Public-sector mental health care: new challenges.

Abstract

Mental health care is unique in that state and local governments finance and manage a distinct health care system for people with these disorders. This public system serves as a safety net, providing for the uninsured and compensating for inadequate benefits in commercial plans. Concerns about inadequate and flawed public systems dominated public debate about mental health care in the 1970s and 1980s. However, in the 1990s issues such as managed care and insurance parity have taken over as dominant concerns. A review of two past issues of Health Affairs that focused on mental health policy during the 1990s illustrates how concerns have shifted. In the Fall 1992 issue about half of the papers primarily addressed public-sector concerns. 1 Only a single paper primarily addressed managed care. 2 In contrast, the Fall 1995 issue was subtitled “Mental Health in the Age of Managed Care.” Clearly, managed care had become a dominant concern; only one of the major papers in this issue focused primarily on state mental health systems. 3 Does a reduced level of policy debate about public systems mean that change has slowed? What are the current trends, issues, problems, and possibilities in this sector of health care? In this paper I address these questions, with illustrations from Ohio. n Today’s public systems. Behavioral disorders remain essentially the only set of health problems for which state and local governments finance and manage a specialty treatment system. Public funds pay for a large portion of the costs of care for certain other disorders (such as Medicare financing of dialysis), and public services exist for a few rare disorders such as leprosy. However, the public mental health system is the only substantial, disorder-specific treatment system in existence today. States remain the largest single payers for mental health care, if states’ contributions to Medicaid are considered. National mental health spending in 1996 totaled $66.7 billion. 4 State (and local) governments spent $11.6 billion, not including their share of Medicaid (which ranges from about 30 percent to 50 percent). Medicaid mental health spending was $12.6 billion. In sum, public spending covered 53 percent of all mental health treatment costs. Private insurance payments of $17.9 billion covered only about a quarter of costs.