The allocation of mental health services: why is it so difficult to get the balance right?

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By Dr. Mark Gray
Pro Vice-Chancellor & Director of Knowledge Transfer, Middlesex University.

Is there an optimal level of mental health provision?

It’s a question that has dogged the economics of mental health for many years, largely because while in other clinical settings differences in allocative outcome don’t cross boundaries from one setting to another without at least some element of positive benefit, in the case of mental health provision they may not.

Take the simple case of the balance between public health interventions in malaria and the treatment of severe cases of malaria. An optimal balance would include one in which shifting resource from treatment to prevention would have benefits for treatment (fewer severe cases to treat, for example). In mental health, a WHO paper in 2004 (‘Prevalence, Severity, and Unmet Need for Treatment of Mental Disorders in the World Health Organization World Mental Health Surveys’, JAMA, (2004), 291(21):2581–2590) suggested that this may not be so:

‘A major practical difficulty in rationalizing allocation of treatment resources is that system barriers constrain reallocation options. This is especially true in a decentralized system like in the United States. For example, there is no obvious mechanism by which constraining access to psychotherapy among middle-class persons with mild mental disorders in the United States would result in an increase in treatment of low-income people with serious mental illness.’

This means that in arranging an ordering of preferred outcomes (a utility or preference ordering), allocating resources by clinical severity or type may not carry the same certainty of spillover benefit. Put simply, rationing low level interventions in mild cases would not invariably convert to reducing the burden on the health system from treating more severe ones later on. Things may be even more complicated by the nature of the interventions themselves across stages of progression – and more complex still because, unlike many degenerative or progressive diseases, the rate of progression may not scale linearly with the cost of care. Some people may remain ‘mild cases’ for many years, requiring a lot of (lifelong) intervention care or medication.

Richard Layard states the case for low level but consistently high-quality intervention thus,

‘Progress in evidence-based psychological therapies, especially cognitive behavioural therapy, has resulted in 50% recovery rates for people with clinical depression or chronic anxiety disorders and substantial improvements for others. Therapy also halves the likelihood of a relapse. Even so, only a small fraction of people suffering from mental illness receive such treatment.

Psychological therapy is a remarkably good bargain. For each dollar or pound spent, roughly an equal amount is saved on welfare benefits and an equal amount on physical health care.'(Layard, R., ‘The economics of mental health’, IZA World of Labor, (January 2017): 9)

In theory, then, the spillovers may occur outside of the treatment system and of the healthcare setting.  In short, while there may not be an optimal level of mental health provision within a health system, the external benefits may be considerable. For health care professionals these benefits (enhanced life quality for patients, the ability to return to work and family life etc.) may themselves be important, but they are inevitably evaluated at the point at which they ‘pay off’ for the investment made by taxpayers or health insurance holders – that is, in working days gained, productivity restored, GDP earned.

Mental health economics within the health care system 

Within the health care system, though, mental health economics still struggles with constructing choice rules to allocate interventions efficiently. As one recent survey article cogently argues,

‘Mental health economics is like health economics only more so: uncertainty and variation in treatments are greater; the assumption of patient self-interested behavior is more dubious; response to financial incentives such as insurance is exacerbated; the social consequences and external costs of illness are more formidable’ (Frank, Richard G., and McGuire, Thomas G., (2011), ‘Economics and mental health’ in Handbook of Health Economics, Mark V. Pauly, Thomas G. Mcguire, Pedro P. Barros (eds),  Volume 2, 893-954).

Simply put, allocative choice rules are more difficult to construct here than elsewhere.
Mental health provision may have clear and significant social benefits, but within the health care system it remains very challenging to decide what to provide, when and to whom.

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