1. Surgeon General Report Chapter 6
Organizing and Financing Mental Health Services
Sharin Palladino

2. Overview of Chapter
This chapter examines what research has revealed about the organization and financing of mental health services as well as the cost and quality of those services.

3. Structure of U.S. Mental Health Service System
Mental disorders and mental health problems are treated by a variety of caregivers who work in diverse, relatively independent and loosely coordinated facilities both public and private, referred to as the de facto mental health service system

4. Interesting Fact:
15% of adults and 21% of U.S. children and adolescents use services in the de facto system each year

5. Four Divisions of de facto mental health service system

6. Specialty Mental Health Sector
Consists of mental health professionals such as psychiatrists and psychologists who are trained to treat people with mental disorders
bulk of specialty treatment is provided in outpatient setting such as private office-based practice or in private and public clinics

7. Specialty Mental Health Sector
Slightly less than 6% of the adult population and 8% of children and adolescents use specialty mental health services each year
patients average about 14 visits per year

8. General Medical/Primary Care Sector
Consists of health care professionals such as general internists and pediatricians
More than 6% of the adult population use the general medical sector for mental care

9. General Medical/Primary Care Sector
Initial point of contact and could even be the only source of mental health services used by individuals with mental disorders
Patients average 4 visits per year
Only 3% of children and adolescents use this service

10. Human Services Sector
Consists of social services, school-based counseling services, residential rehabilitation services, vocational rehabilitation, criminal justice/prison-based services, and religious professional counselors

11. Human Services Sector Approximately 5% of adults use these services
for children, school mental health services are a major source of care (16%)
3% of children use other human services such as child welfare

12. Voluntary Support Network Sector
Consists of self-help groups, 12 step-programs, and peer counselors
3% of the adult population utilizes these services

13. Public versus Private Sector
Public Sector:
services directly operated by government agencies and services financed with government resources
Private Sector:
services directly operated by private agencies and services financed with private resources

14. More on the Public Sector...
The public sector serves particularly those individuals with no health insurance, those who have insurance but no mental health coverage, and those who exhaust limited mental health benefits in their health insurance

15. More on the Public Sector...
Federally funded public sector programs buttress the traditional responsibility of state and local mental health systems and serve as the mental health service “safety net” and “catastrophic insurer” for citizens with the most severe problems and fewest resources

16. Where does the funding come from for each division of the de facto mental health service system?

17. Specialty Mental Health Sector
state and county funded mental health services serve as a safety net for people unable to obtain or retain access to privately funded mental health services

18. General Medical Sector
receives a greater proportion of Federal Medicaid funds

19. Voluntary Support Network Sector
largely funded by private donations of time and money

20. Why should we care about where the funding comes from?
Many people use both public and private sector so it is imperative to ensure that both sectors can meet full treatment needs of population

21. More interesting facts….
Slightly more than 1/2 of the 15% of the population that use mental health services have a specific mental or addictive disorder (8%), while 7% have a mental health problem not identified in the DSM-III or IIIR

22. Seeking Treatment
Less than 1/3 of adults with diagnosable mental disorders receive treatment

23. Why aren’t people seeking treatment?
Most of those with disorders who do not seek care believe that the problems will go away by themselves or they could handle them on their own
Another major reason for not seeking treatment = $$$$$$$$$$$$

24. Indirect Costs (lost productivity)
In 1990, $79 billion loss in U.S. economy due to lost productivity
indirect costs are derived from lost or reduced productivity at the workplace, school or home

25. DALY’s = Disability Adjusted Life Years
Used as a common metric for describing the burden of disability and premature death resulting from the full range of mental and physical disorders
mental disorders account for 15.4% of burden of disease

26. SGR Top 10 leading causes of disability (1996)
Unipolar major depression
bipolar disorder
schizophrenia
obsessive-compulsive disorder

27. Direct Costs
The government pays a lot as far as financing mental health service and often picks up the slack left from insurance companies because such coverage is usually less generous than that for general health
In 1996, the U.S. spent more than $69 billion for the direct treatment of mental illnesses

28. More Direct Costs
A majority of private health insurance plans have a benefit that combines coverage of mental illness and substance abuse.
Most treatment services for mental illness and substance abuse are separate
This leads to problems for treating the substantial number of individuals with comorbid mental illness and substance abuse disorder who benefit from treating both disorders together.

29. More Money Talk
In 1996, 53% of funding for mental health treatment came from public payers
In 1996, 47% of expenditures came from private sources and 1/2 of that was from private insurance
The remainder was out of pocket

30. And More Money Talk
Among fastest rising expenses for mental health services were outpatient prescription drugs
Shows increase in use of prescription drugs to treat mental disorders
Interesting fact: Medicare does not cover prescription drugs and is a barrier to effective treatment among the elderly who cannot afford supplemental insurance

31. Yet more information on Funding
7% of total health care expenditures were for mental health services
In the past two decades, Medicaid funding of mental health care has grown in importance due to substantial funding offered to states by Federal government

32. So, how do we manage mental health care?

33. Private insurance vs. public insurance
More restrictive for mental health care than for physical care
some insurers refuse coverage; others place restrictions on use and total dollars covered
More restrictive for mental health care than for physical care
Also imposed restricted coverage, particularly on long term care

34. The irony is …….
The purpose of health insurance is to protect individuals from catastrophic financial loss yet…...
Individuals pay significantly more out of pocket for mental health care than for physical health care

35. The following services SHOULD be covered by insurance..
Hospital and other 24 hr services - crisis intervention
intensive community services
ambulatory or outpatient services
medical management
case management
intensive psychosocial rehabilitation services
other outreach approaches to the care of individuals with severe disorders

36. Average personal expense for insured persons per year
Private insurance $193
Medicare $320
Medicaid $481
Uninsured $2430

37. Insurance company theories….
Insurance companies use economic theories to apply to services provided and to persons accepted for coverage.

38. Economic theories
Moral hazard -- a concern that if people with insurance do not have to pay the full cost of care, they will use more services
Adverse selection -- the plan that provides the best coverage will attract people with the greatest need for care leading to higher costs and elevated service

39. We are almost done!!!!!!

40. Solutions?
This way
This way

41. Managed Care Plans
HMO - focused on short term therapy - uses specific providers
PPO - contracts with provider networks
POS - similar to PPO - uses network of providers
FFS - fee for services provided at the point of care

42. Other solutions include
Carve out Managed Behavioral Health Organizations - (MBHO)
Used as either payer carve outs (state employees) or health plan subcontracts (Humana, Prudential)
Each has separate coverage and limits of care and dollar amounts

43. Mental Health services are different….
Mental health services associated with private insurance, public insurance, and public direct-service programs often have managed mental health care arrangements that are different from overall health services. This has emerged within the past decade.

44. How to balance cost vs care
Consumer concerns expressed that cost containment will lead to undertreatment of mental illness
Managed care has had variable success in alleviating these concerns
Continued monitoring of quality of care standards needed to improve care while keeping costs reasonable
movement toward parity mandate

45. Now for some comic relief….

46. What will you be doing now that your thesis is done??

47. And now back to reality….

48. Did you know... 1 in 5 Americans has a mental disorder each year
Mental disorders, substance abuse and Alzheimer’s disease cost the United States $99 billion dollars a year…
Consumer’s Bill of Rights and parity legislation have been developed to protect citizens’ rights to care

49. YOU ARE DONE!!!!!