mental health care. About half of those receiving outpatient mental health care visited general medical providers only. Annual outpatient mental health expenses per enrollee were about $25 (1983 dollars). The authors compare their findings with those of other studies and discuss their implications for insurance coverage of mental health services.     

Direct costs and expenditures for mental health care in the United States in 1980

Estimates of direct costs and expenditures for mental health care in 1980 are presented in this analysis. Besides estimates for the specialty mental health sector, the general medical sector, and the human service sector (schools and the criminal justice system), the authors include transportation costs and expenditures for transfer payments. They obtained a low total estimate of $19.2 billion and a high total estimate of $22 billion. Comparisons with previous estimates indicate an annual growth rate in real costs for mental health care of about 1.7 percent since 1971.     

The impact of closing a state psychiatric hospital on the county mental health system and its clients.

OBJECTIVE: This three-year study examined the impact of closing a state psychiatric hospital in 1991 on service utilization patterns and related costs for clients with and without serious mental illness. METHODS: The cohort consisted of all individuals discharged from state hospitals and those diverted from inpatient to community services and enrolled in the unified systems project, a state-county initiative to build up the service capacity of the community system. The size of the cohort grew from 1,533 enrollees to 2,240 over the three years. Information on the types, amounts, and cost of all services received by each enrollee was compiled from multiple administrative databases, beginning two years before enrollment and for up to three years after. The data were analyzed to reveal patterns of and changes in service utilization and related costs. RESULTS: Replacement of most inpatient services with residential and ambulatory services resulted in significant cost reduction. For project enrollees, a 94 percent reduction in state hospital services resulted in cost savings of more than $45 million during the three-year evaluation period. These savings more than offset the funds used to expand community services. Overall, the net savings to the system for mental health services for this group was $3.4 million over three years. CONCLUSIONS: The hospital closure and infusion of funds into community services produced desired growth of those services. The project reduced reliance on state psychiatric hospitalization and demonstrated that persons with serious mental illness can be effectively treated and maintained in the community.     

State mental health agency spending, 1985-1990

Major differences exist among states in the level of spending on mental health care, in the magnitude and direction of changes in those levels, and in the share of resources devoted to state hospital and community-based services. Using data collected by the National Association of State Mental Health Program Directors (NASMHPD) Research Institute, this article describes those differences and examines their relation to a set of state-level fiscal determinants of mental health spending. Levels of spending in 1990 and rates of change in those levels between 1985 and 1990 show virtually no correlation. Changes in spending between 1985 and 1990 are decomposed into several components. States with high growth tend to have high growth in tax capacity and high growth in mental health spending as a share of health and welfare spending.     

Family support in the United States: financing trends and emerging initiatives

Trends in family support spending and new programmatic initiatives across the country during the 1990s are summarized. Nationally, total spending for family support exceeded $1 billion in 2000. Between 1990 and 2000, spending for such services in the United States grew from 1.5% to 4% of total resources expended by state MR/DD agencies. However, we found considerable state variability in level of resources allocated to support families providing care to a member with developmental disabilities. Programmatic initiatives include trends toward family-directed services, targeted programs for special populations, such as ethnic minorities and aging caregivers, and the slow expansion of cash subsidies. Recommendations for the future course of policy in this area are provided.     

Public mental health funding in California, 1959 to 1989

Actual expenditures for local mental health services in California from 1959 to 1989 are analyzed to determine trends in state funding of services. As the locus of authority for mental health services shifted from state to county governments, the relative share of state budget appropriations devoted to mental health steadily dwindled. Since 1973 the public mental health budget has declined by 11.8 percent, and in most years the percentage of state general funds allocated to mental health has decreased. Programs for the developmentally disabled, which are similar in scope and mission to those for the mentally ill but are both funded and directed by the state, have received consistently higher levels of funding. California's practice of decentralizing operating authority for mental health programs while retaining responsibility for funding is seen as detrimental to the quality of public mental health services.     

“Program” deinstitutionalization

Summary Due to the petroleum recession, Oklahoma's mental health system, when new prisoner programs are subtracted, suffered a $15 million reduction since 1981. With careful shifting of funds, personnel, and patients, progress was accomplished in deinstitutionalization. State hospital mentally, ill populations were reduced by over 50% and community patient load quadrupled.     

Potential cost savings from pill splitting of newer psychotropic medications

Many of the newer psychotropic medications have a pricing structure in which there are only small cost differences between pills of different strengths, affording an opportunity for cost saving by splitting pills. Twelve newer psychotropic medications were examined. Although savings varied for each drug, aggregate data indicated that splitting pills can produce an annual savings of up to $1.45 billion, which represents about 10 percent of the retail sales of these drugs. Such savings can benefit individuals, state Medicaid programs, community mental health centers, and managed care companies. The authors propose several strategies for encouraging the use of pill splitting.     

Community mental health and mental retardation services in the United States: a comparative study of resource allocation.

OBJECTIVE: Preliminary studies suggest that during the 1980s, spending for community mental retardation services in the United States may have grown much more rapidly than spending for community mental health. The primary objective of this study was to test empirically the validity of this thesis on a national basis. An additional objective was to determine why such a distinction in community spending patterns might have evolved nationally. METHOD: The study used states as the units of analysis and employed a five-factor hierarchical regression to predict variance in mental health and mental retardation spending. Factors were state size, state wealth, degree of federal assistance, state civil rights activity, and strength of consumer advocacy groups. Strong roles for the civil rights and consumer advocacy factors were hypothesized. A collateral opinion survey in the 10 states exhibiting the greatest within-state difference in community mental health and mental retardation spending was also completed. RESULTS: Community mental retardation spending grew nearly four times more rapidly than community mental health spending in the 1980s. The consumer advocacy and civil rights factors were strongly associated with spending for community mental retardation services in the states, but these factors did not predict spending for community mental health services. CONCLUSIONS: Study recommendations included strengthening mental health family and consumer advocacy groups in the states and promoting systematic exchange between the mental health and mental retardation fields through joint state planning initiatives, studies, and conferences. The need for Medicaid reform is a unifying theme in both the mental health and mental retardation fields.     

A medical algorithm for detecting physical disease in psychiatric patients

An algorithm for screening psychiatric patients for physical disease was empirically derived from a comprehensive assessment of 509 patients in California's mental health system. The first 343 patients were used to develop the algorithm, and the remaining 166 were used as a test group. Calculations were made for several versions of the algorithm, and the data were compared with the diagnoses listed in the patients' admission mental health record. The algorithmic procedure was more accurate and more cost-effective than the medical evaluation procedures used by the state mental health system. When applied to the test group, the algorithm detected up to 90 percent of patients who had an active, important physical disease at a cost of $156 per patient. The mental health system had detected 58 percent of test-group patients with a disease at a cost of $230 per patient.     

Federal income payments and mental retardation: the political and economic context

Federal income maintenance programs for people with mental retardation in the United States were described. Combined SSI and DI spending in fiscal year 2000 totaled an estimated $20.6 billion for people with mental retardation. This population is particularly vulnerable to the vagaries of changing public policy and are particularly reliant upon public support. The relative importance of income programs in the lives of people with mental retardation is discussed and the changing role of federal social welfare policy with regard to these programs analyzed.     

State mental health policy: critical priorities confronting state mental health agencies

The authors of this column report on an environmental scan conducted via intensive interviews of the 55 state and territorial state mental health agency (SMHA) directors who collectively oversee a $28 billion budget and serve nearly six million Americans who have a serious mental illness. Currently, a dynamic set of forces are substantively reshaping the role, resources, and capacities of the SMHA within the larger fabric of state government. As such, SMHA directors developed year 2007 priorities. These priorities include integrating health and mental health care, enhancing consumer empowerment, addressing mental health workforce crises (for example, training and recruitment), and ensuring financial stewardship.