Abstract
This paper surveys the emerging literature on financing and demand for mental health services. Most studies at present simply report the cost experience of members of an insurance pool, and research on demand behavior has been very limited. Nevertheless, some conclusion are possible. First, the responsiveness of demand for outpatient mental health care is greater than the responsiveness of demand for general medical services. Second, demand for mental health services grows over time among members of an insurance pool, even as coverage remains stable. Third, demand of lower income groups is more responsive to insurance than is demand of upper income groups. New research should focus on the effect of financing policy on the choice of setting for care.
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